Netskope Inc

The cloud and AI have completely revolutionized work. We are more dispersed, more productive, and more automated than ever before, and the rate of change is only accelerating. Not since the internet has there been such a transformative tectonic shift. But, with it has come collateral damage—traditional security and networking are now broken.

We founded Netskope to address this revolution. We built Netskope One, our unified, cloud-native platform from the ground up to solve the challenge of securing and accelerating the digital interactions of enterprises in this new era. Organizations rely on our Netskope One platform to provide profound contextual intelligence into their data and digital interactions, securing them with precision, without sacrificing the digital experience. We leverage our patented technologies to enable dynamic, granular context-aware policies that allow us to protect sensitive data, stop threats, support regulatory compliance, and elevate the digital experience.

By converging advanced security and modern networking capabilities with deep analytics, based on our analysis of IDC data, we believe our unified solution addresses a large total addressable market that is projected to reach $138.9 billion by 2028, growing at a 16.8% compound annual growth rate ("CAGR") from 2024 to 2028, providing us with a sustained and durable opportunity. We believe we are in the early days of addressing the nascent market opportunity for AI security that we project will grow to $30.8 billion by 2028, contributing an incremental $9.9 billion to our estimated total addressable market by 2028.7

Organizations today operate in a digital landscape that is heterogeneous and highly connected. It is comprised of globally dispersed users and non-human entities such as devices, applications, automated systems, and AI agents that interact with each other and a plethora of managed and unmanaged Software-as-a-Service applications, websites, AI, private applications, and other ecosystem applications across data centers and private and public clouds. With this new digital landscape, enterprises need a security and networking platform that can handle these far more complex, distributed, and dynamic sets of connections—all with more advanced security measures—to keep the organization, its people, and its data safe.

7 See the section titled "Business—Our Market Opportunity" for a more detailed discussion of the assumptions underlying our estimate of the total addressable market for our unified solution and AI security.

Legacy appliance-based and first-generation cloud security solutions were designed for a legacy internet and data footprint, where simple rules-based threat detection and block-or-allow policies were sufficient. Moreover, traditional corporate networks were not designed to support the scale, flexibility, performance, and advanced security that is essential in the cloud and AI era.

Architecture is critical when addressing these challenges. Our Netskope One platform uses a unique architecture built from the ground up as a unified platform with a converged security, network, and analytics technology stack that runs on our NewEdge global private cloud network ("NewEdge network") to deliver highly secure and performant digital interactions. Our Netskope One platform deeply understands the dynamic "language" of the modern internet. This means enabling real-time contextual visibility into, and control over, an organization's traffic.

As the digital and threat landscape continues to evolve, we have grown rapidly since our inception. Our Annual Recurring Revenue ("ARR")8 increased 33% year-over-year to $707 million as of July 31, 2025, compared to $531 million as of July 31, 2024. Our revenue increased 31% year-over-year to $328 million for the six months ended July 31, 2025, compared to $251 million for the six months ended July 31, 2024. Net loss improved to $170 million for the six months ended July 31, 2025, compared to $207 million for six months ended July 31, 2024. Similarly, our ARR increased 30% year-over-year to $618 million as of January 31, 2025, compared to $475 million as of January 31, 2024. Our revenue grew 32% year-over-year to $538 million for fiscal 2025, compared to $407 million for fiscal 2024. Net loss increased to $355 million for fiscal 2025 from $345 million for fiscal 2024.

We have achieved strong retention metrics, as evidenced by our dollar-based net retention rate ("NRR")9, which increased to 118% as of July 31, 2025, compared to 113% as of July 31, 2024. In addition, our dollar-based gross retention rate ("GRR")10 increased to 96% as of July 31, 2025, compared to 95% as of July 31, 2024.

In recent periods, we have invested in research and development to drive rapid innovation, leveraging our core platform to serve our customers' needs and further strengthen our technology leadership. We have also invested in expanding our salesforce and channel partners to pursue attractive growth opportunities both domestically and internationally. Netskope is built to scale. As a result, our loss from operations improved to $91 million for the six months ended July 31, 2025 from $161 million for the six months ended July 31, 2024, while our non-GAAP loss from operations improved to $63 million for the six months ended July 31, 2025 from $123 million for the six months ended July 31, 2024. In addition, our loss from operations improved to $256 million in fiscal 2025 from $313 million in fiscal 2024, while our non-GAAP loss from operations improved to $181 million in fiscal 2025 from $229 million in fiscal 2024. For the five most recent fiscal quarters ended July 31, 2024, October 31, 2024, January 31, 2025, April 30, 2025, and July 31, 2025 our incremental operating margin was 12%, 83%, 85%, 108%, and 74%, while our incremental non-GAAP operating margin was 10%, 72%, 72%, 100%, and 58%, respectively.

8 We define Annual Recurring Revenue ("ARR") as the annualized value of our cloud subscription contracts that are active as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms. Provided that we are actively negotiating a renewal or new agreement with a customer after the expiration of a contract, we continue to include that contract's annualized value in ARR until the customer notifies us of their decision not to renew. ARR excludes non-recurring components of revenue such as professional services, training, sales of hardware, and other non-recurring revenue.

9 Our dollar-based Net Retention Rate ("NRR") reflects the percentage of our ARR from existing customers, inclusive of the effects of upsell, cross-sell, contraction, and churn. We calculate this by first determining the ARR of the cohort of customers established on the same date of the prior fiscal year (the "Prior Period ARR"). We then calculate the ARR from these same subscription customers as of the current period end (the "Current Period ARR"). Current Period ARR includes any expansion and is net of contraction and churn over the trailing 12 months, but excludes ARR from new customers. We then divide the Current Period ARR by the Prior Period ARR to arrive at our NRR.

10 Our dollar-based Gross Retention Rate ("GRR") reflects the percentage of ARR retained from existing customers, inclusive of the effects of churn. We calculate this by first determining the Prior Period ARR. We then deduct from the Prior Period ARR any ARR from subscription customers that are no longer active at the end of that reporting period over that year (the "Current Period Remaining ARR"). We then divide the total Current Period Remaining ARR by the total Prior Period ARR to arrive at our GRR. GRR includes the impact of customer losses but does not include the impact of customer expansion or contraction.

Our operating cash flow margin improved to 3% for the six months ended July 31, 2025 from (42%) for the six months ended July 31, 2024. See the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures" for information regarding our use of non-GAAP loss from operations and incremental non-GAAP operating margin and a reconciliation of non-GAAP loss from operations to loss from operations.

Our focus on innovation and dedication to customer experience has allowed us to achieve a number of key milestones. Our revenue has grown significantly over time as we have launched new products on our platform.