Netskope 2026 Q3 Earnings Beats Expectations Despite Widening Loss

Netskope (NTSK) reported fiscal 2026 Q3 earnings on Dec 11, 2025, with revenue surging 33% year-over-year to $184.17 million, exceeding estimates. The company narrowed its per-share loss to $1.85 from $0.72 in 2025 Q3, though net losses expanded to $453.07 million. Guidance for Q4 and FY2026 revenue growth aligned with expectations, while insider buying and AI-driven security optimism offset liquidity concerns.

Revenue

Netskope’s total revenue rose 32.9% to $184.17 million in Q3 2026, driven by robust performance in its channel partners segment, which contributed $175.23 million. Direct end customers added $8.94 million, reflecting a strategic focus on expanding through distribution networks while maintaining core client relationships.

Earnings/Net Income

The company’s losses deepened to $1.85 per share in Q3 2026, a 156.9% increase in per-share losses compared to 2025 Q3. Net losses widened to $453.07 million, a 540.5% rise year-over-year, primarily due to IPO-related stock compensation expenses and operational scaling. Despite the revenue beat, the earnings performance underscores ongoing profitability challenges.

Price Action

Netskope’s stock gained 3.66% in the latest trading day, 19.41% for the week, and 4.44% month-to-date, reflecting investor optimism amid strong revenue growth and strategic AI investments.

Post-Earnings Price Action Review

The strategy of buying NTSK when revenue misses and holding for 30 days showed a positive result. Here’s a detailed analysis: Recent Performance: Netskope’s Q3 revenue surged 33% to $184.2 million, surpassing the $176.05 million estimate, driven by strong adoption of its AI-native security platform. Insider Activity: Three insider purchases totaling 6 million shares over three months signal confidence in long-term growth. Market Sentiment: Despite the revenue beat, a P/S ratio near its one-year high raises overvaluation concerns. Analysts remain cautiously optimistic, with a $26.92 target price and a “moderate buy” rating. Financial Health: Liquidity risks persist, with a current ratio of 0.92 and a debt-to-equity ratio of -1.2. Historical data on post-miss strategies remains inconclusive. In conclusion, while revenue strength and insider buying are positive, financial metrics and valuation caution suggest a balanced approach.

CEO Commentary

CEO Sanjay Beri highlighted 34% YoY ARR growth to $754 million and 33% revenue growth, driven by cloud and AI adoption. He emphasized the Netskope One platform’s 118% net retention and 53% multi-product adoption, underscoring strategic priorities in AI-driven security and global expansion.

Guidance

Netskope expects Q4 FY26 revenue of $188–190 million (27% growth) and full-year revenue of $701–703 million (30% growth). Operating margins are projected at -13% to -14% for Q4 and -16.5% to -17% for FY26, with net loss per share of $0.05–$0.07 and $0.51–$0.53, respectively. Free cash flow guidance stands at $5–8 million for FY26.

Additional News

Netskope raised $992.2 million via its September IPO, bolstering $1.2 billion in liquidity. The company advanced AI security with Model Context Protocol (MCP) capabilities and expanded its U.S. Federal Advisory Board with former government leaders. Strategic partnerships with Microsoft were deepened to enhance enterprise cloud and AI security solutions.