Cloudflare, Inc. vs Zscaler, Inc.: Strategic Comparison

This in-depth comparison examines Cloudflare, Inc. and Zscaler, Inc. across revenue, market value, business model, competitive positioning, and long-term growth strategy. Whether you are researching Cloudflare, Inc. on its own, evaluating Zscaler, Inc., or weighing the two companies side by side, the breakdown below highlights where each company leads and where the gap between Cloudflare, Inc. and Zscaler, Inc. is widest.

On the headline numbers, annual revenue is $2.2B (FY2025) for Cloudflare, Inc. and $3.4B (FY2026) for Zscaler, Inc., while their respective market capitalizations stand at $122.5B and $32.6B. Both Cloudflare, Inc. and Zscaler, Inc. are headquartered in United States. Their local markets and applicable rules may still differ.

Cloudflare, Inc.: Cloudflare sits between internet users and the websites, apps, and corporate networks they connect to. When traffic passes through its network, Cloudflare caches content close to users, filters out attacks such as DDoS floods and malicious bots, and can run customer code at the edge. It says roughly 20% of websites use its services. Founded in 2009 and headquartered in San Francisco, the company went public on the NYSE in September 2019 and had 5,156 full-time employees at the end of 2025. The company is headquartered in San Francisco, California.

Zscaler, Inc.: Zscaler sells cloud-delivered security services that sit between users, devices, applications, and the internet. Its Zero Trust Exchange enforces identity-aware access, inspection, and data protection from the cloud instead of relying on firewalls and VPNs at the corporate perimeter.

Cloudflare, Inc. and Zscaler, Inc. pursue distinct approaches to generating revenue, and understanding how each company operates is the foundation of any fair comparison between Cloudflare, Inc. and Zscaler, Inc..

Cloudflare, Inc. business model: Cloudflare makes money by selling subscriptions and usage-based services that run on a single global network. Millions of websites use a free plan; paying customers move up to Pro, Business, and Enterprise plans for advanced DDoS mitigation, web application firewall, bot management, and support. Enterprises also buy Cloudflare One, a Zero Trust and SASE suite priced per user that replaces corporate VPNs, plus email security. A fast-growing developer platform (Workers, R2 storage, D1, Workers AI) bills on usage. Because every server runs the full software stack, new products ride on infrastructure Cloudflare already operates, which keeps non-GAAP gross margin in the mid-70s (75.8% in 2025).

Zscaler, Inc. business model: Zscaler earns almost all of its revenue from subscriptions to cloud security services, usually sold on annual or multi-year contracts and priced by users, workloads, or modules. Core products are Zscaler Internet Access (secure web gateway), Zscaler Private Access (zero trust access to internal apps), and Zscaler Digital Experience (performance monitoring), with data protection, workload security, security operations, and AI security sold on top. Most sales go through channel partners and service providers. Deferred revenue was $2.926 billion at July 31, 2026, up 19%. Red Canary, bought in 2025, brought a managed detection and response business that contributed $141 million of ARR at the end of fiscal 2026.

The durability of a company's moat often decides long-term winners. Here is how the competitive advantages of Cloudflare, Inc. stack up against those of Zscaler, Inc..

Cloudflare, Inc. competitive advantage: Cloudflare's advantage is its network: data centers in more than 330 cities that run every product on every server, combined with a free tier that brings an enormous volume of diverse traffic onto the platform. That traffic gives Cloudflare broad visibility into attacks, and the shared architecture lets it launch new security, AI, and developer products to its whole customer base at low marginal cost.

Zscaler, Inc. competitive advantage: Zscaler built its proxy architecture for the cloud from the start rather than adapting hardware firewalls. Customers route traffic through its service, which gives it a large installed base for cross-selling private access, data protection, and newer security-operations and AI-security products.

Future prospects matter as much as current results. The growth strategies below explain how Cloudflare, Inc. and Zscaler, Inc. each plan to expand from here.

Cloudflare, Inc. growth strategy: Cloudflare grows by landing customers with free or low-cost plans and expanding into more products per account. Its main growth vectors are larger enterprise contracts (it signed its largest-ever deal in Q4 2025, averaging $42.5 million per year in annual contract value), Cloudflare One Zero Trust, and the developer platform. In 2025-2026 it leaned into AI: Workers AI for inference, the Replicate model platform acquired in late 2025, AI crawler controls for publishers, and acquisitions of web framework teams (Astro, VoidZero/Vite) to pull more developers onto Workers.

Zscaler, Inc. growth strategy: Zscaler is trying to grow beyond seat-based internet and private access by selling data security, workload and branch connectivity, security operations through Red Canary, and security for AI applications and agents. It also uses Z-Flex, a flexible purchasing program, to move customers onto more modules. Investors watch ARR growth excluding acquisitions, net new ARR, free cash flow, and how it holds up against bundled offers from larger rivals.

A closer look at the financial trajectory of Cloudflare, Inc. and Zscaler, Inc. rounds out the comparison.

Cloudflare, Inc.: Cloudflare's revenue has compounded from $431.1 million in 2020 to $2.17 billion in 2025. In 2025 it posted 29.8% growth, 75.8% non-GAAP gross margin, $303.9 million of non-GAAP operating income (14.0% of revenue), $603.1 million of operating cash flow, and $260.6 million of free cash flow, while still reporting a $102.3 million GAAP net loss driven by stock-based compensation. Growth accelerated in 2026: Q2 2026 revenue was $696.1 million (+36% year over year), with a $170.0 million GAAP net loss and $107.8 million of non-GAAP net income. Cash and securities stood at $4.16 billion on June 30, 2026. Management raised full-year 2026 revenue guidance to $2.864-$2.870 billion in August 2026. Cloudflare, Inc. is a massive global internet infrastructure and security company, maintaining a market valuation generally exceeding $25 billion.

Zscaler, Inc.: Fiscal 2026 revenue grew 25% to $3.353 billion; excluding Red Canary it grew 20% to $3.209 billion. GAAP loss from operations was $133.3 million, while non-GAAP operating income rose to $767.1 million, or 23% of revenue. GAAP net loss was $63.2 million. Fourth-quarter revenue was $898.2 million and ARR ended the year at $3.771 billion. For fiscal 2027, CFO Kevin Rubin guided to revenue of $3.908 billion to $3.938 billion and ARR of $4.396 billion to $4.426 billion, growth of roughly 17%.