Netskope Annual Recurring Revenue Reached $899 Million
The cloud security company posted $220.5 million of second-quarter revenue, 29% above a year earlier.
Netskope, Inc. (NTSK), a provider of security and networking for the cloud and AI era, reported annual recurring revenue of $899 million as of July 31, 2026, 27% higher than a year earlier. That year-over-year rate slowed from 29% growth to $845 million at April 30 and 31% growth to $811 million at January 31.
Revenue for the three months ended July 31 was $220.5 million, up 29% from a year earlier, after 28% year-over-year growth to $201.6 million in the first quarter of fiscal 2027 and 32% year-over-year growth to $196.3 million in the fourth quarter of fiscal 2026. Chief Executive Sanjay Beri said the company exceeded its guidance across every metric and attributed the results to organic innovation and demand for the Netskope One platform across security, networking, analytics, and AI.
GAAP gross margin was 74%, matching the first quarter of fiscal 2027 and up from 73% in the fourth quarter of fiscal 2026. Non-GAAP gross margin was 77%, also unchanged from the first quarter and up from 76% two quarters earlier. GAAP gross profit was $163.0 million.
The operating loss narrowed. GAAP loss from operations was $89.8 million, or a (41)% margin, compared with $108.7 million and a (54)% margin in the first quarter of fiscal 2027 and $114.3 million and a (58)% margin in the fourth quarter of fiscal 2026. Non-GAAP loss from operations was $19.3 million, or a (9)% margin, compared with $29.2 million and a (14)% margin in the first quarter and $20.4 million and a (10)% margin in the fourth quarter of fiscal 2026. The company recorded $3.5 million of restructuring costs in the three months ended July 31, an item absent from the first-quarter and fourth-quarter non-GAAP reconciliations.
GAAP net loss per share was $0.27. Non-GAAP net loss per share was $0.03, compared with $0.06 in the first quarter of fiscal 2027 and $0.04 in the fourth quarter of fiscal 2026.
Cash generation recovered from the first quarter. Net cash used in operations was $16.5 million, or a (7)% operating cash flow margin, after $53.9 million of cash used in the first quarter of fiscal 2027 and $18.1 million of cash generated in the fourth quarter of fiscal 2026. Free cash flow was $29.8 million of cash used, or a (14)% margin, after $57.2 million of cash used in the first quarter and $4.0 million of cash generated in the fourth quarter of fiscal 2026. Total cash, cash equivalents, and marketable securities were $1.1 billion at quarter-end, matching the level after the first quarter of fiscal 2027 and down from $1.2 billion after the fourth quarter of fiscal 2026.
Beri said the company was encouraged by early traction with AI Security solutions. Netskope was named a Leader in Gartner’s Magic Quadrant for Secure Access Service Edge Platforms for a third consecutive year and in the Security Service Edge Magic Quadrant for a fifth year. It joined NVIDIA’s Open Secure AI Alliance and shipped Netskope One DataSec Command Center and NewEdge AI Fast Path, which reduced latency by as much as 90% to popular AI destinations.
For the third quarter of fiscal 2027, Netskope expects revenue of $227 million to $229 million, a non-GAAP operating margin of approximately (8)%, and non-GAAP net loss per share of $0.03 to $0.04. For the full year of fiscal 2027, it now expects revenue of $888 million to $892 million, non-GAAP gross margin of approximately 77%, non-GAAP operating margin of approximately (9)%, non-GAAP net loss per share of $0.15, and free cash flow margin of approximately 2%.