Netskope Inc Q3 FY2026 earnings call

• Business Vision: Netskope's vision is to redefine security and networking for the cloud and AI era. The total available market is projected to be $149 billion by 2028.
• Q3 Metrics: Delivered strong performance with 34% Y/Y ARR growth to $754M, Q3 revenue up 33% to $184M, $11M free cash flow, and operating margin improved 11 percentage points Y/Y to 6% free cash flow margin.
• Key Achievements: Significant customer wins across verticals and geographies, including a Fortune 200 biotechnology company, a global pharmaceutical retailer, and a financial institution. Multiproduct adoption increased, with 53% of customers using 4+ products and 26% using 6+.
• Innovations: Advanced universal Zero Trust network access, AI-powered innovations for security teams, expanded NewEdge private cloud with new data centers, and partnerships with Microsoft and CrowdStrike to release integrated products.

Netskope achieved strong financial performance in Q3. Annual recurring revenue (ARR) grew 34% year-over-year to $754 million. Q3 revenue was $184 million, a 33% year-over-year increase. Revenue growth was robust across geographies: Americas grew 34%, EMEA 34%, and APJ 29%. The number of customers generating over $100,000 in ARR in Q3 increased 24% to 1,444. Over 85% of ARR comes from customers with $100,000+ ARR, and the average ARR from this segment rose 10% year-over-year to over $450,000 per customer. Net retention rate was 118%. Additionally, 53% of customers were using 4 or more Netskope One products, and 26% were using 6 or more.

• Q4 FY2026: Expected total revenue $188M-$190M (27% midpoint growth), operating margin -13% to -14%, net loss per share $0.05-$0.07.
• Full Year FY2026: Expected total revenue $701M-$703M (30% midpoint growth), gross margin ~75%, operating margin -16.5% to -17%, net loss per share $0.51-$0.53, free cash flow $5M-$8M.

Forward-looking statements subject to known/unknown risks/uncertainties. Macroeconomic and geopolitical uncertainties. Transition in billing terms creating near-term variability in cash conversion, free cash flow, and billings.

Q: Any color on 7-digit transactions and 8-digit deals in pipeline?

A: Highlighted wins like a Fortune 50 global pharmaceutical retailer and a financial institution consolidation. Greenfield opportunities exist with 20+ products, but specifics on pipeline not shared.

Q: Thoughts on Americas region growth?

A: Americas revenue grew 34% Y/Y. Focus on recruiting new reps and ramping them, with consistent growth across all geographies for diversification.