Zscaler Sinks 30% on 16%-17% FY2027 ARR Growth Outlook and Sales Leadership Shakeup
Updated
Updated · CNBC · May 27
Zscaler Sinks 30% on 16%-17% FY2027 ARR Growth Outlook and Sales Leadership Shakeup
3 articles · Updated · CNBC · May 27
Summary
More than 30% of Zscaler's market value vanished Wednesday — its worst day ever — after investors focused on a softer long-term outlook rather than a fiscal third-quarter beat.
FY2027 annual recurring revenue growth of 16% to 17%, current-quarter revenue of $875 million to $878 million, and a 200-basis-point capex increase all signaled slower momentum and higher costs.
Two departed sales leaders added to the pressure, with CFO Kevin Rubin saying the company was taking a "prudent approach" to guidance during the transition; Evercore ISI downgraded the stock to in line.
Q3 results still topped estimates at $1.08 adjusted EPS on $850 million in revenue, but the selloff extends a broader software-sector backlash as investors weigh AI disruption against rising cybersecurity demand.