Netskope (NTSK) Q2 Fiscal 2027 Earnings Call: ARR Up 27%, Revenue Guidance Raised
Source Tradingkey
Key takeaways
- Netskope ended Q2 fiscal 2027 with ARR of $899 million, up 27% year over year. Net new ARR reached $54 million, up 9%.
- Revenue increased 29% to $220.5 million, ahead of the company’s guidance. Regional revenue grew 37% in EMEA, 31% in APJ and 25% in the Americas.
- Non-GAAP operating margin improved by 11 percentage points year over year to negative 9%. Gross margin rose approximately 2 percentage points to 77%.
- Net retention rate increased to 114%, while RPO grew 36% to $1.35 billion. The number of customers generating more than $100,000 in ARR rose 23%.
- Management raised full-year fiscal 2027 revenue guidance to $888 million-$892 million and maintained an outlook for a positive free cash flow margin of approximately 2%.
- Netskope said approximately one-third of its AI security pipeline is in or entering proof-of-concept stages. Management expects the normal enterprise sales process to take six to 12 months, with more conversions weighted toward the second half, particularly Q4.
Key financial data
| Metric | Q2 fiscal 2027 result | Change or context |
|---|---|---|
| ARR | $899 million | Up 27% year over year |
| Net new ARR | $54 million | Up 9% year over year |
| Revenue | $220.5 million | Up 29% year over year; ahead of company guidance |
| RPO | $1.35 billion | Up 36% year over year |
| Net retention rate | 114% | Increased during Q2 |
| Gross margin | 77% | Up approximately 2 percentage points year over year; non-GAAP |
| Operating margin | Negative 9% | Improved 11 percentage points year over year; non-GAAP |
| Net loss per share | $0.03 | Based on 405 million weighted-average shares; non-GAAP |
| Free cash flow | Negative $29.8 million | Slightly ahead of management’s expectations |
| Cash, cash equivalents and marketable securities | $1.1 billion | Balance at quarter-end |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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