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Zscaler (ZS) — What two recent customer relationships tell investors about scale, go-to-market, and risk

Zscaler sells cloud-native security as a subscription service, monetizing primarily through multi-year SaaS contracts and related support, with the bulk of revenue recognized ratably over the term. The business is enterprise-focused, channel-heavy, and globally distributed, delivering mission-critical traffic routing for large organizations and government agencies; these characteristics drive both durable revenue and specific concentration and renewal risks. For a deeper look at how these customer signals affect commercial durability and competitive positioning, explore our platform at https://nullexposure.com/.

Snapshot thesis: subscriptions, scale, and mission-critical positioning

Zscaler’s economics rest on highly recurring subscription revenue, a go-to-market that leans on channel partners, and an installed base where many customers route all internet traffic through the Zscaler cloud — a configuration that elevates product stickiness and expansion potential. The company's revenue is geographically diversified (North America largest, with meaningful EMEA and APAC exposure), and although no single end customer contributes more than 10% of revenue, the customer roster skews toward very large enterprises and government agencies — a profile that underpins both steady ARR growth and concentrated enterprise renewal exposure.

What the new relationship signals are — two items you should track

The public mentions captured in March 2026 highlight two different strategic collaborations: a partnership-oriented professional services integration with Ernst & Young focused on cryptography discovery, and a regional AI and threat-research partnership with Bharti Airtel in India. Both speak to Zscaler’s strategy of embedding its security platform into larger enterprise and telco-led initiatives.

Ernst & Young: cryptography discovery integration for PQC planning

Zscaler is serving as the primary data source for cryptographic discovery in an Ernst & Young offering, enabling EY customers to assess and plan for post-quantum cryptography (PQC) migration. According to a Zscaler product blog post dated March 10, 2026, EY will leverage Zscaler-derived telemetry to help clients design PQC migration roadmaps. (Source: Zscaler blog, March 10, 2026 — https://www.zscaler.com/de/blogs/product-insights/future-proof-security-first-quantum-ready-security-service-edge-sse)

Bharti Airtel: regional AI & cyber threat research center in India

Zscaler and Bharti Airtel announced the launch of an AI & Cyber Threat Research Center in India with a national remit for cyber resilience, signaling deeper local market embedding and partnership with a major telco. A news piece reported on March 10, 2026, described the collaboration as part of Zscaler’s efforts to expand its AI and security footprint in APAC via strategic partners. (Source: SimplyWallSt coverage, March 10, 2026 — https://simplywall.st/stocks/us/software/nasdaq-zs/zscaler/news/zscaler-taps-bharti-airtel-to-deepen-ai-security-role-in-ind)

How these relationships fit into Zscaler’s operating model

These two items reinforce several company-level operating characteristics derived from public filings and disclosures:

  • Contracting posture: subscription-first, ratable revenue. Zscaler recognizes subscription and support revenue over time; company filings show subscription revenue accounted for roughly 97–98% of total revenue in recent fiscal years, and contract terms are typically one to three years. This underpins predictable ARR and high renewal visibility.
  • Customer concentration: enterprise-scale but low single-customer risk. Zscaler serves very large enterprises — around 40% of the Forbes Global 2000 and a substantial portion of the Fortune 500 — yet it reports no single end customer contributing 10% or more of revenue. This profile drives strong aggregate retention economics while constraining idiosyncratic counterparty risk.
  • Go-to-market and counterparty posture: channel-dominant. Public disclosures show channel partners accounted for a very large share of revenue (the firm reported channel partner revenue representing the majority of contract revenue in FY2025), indicating that partner ecosystems materially shape new customer acquisition and expansion.
  • Criticality and maturity: mission-critical deployments for many customers. The company states many large customers route nearly all internet-bound traffic through its platform, an architecture that makes services mission-critical and increases switching costs over time.
  • Geographic exposure: global but North America weighted. Revenue mix is concentrated in North America (~51%), with EMEA (~30%) and APAC (~16%), which informs both market opportunity and regional regulatory/cybersecurity risk vectors.
  • Materiality of services vs. software: Zscaler is fundamentally a software/SaaS vendor, but professional services are comparatively immaterial to total revenue. The firm emphasizes renewal and expansion of subscription services as the primary driver of financial performance.

These characteristics combine into a predictable subscription economics model with high gross retention potential but dependence on channel execution and enterprise renewal cycles.

Investment implications and risk factors for operators and allocators

  • Upside: Embedded, sticky security posture. When customers route all traffic through Zscaler, expansion through add-on security modules and telemetry services is straightforward, increasing lifetime value.
  • Upside via partnerships. Collaborations like EY for cryptography discovery and Bharti Airtel in India accelerate product-led adoption within large accounts and regulated markets, reinforcing cross-sell opportunities.
  • Key risks: channel concentration and renewal cycles. Heavy reliance on channel partners means partner economics and attrition dynamics materially affect top-line growth; channel concentration is a company-level exposure even with broad end-customer dispersion.
  • Regulatory and geopolitical exposure. Significant government and global enterprise customers create regulatory scrutiny and potential compliance complexity across geographies.
  • Materiality nuance. While no single customer breaches the 10% revenue threshold, the channel partner concentration line-item is material to how revenue actually flows and should be monitored in future filings.

For executives evaluating partnerships, the EY and Bharti Airtel relationships should be seen as evidence of enterprise-grade adoption plus an active strategy to localize capabilities in partnership with professional services and telco incumbents.

Practical next steps for investors and operators

  • Review upcoming fiscal filings for channel revenue trends and renewal rate disclosures; watch for any shifts in the channel/direct mix that would influence gross margins and sales efficiency.
  • Track product telemetry monetization efforts (e.g., cryptography discovery services) as early indicators of security-telemetry upsell and professional-services monetization.
  • Monitor regional deployments and regulatory sign-offs related to the Bharti Airtel collaboration, which will signal traction in APAC telco-led markets.

If you want continuous monitoring and structured commentary on relationships like these, visit https://nullexposure.com/ to see our coverage and subscription options.

Bottom line and action

Zscaler’s latest public customer touchpoints demonstrate a two-pronged GTM approach: embed with professional services firms to reach enterprise risk-management functions, and partner with large telcos to scale regional penetration. The combination bolsters expansion potential inside large accounts while leaving the company exposed to partner execution and renewal cycles — a trade-off investors and operators must price. For ongoing analysis and to subscribe to relationship tracking, go to https://nullexposure.com/.