Shares of Zscaler are lower after analysts at boutique firm OTR Global said in a note to investors prior to the open that their checks with the company's partners indicated that a greater proportion fell below their sales goals this quarter than last and more of them saw growth in the current quarter trailing the broader security market. OTR stated this morning that four of the 14 Zscaler partners it polled fell below their sales expectation in the fiscal fourth quarter, which is up from two of 13 polled last quarter, and seven of 11 partners said they saw growth lagging the overall security market in the fiscal fourth quarter. Win rates deteriorated quarter-over-quarter for three of 14 partners, while some large partners reported increased competition among channel partners, OTR said, according to contacts. In early afternoon trading, Zscaler shares are down $6.82, or 8.4%, to $74.09.

Zscaler announced innovations - ZDX Copilot, Hosted Monitoring, and Data Explorer - to its Zscaler Digital Experience service. The new ZDX Copilot, an AI assistant, instantly analyzes and harnesses knowledge from over 500 trillion data points daily across users, devices, networks, and applications, to provide IT operations, service desk, and security teams insights they need related to digital experience and performance. Teams can ask sequences of questions to effectively converse with Copilot, which uses Generative AI, to review high-level trends and progressively narrow results down to specific actionable insights.