Zscaler's AI Security: Strategic Growth & Innovation in Q4 2025 Earnings

Analysis of "AI Security" in Zscaler, Inc.'s Q4 2025 Earnings Transcript

Zscaler places AI security as a core strategic growth pillar alongside Zero Trust Everywhere and Data Security Everywhere. The company highlights AI security as a rapidly expanding market opportunity driven by the explosive adoption of AI/ML technologies and the new security challenges they introduce.

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1. Strategic Positioning and Market Opportunity

• Zscaler views AI security as a billion-dollar growth vector and a key part of its platform innovation roadmap heading into fiscal 2026.
• The company emphasizes the transformational impact of AI on enterprises, noting a 3500% increase in AI/ML traffic on its cloud in the past year.
• AI adoption is creating new cyber risks such as model jailbreaking, prompt injection, and model poisoning, which Zscaler aims to address with innovative security solutions.

"We have entered an era of omnipresent AI, which is fundamentally transforming enterprises and is leading to an explosive growth of AIML traffic... The adoption of AI at this breakneck pace is creating new security challenges, such as model jailbreaking, prompt injection, model poisoning, and more."

• AI security is integrated into Zscaler’s broader platform, which already serves a significant portion of the Global 2000 and Fortune 500 companies, underscoring strong market validation.

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2. Product Innovation and Solution Offerings

• Zscaler has launched AI Guard and GenAI security offerings to secure AI applications and workloads.
• The company is innovating in two primary AI security areas:
  1. Security for AI applications: Protecting AI apps and access from both traditional cyber threats and emerging AI-specific attacks.
  2. Agentic AI security: Securing agent-to-agent and agent-to-application communication using Zero Trust principles, extending their proven platform to new AI-driven communication models.

"To address these emerging security challenges, we are innovating in two primary areas. First, security for AI applications... we recently launched Zscaler AI Guard, which is being tested by a significant number of large customers... Our second area of AI innovations is agentic, which includes AgenTeq SecOps and AgenTeq ITOps."

• The company is also developing an AI-powered SOC (Security Operations Center) solution aimed at simplifying operations, reducing alert fatigue, automating threat hunting, and predicting breaches, which will help customers reduce costs and complexity.

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3. Customer Adoption and Go-to-Market Approach

• AI security solutions are primarily being adopted through upsell within the existing large customer base, leveraging strong CIO and CSO relationships.
• Zscaler also uses design partnerships with customers to co-develop AI security solutions, indicating a collaborative approach to product innovation.
• While upsell is the main growth driver, AI security is also opening doors for new logo acquisition.

"Most of the new stuff we bring in majority of that will come from upsell opportunity but there are many solutions that are opening doors for new logos as well."

• Customers initially focus on securing public AI services (e.g., Google Gemini), then move to securing private AI models and applications in data centers or public clouds.
• The company recently launched AI guardrails to secure private AI models, which is generating strong early interest.

"Our customers first start to have secure use of public AI such as Gemini of the world... The next piece became how about secure my private applications, my private models... From there, we recently launched an offering We call it AI guardrails. It's early stage, but it is having tremendous interest."

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4. Financial Impact and Growth Outlook

• AI security is part of the platform segments that collectively surpassed $1 billion in ARR in Q4.
• The company expects AI security to grow at a faster pace than some other segments, though it is currently smaller in scale compared to Zero Trust and Data Security.

"AI security is somewhat smaller, but we expect it to grow at a faster pace as well."

• The strong customer demand for AI security solutions contributed to Zscaler’s 22% year-over-year ARR growth, surpassing $3 billion.
• The company is confident that AI security, combined with Zero Trust and Data Security, will continue to drive strong growth and platform adoption in fiscal 2026.

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Summary

Zscaler treats AI security as a strategic growth pillar and a critical component of its evolving cybersecurity platform. The company is actively innovating to address the unique security challenges posed by AI adoption, including securing AI applications, agentic AI communications, and AI-powered security operations. With strong customer interest, early deployments of AI Guard and AI guardrails, and integration into a broader Zero Trust platform, Zscaler is positioning itself to capitalize on the rapidly expanding AI security market. The company’s messaging underscores confidence in AI security as a high-growth, high-potential segment that complements its existing strengths and drives both upsell and new customer acquisition.

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Selected Quotes

"We are seeing significant customer interest in our powerful AI security solutions, including our new AI Guard and GenAI security offerings."

"The adoption of AI at this breakneck pace is creating new security challenges... To address these emerging security challenges, we are innovating in two primary areas."

"We recently launched Zscaler AI Guard, which is being tested by a significant number of large customers."

"Our customers first start to have secure use of public AI such as Gemini of the world... From there, we recently launched an offering We call it AI guardrails. It's early stage, but it is having tremendous interest."

"AI security is somewhat smaller, but we expect it to grow at a faster pace as well."

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This analysis reflects Zscaler’s clear strategic focus on AI security as a key driver of future growth and innovation within its cybersecurity platform.