Netskope Reports Strong Q2 Results Amid Analyst Upgrades Despite Cash Burn Concerns
On September 2, 2026, Netskope (NASDAQ:NTSK) reported second-quarter fiscal 2027 results that exceeded guidance. Revenue reached $220.5 million with annual recurring revenue climbing to $899 million and remaining performance obligations rising to $1.35 billion. Following the report, eight analysts raised their price targets for Netskope due to strong growth metrics and optimism around its AI security portfolio. Despite positive financial indicators such as a 27% year-over-year ARR increase and improved gross margins, concerns remain about cash flow. The company reported negative free cash flow of $29.8 million in the quarter and guided for only a modest full-year improvement to approximately 2%. Management has redirected resources toward AI infrastructure investments while also implementing workforce reductions. Analysts remained bullish despite these challenges, citing strong customer retention rates and increased platform adoption as key positives. CEO Sanjay Beri highlighted both opportunities and risks associated with securing AI systems, noting the complexity of protecting autonomous agents in evolving environments.
Tickers: $NTSK