Netskope (NASDAQ:NTSK) Issues Earnings Results

Netskope (NASDAQ:NTSK) posted its quarterly earnings results on Wednesday. The company reported ($0.03) earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of ($0.26) by $0.23, FiscalAI reports. The company had revenue of $220.54 million during the quarter. Netskope had a negative net margin of 91.84% and a negative return on equity of 81.80%. 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 Trading Up 4.3%

Shares of Netskope stock opened at $14.34 on Friday. Netskope has a 1 year low of $7.66 and a 1 year high of $27.99. The company has a debt-to-equity ratio of 4.06, a current ratio of 2.17 and a quick ratio of 2.16. The business has a 50 day moving average price of $13.36 and a 200 day moving average price of $11.29. The company has a market capitalization of $5.79 billion and a P/E ratio of -5.62.

Insider Buying and Selling

In other news, Director Arif Janmohamed sold 336,173 shares of the business’s stock in a transaction on Monday, June 15th. The stock was sold at an average price of $9.00, for a total value of $3,025,557.00. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, major shareholder Lightspeed Venture Partners Se sold 219,075 shares of the company’s stock in a transaction on Thursday, July 9th. The shares were sold at an average price of $12.23, for a total value of $2,679,287.25. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders have bought 1,833,380 shares of company stock worth $21,960,909 and have sold 3,529,696 shares worth $33,002,807. 25.52% of the stock is owned by insiders.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the company. Farther Finance Advisors LLC purchased a new position in Netskope in the 4th quarter valued at about $25,000. Quarry LP purchased a new stake in shares of Netskope during the third quarter worth about $41,000. Triumph Capital Management raised its position in shares of Netskope by 380.0% in the fourth quarter. Triumph Capital Management now owns 2,400 shares of the company’s stock valued at $42,000 after buying an additional 1,900 shares during the last quarter. Wells Fargo & Company MN raised its position in shares of Netskope by 261.7% in the fourth quarter. Wells Fargo & Company MN now owns 3,617 shares of the company’s stock valued at $63,000 after buying an additional 2,617 shares during the last quarter. Finally, Leonteq Securities AG purchased a new position in shares of Netskope during the fourth quarter valued at approximately $64,000.

Wall Street Analyst Weigh In

A number of equities research analysts recently weighed in on NTSK shares. JPMorgan Chase & Co. upped their price target on Netskope from $16.00 to $18.00 and gave the stock an “overweight” rating in a report on Thursday. Wells Fargo & Company lifted their price objective on Netskope from $13.00 to $17.00 and gave the stock an “overweight” rating in a report on Monday, August 17th. Royal Bank Of Canada boosted their target price on Netskope from $18.00 to $20.00 and gave the stock an “outperform” rating in a research report on Thursday. Weiss Ratings restated a “sell (e+)” rating on shares of Netskope in a research report on Wednesday, July 8th. Finally, Robert W. Baird lifted their price target on Netskope from $18.00 to $20.00 and gave the stock an “outperform” rating in a research note on Thursday. Sixteen research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has given a Sell rating to the company’s stock. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus price target of $19.03.

Key Netskope News

Here are the key news stories impacting Netskope this week:

• Positive Sentiment: Netskope reported fiscal Q2 revenue of approximately $220.5 million, up 29% year over year and above expectations. Adjusted EPS was a loss of $0.03, substantially better than the $0.26 loss analysts expected. Netskope Announces Strong Second Quarter Fiscal 2027 Financial Results
• Positive Sentiment: Annual recurring revenue rose 27% year over year to $899 million, reinforcing the company’s recurring-revenue growth profile and supporting optimism about its cloud and AI security opportunity. Netskope Positioned to Capture AI Opportunity After Fiscal Q2 Upside, Morgan Stanley Says
• Positive Sentiment: Management raised fiscal 2027 revenue guidance to $888 million-$892 million, above the $881 million consensus estimate. The company also guided to a smaller-than-expected full-year loss and forecast third-quarter revenue of $227 million-$229 million, slightly above expectations. Netskope Raises Fiscal 2027 Revenue Outlook
• Positive Sentiment: JPMorgan, RBC, Baird, Rosenblatt and BTIG all raised their price targets, with targets ranging from $18 to $20 and ratings of Overweight, Outperform or Buy. The upgrades indicate improving sell-side confidence following the earnings beat.
• Positive Sentiment: Zacks upgraded NTSK to Rank #2, or Buy, citing improving earnings prospects. Analysts overall now assign the stock a “Moderate Buy” consensus rating. What Makes Netskope a New Buy Stock
• Neutral Sentiment: Despite the quarterly improvement, Netskope reported a negative net margin of 91.84%, negative return on equity of 81.80% and a debt-to-equity ratio of 4.06, leaving profitability and leverage as important risks for investors.

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.