Netskope Announces Strong Third Quarter Fiscal Year 2026 Financial Results

Rhea-AI Summary

Netskope (NASDAQ:NTSK) reported Q3 fiscal 2026 results for the quarter ended October 31, 2025, with ARR up 34% YoY to $754M and Q3 revenue +33% YoY to $184.2M. Remaining Performance Obligations surpassed $1.0B, up 41% YoY. GAAP gross margin was 58% while non-GAAP gross margin improved to 75%. GAAP loss from operations widened to ($447.0)M driven by stock-based compensation; non-GAAP loss narrowed to ($28.2)M. Net cash from operations was $11.2M and free cash flow was $10.6M. Cash, cash equivalents and marketable securities totaled $1.2B. The company completed an IPO in September, raising $992.2M net.

Positive

• ARR +34% year-over-year to $754M
• Revenue +33% year-over-year to $184.2M
• Remaining Performance Obligations > $1.0B (+41% YoY)
• Total cash and marketable securities of $1.2B
• Completed IPO proceeds of $992.2M net

Negative

• GAAP loss from operations widened to ($447.0)M due to stock-based compensation
• GAAP gross margin down to 58% from 66% year-over-year
• GAAP net loss per share ($1.85) vs ($0.72) prior year

Key Figures

ARR $754 million Annual Recurring Revenue, 34% year-over-year growth, Q3 FY26

Q3 revenue $184.2 million Third quarter FY26 revenue, 33% year-over-year growth

Remaining Performance Obligations Over $1 billion RPO surpassed $1 billion, 41% year-over-year growth

GAAP loss from operations ($447.0 million) Q3 FY26 GAAP operating loss versus ($53.8 million) prior year

Non-GAAP loss from operations ($28.2 million) Q3 FY26 non-GAAP operating loss, improved from ($35.5 million)

Operating cash flow $11.2 million Q3 FY26 net cash from operations, versus ($10.9 million) prior year

Free cash flow $10.6 million Q3 FY26 free cash flow, versus ($28.6 million) prior year

Cash & securities $1.2 billion Total cash, cash equivalents and marketable securities at Q3 FY26 end

Market Reality Check

$22.50 Last Close

Volume Volume 1,946,559 is slightly below the 20-day average of 2,049,441, suggesting no unusual trading activity ahead of the release. normal

Technical Shares at 22.5 are trading above the 200-day moving average of 21.7, indicating strength versus longer-term trend despite the pre-news dip.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 01	AI security update	Positive	-3.4%	New MCP security capabilities in Netskope One for AI agent protection.
Nov 24	Governance/board	Positive	-2.3%	Added former U.S. government leaders to Federal Advisory Board.
Nov 18	Partnerships & AI	Positive	-2.9%	Expanded Microsoft security and AI integrations, generally available releases.
Nov 06	Earnings date	Neutral	-4.2%	Announced date and time for Q3 FY26 financial results call.
Oct 13	AI research	Positive	+7.8%	Published research on CEO‑CIO alignment and AI adoption trends.

Pattern Detected

Recent company-specific news has often been followed by negative next-day moves, even on seemingly positive announcements.

Recent Company History

Over the past six months, Netskope has issued several announcements around AI capabilities, partnerships, management/governance developments, and its earnings calendar. Notably, news on Nov 18, 2025 about expanded Microsoft integrations and on Dec 01, 2025 about MCP security features both preceded negative 24-hour price reactions despite strategic positives. A research release on Oct 13, 2025 was followed by a 7.77% gain. Today’s earnings update fits into a pattern of rapid growth alongside evolving market expectations.

Market Pulse Summary

The stock is up +5.5% following this news. A strong positive reaction aligns with Netskope’s rapid top-line growth and improving cash generation, as ARR reached $754 million with 34% year-over-year growth and Q3 revenue grew 33% to $184.2 million. The move would also reflect investor focus on positive free cash flow of $10.6 million and a cash and securities balance of $1.2 billion, while recognizing that large GAAP losses and stock-based compensation remain important risks to monitor.

Key Terms

annual recurring revenue financial

"Annual Recurring Revenue (ARR): ARR grew 34% year-over-year to $754 million"

Annual recurring revenue is the predictable amount of money a company expects to earn each year from ongoing customer subscriptions or contracts. It helps businesses understand how much steady income they can count on, much like a subscription service that charges customers every month or year. This figure is important because it shows the company's stability and growth potential.

remaining performance obligations financial

"Surpassed $1 billion in Remaining Performance Obligations, reflecting 41% year-over-year growth"

Remaining performance obligations are the work a company still needs to complete for its customers, like finishing a service or delivering a product. It’s important because it shows how much future income the company has coming in from current agreements, giving a clearer picture of its ongoing business.

free cash flow financial

"Q3 free cash flow was $10.6 million, representing a positive 6% free cash flow margin"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

initial public offering financial

"due primarily to the vesting of certain equity awards in conjunction with the initial public offering"

An initial public offering (IPO) is when a private company first sells its shares to the public and becomes a stock-listed company. It matters because it allows the company to raise money from a wide range of investors, helping it grow, while giving early shareholders a way to sell some of their ownership.

restricted stock unit financial

"Multiple restricted stock unit (RSU) awards vested (code M), delivering Class B Common Stock"

A restricted stock unit is a promise from a company to give an employee shares of stock after certain conditions are met, like staying with the company for a set amount of time. It’s like earning a bonus that turns into company stock once you’ve proven your commitment, making it a way to motivate and reward employees.

AI-generated analysis. Not financial advice.

• 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, Calif., Dec. 11, 2025 (GLOBE NEWSWIRE) -- 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.

About Netskope

Netskope (NASDAQ: NTSK), a leader in modern security and networking for the cloud and AI era, addresses the needs of both security and networking teams by providing optimized access and real-time, context-based security for people, devices, and data anywhere they go. Thousands of customers, including more than 30 of the Fortune 100, trust the Netskope One platform, its Zero Trust Engine, and its powerful NewEdge network to reduce risk and gain full visibility and control over cloud, AI, SaaS, web, and private applications—providing security and accelerating performance without trade-offs. Learn more at netskope.com, on LinkedIn, and Instagram.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including, but not limited to, statements regarding our future financial and operating performance, including our GAAP and non-GAAP guidance and financial outlook for the fourth quarter of fiscal 2026 and full year fiscal 2026. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including but not limited to: macroeconomic influences and instability, geopolitical events, operations and financial results and the economy in general; risks associated with scaling our business and managing our rapid growth; our ability to expand our partner relationships; our ability to identify and effectively implement the necessary changes to address execution challenges; our limited experience with new products and the risks associated with new product offerings, including adoption by customers and the discovery of software bugs; our ability to attract and retain new customers; the failure to timely develop and achieve market acceptance of new products as well as existing products; rapidly evolving technological developments in the market for security, networking and analytics products and our ability to innovate and remain competitive; length of sales cycles; risks related to the use of AI in our platform; and general market, political, economic and business conditions, as well as those risks and uncertainties included in filings we make with the Securities and Exchange Commission from time to time.

All forward-looking statements in this press release are based on information available to Netskope as of the date hereof, and we undertake no obligation to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.

Non-GAAP Financial Measures

In addition to GAAP financial measures, this press release includes non-GAAP financial measures that we use to evaluate our business performance, identify trends affecting our business, formulate business plans and make strategic decisions. These non-GAAP financial measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow and free cash flow margin, and their respective definitions are presented below.

There are limitations to the non-GAAP financial measures included in this press release, and they may not be comparable to similarly titled measures of other companies. The non-GAAP financial measures included in this press release should not be considered in isolation from or as a substitute for their most directly comparable GAAP financial measures. Our management believes that our non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our ongoing core operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and when planning, forecasting and analyzing future periods.

For a reconciliation of the non-GAAP financial measures presented for historical periods to their most directly comparable GAAP financial measures, please see the tables captioned "Reconciliation of GAAP to Non-GAAP Financial Information" included at the end of this press release. We encourage you to review the reconciliation in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items and may include other expenses, costs and non-recurring items.

Non-GAAP Gross Profit and Non-GAAP Gross Margin

We define non-GAAP gross profit as GAAP gross profit excluding stock-based compensation expense and related taxes, and amortization of acquired intangible assets. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.

Non-GAAP Loss from Operations and Non-GAAP Operating Margin

We define non-GAAP loss from operations as GAAP loss from operations excluding stock-based compensation expense and related taxes, amortization of acquired intangible assets, and acquisition-related expense We define non-GAAP operating margin as non-GAAP loss from operations as a percentage of revenue.

Non-GAAP Net Loss

We define non-GAAP net loss as GAAP net loss adjusted to exclude stock-based compensation expense and related taxes, amortization of acquired intangible assets, acquisition-related expense, gain/loss on fair value change in convertible notes, and non-GAAP provision for (benefit from) income taxes.

Non-GAAP Net Loss Per Share

We define non-GAAP net loss per share as GAAP net loss per share, adjusted to exclude stock-based compensation expense and related taxes, amortization of acquired intangible assets, acquisition-related expense, gain/loss on fair value change in convertible notes, and non-GAAP provision for (benefit from) income taxes.

Free Cash Flow and Free Cash Flow Margin

We define free cash flow as net cash provided by (used in) operating activities less purchase of property and equipment and intangible assets and capitalized internal-use software. Free cash flow margin is determined by dividing free cash flow by revenue. We believe free cash flow and free cash flow margin serve as valuable indicators of liquidity, as it provides our management, board of directors, and investors with insight into our ability to generate cash from our operations, strategic initiatives, and strengthening our balance sheet.

Investor Relations Contact:
Michelle Spolver
IR@netskope.com

Media Contact:
Tim Whitman
press@netskope.com

NETSKOPE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
	October 31,				January 31,
		2025				2025
Assets
Current assets:
Cash and cash equivalents	$	984,652			$	166,012
Marketable securities		168,251				80,679
Accounts receivable, net		131,534				195,100
Inventories		5,377				5,763
Deferred contract acquisition costs		48,813				42,860
Prepaid expenses and other current assets		63,213				37,991
Total current assets		1,401,840				528,405
Property and equipment, net		89,544				99,480
Operating lease right-of-use assets		32,816				34,571
Intangible assets, net		23,895				37,242
Goodwill		61,083				61,083
Deferred contract acquisition costs, noncurrent		89,188				78,805
Other assets, noncurrent		16,670				18,920
Total assets	$	1,715,036			$	858,506
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	16,430			$	2,652
Accrued compensation and benefits		77,471				62,781
Deferred revenue		471,455				430,156
Operating lease liabilities, current		10,124				10,267
Accrued expenses and other current liabilities		27,505				20,852
Total current liabilities		602,985				526,708
Deferred revenue, noncurrent		148,426				160,151
Convertible notes		780,365				626,622
Operating lease liabilities, noncurrent		24,492				25,808
Other liabilities, noncurrent		7,737				4,806
Total liabilities		1,564,005				1,344,095
Stockholders’ equity (deficit):
Convertible preferred stock		-				1,050,561
Common stock		-				10
Class A common stock		5				-
Class B common stock		34				-
Additional paid-in capital		2,796,530				418,791
Accumulated other comprehensive loss		(73,408	)			(5,439	)
Accumulated deficit		(2,572,130	)			(1,949,512	)
Total stockholders’ equity (deficit)		151,031				(485,589	)
Total liabilities and stockholders’ equity (deficit)	$	1,715,036			$	858,506

NETSKOPE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
	Three Months Ended October 31,								Nine Months Ended October 31,
		2025				2024				2025				2024
Revenue	$	184,173			$	138,532			$	512,667			$	389,782
Cost of revenue(1)		77,530				46,765				173,267				141,209
Gross profit		106,643				91,767				339,400				248,573
Operating expenses:
Sales and marketing(1)		149,869				65,765				297,295				217,391
Research and development(1)		262,702				62,402				403,439				192,758
General and administrative(1)		141,042				17,434				176,959				52,989
Total operating expenses		553,613				145,601				877,693				463,138
Loss from operations		(446,970	)			(53,834	)			(538,293	)			(214,565	)
Other income (expense), net:
Loss on changes in fair value of convertible notes		(8,439	)			(18,125	)			(85,841	)			(63,249	)
Other income, net		5,407				711				9,529				3,469
Loss before provision for income taxes		(450,002	)			(71,248	)			(614,605	)			(274,345	)
Provision for (benefit from) income taxes		3,073				(505	)			8,013				3,127
Net loss	$	(453,075	)		$	(70,743	)		$	(622,618	)		$	(277,472	)
Net loss per share attributable to common stockholders, basic and diluted	$	(1.85	)		$	(0.72	)		$	(4.07	)		$	(2.89	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted		244,659,095				98,265,450				153,012,468				95,875,697
(1)Includes stock-based compensation expense as follows:
Cost of revenue	$	28,018			$	589			$	28,945			$	1,930
Sales and marketing		71,845				4,135				78,304				14,667
Research and development		190,082				5,878				198,881				18,738
General and administrative		120,527				1,711				121,984				4,318
Total stock-based compensation expense	$	410,472			$	12,313			$	428,114			$	39,653

NETSKOPE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
	Nine Months Ended October 31,
		2025				2024
Cash flows from operating activities
Net loss	$	(622,618	)		$	(277,472	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation expense		428,114				39,653
Depreciation and amortization		35,791				39,861
Amortization of deferred contract acquisition costs		39,419				33,198
Non-cash operating lease expenses		10,032				8,886
(Accretion of discount) amortization of premium on investments, net		(552	)			(1,547	)
Change in fair value of convertible notes		85,841				63,249
Deferred income tax benefit		-				(2,254	)
Other		230				777
Changes in operating assets and liabilities:
Accounts receivable, net		63,566				(12,481	)
Inventories		149				29
Deferred contract acquisition costs		(55,755	)			(43,503	)
Prepaid expenses and other current assets		(20,164	)			927
Other non-current assets		2,251				(675	)
Accounts payable		13,359				4,746
Accrued compensation and benefits		8,121				4,969
Operating lease liabilities		(9,736	)			(9,515	)
Accrued expenses and other current liabilities		9,397				(4,467	)
Deferred revenue		29,574				37,753
Other non-current liabilities		2,931				1,068
Net cash provided by (used in) operating activities		19,950				(116,798	)
Cash flows from investing activities
Purchases of property and equipment		(9,563	)			(32,437	)
Capitalized internal-use software		(1,990	)			(2,579	)
Purchases of intangible assets		-				(3,337	)
Payments for business combination, net of cash acquired		-				(2,508	)
Purchases of marketable securities		(197,145	)			(40,636	)
Proceeds from maturities of marketable securities		63,601				120,514
Proceeds from sales of marketable securities		46,454				-
Net cash (used in) provided by investing activities		(98,643	)			39,017
Cash flows from financing activities
Proceeds from issuance of common stock upon initial public offering, net of underwriting discount and commissions		992,209				-
Payments for deferred offering costs		(6,320	)			-
Proceeds from issuance of common stock upon exercise of stock options		31,174				22,743
Proceeds from issuance of convertible senior notes, net of issuance cost		-				74,355
Payments for taxes upon net share settlement of equity awards		(117,205	)			-
Payments for holdback on business combination		(2,524	)			-
Net cash provided by financing activities		897,334				97,098
Net increase in cash, cash equivalents, and restricted cash		818,641				19,317
Cash, cash equivalents, and restricted cash, beginning of period		167,197				165,770
Cash, cash equivalents, and restricted cash, end of period	$	985,838			$	185,087

NETSKOPE, INC.
RECONCILIATION OF GAAP to NON-GAAP FINANCIAL INFORMATION
(in thousands, except percentages and per share data)
(unaudited)
	Three Months Ended October 31,								Nine Months Ended October 31,
		2025				2024				2025				2024
Gross profit reconciliation:
Gross profit	$	106,643			$	91,767			$	339,400			$	248,573
Stock-based compensation expense and related taxes		28,602				589				29,543				1,930
Amortization of acquired intangible assets		2,341				5,174				12,016				14,645
Non-GAAP gross profit	$	137,586			$	97,530			$	380,959			$	265,148
Gross margin		58	%			66	%			66	%			64	%
Non-GAAP gross margin		75	%			70	%			74	%			68	%
Sales and marketing expense reconciliation:
Sales and marketing expense	$	149,869			$	65,765			$	297,295			$	217,391
Stock-based compensation expense and related taxes		(73,680	)			(4,143	)			(80,461	)			(14,757	)
Amortization of acquired intangible assets		(280	)			(421	)			(1,330	)			(1,178	)
Non-GAAP sales and marketing expense	$	75,909			$	61,201			$	215,504			$	201,456
Sales and marketing expense as a percentage of revenue		81	%			47	%			58	%			56	%
Non-GAAP sales and marketing expense as a percentage of revenue		41	%			44	%			42	%			52	%
Research and development expense reconciliation:
Research and development expense	$	262,702			$	62,402			$	403,439			$	192,758
Stock-based compensation expense and related taxes		(192,612	)			(5,884	)			(201,474	)			(18,783	)
Amortization of acquired intangible assets		-				-				-				(70	)
Non-GAAP research and development expense	$	70,090			$	56,518			$	201,965			$	173,905
Research and development expense as a percentage of revenue		143	%			45	%			79	%			49	%
Non-GAAP research and development expense as a percentage of revenue		38	%			41	%			39	%			45	%
General and administrative expense reconciliation:
General and administrative expense	$	141,042			$	17,434			$	176,959			$	52,989
Stock-based compensation expense and related taxes		(121,285	)			(1,711	)			(122,743	)			(4,318	)
Acquisition related expense		-				(443	)			-				(460	)
Non-GAAP general and administrative expense	$	19,757			$	15,280			$	54,216			$	48,211
General and administrative expense as a percentage of revenue		77	%			13	%			35	%			14	%
Non-GAAP general and administrative expense as a percentage of revenue		11	%			11	%			11	%			12	%
Loss from operations reconciliation:
Loss from operations	$	(446,970	)		$	(53,834	)		$	(538,293	)		$	(214,565	)
Stock-based compensation expense and related taxes		416,179				12,327				434,221				39,788
Acquisition related expense		-				443				-				460
Amortization of acquired intangible assets		2,621				5,595				13,346				15,893
Non-GAAP loss from operations	$	(28,170	)		$	(35,469	)		$	(90,726	)		$	(158,424	)
Operating margin		(243	)%			(39	)%			(105	)%			(55	)%
Non-GAAP operating margin		(15	)%			(26	)%			(18	)%			(41	)%
Net loss reconciliation:
Net loss	$	(453,075	)		$	(70,743	)		$	(622,618	)		$	(277,472	)
Stock-based compensation expense and related taxes		416,179				12,327				434,221				39,788
Acquisition related expense		-				443				-				460
Amortization of acquired intangible assets		2,621				5,595				13,346				15,893
Loss on fair value change in convertible notes		8,439				18,125				85,841				63,249
Provision for (benefit from) income taxes		364				(2,239	)			364				(2,239	)
Non-GAAP net loss	$	(25,472	)		$	(36,492	)		$	(88,846	)		$	(160,321	)
Basic and diluted EPS reconciliation:
Net loss per share, basic and diluted	$	(1.85	)		$	(0.72	)		$	(4.07	)		$	(2.89	)
Stock-based compensation expense and related taxes		1.70				0.13				2.84				0.41
Acquisition related expense		-				-				-				-
Amortization of acquired intangible assets		0.01				0.06				0.09				0.17
Loss on fair value change in convertible notes		0.04				0.18				0.56				0.66
Provision for (benefit from) income taxes		-				(0.02	)			-				(0.02	)
Non-GAAP net loss per share, basic and diluted	$	(0.10	)		$	(0.37	)		$	(0.58	)		$	(1.67	)
Note: Certain figures may not sum due to rounding.

NETSKOPE, INC.
SELECTED CASH FLOW INFORMATION
(in thousands, except percentages)
(unaudited)
	Three Months Ended October 31,								Nine Months Ended October 31,
		2025				2024				2025				2024
Reconciliation of cash provided by (used in) operating activities to free cash flow
Net cash provided by (used in) operating activities	$	11,236			$	(10,884	)		$	19,950			$	(116,798	)
Purchase of property and equipment and intangible assets		(525	)			(15,999	)			(9,563	)			(35,774	)
Capitalized internal-used software		(117	)			(1,761	)			(1,990	)			(2,579	)
Free cash flow	$	10,594			$	(28,644	)		$	8,397			$	(155,151	)
Net cash (used in) provided by investing activities	$	(118,247	)		$	(14,665	)		$	(98,643	)		$	39,017
Net cash provided by financing activities	$	880,853			$	83,523			$	897,334			$	97,098
Operating cash flow margin		6	%			(8	)%			4	%			(30	)%
Free cash flow margin		6	%			(21	)%			2	%			(40	)%
Note: Certain figures may not sum due to rounding.

FAQ

What were Netskope's Q3 2026 revenue and ARR (NASDAQ:NTSK)?

Q3 revenue was $184.2M and ARR was $754M as of October 31, 2025.

How much cash did Netskope (NTSK) have at the end of Q3 2026?

Total cash, cash equivalents and marketable securities were $1.2B at quarter end.

What drove Netskope's large GAAP operating loss in Q3 2026?

The GAAP operating loss of $447.0M was primarily due to significant stock-based compensation expense.

How much free cash flow did Netskope generate in Q3 fiscal 2026?

Free cash flow for Q3 was $10.6M, representing a positive 6% free cash flow margin.

What is Netskope's Q4 2026 revenue guidance (NTSK)?

Q4 revenue is guided to be $188M to $190M for fiscal 2026.

How much did Netskope raise in its September IPO?

Netskope raised $992.2M of net proceeds from its IPO in September 2025.