Netskope (NTSK) investor relations material

Executive summary

• Q2 revenue grew 29% year-over-year to $221 million, with ARR up 27% to $899 million, both ahead of guidance, driven by strong demand for AI security and platform adoption.

• Net retention rate reached 114%, with 23% growth in customers spending over $100,000 in ARR and 59% of customers using four or more products.

• Recognized as a leader in Gartner Magic Quadrant for SASE and Security Service Edge, and in IDC's SASE MarketScape, with a total addressable market projected to exceed $336B by 2029.

• Significant innovation in AI security, including launches of Agentic Broker, AI Guardrails, AI Command Center, DataSec Command Center, and AI Fast Path technology.

• Expanded partnerships with NVIDIA, CrowdStrike, Anthropic, and Amazon to enhance AI and security integrations.

Financial highlights

• Q2 revenue was $220.5 million, up 29% year-over-year, with ARR at $899 million, up 27%; non-GAAP gross margin improved to 77%, and non-GAAP operating margin to -9%.

• Net loss per share was $(0.03) non-GAAP, outperforming guidance; GAAP net loss per share was $(0.27).

• Free cash flow for Q2 was $(29.8) million, with a margin of -14%, ahead of expectations.

• RPO grew 36% year-over-year to $1.35 billion.

• Ended Q2 with $1.1 billion in cash, equivalents, and marketable securities.

Outlook and guidance

• Q3 revenue expected between $227 million and $229 million, up ~24% year-over-year; FY27 revenue guidance raised to $888 million–$892 million (~26% growth).

• Non-GAAP gross margin expected to remain at ~77%, operating margin at -9%, and free cash flow margin at ~2% for the year.

• CapEx for the year projected at 4%-5% of revenue, supporting continued NewEdge network investment.

• Existing liquidity of $1.1 billion expected to support operations and capital needs for at least the next 12 months.