Sep 2, 2026 earnings call — Netskope highlights AI security and platform momentum
Q2 revenue grew 29% to $220.5 million and ARR reached $899 million with NRR at 114%.
Revenue $0.2B (est $0.2B) · EPS $-0.03 (est $-0.07)
Key quotes
"They want to capture the enormous potential of one of the most defining technologies of our lifetime without compromising security, performance or control."
"Netskope uniquely delivers this modern, scalable, resilient and sovereign real-time architecture through the combination of our Netskope One platform and NewEdge Private Cloud network."
"Q2 operating margin was negative 9%, an impressive 11 percentage point improvement compared to Q2 of last year and significantly ahead of our guidance."
Analyst Q&A 11
ARR growth drivers and AI timing
Q (Simran Biswal · RBC): Analyst asked which factors could drive ARR acceleration and specifics on AI contribution and why the company is well positioned for AI.
A: Management said the AI security pipeline is strong and many deals are expected in the back half of the year, with rep ramping (about 50% ramped now) increasing later in EMEA and APJ then North America. They noted many AI products are in POC now and follow a typical 6- to 12-month enterprise buying cycle toward closing in the back half of the year.
"And one of the key areas for us is not only the product innovation but continuing to grow that rep ramping count." — Sanjay Beri (CEO)
(No management answer)
Q (Jonathan Ho · William Blair): Analyst tried to ask but had a brief greeting and then disconnected.
A: The analyst's line disconnected and there is no management answer recorded in this exchange.
Which AI products customers like most
Q (Deutsche Bank): Analyst asked which AI security products are resonating in POCs and whether the new capabilities open doors with new prospects. Also asked about drivers of net new ARR increase.
A: Management said customers focus on use cases and highlighted Agentic Broker and Guardrails as the most resonant products, with AI Command Center also important over time. For net new ARR, management said overall strong demand and some AI deals drove the uptick, with AI funnel remaining strong.
"Agentic Broker. That is your way to understand agentic use, and then enforce policy because we're not a visibility platform." — Sanjay Beri (CEO)
Quantum-proof encryption and federal market
Q (Jonathan Ho · William Blair): Analyst asked about the quantum-proof cryptography capability and whether it opens opportunities; also asked for an update on federal government/FedRAMP and zero trust opportunities.
A: Management said they implemented lattice-based, quantum-resilient encryption so customers can already communicate to Netskope securely and be future-ready, which helps in POCs and supports high POC win rates above 80%. On federal, they said they are FedRAMP High certified, building a federal sales team, and see federal as a small but important and growing part of the business.
"We're using Lattice-based encryption, which is pretty much the standard that NIST recommends." — Sanjay Beri (CEO)
POC timing to purchase and AI monetization
Q (Richard Poland · Wells Fargo): Analyst asked how far along POCs are in the 6–12 month sales cycle and any early signs of monetization or uplift from closed AI deals.
A: Management said they began releasing AI security products in Q1 and Q2 and some beta customers have converted, but most POCs follow a normal 6- to 12-month enterprise cycle with many POCs expected to convert toward the end of the year and into Q3. They emphasized AI security is multiple integrated products within the platform and customers may adopt pieces over time.
"That really falls in that 6- to 12-month sales cycle process." — Sanjay Beri (CEO)
How AI products affect sales cycle length
Q (Morgan Stanley): Analyst asked whether AI product sales cycles are compressing or elongating as customers adopt them and whether deployments are technically easy.
A: Management said existing customers can enable Agentic Broker and Guardrails easily because the platform is organically integrated with a common GUI and engines, making technical deployment simple; other products like AI Gateway require installation for east-west coverage and will follow normal sales cycles. They aim to make the POC part as easy as possible.
"That organic approach of being purely building properly a platform, that enables customers to adopt these products and implement them from a technical point of view in a very easy way." — Sanjay Beri (CEO)
CapEx increase reason and scaling
Q (JPMorgan): Analyst asked if the CapEx step-up tied to NewEdge is demand-driven capacity or prebuild for agentic traffic and whether CapEx will scale with traffic.
A: Management said it's continued infrastructure investment driven by strong demand and that full-year CapEx is expected between 4% and 5% of revenue, consistent with prior guidance of low single digits. They noted ARR comes before revenue and they will update if things change.
"Look, it's continued infrastructure investment." — Andrew Del Matto (CFO)
NRR potential and portfolio breadth
Q (Zachary Schneider · Baird): Analyst asked how to think about a natural ceiling for NRR given product breadth and whether the portfolio drives sustainable expansion.
A: Management said NRR can fluctuate quarter to quarter but has historically been in the 113–115 range; they did not provide guidance on NRR. They said customers often start with 1–2 use cases and add products over years, so the broad platform and AI security are durable drivers of expansion.
"Customers and enterprises, as you know, with a platform like ours, which is quite broad, they often will start with 1 or 2 core use cases and then they'll grow the year after and the year after." — Sanjay Beri (CEO)
Transaction pricing for AI products
Q (Aidan Perry · Piper Sandler): Analyst asked how customers respond to transaction-based pricing for new AI products and whether usage supports larger commitments.
A: Management said transaction pricing fits agent transactions (prompts and responses) and customers understand it, especially since many AI interactions are nonhuman; they emphasize transparency and visibility into transaction counts. They also said some AgentSkope offerings use outcome-based pricing tied to detected cases and outcomes.
"So if you think about the Agentic Broker, it's covering agent transactions. And so we price by transaction." — Sanjay Beri (CEO)
SASE market, competition, and strengths
Q (Eshaan Shetty · KeyBanc): Analyst asked about the competitive landscape in SASE, whether demand supports multiple large vendors, reasons customers choose Netskope, and where competitors win.
A: Management said SASE is durable and expanding as it subsumes more functions, creating more TAM and supporting multiple vendors; they view AI security and AgentSkope as additional pillars beyond SASE. They said many customers prefer a few open, integrated platforms and Netskope aims to be an open converged platform with broad product set and integrations.
"We don't lack for TAM for a long, long time." — Sanjay Beri (CEO)
Sales force ramp progress and hiring
Q (Nolan Bruce Jenevein · Oppenheimer & Company): Analyst asked to confirm the percentage of ramped reps, whether this increased sequentially, and for more color on ramp timing.
A: Management confirmed reps were hired earlier in EMEA and APJ and will ramp there first, then North America, resulting in more fully ramped reps later in the year and next year; they are also expanding partnerships and the managed services Catalyst program to increase go-to-market capacity. They emphasized growing reps and SEs plus partnerships as part of the plan.
"Yes, we're growing more feet on the street and more reps and more SEs, and we're ramping them and that capacity is coming live later in the year and next year, but we're also expanding our partnerships." — Sanjay Beri (CEO)