Netskope (NTSK) Q3 2026 earnings summary

Executive summary

• Achieved 34% year-over-year ARR growth to $754M and 33% revenue growth to $184.2M in Q3 FY26, with three consecutive quarters of ARR growth acceleration and major customer wins across multiple geographies and verticals.

• Net Retention Rate reached 118%, driven by cross-sell and upsell, with over 85% of ARR from $100K+ customers and strong multi-product adoption.

• Completed IPO in September 2025, raising $992.2M in net proceeds and converting all preferred stock to common stock, resulting in a one-time stock-based compensation expense.

• Recognized as a leader in SASE, SSE, and SD-WAN by Gartner, Forrester, IDC, and GigaOm, with continued innovation in AI security, data protection, and networking.

• Expanded global network and launched new AI-powered security features, with significant white space for further platform adoption.

Financial highlights

• Q3 revenue was $184.2M, up 33% year-over-year; ARR reached $754M, up 34%; Americas and EMEA both grew 34%, APJ 29%.

• Q3 non-GAAP gross margin was 75%, up 5 percentage points year-over-year; GAAP gross margin was 58%.

• Free cash flow was $11M in Q3 (6% margin), marking the first time achieving positive TTM FCF, with over $200M improvement year-over-year.

• Q3 GAAP net loss was $453.1M (net loss per share: $1.85), primarily due to IPO-related stock-based compensation; non-GAAP net loss per share was $0.10.

• Ended Q3 with $1.2B in cash, cash equivalents, and marketable securities, including $992.2M in IPO proceeds.

Outlook and guidance

• Q4 FY26 revenue expected at $188M–$190M (27%–28% growth), non-GAAP operating margin of -14% to -13%, and non-GAAP net loss per share of $0.05–$0.07.

• FY26 revenue guidance of $701M–$703M (30%–31% growth), non-GAAP gross margin ~75%, non-GAAP operating margin -17% to -16.5%, and non-GAAP net loss per share $0.53–$0.51.

• FY26 free cash flow projected at $5M–$8M.

• Management expects continued revenue growth driven by customer expansion and retention, with ongoing investment in R&D and go-to-market.

• Expects long-term improvement in gross and operating margins as scale and efficiencies are realized.