BlitzLab Scoring · Oct 2026 · Model v1.0 (frozen)
Zscaler — Blitz Index 61 (B)
ARR $3,771M (+25%) with a metering-based second curve — but the $10B ARR long-term goal is 30% of the G2 bar.
61Grade B
Confidence: High · Category: platforms
Score breakdown
| Section | Score | Detail |
|---|---|---|
| A · Speed | 18 / 25 | FY2026 revenue +25.4% ($3.35B); net-new ARR accelerating (+17% ex-Red Canary); FY2027 guidance slows to ~17% |
| B · Moat | 37 / 60 | 76.8% gross margin; 40%+ of Forbes Global 2000 as customers; channel-led distribution, no true network effects |
| C · Creative destruction | 11 / 15 | Firewall-and-VPN appliances → cloud-native Zero Trust Exchange; Zero Trust Everywhere 350 → 950+ in a year |
| D · BlitzFailing | −5 | SBC 24.5% of revenue drives GAAP losses; 2028 Notes $1,725M maturity wall; CRO transition |
Radar axes (0–100): Moat 61.7 · Speed 72 · Creative 73.3.
Watch item
Gates: G1 ✓ · G2 ✓ (borderline). 4 points below the threshold — first score. The business is a B; the price is the market's business.
Strengths
- ARR $3,771M (+25%) · RPO $7,365M (+27%) — subscription visibility
- Non-seat metering = 30% of new/upsell ACV (ARR +100% YoY) + Z-Flex TCV $1.7B — the usage-economy second curve
- Security for AI bookings $100M+ (+50% QoQ) — the adjacent-market entry with real numbers
- Non-GAAP operating margin 23% (record) + $779M FCF — a cash-generating SaaS
Concerns
- FY2027 guidance +17% vs FY2026 +25% — temporary slowdown or structural, decided at Q1 FY2027
- $10B ARR long-term goal is 30% of the G2 bar — the self-drawn ceiling is the structural debate
- SBC/revenue 24.5% ($822M) — the identity of GAAP losses, structural dilution
- 2028 Notes $1,725M maturity concentration (conversion $439.52 = 2.1x current price); CRO changeover
Next earnings
Nov 24, 2026 · Expected
Coverage
Zscaler, Inc. · Q1 FY2027 due Nov 24, 2026 (expected) · Score 61 · Grade B
BlitzLab scores businesses against a scholar’s standard — not investment advice. No price targets, no buy/sell recommendations. Figures are from SEC filings (XBRL) as labeled in the source scorecard.