Zscaler Inc at UBS Global Technology and AI Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Roger Boyd - UBS AG - Analyst : Yes. We're going to do a fireside chat. I've got the iPad up here. So if you have any questions, you can submit them through the app, and we'll weave them into the conversation. I wanted to jump into one of the big debates coming out of the quarter, which was the concept of organic growth. And I felt like it masked a lot of what was a really strong first quarter. But just kind of in your words, what have you been talking about in terms of organic growth? I felt like there was pretty good success on the organic business in 1Q. And how should investors think about that? I know it's not the focus going forward, but address it.

Question: Roger Boyd - UBS AG - Analyst : Yes. Cool. Thanks for addressing that. And then I wanted to shift to one of the areas of strength, in my view, was the strength you have in Zero Trust Everywhere and now 450 customers that are buying across three different platforms. What's exciting about that? Kind of where are you in terms of bringing that to the entire installed base? And what's driving that momentum?

Question: Roger Boyd - UBS AG - Analyst : Makes sense. I want to come back to data security, but specifically on AI security and what you're doing around security analytics. It felt like with Avalor and Red Canary, there's been more of a platform expansion in that direction. And you talked a little bit about this, but why is that compelling right now? It feels like there's a big opportunity for you to get more strategic with customers, provide more around detection and response. Like what's the opportunity there?

Question: Roger Boyd - UBS AG - Analyst : Makes sense. And then to talk about the size of that AI security bucket. I think you just crossed $400 million in ARR and Red Canary in that. You have some products that have been in the market for a while like ZDX that are contributing there. But it does seem like there's been some pretty strong momentum on specifically the AI for security business or security for AI. AI security posture management is something that you've had for a little bit. What does the momentum look like there? And what are customers telling you about that AI for security?

Question: Roger Boyd - UBS AG - Analyst : Yes. And to that point, you noted a couple of larger AI security posture management wins last quarter. I think there's a view amongst investors that, that market is still relatively early, but it seems like you have some traction there. And I'd be curious to get your perspective on what gives you the right to win in that market. We've seen all the other vendors go out and acquire products there. I think you feel like you've got a differentiated product and a point in line with applications. But what gives you the right to win that business?

Question: Roger Boyd - UBS AG - Analyst : Yes. Maybe to round out the emerging products. In data security, you've had a pretty unique entry to that market with in-line CASB and DLP. How do you think about that market evolving? There's obviously a bunch of noise around the data security posture management side. Do you find that customers are trying to consolidate that? Do you feel like that's going to continue to progress over the next year?

Question: Roger Boyd - UBS AG - Analyst : Yes. One of the other questions I got coming out of last week was what is -- what's going on with the core business? What's the strength of the core business? And I think it's kind of a challenging question because the core business is ZIA, ZPA, but increasingly ZDX and data security and agentic AI. Like how do you think about the market for -- I won't use a SASE term, but how do you think about the core market for user security?

Question: Roger Boyd - UBS AG - Analyst : Great. I think I want to talk about go-to-market changes and efficiency that's coming back there. I think maybe you admit that last year was a bit of a challenging year for Zscaler. You had some turnover in the go-to-market organization. Mike Rich has now been in place for over a year. Where are you today? And how should we think about sales efficiency, sales capacity over the next year?

Question: Roger Boyd - UBS AG - Analyst : Awesome. Like some other vendors in the space, you introduced a Flex contract with Z-Flex and the momentum has been really good there. I'd be curious to get your view of how customers have received that and what you've seen from a contract duration perspective, what that means for additional flexibility to try new modules, expand across the platform? How has that reception been so far?

Question: Roger Boyd - UBS AG - Analyst : Yes. Very good. I want to get your impression on the M&A strategy. And you've obviously made a couple in the past few years. You've had

Question: Roger Boyd - UBS AG - Analyst : Great. Maybe two questions to close. I think with any technological change, it sort of necessitates a rethinking about how to do security. And we've seen adoption of SaaS and remote work, poke holes and the concept of perimeter defense. How do you see AI kind of accelerating that or changing that further? And I know you've seen some strength with Zero Trust Gateway, which is a relatively new product in terms of how to secure the cloud. How do you see that kind of evolving from here?

Question: Roger Boyd - UBS AG - Analyst : Awesome. Well, it's -- I think we're up on time. So we'll end it there. But Jay, thank you for being here. It was great. Thank you all for joining. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 02, 2025 / 4:15PM, ZS.OQ - Zscaler Inc at UBS Global Technology and AI Conference