CrowdStrike And Palo Alto Networks Aside, AI Boom Powers Growth In This Smaller Cybersecurity Player

Netskope’s strong Q2 and raised outlook show how AI-driven demand is extending beyond the biggest cybersecurity players.

• Netskope’s Q2 revenue jumped 29% to $221 million, beating estimates.
• The company raised its fiscal 2027 revenue outlook, adding that AI security products were gaining customer interest and some new offerings were moving into proof-of-concept stages.
• Retail sentiment on Stocktwits turned ‘extremely bullish.’

Netskope delivered a stronger-than-expected fiscal second quarter on Wednesday, with revenue jumping 29% and its loss narrowing from a year earlier, as demand for cloud and AI security helped the smaller cybersecurity company gain momentum. 

The company also raised its full-year outlook, sending the NTSK stock 10% higher in overnight trading.

Netskope, valued at $5.7 billion, is increasingly positioning itself as a broader platform rather than a point solution, putting it in competition with larger cybersecurity players such as CrowdStrike and Palo Alto Networks. 

The Santa Clara, California-based firm helps companies protect their data, cloud apps, networks and AI systems from cyber threats through its Netskope One platform and NewEdge private cloud network.

Netskope: Q2 Earnigns Overview

Netskope reported revenue of $221 million, up from $170.8 million a year earlier and above Wall Street’s $214.2 million estimate. Adjusted loss came in at $0.3 per share, narrower than the $0.07 per share loss analysts expected.

Annual recurring revenue rose 27% to $899 million, while remaining performance obligations jumped 36% to $1.35 billion. Gross margin also expanded to 77% from 75% a year earlier.

CEO Sanjay Beri said the results were driven by “continued differentiating organic innovation” and demand for the Netskope One platform across “security, networking, analytics and AI.”

The company raised its fiscal 2027 revenue outlook to $888 million-$892 million, with the midpoint above analysts’ $881 million estimate.

AI Momentum Driving Revives Cybersecurity Play 

AI is becoming a particularly important part of that strategy. Netskope said products including AI Guardrails, AI Gateway, AI Command Center and Agentic Broker are generating growing customer interest, with some AI security opportunities already moving into proof-of-concept stages.

During the earnings call, Beri said many enterprises still lack visibility into which AI tools and agents are being used inside their organizations. Management also highlighted transaction-based pricing for AI products and outcome-based pricing for some security offerings.

“In the age of AI, security and network modernization have become inseparable,” Beri said.

CrowdStrike and Palo Alto Networks recently reported robust growth, underscoring how enterprise demand for cybersecurity remains resilient as companies race to deploy AI while protecting increasingly complex digital infrastructure.

Retail View On NTSK Stock

On Stocktwits, the retail sentiment for NTSK shifted to ‘extremely bullish’ from ‘bullish.’ A trader called the Q2 report “strong,” while another expressed concerns over a potential pullback in the stock on Thursday.

“$NTSK why do I have a feeling this is going to dump tomorrow?” said the trader.

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