Netskope Inc. reported fourth‑quarter 2026 revenue of $196.3 million, up 32% from $148.5 million in the same period a year earlier, and non‑GAAP earnings per share of $(0.04), beating the consensus estimate of $(0.06). The revenue beat was driven by strong demand for the Netskope One platform, which attracted new enterprise customers and expanded usage among existing accounts, while the EPS beat reflected disciplined cost management and the company’s ability to convert higher revenue into operating leverage.
The company’s gross margin expanded to 73% on a GAAP basis, up from 67% in Q4 FY25, and to 76% on a non‑GAAP basis, up from 70% a year earlier. The margin improvement is largely attributable to the NewEdge network’s economies of scale and the higher mix of high‑margin AI‑security contracts, which offset modest increases in support and professional services costs.
For fiscal year 2027, Netskope guided revenue of $870 million to $876 million, a 23% increase from the $700 million revenue reported in FY26, and adjusted EPS of $(0.19) versus the consensus estimate of $(0.19) to $(0.20). The guidance reflects a cautious outlook for growth, with management noting that the transition to annual billings will pressure near‑term free cash flow, although the company expects a positive free‑cash‑flow year in FY27.
"We closed fiscal 2026 on a strong note, delivering record net new ARR in Q4 and achieving our first full year of positive free cash flow," said CEO Sanjay Beri. "We ended the year on a high note with results that exceeded our guidance across all key metrics," he added. "We are also very pleased to generate $12 million in free cash flow for fiscal year 2026, marking a notable milestone of Netskope’s first ever year of positive free cash flow." Beri also highlighted the launch of new AI‑security products and the AI Fast Path infrastructure, stating, "With the launch of our new AI Security products and our AI Fast Path infrastructure, we are delivering deep, real‑time protection at the speed of inference."
The earnings release underscores Netskope’s progress toward operating leverage and positive free cash flow, while the FY27 guidance signals a slowdown in revenue growth to roughly 23% and a near‑term free‑cash‑flow dip due to the billing transition. The company’s focus on AI‑native security and its expanding NewEdge network position it well for long‑term growth, but the cautious outlook highlights the challenges of scaling while managing cash flow during a major contract‑billing shift.
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