Cybersecurity Giants: Zscaler vs. Cisco

Zscaler and Cisco Systems are two major players in the cybersecurity market. While both companies have seen growth, their business models differ significantly.

Zscaler is a cloud-native security specialist that focuses on zero-trust access, SASE, and AI security. In its fourth quarter of fiscal 2026, Zscaler reported revenues of $898.2 million, a 24.9% year-over-year increase. Non-GAAP earnings per share rose 33.7% to $1.19.

Cisco, on the other hand, combines cybersecurity with networking, observability, and infrastructure. The company's fourth quarter of fiscal 2026 saw revenues rise 18% to $17.25 billion, with non-GAAP earnings per share increasing 23% to $1.22.

Zscaler's biggest challenge is slowing growth, which has fallen from above 40% to the mid-20% range. The company is investing heavily in AI and expects capital expenditures to remain elevated in fiscal 2027. Free cash flow margin declined to 23% in fiscal 2026 from 27% in fiscal 2025.

Cisco, while facing challenges of its own, has a more diversified business model and stronger absolute cash generation. The company's valuation is lower, with a forward 12-month price-to-sales multiple of 5.80 compared to Zscaler's 8.53.