Zscaler Shares Slide as CRO Transition Overshadows Strong Q4 Beat
Zscaler shares dropped as much as 9% Friday after the company named Ross Tackett as chief revenue officer, succeeding Mike Rich — a leadership change landing just weeks after a strong fiscal Q4 beat and above-consensus FY2027 guidance.
Shares of $ZS fell sharply Friday, on pace for their worst daily performance in four months, after the cybersecurity company announced a change atop its sales organization the day before.
| Ticker | Price | Change | Today |
|---|---|---|---|
| ZS | $195.00 | -9.15% | -$19.65 |
A change at the top of sales
Zscaler said Ross Tackett, currently the company's head of worldwide sales, will become chief revenue officer effective October 1, succeeding Mike Rich. The company said Rich is stepping down as CRO for personal reasons after nearly three years in the role; he'll remain with Zscaler as a strategic advisor through December 31 to help with the transition. Tackett has been at Zscaler for three years and previously spent more than a decade in sales leadership at ServiceNow and over 16 years in similar roles at Dell.
The move follows a strong quarter
The leadership change comes just three weeks after Zscaler posted fiscal fourth-quarter results on September 3, 2026 that beat expectations across the board and issued a fiscal 2027 outlook ahead of consensus.
| Metric | Q4 FY2026 | vs. Estimate |
|---|---|---|
| Adj. EPS | $1.19 | Beat ($1.09 est.) |
| Revenue | $898.2M | Beat ($877.6M est.), +25% YoY |
| ARR | $3.77B | +25% YoY, $246M net new |
| Adj. operating income | $218.4M | +37% YoY, record 24% margin |
| Free cash flow | $60.8M | Down from $171.9M a year ago |
| Deferred revenue | $2.93B | +19% YoY |
The one soft spot in an otherwise strong print was free cash flow, which fell to $60.8 million from $171.9 million a year earlier, which the company attributed to higher capital expenditures and increased investment in internal-use software.
Guidance also came in ahead of estimates
| Metric | Guidance | vs. Estimate |
|---|---|---|
| Q1 FY2027 revenue | $935M–$939M | Above $926.1M est. |
| Q1 FY2027 adj. EPS | $1.15–$1.16 | Above $1.08 est. |
| FY2027 revenue | $3.908B–$3.938B | Above $3.90B est. |
| FY2027 adj. EPS | $4.86–$4.90 | Above $4.60 est. |
| FY2027 ARR | $4.396B–$4.426B | +16.6% to +17.4% YoY |
| FY2027 FCF margin | 23.0%–23.5% | — |
Key takeaways
Revenue and ARR both grew 25% year-over-year in the quarter, net new ARR rose 24%, and adjusted operating margin reached a record 24%. Both Q4 results and forward guidance for Q1 and the full 2027 fiscal year came in ahead of Wall Street estimates, with the EPS outlook standing out in particular at $4.86 to $4.90 against a $4.60 consensus. Zscaler said growth is broadening beyond its traditional user-based products, supported by non-seat-based offerings, momentum in its Z-Flex pricing model, and record large-deal activity. The company also pointed to AI as a growth driver across several product lines, including Zero Trust SASE, Agentic SecOps, Data Security, and Security for AI.
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