Netskope, Inc. Class A Common Stock

Q1 revenue was $201.6 million, up 28% year over year, ahead of guidance. ARR ended at $845 million, up 29% year over year; net new ARR was $34 million versus $39 million in Q1 last year. Gross margin was 77%, up about 3 percentage points year over year, and operating margin was -14%, improving 4 points year over year. Net loss per share was $0.06. RPO grew 33% year over year to over $1.2 billion, contracted future billings grew 71%, and free cash flow was negative $57 million. Q2 fiscal 2027 guidance calls for revenue of $213 million to $215 million, operating margin of about -14% to -15%, and net loss per share of $0.06 to $0.07. Full-year fiscal 2027 guidance was raised to revenue of $879 million to $883 million, gross margin of about 77%, operating margin of about -9.5% to -10%, net loss per share of $0.18, and positive free cash flow margin of 2% to 4%.

Sanjay Beri framed the quarter around Netskope’s role in secure AI adoption, saying customers need real-time security, networking, and data controls as AI agents and shadow AI expand. He emphasized Netskope’s differentiated platform, citing its unified code base, new edge private cloud, and AI-native architecture as the basis for winning across SSE, SASE, AI security, and data protection. His tone was confident and expansionary, highlighting strong customer adoption, rapid product innovation, and what he called a massive market opportunity.

Drew Del Matto focused on the company’s financial leverage and the setup for second-half acceleration. He cited 29% ARR growth to $845 million, 28% revenue growth to $201.6 million, 77% gross margin, -14% operating margin, and $1.1 billion in cash, cash equivalents, and marketable securities. He also said free cash flow of negative $57 million was in line with guidance and tied to the transition to annual billing, while still expecting positive quarterly free cash flow in the back half and full-year free cash flow margin of 2% to 4%.

Analysts pressed on whether SASE is commoditizing and whether AI security is truly differentiated, given the lower net new ARR versus a tough comparison. Management answered that AI security products were only just released, that POV win rates are over 80%, and that new logo ARR grew about 60%, with the larger sales-rep ramp expected to help in the second half. Questions also focused on pricing, competitive dynamics, and AI budget ownership; Netskope said AI security is priced mainly by transaction or outcome, budget is still forming and split across security, app, and infrastructure, and AI command center / AgentScope were built with customer input.