Netskope Reports Q1 FY27 Results with Strong Revenue Growth, Improved Gross Margin, and Shift to Negative Operating Cash Flow
NTSK sits 29% above its 52-week low of $7.665 on elevated volume (2.8× avg).
Summary
Netskope reported strong Q1 FY27 revenue growth of 28% and improved gross margins, but net loss increased and operating cash flow turned negative due to IPO-related stock compensation and billing changes. The company maintains over $1.1 billion in liquidity.
Key Events · Earnings and Guidance · NTSK
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Strong Revenue Growth
Revenue increased by 28% year-over-year to $201.6 million for the three months ended April 30, 2026, driven by new customer acquisition and expansion within existing customers.
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Improved Gross Margin
Gross margin expanded to 74% from 69% in the prior year, reflecting enhanced operational efficiencies in managing global data centers and cloud infrastructure.
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Increased Net Loss, Improved EPS
Net loss increased to $116.5 million from $79.2 million year-over-year. However, net loss per share improved significantly to $(0.29) from $(0.76), primarily due to a substantial increase in weighted-average shares outstanding following the IPO.
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Shift to Negative Operating Cash Flow
Operating cash flow turned negative to $(53.9) million from a positive $25.6 million in the prior year, mainly due to a transition to annual billing for multi-year contracts and higher compensation payments.
Analysis · NTSK · Technology
Netskope's first-quarter fiscal year 2027 results show robust revenue growth and improved gross margins, indicating strong business performance. However, the company experienced a significant increase in net loss and a shift to negative operating and free cash flow. This is largely attributed to a substantial rise in stock-based compensation expenses following its IPO and a transition from upfront collections for multi-year contracts to annual billing arrangements. Despite the negative cash flow, Netskope maintains a strong liquidity position with over $1.1 billion in cash and marketable securities, and a solid backlog of $1.2 billion in remaining performance obligations.
At the time of this filing, NTSK was trading at $9.90 on NASDAQ in the Technology sector, with a market capitalization of approximately $5B. The 52-week trading range was $7.67 to $27.99. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.