Netskope (NASDAQ:NTSK) shares rose 11.3% to $15.30 in premarket trading after the cloud and AI security company reported fiscal second-quarter 2027 revenue and adjusted earnings above analyst expectations.
Revenue for the quarter ended July 31, 2026 increased 29% year over year to $221 million, compared with the Wall Street consensus estimate of $214.2 million.
Netskope reported an adjusted loss of $0.03 per share, narrower than the $0.07 per-share loss expected by analysts.
Annual Recurring Revenue Reaches $899 Million
Annual recurring revenue increased 27% year over year to $899 million, while remaining performance obligations rose 36% to $1.35 billion.
Net revenue retention increased to 114%.
Netskope provides security, networking and AI capabilities through its Netskope One platform.
Non-GAAP Operating Margin Improves
Netskope reported a non-GAAP operating margin of negative 9%, an improvement of 11 percentage points from the prior-year period.
The result compared with the company’s guidance for a negative operating margin of between 14% and 15%.
Non-GAAP gross margin was 77% during the quarter.
Netskope Raises FY2027 Revenue Guidance
Management increased its full-year fiscal 2027 revenue forecast to between $888 million and $892 million.
The company also forecast a positive free-cash-flow margin of approximately 2% for the full year.
Following the quarterly report, RBC Capital analyst Matthew Hedberg raised his price target on Netskope shares to $18 from $13 while maintaining an Outperform rating.
Netskope Shares Trade at $15.30 Premarket
The broader US equity market showed limited movement, with the S&P 500 broadly unchanged and the Nasdaq slightly lower.
The source material identified Palo Alto Networks and Zscaler as peers in the cybersecurity sector that were also reporting quarterly results around the same period.
Netskope’s premarket increase took its shares to $15.30, compared with an opening price of $13.94 and a 52-week high of $27.99.