Zscaler to Report Q2 Earnings: What's in Store for the Stock?

Zscaler ZS is scheduled to report second-quarter fiscal 2026 results on Feb. 26, after market close.

For the fiscal second quarter, Zscaler projects total revenues between $797 million and $799 million. The Zacks Consensus Estimate is pegged at $798 million, suggesting growth of 23.2% from the year-ago quarter.

Zscaler anticipates non-GAAP earnings per share between 89 cents and  90 cents. The Zacks Consensus Estimate for the bottom line is pegged at 89 cents per share, indicating a whopping 14% increase from the year-ago quarter’s earnings of 78 cents.

Let’s see how things are shaping up for this announcement.

Factors to Consider for ZS Q2 Earnings

Zscaler’s second-quarter results are expected to benefit from its security and networking solutions, given the rising demand for AI security. Momentum in its Zero Trust Everywhere platform is likely to have driven larger platform deals and customer consolidation in the to-be-reported quarter.

Strong momentum with Global 2000 and Fortune 500 customers and $1 million ARR customers driven by the ongoing digital transformation across organizations and the growing popularity of hybrid work is likely to have been a key catalyst in the to-be-reported quarter. Zscaler’s growing enterprise penetration is also a tailwind in this quarter.

Zscaler is expected to have gained from emerging opportunities from SAP RISE cloud migrations, which management believes could mirror the earlier Office 365-driven growth wave. However, several headwinds remain. Given that the overall IT budgets are still tight, continued scrutiny of large deals is likely to have offset the other gains in the to-be-reported quarter.

Zscaler’s legacy ZIA/ZPA business is growing more slowly than newer pillars, increasing dependence on newer products to sustain elevated growth. This is likely to have persisted in the second quarter of fiscal 2026.

What Our Model Says About ZS

Our proven model does not conclusively predict an earnings beat for ZS this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

ZS has an Earnings ESP of 0.00% and currently carries a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Credo Technology Group CRDO has an Earnings ESP of +3.54% and presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Credo Technology Group is set to report third-quarter fiscal 2026 results on March 2. The Zacks Consensus Estimate for the third-quarter earnings is pegged at 96 cents per share, revised upward by 18 cents over the past 30 days. Estimates for Credo Technology Group’s EPS for the third quarter indicate a year-over-year increase of 284%.

MongoDB MDB is set to report fourth-quarter fiscal 2026 results on March 2. The stock has an Earnings ESP of +0.05% and presently sports a Zacks Rank #1.

The Zacks Consensus Estimate for MongoDB’s fourth-quarter earnings has remained unchanged at $1.47 per share over the past 60 days. The consensus estimate for MongoDB’s EPS for the fourth quarter implies a year-over-year increase of 14.8%.

Snowflake SNOW is set to report fourth-quarter fiscal 2026 results on Feb. 25. The stock has an Earnings ESP of +0.57% and presently carries a Zacks Rank #3.

The Zacks Consensus Estimate for Snowflake’s fourth-quarter earnings is pegged at 27 cents per share, which has been revised a penny upward over the past 60 days. Estimates for Snowflake’s fourth-quarter EPS suggest a year-over-year decline of 10%.

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This article originally published on Zacks Investment Research (zacks.com).

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