Zscaler AI Protect hits $100m in bookings as security demand surges

Zscaler's AI Protect product surpassed $100 million in bookings in 12 months as enterprises race to secure autonomous AI agents.

Zscaler Inc. is carving out a growth lane in cybersecurity by securing AI agents, a market that generated more than $100 million in bookings for its AI Protect product over the past year.

"Customer interest continues to grow as organizations seek ways to secure both public AI applications and internally developed AI models," management said during the company's fiscal third-quarter earnings call.

The milestone comes as Zscaler's broader business accelerates. Annual recurring revenue rose 25% year over year to $3.53 billion in the fiscal third quarter, while revenue climbed 25% to $850 million. Remaining performance obligations, a measure of future contracted revenue, increased roughly 30% to $6.5 billion. The company is also acquiring Symmetry Systems to improve visibility into how users, applications, data and AI agents interact across enterprise networks.

The AI security push positions Zscaler to capture a larger share of cybersecurity spending as enterprises deploy autonomous agents that traditional perimeter defenses cannot protect. The Zacks Consensus Estimate for fiscal 2026 revenue stands at $3.33 billion, implying 24.5% year-over-year growth. Zscaler trades at 5.73 times forward sales, a discount to the industry average of 16.25 times, reflecting the stock's 55.3% decline over the past year.

How Zscaler competes in the AI security race

Zscaler faces formidable rivals. Palo Alto Networks reported fiscal third-quarter revenue of $3 billion, up 31% year over year, with its next-generation security ARR exceeding $8 billion. CrowdStrike posted first-quarter revenue of $1.39 billion, up 26%, and ARR of $5.51 billion, up 24%. Both companies are integrating AI capabilities across their network, cloud and security operations products, helping customers manage growing risks from AI applications and automated agents.

Zscaler differentiates through its Zero Trust architecture and focus on machine-to-machine interactions, an area that becomes more critical as AI agents operate autonomously across enterprise networks. The company's AI Protect solution helps customers discover AI assets, enforce security controls and prevent data leaks. Its planned acquisition of Symmetry Systems should strengthen visibility into agentic AI deployments, tracking how users, applications and AI agents interact across environments.

Despite the product momentum, Zscaler shares have fallen 55.3% over the past year, even as the Zacks Security industry rose 29.6%. Analysts expect fiscal 2026 earnings to grow 23.2% and fiscal 2027 earnings to rise 12.1%. Estimates for fiscal 2026 have been revised upward over the past 30 days, while fiscal 2027 estimates have moved lower.

With insider ownership at 35% and the stock trading 33.4% below estimated fair value, according to Simply Wall St, some investors see a disconnect between the company's growth trajectory and its market valuation. Analysts anticipate a potential price increase of 43.3% from current levels. For investors, the question is whether the AI security opportunity can close that gap before competitive pressure from Palo Alto Networks and CrowdStrike intensifies further.

This article is for informational purposes only and does not constitute investment advice.