• ARR increased 34% year-over-year to $754 million
• Q3 revenue increased 33% year-over-year to $184.2 million
• Surpassed $1 billion in Remaining Performance Obligations, reflecting 41% year-over-year growth
• Q3 net cash provided by operating activities was $11.2 million, representing 6% of revenue
• Q3 free cash flow was $10.6 million, representing a positive 6% free cash flow margin

Santa Clara, California – Netskope (NASDAQ:NTSK) a leader in modern security and networking for the cloud and AI era, today announced financial results for the third quarter of fiscal year 2026, ended October 31, 2025.

“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. And, the investments we’ve made in our foundational technology architecture, NewEdge private cloud, and go-to-market engine are driving clear returns as we successfully scale to address our estimated $149 billion market opportunity.”

Third Quarter Fiscal Year 2026 Financial Highlights

• Annual Recurring Revenue (ARR): ARR grew 34% year-over-year to $754 million as of October 31, 2025.
• Revenue: Q3 Revenue was $184.2 million, an increase of 33% year-over-year.
• Gross Profit and Margin: GAAP gross profit was $106.6 million, compared to $91.8 million for the third quarter of fiscal 2025, and GAAP gross margin was 58%, compared to 66% for the third quarter of fiscal 2025. Non-GAAP gross profit was $137.6 million, compared to $97.5 million for the third quarter of fiscal 2025, and non-GAAP gross margin was 75%, compared to 70% for the third quarter of fiscal 2025. Non-GAAP gross profit excludes $28.6 million in stock-based compensation expense and related taxes, compared to $0.6 million in the prior year period, due primarily to the vesting of certain equity awards in conjunction with the initial public offering.
• Loss from Operations and Operating Margin: GAAP loss from operations was ($447.0) million, compared to a loss of ($53.8) million for the third quarter of fiscal 2025, and GAAP operating margin was (243%), compared to (39%) for the third quarter of fiscal 2025. Non-GAAP loss from operations was ($28.2) million, compared to a loss of ($35.5) million for the third quarter of fiscal 2025, and non-GAAP operating margin was (15%), compared to (26%) for the third quarter of fiscal 2025. Non-GAAP loss from operations excludes $416.2 million in stock-based compensation expense and related taxes, compared to $12.3 million in the prior year period, due primarily to the vesting of certain equity awards in conjunction with the initial public offering.
• Net Loss Per Share: GAAP net loss per share was ($1.85), compared to ($0.72) in the third quarter of fiscal 2025. Non-GAAP net loss per share was ($0.10), compared to ($0.37) in the third quarter of fiscal 2025. Non-GAAP net loss per share excludes $0.04 for the loss on the change in fair market value of convertible notes, compared to $0.18 in the year ago period. As of October 31, 2025, the weighted average common stock outstanding was 245 million and the fully-diluted share count under the treasury stock method was approximately 506 million.
• Cash Flow: Net cash generated from operations was $11.2 million, compared to ($10.9) million used in operations in the third quarter of fiscal 2025 and operating cash flow margin was 6%, compared to (8%) in the third quarter of fiscal 2025. Free cash flow was $10.6 million, compared to ($28.6) million in the third quarter of fiscal 2025 and free cash flow margin was positive 6%, compared to (21%) in the third quarter of fiscal 2025.
• Cash, Cash Equivalents, and Marketable Securities: Total cash, cash equivalents and marketable securities at the end of the third quarter was $1.2 billion.

Recent Business Highlights

• Completed our Initial Public Offering in September, raising $992.2 million in IPO proceeds, net of underwriting discounts and commissions.
• In addition to being recognized as a Leader in both the 2025 Gartner Magic Quadrant for Secure Services Edge (SSE), for four consecutive years and a Leader in the 2025 Magic Quadrant for SASE platforms for two consecutive years, during Q3 Fiscal 2026, Netskope was also recognized as:
  • A leader in The Forrester Wave™: Secure Access Service Edge Solutions, Q3 2025 report. Netskope was the highest scoring vendor in the report overall and also the highest scoring vendor in Forrester’s “Strength of Offering” category.
  • A Leader in GigaOMs DLP Radar report and SD-WAN Platforms Radar report.
• Expanded our NewEdge private cloud network with new data centers in Malaysia, Toronto, Hawaii, and Oman to meet growing customer demand. NewEdge now covers close to 80 major metropolitan areas, with over 120 data centers globally, all of which are available to every customer, have full edge compute, and run all services.
• Announced updates to our Netskope One platform, including:
  • Universal Zero Trust Network Access (UZTNA) enhancements to extend to IoT and OT use cases. Netskope’s UZTNA solution helps customers modernize their networks by enabling the consolidation of legacy technologies beyond just Virtual Private Networking (VPN), to also include Network Access Control (NAC) and Virtual Desktop Infrastructure (VDI).
  • New AI-powered innovations which improve efficiency and effectiveness of security teams. This includes an integrated AI agent for Netskope One Private Access, which provides insight into an organization’s existing ZTNA network topologies and private application configurations.
• Deepened our collaboration with Microsoft through enterprise security and AI integrations, including Netskope One integration with Microsoft Purview. In addition, we released Netskope One Advanced SSE for Microsoft Entra Global Secure Access (GSA), and new protections for Microsoft 365 Copilot conversations – including GenAI queries, responses, and AI-generated content – using our market-leading data and threat protection delivered through our new CASB API for Microsoft 365 Copilot.

Financial Outlook

Netskope is providing the following guidance for the fourth quarter of 2026 and fiscal year 2026:

For the fourth quarter of fiscal 2026, we expect:

• Q4 revenue of $188 million to $190 million
• Non-GAAP operating margin of (14.0%) to (13.0%)
• Non-GAAP net loss per share of ($0.07) to ($0.05), using approximately 400 million weighted average common stock outstanding

For the full year of fiscal 2026, we expect:

• Total revenue of $701 million to $703 million
• Non-GAAP gross margin of approximately 75%
• Non-GAAP operating margin of (17.0%) to (16.5%)
• Non-GAAP net loss per share of ($0.53) to ($0.51), using approximately 215 million weighted average common stock outstanding
• Free cash flow of $5 million to $8 million

These statements are forward-looking, and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, reconciling items that may be incurred in the future, such as stock-based compensation and related employer payroll taxes, the effect of which may be significant.

Conference Call

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. The conference call will be available via live webcast and replay at the Investor Relations section of Netskope’s website at investors.netskope.com.

Supplemental Financial and Other Information:

Supplemental financial information can be accessed through Netskope’s investor relations website at investors.netskope.com.