Zscaler to Accelerate Innovation in AI-Powered Security Operations with Acquisition of Red Canary

Rhea-AI Summary

Zscaler (NASDAQ: ZS) has announced the acquisition of Red Canary, a leader in Managed Detection and Response (MDR). Red Canary's expertise enables customers to investigate threats up to 10 times faster with 99.6% accuracy through automated remediation. The integration will combine Zscaler's cloud security platform, which processes over 500 billion daily transactions, with Red Canary's threat detection capabilities to create an AI-powered Security Operations Center (SOC).

Red Canary, recognized as a Leader in Forrester Wave™ for MDR and featured in Gartner® Market Guide, will enhance Zscaler's ability to protect its customer base, which includes nearly 45% of Fortune 500 organizations. The acquisition is expected to close in August 2025, subject to regulatory approvals.

Positive

• Integration will enable 10x faster threat investigation with 99.6% accuracy
• Zscaler processes over 500 billion daily transactions, providing extensive data for AI-driven solutions
• Zscaler protects nearly 45% of Fortune 500 organizations
• Red Canary is recognized as a Leader in Forrester Wave and featured in Gartner Market Guide
• Combination will enhance automated remediation capabilities and security workflows

Negative

• Acquisition is subject to regulatory approvals, which could delay or prevent completion
• Integration challenges may affect service delivery and customer retention
• Potential risks in retaining key Red Canary employees post-acquisition

The Foundation Built from the Zscaler Zero Trust Exchange Platform and Data Fabric Together with Red Canary’s Threat Detection and Response Capabilities Will Transform Security Operations with Agentic AI

SAN JOSE, Calif., May 27, 2025 (GLOBE NEWSWIRE) -- Zscaler, Inc. (NASDAQ: ZS), the leader in cloud security, today announced it has signed a definitive agreement to acquire Red Canary, a recognized leader in Managed Detection and Response (MDR). With over 10 years of expertise in security operations (SecOps), Red Canary has enabled its extensive customer base to investigate threats up to 10 times faster¹ with 99.6% accuracy, while streamlining workflows through automated remediation. Combined with Zscaler’s massive amounts of high-quality data—derived from the world's largest security cloud—and global intelligence from its ThreatLabz Security Research team, the combination will deliver a unified, agentic Security Operations Center (SOC) that combines AI-driven workflows with human expertise. These complementary capabilities will redefine how businesses detect, respond to, and mitigate modern cyber threats.

“With our innovative AI-powered risk management services like Risk360 and the acquired data fabric technology from Avalor, we are disrupting legacy security operations just like we did with our Zero Trust Exchange^TM platform,” said Jay Chaudhry, CEO, Chairman, and Founder of Zscaler. “The proposed acquisition of Red Canary is a natural expansion of our capabilities into managed detection and response and threat intelligence to accelerate our vision of AI-powered SOC of the future. By integrating Red Canary with Zscaler, we will deliver to our customers the power of a fully integrated Zero Trust platform and AI-powered security operations.”

Protecting nearly 45% of the Fortune 500 organizations, Zscaler has established over 15 years of leadership operating the world's largest cloud security platform which processes over 500 billion daily transactions. It has leveraged its massive, high-quality data lake to accelerate the development of advanced AI-driven solutions, like Zscaler Digital Experience (ZDX) and Zscaler Exposure Management. A proven innovator in MDR, Red Canary has been recognized as a Leader in the Forrester Wave™: Managed Detection and Response for the third consecutive year and featured in the Gartner® Market Guide for MDR for the seventh year in a row. Within the SOC, Red Canary plays a crucial role by helping security teams automate remediation workflows, resulting in greater efficiency and improved security outcomes.

By bringing together Zscaler’s AI-powered Zero Trust platform with Red Canary’s domain expertise in threat detection and response—spanning endpoints, identity, network, and cloud workloads—this transaction is uniquely positioned to address the operator pain points that often lead to missed signals, incomplete threat analysis, and increased vulnerability to undetected threats. The integration of Zscaler and Red Canary will better enable security teams to detect, triage, investigate, and respond to threats with greater speed and efficiency, helping organizations confidently and precisely tackle modern security challenges.

“For over 10 years, we’ve protected our customers by combining high-fidelity signals with agentic AI, behavioral analytics, and global threat intelligence—delivering fast, accurate, and high-quality threat detection and response,” said Brian Beyer, CEO of Red Canary. “As part of Zscaler, we will elevate how IT and security teams address the rapidly shifting threat landscape with the strength of our combined technology and expertise. Zscaler’s global scale and reach provide the resources and granular data needed to fuel advanced AI, threat intelligence, and detection engineering, giving us a broader view of adversary behavior while enabling faster innovation across the board. Both companies share a relentless commitment to quality, execution, and delivering exceptional outcomes for our customers.”

The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in August 2025.

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_{¹ 10x faster on average compared to traditional security approaches}

Forward-Looking Statements

This press release contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. These forward-looking statements include the expected benefits and impacts of the proposed acquisition. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. A significant number of factors could cause actual results to differ materially from statements made in this press release, including those factors related to our ability to successfully integrate Red Canary technology into our cloud platform and our ability to retain key employees of Red Canary after the acquisition.

Additional risks and uncertainties are set forth in our most recent Annual Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on March 10, 2025, which is available on our website at ir.zscaler.com and on the SEC's website at www.sec.gov. Any forward-looking statements in this release are based on the limited information currently available to Zscaler as of the date hereof, which is subject to change, and Zscaler will not necessarily update the information, even if new information becomes available in the future.

About Zscaler

Zscaler (NASDAQ: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust Exchange protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across more than 150 data centers globally, the SASE-based Zero Trust Exchange is the world’s largest in-line cloud security platform.

Zscaler™ and the other trademarks listed at https://www.zscaler.com/legal/trademarks are either (i) registered trademarks or service marks or (ii) trademarks or service marks of Zscaler, Inc. in the United States and/or other countries. Any other trademarks are the properties of their respective owners.

Media Contact:
Pavel Radda
press@zscaler.com

Investor Relations Contact:
Ashwin Kesireddy
ir@zscaler.com

FAQ

What is the expected closing date for Zscaler's acquisition of Red Canary?

The acquisition is expected to close in August 2025, subject to customary closing conditions and regulatory approvals.

How will the Red Canary acquisition benefit Zscaler's security capabilities?

The acquisition will enable 10x faster threat investigation with 99.6% accuracy, combining Zscaler's cloud security platform with Red Canary's threat detection and response capabilities for enhanced AI-powered security operations.

What percentage of Fortune 500 companies does Zscaler currently protect?

Zscaler currently protects nearly 45% of Fortune 500 organizations.

How many daily transactions does Zscaler's cloud security platform process?

Zscaler's cloud security platform processes over 500 billion daily transactions.

What recognition has Red Canary received in the cybersecurity industry?

Red Canary has been recognized as a Leader in the Forrester Wave for MDR for three consecutive years and featured in the Gartner Market Guide for MDR for seven years in a row.