Netskope, Inc.

What they do

Netskope sells cloud-delivered security and networking, marketed as the Netskope One platform spanning security, networking, analytics and AI. Its offerings include secure access service edge (SASE) and security service edge, plus newer AI Security solutions and a Netskope One DataSec Command Center for discovering and protecting sensitive data across cloud, network, endpoint, email and AI environments. It also develops NewEdge AI Fast Path, which optimizes network paths between users, sites and agents and AI destinations to improve inference speed and time to first token. The company is based in Santa Clara, California and trades on Nasdaq under NTSK.

Revenue drivers

• Netskope One platform subscriptions — The core business is subscription revenue from the Netskope One platform across security, networking, analytics and AI; the company reported ARR of $899 million as of July 31, 2026, up 27% year over year, and Q2 fiscal 2027 revenue of $220.5 million.
• SASE / security service edge — SASE and security service edge remain the most externally validated product lines, with Netskope named a Leader in the Gartner Magic Quadrant for SASE Platforms for the 3rd year in a row and in Security Service Edge for the 5th year in a row.
• AI Security solutions — AI Security is described by the CEO as having early traction, positioning Netskope at the intersection of cloud, AI, networking and security; no separate revenue figure was disclosed.
• DataSec Command Center — A newly released unified control plane that discovers, tracks and protects sensitive data across AI environments, cloud, network, on-premises, endpoint and email; it is a product release, not a reported revenue segment.

Recent performance

For the second quarter of fiscal 2027 ended July 31, 2026, revenue was $220.5 million, up 29% year over year, and ARR reached $899 million, up 27%. GAAP gross margin was 74% versus 72% a year earlier, and non-GAAP gross margin was 77% versus 75%. GAAP loss from operations widened to $(89.8) million from $(46.0) million, with GAAP operating margin of (41)% versus (27)%; non-GAAP loss from operations narrowed to $(19.3) million from $(34.0) million. GAAP net loss per share was $(0.27) versus $(0.84), and non-GAAP net loss per share was $(0.03) versus $(0.32). Net cash used in operations was $(16.5) million and free cash flow was $(29.8) million; total cash, cash equivalents and marketable securities were $1.1 billion.

Strategy

Management attributes results to organic innovation and demand for the Netskope One platform across security, networking, analytics and AI. The company is pushing into AI security, joining NVIDIA's Open Secure AI Alliance and shipping products such as Netskope One DataSec Command Center and advancements to NewEdge AI Fast Path. It frames itself as part of the infrastructure enterprises need to adopt AI safely. It continues to invest in product releases and third-party validation, including Gartner Magic Quadrant leadership positions.

Risks

• Persistent losses and negative free cash flow — GAAP loss from operations widened to $(89.8) million in Q2 fiscal 2027 from $(46.0) million a year earlier, and free cash flow was $(29.8) million.
• Thin shareholder equity — As of July 31, 2026, total liabilities of $1.56 billion against total assets of $1.71 billion left shareholder equity of just $156.8 million.
• Competitive security and networking market — The company's own risk factors cite increased competition in its markets and its ability to compete effectively; its positioning depends on third-party recognition such as Gartner Magic Quadrant placements.
• Dependence on continued customer adoption and retention — The filings flag the ability to attract new customers and to retain and expand adoption among existing customers as a risk, which matters for a subscription model built on ARR growth.

Outlook

Management said Q2 fiscal 2027 results exceeded guidance across every metric and cited durable customer demand and rapid product innovation. The CEO pointed to early traction in AI Security and described a large market opportunity, with the company positioned to pursue it. The earnings release characterizes Netskope as a leader in modern security and networking for the cloud and AI era. No specific forward financial guidance figures were included in the excerpt provided.