Netskope (NASDAQ:NTSK) Issues Quarterly Earnings Results

Netskope (NASDAQ:NTSK) announced its quarterly earnings results on Wednesday. The company reported ($0.03) earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of ($0.26) by $0.23, FiscalAI reports. The firm had revenue of $220.54 million during the quarter. Netskope updated its FY 2027 guidance to -0.150–0.150 EPS and its Q3 2027 guidance to -0.040–0.030 EPS.

Here are the key takeaways from Netskope’s conference call:

• Q2 exceeded expectations: Revenue rose 29% year over year to $220.5 million, ARR increased 27% to $899 million, net retention improved to 114%, and operating margin expanded 11 percentage points year over year to negative 9%.
• Netskope reported strong momentum for its AI security suite, with approximately one-third of the AI security pipeline already in or entering proof-of-concept stages. Management expects enterprise sales cycles of roughly 6–12 months, with more AI-related conversions anticipated in the second half of the fiscal year.
• Platform expansion continued, with 59% of customers using at least four Netskope One products versus 51% a year ago; customers generating more than $100,000 in ARR increased 23% to 1,686, representing 87% of total ARR.
• Management raised full-year fiscal 2027 revenue guidance to $888 million–$892 million, or approximately 26% growth, while forecasting about 77% gross margin, negative 9% operating margin, and a positive free-cash-flow margin of approximately 2%.
• Netskope plans to reduce its workforce by approximately 5% as it reallocates spending toward AI infrastructure and tokens; full-year capital expenditures are now expected at 4%–5% of revenue, primarily for continued NewEdge network investment.

Netskope Stock Performance

Shares of Netskope stock opened at $13.75 on Thursday. Netskope has a 12 month low of $7.66 and a 12 month high of $27.99. The firm has a market capitalization of $5.55 billion and a P/E ratio of -68.75. The company has a current ratio of 2.17, a quick ratio of 2.16 and a debt-to-equity ratio of 4.06. The business has a fifty day simple moving average of $13.27 and a two-hundred day simple moving average of $11.27.

Netskope News Summary

Here are the key news stories impacting Netskope this week:

• Positive Sentiment: Strong quarterly performance: Netskope reported fiscal Q2 revenue of approximately $220.5 million, up 29% year over year, while adjusted EPS was a loss of $0.03 versus the consensus estimate of a $0.26 loss. Annual recurring revenue increased 27% to $899 million, and management said results exceeded guidance across every metric. Netskope Announces Strong Second Quarter Fiscal 2027 Financial Results
• Positive Sentiment: Raised financial outlook: Netskope forecast third-quarter revenue of $227 million to $229 million, above analysts’ $226.6 million estimate, and projected a narrower EPS loss of $0.03 to $0.04. Full-year fiscal 2027 revenue guidance was increased to $888 million-$892 million from a consensus estimate of $881 million, while the expected EPS loss of $0.15 is substantially better than the $0.32 analyst forecast. Netskope Raises Fiscal 2027 Revenue Outlook
• Positive Sentiment: AI and cloud-security demand remain a growth catalyst: Coverage highlights Netskope as a smaller cybersecurity company benefiting from increased enterprise adoption of AI, cloud applications and related security tools. AI Boom Powers Growth in Netskope
• Neutral Sentiment: Analyst sentiment is constructive but not uniformly bullish: Analysts currently assign Netskope an average “Moderate Buy” rating. The improved guidance supports potential estimate upgrades, although the company remains unprofitable and trades with a negative P/E ratio. Netskope Given Moderate Buy Rating
• Negative Sentiment: Profitability remains a concern: Despite beating EPS expectations, Netskope still posted a net loss and continues to guide for negative fiscal-year earnings. After the initial positive reaction to the earnings release, investors may be locking in gains following the stock’s rebound from its 52-week low.

Insider Buying and Selling at Netskope

In related news, major shareholder Lightspeed Venture Partners Se sold 219,075 shares of the stock in a transaction dated Thursday, July 9th. The shares were sold at an average price of $12.23, for a total value of $2,679,287.25. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, major shareholder Iconiq Strategic Partners Viii purchased 64,771 shares of the stock in a transaction that occurred on Monday, July 13th. The shares were acquired at an average cost of $12.42 per share, with a total value of $804,455.82. Following the completion of the transaction, the insider owned 916,690 shares in the company, valued at $11,385,289.80. This trade represents a 7.60% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Over the last 90 days, insiders bought 1,833,380 shares of company stock valued at $21,960,909 and sold 3,529,696 shares valued at $33,002,807. 25.52% of the stock is currently owned by company insiders.

Institutional Trading of Netskope

A number of hedge funds have recently made changes to their positions in NTSK. Scge Management L.P. purchased a new stake in shares of Netskope in the 3rd quarter worth approximately $312,104,000. Public Sector Pension Investment Board purchased a new position in Netskope during the fourth quarter valued at $60,882,000. Wasatch Advisors LP purchased a new position in Netskope during the second quarter valued at $25,107,000. Vanguard Group Inc. boosted its holdings in Netskope by 51.5% in the fourth quarter. Vanguard Group Inc. now owns 5,332,708 shares of the company’s stock worth $93,536,000 after acquiring an additional 1,812,857 shares in the last quarter. Finally, BIT Capital GmbH purchased a new stake in shares of Netskope in the fourth quarter worth $27,683,000.

Analyst Ratings Changes

Several analysts recently issued reports on the company. BMO Capital Markets cut their target price on Netskope from $14.00 to $13.00 and set an “outperform” rating on the stock in a research note on Thursday, June 4th. Morgan Stanley lowered their price target on Netskope from $18.00 to $14.00 and set an “overweight” rating for the company in a research report on Thursday, June 4th. KeyCorp lifted their price objective on Netskope from $16.00 to $17.50 and gave the stock an “overweight” rating in a research report on Friday, August 21st. Piper Sandler decreased their target price on Netskope from $21.00 to $18.00 and set an “overweight” rating for the company in a report on Thursday, June 4th. Finally, Deutsche Bank Aktiengesellschaft set a $17.00 price target on Netskope in a research note on Monday, August 17th. One research analyst has rated the stock with a Strong Buy rating, fifteen have given a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus target price of $17.71.

About Netskope

We are redefining security and networking for the era of cloud and AI. The cloud and AI have completely revolutionized work. We are more dispersed, more productive, and more automated than ever before, and the rate of change is only accelerating. Not since the internet has there been such a transformative tectonic shift. But, with it has come collateral damage-traditional security and networking are now broken. We founded Netskope to address this revolution. We built Netskope One, our unified, cloud-native platform from the ground up to solve the challenge of securing and accelerating the digital interactions of enterprises in this new era.