Zscaler Slashes FY26 Sales Guidance, Shares Plunge 8.62% After Q2 Beat
Zscaler’s shares tumbled 8.62% after reporting better-than-expected second-quarter revenue and earnings but slashing its FY26 sales guidance. The firm cited slower enterprise cloud adoption as it forecast lower full-year bookings growth, triggering concern over its valuation as short-, medium- and long-term price momentum weakened.
1. Q2 Earnings Beat Expectations
Zscaler reported second-quarter revenue and earnings that topped consensus forecasts, driven by strong demand for its zero-trust security platform. The company highlighted growth in subscription billings and expanding enterprise deals, underpinning a solid financial performance for the period.
2. FY26 Sales Guidance Cut
Despite the beat, Zscaler lowered its FY26 sales guidance, pointing to slower enterprise cloud adoption and extended deal cycles. The revised outlook reduces previously projected full-year bookings growth and reflects heightened sales execution challenges across key verticals.
3. Stock Reaction and Trend
Shares fell 8.62% on the guidance downgrade, marking the steepest daily decline in months. Market indicators show weakening price momentum across short-, medium- and long-term horizons, suggesting investor caution on valuation and growth visibility.