1. Netskope's ARR increased 34% year-over-year to $754 million. 2. Q3 revenue surged 33% year-over-year, reaching $184.2 million. 3. GAAP net loss per share was ($1.85), higher than ($0.72) last year. 4. Positive free cash flow of $10.6 million marked significant operational improvement. 5. Netskope expanded its private cloud with new data centers globally.
FAQ
Why Bullish?
The significant year-over-year growth in revenue and ARR demonstrates strong market demand. However, increased losses and cash flow margins also indicate caution for investors.
How important is it?
The reported financial growth, along with strategic initiatives, plays a critical role in determining NTSK's market performance moving forward.
Why Short Term?
Immediate investor sentiment may react positively due to accelerated growth figures. Yet, longer-term profitability concerns could temper the initial excitement.
Netskope Reports Robust Q3 Fiscal Year 2026 Financial Results
SANTA CLARA, Calif., December 11, 2025 (GLOBE NEWSWIRE) -- Netskope (NASDAQ: NTSK), a leader in modern security and networking solutions tailored for the cloud and AI era, has announced impressive financial outcomes for the third quarter of fiscal year 2026, which concluded on October 31, 2025. Highlighting a significant demand for its innovative Netskope One platform, the company showcased strong year-over-year growth across several key financial metrics.
Key Financial Highlights
- Annual Recurring Revenue (ARR): Increased by 34% year-over-year, reaching $754 million.
- Q3 Revenue: Rose to $184.2 million, marking a 33% year-over-year growth.
- Remaining Performance Obligations: Surpassed $1 billion, reflecting a 41% year-over-year expansion.
- Operating Cash Flow: Generated $11.2 million, equivalent to 6% of revenue.
- Free Cash Flow: Reported at $10.6 million, translating to a positive 6% free cash flow margin.
CEO Statement on Growth and Market Position
“We delivered an excellent third quarter with accelerating top-line growth and incremental improvements to the bottom line,” said Sanjay Beri, CEO of Netskope. “Cloud modernization and AI are fueling strong demand for our market-leading Netskope One platform of security, networking, and analytics products. The investments we’ve made in our foundational technology architecture, NewEdge private cloud, and go-to-market strategy are yielding substantial returns as we scale to capitalize on our estimated $149 billion market opportunity.”
Detailed Financial Performance
In the third quarter of fiscal 2026, Netskope's financial metrics revealed:
- GAAP Gross Profit: $106.6 million (down from $91.8 million in Q3 fiscal 2025) with a gross margin of 58%.
- Non-GAAP Gross Profit: $137.6 million (up from $97.5 million in Q3 fiscal 2025) with a gross margin of 75%.
- Net Loss per Share: GAAP net loss per share was ($1.85), an increase from ($0.72) in the same period last year. Non-GAAP net loss per share improved to ($0.10) from ($0.37).
- Operating Cash Flow Margin: Improved to 6%, compared to (8%) in Q3 fiscal 2025.
Business Developments and Expansion Initiatives
Netskope recently completed its Initial Public Offering (IPO) in September, raising $992.2 million in net proceeds. The company also expanded its NewEdge private cloud network with additional data centers in Malaysia, Toronto, Hawaii, and Oman, enhancing its global presence in response to rising customer demand. NewEdge currently operates in close to 80 metropolitan areas worldwide, featuring over 120 data centers fully capable of delivering all services.
Furthermore, Netskope launched significant updates to its Netskope One platform, enhancing Universal Zero Trust Network Access (UZTNA) to support IoT and OT use cases. The company also introduced AI-powered features aimed at improving the efficiency and effectiveness of security teams.
Future Outlook and Guidance
Netskope has provided an optimistic outlook for both the fourth quarter of fiscal 2026 and the full fiscal year:
- Q4 Revenue Forecast: $188 million to $190 million.
- Non-GAAP Operating Margin: (14.0%) to (13.0%).
- Non-GAAP Net Loss per Share: ($0.07) to ($0.05) with approximately 400 million weighted average common stock outstanding.
- Full Year Revenue: $701 million to $703 million.
- Free Cash Flow: $5 million to $8 million.
Conference Call Information
Netskope will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time today to discuss its financial results and outlook in greater detail.