Zscaler Q2 Revenue Up 26% to $816M; ARR Reaches $3.4B
Zscaler delivered 26% year-over-year revenue growth to $816 million in fiscal Q2, with total ARR rising 25% to $3.4 billion and RPO up 31% to $6.1 billion. It recorded 728 customers over $1 million ARR (up 18%), hit record large deals and processed 1 trillion AI transactions, while raising Red Canary ARR guidance to $130 million.
1. Strong Q2 Financial Performance
Zscaler recorded 26% year-over-year revenue growth to $816 million in fiscal Q2 and saw total ARR rise 25% to $3.4 billion. Remaining performance obligations reached $6.1 billion, up 31%, with current RPO at 47% of the total.
2. Record Large Deal Momentum
The company closed twice as many $1 million+ deals as last year, ending the quarter with 728 customers generating over $1 million ARR (up 18%) and 3,886 customers above $100,000 ARR (up 18%). Net new ARR was $156 million, or $139 million excluding Red Canary, marking solid deal flow across regions.
3. AI and Product Expansion
Zscaler processed nearly 1 trillion AI transactions in 2025 and introduced AI Protect plus agentic SecOps/ITOps to secure AI assets and prevent data leaks. Management highlighted growth in Zero Trust Everywhere and Data Security Everywhere, with full-bundle users increasing from 130 to over 550 enterprises year-over-year.
4. Business Model Shift and Guidance
Non-seat based metered usage via Z-Flex and AI-driven token pricing accounted for over 25% of new ACV, driving more than 100% ARR growth in these solutions. Red Canary ARR guidance for FY26 was raised to $130 million, underlining confidence in acquisition benefits and future momentum.