CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
ZS delivered strong Q3 FY 26 results, with non-GAAP EPS of $1.08 beating consensus by $0.07, while revenue of $850.5M grew 25% Y/Y, exceeding Street expectations by $14.8M. This marks consistent execution, with revenue growth maintaining the 25% level from Q2, demonstrating sustained business momentum across the platform. ARR growth remained solid at 25% Y/Y to $3.525B, with organic growth of 21% excluding the Red Canary acquisition contribution. The sequential improvement in net new ARR and record operating margin expansion to 23% reflect stronger demand and improved execution, in our view. Management raised full-year revenue guidance to $3.3295B-$3.3325B (24.6%-24.7% growth) and non-GAAP EPS guidance to $4.10-$4.11, both above consensus estimates, and benefiting from a reduced tax rate. However, FCF margin guidance was lowered to 22.8%-23.3% from 26.5%-27.0% due to higher capex investments, though we believe continued platform expansion investments position ZS well for sustained long-term growth.