Cybersecurity vendor Zscaler, Inc. (ZS) said on Tuesday it will acquire managed detection and response (MDR) company Red Canary to strengthen its security operations.
San Jose, California-based Zscaler said Red Canary has over a decade of expertise in security operations. It enables the customer base to investigate threats up to 10 times faster with near-perfect accuracy while also streamlining workflows through automated remediation.
The combined company will deliver a “unified, agentic Security Operations Center (SOC)” that combines artificial intelligence (AI)-driven workflows with human expertise.
CEO Jay Chaudhry said, “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.”
The deal terms were not disclosed, but Zscaler said the acquisition is subject to customary closing conditions, including regulatory approvals, and would close in Aug. 2025.
Denver-based Red Canary said in March that its enterprise new customer bookings increased 23% sequentially in the fourth quarter and annual recurring revenue (ARR) exceeded $140 million.
More details on the deal could be forthcoming when Zscaler reports its quarterly results Thursday after the market closes.
According to the Finchat-compiled consensus, the company is expected to report adjusted earnings per share (EPS) of $0.76 and revenue of $667.09 million for the third quarter of the fiscal year 2025.
On Stocktwits, retail sentiment toward Zscaler stock was ‘neutral’ (44/100) by late Tuesday, and the message volume stayed ‘low.’
A bearish watcher remains wary of the Zscaler stock as it traded at new 52-week highs. ‘Over pumped,’ they said. Some also expressed uneasiness following the negative reaction to Okta’s (OKTA) earnings.
On the other hand, a bullish user said the rally in Zscaler stock wouldn’t stop.
Zscaler stock fell 0.37% to $256.36 in Tuesday’s after-hours session, although it is up about 43% year-to-date.
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