Zscaler touts agent-to-agent opportunities as ARR hits $3 billion

Agent to agent communication is the “next big interest” in cybersecurity, Zscaler claimed Tuesday, as the "breakneck" adoption of AI creates new security issues.

CEO Jay Chaudry told analysts on a Q4 earnings call late Tuesday that agentic security was a “sizeable opportunity” for Zscaler as enterprises look to "secure agentic communication using standard protocols like MCP or A2A.”

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The protocols are essential for inter-agent communication, but have faced increased scrutiny over the security challenges they pose, with MCP expanding an attack surface by connecting to third-party data sources.

The call saw Zscaler report a record $3 billion in ARR and say it now sees over 500 billion daily "transactions" flowing through its servers. It remains loss-making, trimming its GAAP net loss to $41.5 million, from $57.7 million in fiscal 2024.

Expanding AI security

He said Zscaler was “rapidly expanding” its AI security portfolio, touting “strong demand” for its Agentic SecOps and ITOps solutions while also admitting AI security remained a smaller sector than data security.

The adoption of AI at a "breakneck pace" is creating new security challenges including "model jailbreaking, prompt injection, model poisoning" he said.

Using AI to fight the AI security battle, the Zscaler and Red Canary teams were working on integrating the latter's “sophisticated agent technology for detection and investigation” into Zscaler solutions.

In particular, Zscaler's ZDX detection product had been fitted with "a bunch of agentic technology" to detect performance latency issues "as more and more of these agents and models talk to each other."

Thanks to the combination of both portfolios, the company’s agentic operations would surpass $400 million in ARR in FY26 it claimed.

Firewalls are out, but don’t say SASE

Elsewhere, the CEO reiterated claims that interest in zero trust security was removing the need for firewall appliances, but pushed back on the idea Secure Access Service Edge (SASE) was the future of edge security.

Zscaler avoided using the term, as “unfortunately SASE is one of those terms which means anything and everything,” he explained, claiming it often covered both firewalls and SD WAN.

Though, he agreed there was an “acceleration in the elimination of branch firewalls” while cautioning “somehow these old boxes take a lot longer to go sometimes then we want them to.”