Zscaler tanks 31% for worst day ever on 'prudent' guidance, sales shakeup

Zscaler 's stock plummeted more than 30% on Wednesday for its worst day ever after issuing underwhelming guidance that overshadowed better-than-expected fiscal third-quarter results. The cybersecurity company guided for 16% to 17% year-over-year annual recurring revenue growth for the 2027 fiscal year, falling short of StreetAccount estimates. Zscaler expects $875 million to $878 million in revenue this quarter, coming up slightly short of the $878.6 million expected by FactSet. Zscaler projected ARR of $3.74 billion to $3.75 billion in FY2026, or year-over-year growth of approximately 24%. During the quarter, Zscaler said it lost two sales leaders, and finance chief Kevin Rubin said the company is taking a "prudent approach" to guidance amid the transitions. The company also said the memory crunch, spiking prices, and costs will hike capital expenditures as a percentage of revenues by 200 basis points during the 2027 fiscal year. "We are disciplined in our approach to really projecting, but see tremendous opportunity out there," CEO Zscaler CEO Jay Chaudhry told CNBC's Jon Fortt on Wednesday. "Mythos is playing a big role in further fueling the fire because the need for cybersecurity has never been bigger." Zscaler is among the companies working with Anthropic on Project Glasswing, which is aimed at testing the model's capabilities and vulnerabilities before it rolls out to the public. …