Zscaler, Inc.
Cloud Security — Zero Trust Architecture and Secure Access Service Edge (SASE)Founded 2007- Updated July 2025
Reviewed by Swet Parvadiya
Last reviewed: July 2025
CorpDigest
Zscaler, Inc.
Company History
Founded 2007 in San Jose, California
Last reviewed: 2025-07-15 · By Swet Parvadiya
Zscaler's most important fact right now is that it crossed $3 billion in Annual Recurring Revenue in fiscal 2025 while achieving its highest-ever quarterly operating margin of 22% on a non-GAAP basis, with the August 2025 acquisition of Red Canary marking a strategic expansion into AI-powered security operations that combines the company's 500 billion daily transactions with managed detection and response expertise. This combination of scale, profitability improvement, and AI-driven platform expansion positions Zscaler at an inflection point where its cloud-native proxy architecture — built with no on-premise appliances from day one in 2007 — is compounding into an insurmountable data and network advantage. The company generated $2.673 billion in fiscal 2025 revenue, up 23% year-over-year, with gross margins of 77–80% and free cash flow of $726.7 million. The platform protects nearly 45% of Fortune 500 companies and processes over 500 billion transactions daily across 160+ data centers. The risk is that competitors with larger installed bases — Palo Alto Networks, Cisco, Fortinet — and deeper enterprise relationships can match Zscaler's AI capabilities while offering broader security portfolios. The opportunity is that Zscaler's proxy-based architecture, which eliminates lateral movement and minimizes attack surfaces, becomes the standard for enterprise security as AI-driven threats make traditional perimeter defense obsolete.
Jay Chaudhry is the co-founder, Chairman, and CEO of Zscaler, Inc. Born in India, he earned a Bachelor of Technology in Electronics Engineering from Benares Hindu University and an MBA in Marketing, MS in Computer Engineering, and MS in Industrial Engineering from the University of Cincinnati. He also completed the Executive Management Program at Harvard Business School. Before founding Zscaler, Chaudhry built and sold four successful cybersecurity companies: SecureIT (acquired by VeriSign, 1998), CipherTrust (merged with Secure Computing, 2006), AirDefense (acquired by Motorola), and CoreHarbor (acquired by USi/AT&T). He serves as Zscaler's Chairman and CEO, maintaining tight strategic control over the company's cloud-native vision. Forbes estimates his net worth at over $18 billion, making him the wealthiest Indian American. He and his wife Jyoti have established a charitable foundation and donated $3 million to COVID-19 relief in India. Chaudhry is a vegetarian and fitness enthusiast who enjoys hiking and white-water rafting.
Kailash Kailash is the co-founder and Chief Architect of Zscaler, Inc. He holds a B.Tech in Electronic Engineering from Benares Hindu University (1980) and a Masters in Computer Technology from IIT Delhi (1982). Kailash serves as Zscaler's Chief Architect, overseeing the technical design and evolution of the Zero Trust Exchange platform. He has been instrumental in building the cloud-native proxy architecture that distinguishes Zscaler from legacy security vendors. Unlike Chaudhry, who maintains a public profile as CEO, Kailash has remained relatively private, focusing on technical innovation. He owns a negligible amount of Zscaler stock compared to Chaudhry. His technical vision was essential to realizing Chaudhry's concept of a cloud-only security platform with no on-premise appliances.
Jay Chaudhry and Kailash Kailash incorporate SafeChannel, Inc. (later renamed Zscaler) in San Jose, California. Chaudhry provides much of the seed capital from proceeds of his previous four company exits, preserving founder control.
Zscaler launches its cloud-native cybersecurity platform, becoming one of the first companies to offer enterprise security exclusively through a cloud-based proxy architecture with no on-premise appliances.
Microsoft partners with Zscaler to provide advanced cloud security capabilities, validating the cloud-native approach and providing early enterprise credibility.
Zscaler secures $38 million in funding from Lightspeed Venture Partners and Strategic Investments, marking the company's first major external financing after five years of founder-funded operation.
TPG Capital leads a $100 million funding round, valuing the company at over $1 billion and providing capital for global data center expansion and product development.
Zscaler goes public on March 16, 2018, raising $192 million and achieving a valuation that would grow significantly as cloud security adoption accelerated. The company trades under ticker ZS.
Zscaler stock is added to the Nasdaq-100 index on December 17, 2021, reflecting the company's growth into one of the largest technology companies by market capitalization.
Zscaler celebrates 15 years of innovation, with the Zero Trust Exchange processing over 200 billion transactions daily and protecting thousands of enterprise customers globally.
Zscaler formally launches the Zero Trust Exchange platform brand at Zenith Live in June 2023, unifying ZIA, ZPA, ZDX, and data protection capabilities under a single architecture.
Zscaler acquires Canonic Security, an Israeli startup specializing in SaaS supply chain security, adding capabilities to protect against third-party application risks.
Zscaler acquires Avalor, an Israeli risk management platform, for approximately $350 million, adding risk quantification and data fabric technology for security operations.
Zscaler acquires Airgap Networks, adding network segmentation capabilities that complement the zero trust architecture by preventing lateral movement within networks.
Zscaler announces Zscaler Zero Trust SASE, enabling the company to offer its first single-vendor SASE solution by combining SSE capabilities with SD-WAN partnerships.
Zscaler reports total revenues of $2.673 billion for fiscal year 2025, a 23% increase from fiscal 2024, with ARR surpassing $3.015 billion and calculated billings reaching $3.246 billion.
In May 2025, Zscaler announces the acquisition of Red Canary, a leading managed detection and response provider. The deal closes in August 2025, marking Zscaler's expansion into AI-powered security operations.
Zscaler launches AI Guardrails for public and private applications, Zscaler AI Protect for securing AI workloads, and Zscaler Cellular for Zero Trust IoT/OT connectivity. The company achieves CMMC Level 2 certification and becomes the first ISV to earn AWS ISV Competencies in Healthcare, Education, and Government.
Zscaler acquired Canonic Security, an Israeli startup, in 2023 to add SaaS supply chain security capabilities. Canonic's technology helped organizations identify and manage risks from third-party applications connected to their SaaS environments, addressing the growing threat of supply chain attacks.
Zscaler acquired Avalor, an Israeli risk management platform, for approximately $350 million in 2024. Avalor provided risk quantification, data fabric technology, and security analytics that helped organizations prioritize vulnerabilities and measure security posture.
Zscaler acquired Airgap Networks in 2024 to add network segmentation capabilities. Airgap's technology provided agentless microsegmentation that prevented lateral movement within networks, complementing Zscaler's zero trust architecture.
Zscaler acquired Red Canary, a leading managed detection and response (MDR) provider, in August 2025. Red Canary combined high-fidelity signals with AI, behavioral analytics, and global threat intelligence to deliver fast, accurate threat detection and response across endpoints, identity, network, and cloud workloads.