On the sidelines of Zenith Live ’26 in Vienna, sitting across from Zscaler’s founder, CEO, and Chairman Jay Chaudhry, it’s easy to be reminded of a scene from Unstoppable. In it, welder Ned Oldham, when asked how he felt while he was bringing a runaway train under control, famously shrugs off the risky, high-speed chase as just being in his ‘comfort zone’.

Zscaler shares are down by over 50 per cent in the past year, caught in the SaaSpocalypse, but Chaudhry appears to be in his comfort zone. Unlike other SaaS CXOs who have gone on the defensive about their products’ relevance as AI upends the software industry, Chaudhry had been on the offensive just the previous day, declaring in his conference keynote address: “Zscaler was made for this moment.”

For those who have followed his work closely, this may not come as a surprise. Last year, asked by this paper what he had to tell young entrepreneurs in India, he had replied: “Treat a problem as a challenge. Human beings do exceptionally well when they look at a problem as a challenge.” He went on to add, “Don’t be attracted to money. If we (he and his wife) had been attracted to money, we wouldn’t have taken the risks.” The Nasdaq-listed global cybersecurity company, with $24-billion market cap, is the fifth of his ventures, after founding and selling four other successful tech startups in the past decades in the US. Born to farmers with limited means in Himachal Pradesh, he made it to a US university in 1980 on a scholarship and providence. He had almost abandoned his US dream as he could not afford the flight tickets, when fate connected him to JRD Tata and a loan for his travel.

Seizing the ‘moment’

To explain why Zscaler was ‘made for this moment’ he rewinds to the origins of the company. Back in 2007 he was looking to do something ‘big’ after four successful exits. The world was getting more mobile — SaaS, AWS, iPhone... With applications abounding, and users everywhere, he sensed the need for a paradigm shift in the approach to cybersecurity, laying the foundations for Zscaler.

Zscaler works on a ‘zero-trust’ principle — treat every user and application as a potential threat until verified as safe. In a world where users need to access any application, anywhere, on any device and on any network, he is of the view that the firewall-based systems are not effective. If the firewall is breached, bad actors can do what they want. Verification of each and every access and restricted access make for a better approach, he says.

Zscaler was a pioneer in turning the zero-trust concept into a subscription cloud service that allows customers to hide their apps from hackers. “If you are reachable, you are breachable,” he says.

He explains how, even as CEO, he has not been accorded the ‘right’ to make changes to the ERP system or the company’s public cloud. By limiting the access to applications and critical infrastructure to a small group in the virtual world, one improves the security, he says. By executing a “never trust, always verify” protocol for every interaction, ‘zero trust’ isolates the user from the network. This ensures that even if hackers hijack a device, they are trapped in a dead end, with no way to see or infect the rest of the company.

He points out that with Mythos-like models, more and more security vulnerabilities will be discovered going forward. “Software always has vulnerabilities. As part of Anthropic’s Glasswing project, we have been busy finding and fixing vulnerabilities in our software infrastructure.”

Further, with agentic AIs set to outnumber employees in many enterprises down the years, he believes the role of zero-trust and Zscaler has assumed even more importance in an AI world. Besides making it easier for hackers to identify vulnerabilities, the rapid growth in agentic AI usage also means the risks are greater when it gets compromised and remains in the corporate network — “yesterday, users were the weakest link; today agents are the weakest link when it comes to security”.

Disconnect with investors

Given his long stint in the tech ecosystem, what is his take on the SaaSpocalypse? Chaudhry argues for differentiation: “A piece of Claude code cannot write what SAP has done for ERP systems; these are very complex, whereas a simple basic accounting system for a mom-and-pop store can be replaced. The easiest things to disrupt are analytics and reporting.”

Complex systems require a better understanding, technical expertise and process. Zscaler as a global infrastructure company with a presence in around 160 locations and a seamless network connectivity has strong moats, he says.

Mission-critical applications need 100 per cent certainty, he argues.

His 35 per cent stake in Zscaler (held directly and indirectly through trusts) gives him the leeway to act as per his conviction, unlike other SaaS founder-CEOs. Such a high level of ownership is rare in US tech companies after multiple rounds of pre-IPO funding lead to ownership dilution. Zscaler was largely bootstrapped and its performance remains robust. The company is expected to close FY26 (ending July) with revenue of $3.3 billion and 25 per cent growth versus 23 per cent a year ago. Profit is also scaling up significantly with EBITDA margin jumping to 26.8 per cent from 2.3 per cent in FY25.

Here we see a paradox — as profitability scales up significantly, investors are panicking. Wall Street’s Rule of 40 (revenue growth% + free cash flow margin% or EBITA margin% need to be above 40 for a favourable view) is widely used. On this metric for SaaS firms that focus on growth over profitability, Zscaler ranks quite well at around 50 for FY26. The stock trades at one year-forward EV/revenue and EV/FCF multiple of 4.9 and 20 times, respectively (based on Bloomberg consensus estimates) — its cheapest since going public in 2018.

At the time of the IPO, Zscaler was processing 30 billion transactions a day; today that count is over 750 billion — a 25 times increase (47 per cent CAGR). Revenue growth has kept pace at a scorching 43 per cent CAGR. If transaction growth remains strong, as Chaudhry expects with the rise of agentic AIs, Zscaler investors may have less to worry compared with other SaaS companies.

On India, Zscaler’s fifth largest market, Chaudhry says some private Indian banks are savvier than some western banks when it comes to cyber threats, but not so in the case of smaller businesses. He has an overall message: Given the AI threat, all organisations need to buck up.

Finally, what would it take to make India a leader in the AI race? “India should think outside the box and ask itself what it can do to get its young people ready for the world of AI.’’ It should includeAI in curricula at various levels and “look at ways to motivate kids”.

“Books on motivation, positive thinking, working hard and success stories played a big role in my success,” he signs off.

(The writer was in Vienna at the invitation of Zscaler)

Published on July 4, 2026