Netskope (NTSK) Q1 2027 Financial Results Summary

2026-06-04 · Stocks · QuoteReporter

Netskope (NTSK) Q1 2027: Revenue Growth Continues, Losses Widen — Cautiously Optimistic

Netskope, Inc. (NASDAQ: NTSK) reported its financial results for the first quarter of fiscal year 2027, revealing a revenue increase of $44.9 million or +28% year-over-year, reaching $201.6 million. This growth reflects the company's strong position in the cloud security market, although the widening losses may raise concerns among shareholders.

Key Financial Metrics

Annual Recurring Revenue (ARR): Increased 29% YoY to $845 million.
Q1 Revenue: $201.6 million, up from $157.7 million in Q1 2026 (+28% YoY).
GAAP Gross Profit: $148.3 million, compared to $109.5 million in Q1 2026.
GAAP Gross Margin: 74%, up from 69% YoY.
GAAP Loss from Operations: $(108.7) million, compared to a loss of $(45.4) million in Q1 2026.
GAAP Operating Margin: (54)%, compared to (29)% YoY.
GAAP Net Loss Per Share: $(0.29), improved from $(0.76) in Q1 2026.
Free Cash Flow: $(57.2) million, down from $17.5 million in Q1 2026.

Analyst Opinion

This quarter presents a mixed bag for shareholders. On one hand, the revenue growth of 28% year-over-year is a positive indicator of Netskope's expanding market presence and the increasing demand for its cloud security solutions. The ARR growth of 29% further underscores the company's ability to retain and attract customers in a competitive landscape.

However, the significant increase in losses, particularly the GAAP loss from operations widening to $(108.7) million, raises concerns about the company's cost management and operational efficiency. The operating margin deterioration from (29)% to (54)% indicates that while revenue is growing, the costs associated with generating that revenue are also rising sharply. This trend could be a red flag for investors looking for profitability in the near term.

Dividend and Share Buyback

There were no announcements regarding dividends or share buybacks in this quarter's report, which is consistent with the company's focus on growth and reinvestment in its operations.

Guidance and Future Outlook

Looking ahead, Netskope has provided guidance for the second quarter of fiscal 2027, expecting revenue between $213 million and $215 million, which represents approximately 25% to 26% growth year-over-year. The company anticipates a non-GAAP operating margin of approximately (14)% to (15)% and a non-GAAP net loss per share of $(0.06) to $(0.07).

For the full fiscal year 2027, Netskope expects total revenue between $879 million and $883 million, indicating a growth rate of approximately 24% to 25% year-over-year. The anticipated non-GAAP gross margin is around 77%, with a non-GAAP operating margin projected to be approximately (9.5)% to (10.0)%.

Forward Catalysts

Investors should keep an eye on Netskope's upcoming product launches and partnerships, particularly the introduction of the Netskope One AgentSkope and the Netskope AI Command Center. These innovations are designed to enhance the company's offerings in AI security and could drive further customer adoption and revenue growth. Additionally, the ongoing partnership with Deloitte to deliver managed SASE services may open new revenue streams and enhance Netskope's market position.

In conclusion, while Netskope's revenue growth is commendable, the widening losses and operational challenges warrant a cautious approach from investors. The company's ability to manage costs while continuing to innovate will be critical in determining its future success.

Here are the extracted tables from the press release:

NETSKOPE, INC. CONDENSED CONSOLIDATED STATEMENTS of OPERATIONS (in thousands, except share and per share data) (unaudited)

Note: All amounts are in thousands.

Three Months Ended	April 30, 2026	April 30, 2025
Revenue	$201,592	$157,736
Cost of revenue(1)	53,337	48,223
Gross profit	148,255	109,513
Operating expenses:
Sales and marketing(1)	105,682	69,376
Research and development(1)	105,714	67,881
General and administrative(1)	45,596	17,614
Total operating expenses	256,992	154,871
Loss from operations	(108,737)	(45,358)
Other income (expense), net:
Loss on changes in fair value of convertible notes	(12,225)	(33,429)
Other income, net	7,522	1,999
Loss before provision for income taxes	(113,440)	(76,788)
Provision for income taxes	3,056	2,454
Net loss	(116,496)	(79,242)
Net loss per share attributable to common stockholders, basic and diluted	(0.29)	(0.76)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	400,493,597	104,706,962
(1)Includes stock-based compensation expense as follows:
Cost of revenue	3,997	506
Sales and marketing	14,364	3,373
Research and development	31,235	5,308
General and administrative	26,432	904
Total stock-based compensation expense	76,028	10,091

NETSKOPE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)