Netskope Inc (NTSK)

Price$17.69Cached quoteAs of 2026-10-01 18:04 UTC

AI: Overvalued

Price checkNetskope remains expensive because investors pay heavily for growth before durable profits have arrived.

The company is valued near $5.7 billion, while fiscal 2027 revenue guidance is $879-$883 million, putting the valuation at roughly six times forward sales after adjusting for liquidity. Management still expects a non-adjusted operating loss, while its adjusted operating margin is guided near negative 10% and free-cash-flow margin at only 2%-4%. Revenue growth near 25% is attractive, but a value investor is paying today for several years of successful margin expansion. That leaves little margin of safety if growth slows.

Big pictureRecurring security demand is growing quickly, but strong competition makes continued rapid expansion essential.

First-quarter revenue increased 28% to $202 million and annual recurring revenue reached $845 million, up 29% year over year. Customer retention also remains healthy, with net retention around 113%, meaning existing customers collectively spend more over time. Security for cloud applications and artificial-intelligence use can remain important even during weaker economic conditions. However, Netskope competes directly with larger security-platform vendors, so maintaining premium growth requires continued customer wins rather than merely benefiting from an expanding cybersecurity market.

Business strengthLiquidity is substantial, but negative cash flow and unusually high stock compensation weaken shareholder economics.

The April filing reported about $1.10 billion of cash and marketable securities against roughly $713 million of convertible notes, providing meaningful financial runway. However, first-quarter free cash flow was negative $57 million versus positive $17 million a year earlier. Stock compensation was about $77 million in the quarter, nearly two-fifths of revenue, and shares outstanding continued rising after the IPO. The supplied history likewise shows rapidly expanding losses and share counts despite improving revenue and prior financing proceeds.

What could change the storyFaster margin improvement could justify the valuation, while slower growth would make the shares look much dearer.

The bull case requires Netskope to sustain revenue and recurring-revenue growth near the mid-20% range while converting its roughly 77% adjusted gross margin into positive operating earnings and substantially stronger free cash flow. If that happens quickly, today's sales multiple can compress as revenue grows. The bear case is more demanding: growth falling toward the mid-teens while adjusted operating losses, heavy stock compensation and dilution persist. At roughly six times forward sales, the current valuation assumes meaningful progress toward profitability rather than merely continued top-line expansion.

AI: News

First-quarter cash-flow shockFast revenue growth was overshadowed by sharply weaker cash flow, triggering a major share-price decline.

On June 3, Netskope reported first-quarter revenue growth of 28% and recurring revenue growth of 29%, both strong results. However, free cash flow swung to negative $57.2 million from positive $17.5 million a year earlier, while the company remained loss-making. Shares closed about 19% lower on June 4 despite beating analyst sales and adjusted earnings expectations. The reaction is consistent with investors focusing on cash generation and the cost of growth, though price timing alone cannot prove a single cause.

Post-earnings lockup overhangStrong fourth-quarter growth failed to reassure investors as losses and a huge potential share supply remained visible.

On March 11, Netskope reported 32% fourth-quarter revenue growth and 31% recurring-revenue growth, but fiscal 2027 guidance still implied an adjusted operating margin around negative 10%. The company also disclosed that roughly 390 million Class A-equivalent shares could become eligible for public sale when its IPO lockup expired shortly afterward. Shares fell more than 20% in the next session. The selloff coincided with both the earnings outlook and looming supply increase, so their individual effects cannot be separated reliably.

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Revenue

2024

2025

2026

Net income

2024

2025

2026

Free cash flow

2024

2025

2026

Total cash / debt

CashTotal debt

2024

2025

2026

Financial statements

	2026	2025	2024
Revenue	$709.0M	$538.3M	$406.9M
Gross profit	$482.7M	$347.9M	$243.3M
Gross margin	68.08%	64.63%	59.78%
Research & development	$509.0M	$254.2M	$224.5M
Operating expenses	$1.14B	$603.6M	$556.0M
Operating income	−$652.6M	−$255.7M	−$312.8M
Operating margin	−92.04%	−47.51%	−76.88%
EBITDA	−$606.7M	−$204.2M	−$263.3M
EBITDA margin	−85.57%	−37.94%	−64.70%
Net income	−$679.4M	−$354.5M	−$344.9M
Net profit margin	−95.82%	−65.86%	−84.75%
Basic EPSper basic share	-$3.18	-$3.64	-$3.77
Diluted EPSper diluted share	-$3.18	-$3.64	-$3.77

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

≈26.32%of listed shares

ICONIQ Capital, LLC66.27M shares · Jun 30, 2026

View holders

Top 20 reported holders of NTSK
Holder	% owned
ICONIQ Capital, LLC	≈26.32%66.27M shares
ICONIQ Strategic Partners II GP, L.P. / ICONIQ Strategic Partners VI GP, L.P. / ICONIQ Strategic Partners II Co-Invest, L.P. (Series NS) / ICONIQ Strategic Partners VI, L.P. / ICONIQ STRATEGIC PARTNERS II, L.P. / ICONIQ Strategic Partners VI-B, L.P. / ICONIQ Strategic Partners VI Co-Invest, L.P. (Series NS) / ICONIQ Strategic Partners II TT GP, Ltd / ICONIQ STRATEGIC PARTNERS II-B, L.P. / ICONIQ Strategic Partners VI TT GP, Ltd.	≈26.32%66.27M shares
Griffith William J.G.	≈26.32%66.27M shares
BlackRock, Inc.	≈3.69%9.3M shares
CANADA PENSION PLAN INVESTMENT BOARD	≈3.56%8.96M shares
VANGUARD CAPITAL MANAGEMENT LLC	≈3.04%7.64M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	≈2.91%7.32M shares
Penserra Capital Management LLC	≈2.66%6.7M shares
SAPPHIRE VENTURES, L.P.	≈2.00%5.04M shares
BAMCO INC /NY/	≈1.81%4.57M shares
FIRST TRUST ADVISORS LP	≈1.68%4.24M shares
MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd.	≈1.64%4.12M shares
CITIGROUP INC	≈1.56%3.93M shares
VOYA INVESTMENT MANAGEMENT LLC	≈1.45%3.64M shares
MILLENNIUM MANAGEMENT LLC	≈1.40%3.52M shares
Public Sector Pension Investment Board	≈1.37%3.45M shares
CROSSLINK CAPITAL INC	≈1.33%3.35M shares
TimesSquare Capital Management, LLC	≈1.21%3.06M shares
BNP PARIBAS FINANCIAL MARKETS	≈1.10%2.77M shares
JACOBS LEVY EQUITY MANAGEMENT, INC	≈0.98%2.46M shares

Percentages use 251.82M shares of this listed class outstanding on May 26, 2026. ≈ compares the latest reported holding with a share total from a different date; it is not a confirmed current stake.

Reported positions exceed 100% in total, so the circle shows the selected holder only.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys12$114.00M disclosed value

Sells (SEC code S)18$63.32M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 15, 2026Form 4	Janmohamed ArifDirector	SellClass A Common Stock · indirect	336.2K	$9.00	$3.03M	0
Jun 15, 2026Form 4	Lightspeed Venture Partners Select II, L.P. +8TenPercentOwner	SellClass A Common Stock · indirect	336.2K	$9.00	$3.03M	0
Jun 15, 2026Form 4	Lightspeed General Partner XII, L.P. +8TenPercentOwner	SellClass A Common Stock · indirect	336.2K	$9.00	$3.03M	0
Jun 12, 2026Form 4	Janmohamed ArifDirector	SellClass A Common Stock · indirect	1.31M	$9.19	$12.07M	336.2K
Jun 12, 2026Form 4	Lightspeed Venture Partners Select II, L.P. +8TenPercentOwner	SellClass A Common Stock · indirect	1.31M	$9.19	$12.07M	336.2K

Review ownership filings at SEC.gov ↗

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Netskope Inc (NTSK)

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