The latest tech IPO to file is another cybersecurity software leader … and it’s a really, really good one. Netskope.
📈 $707M ARR (+33% YoY)
💰 $538M revenue (+32% YoY)
🏢 4,317 customers (+21% YoY)
⭐ 30%+ of Fortune 100 as customers
📊 118% net retention rate
🌍 120+ data centers globally
🎯 $139B market opportunity
and from -42% to +3% operating cash flow margin in 6 months!
It doesn’t get too much better.
Company Overview
Netskope is a cloud security platform founded in 2012 by CEO Sanjay Beri that redefines security and networking for the cloud and AI era. The Santa Clara-based company provides unified Security Service Edge (SSE) and Secure Access Service Edge (SASE) solutions through its “Netskope One” platform.
What they do: Secure and accelerate digital interactions for enterprises by providing real-time contextual visibility and control over web, cloud, SaaS, AI, and private applications. Think of it as the security layer that sits between users/devices and all their digital destinations.
Key competitors: Zscaler, Palo Alto Networks, Fortinet, Cisco, Broadcom
Market position: Gartner Magic Quadrant Leader in Security Service Edge (2022-2025) and SASE Platforms (2024-2025)
IPO details: Filed August 22, 2025 | Expected late September 2025 | Ticker: $NTSK (NASDAQ) | Morgan Stanley & J.P. Morgan leading
5 Interesting Learnings:
#1. Still Accelerating at $700M+ ARR: The 30%+ Rule at $500M+ ARR. Key: Customers Buy 3-5+ Products.
The Metric: 33% ARR growth at $707M ARR scale
Most SaaS companies hit the “law of large numbers” wall around $300-500M ARR. Netskope just proved you can accelerate at massive scale:
- $531M → $707M ARR (33% growth)
- $407M → $538M revenue (32% growth)
- Revenue growth actually accelerated from 31% to 33% QoQ in recent quarters
Importantly — 35% of their customers buy 5 or more products, and 72% buy 3 or more.
The Learning: With true product-market fit and expanding TAM, the growth ceiling is higher than we thought.
#2. The Cash Flow Inflection Point: From -42% to +3% OCF Margin in 6 Months
Netskope really, really got ready to go public. It rapidly moved from “investing in growth mode” to “still investing, but cash flow positive” — in just 6 months!
The Metrics:
- H1 2024: -42% operating cash flow margin (-$106M)
- H1 2025: +3% operating cash flow margin (+$9M)
- 45 percentage point improvement while growing revenue 31%
This is the holy grail of SaaS metrics—massive profitability improvement while maintaining high growth. The inflection happened fast once they hit the right scale.
The Learning: Unit economics can flip dramatically at scale if your LTV:CAC fundamentals are sound.
#3. NRR Improvement at Scale: 118% While Growing 33%. And A Stunning 96% GRR.
The Metrics:
- Net Retention Rate: 113% → 118% YoY
- Gross Retention Rate: 95% → 96% YoY
- Both improving while adding 746 net new customers
Most companies see NRR compression as they scale due to larger customer mix. Netskope is doing the opposite—expanding faster within existing accounts.
The Learning: Platform plays with multiple products can drive NRR expansion even at massive scale.
#4. The $1M+ Customer Concentration Strategy: 37% of ARR from 111 Customers
Cybersecurity is about the big deals. 85% of reveue comes from $100k+ deals, and they have 111+ $1m customers.
The Metrics:
- 111 customers >$1M ARR (37% of total ARR)
- 1,372 customers >$100K ARR (86% of total ARR)
- Average customer size continues growing
This isn’t a volume play—it’s a high-value enterprise play. The top 2.5% of customers drive over one-third of revenue.
The Learning: Focus on customer expansion over customer acquisition can drive both growth AND efficiency at scale.
#5. International Revenue as Growth Accelerator: 43% Revenue, Higher Growth
The Metrics:
- International: 43% of revenue
- EMEA growth: +37% YoY
- APJ growth: +33% YoY
- Americas growth: +28% YoY
International markets are growing faster than domestic, proving global product-market fit and providing a natural growth hedge.
The Learning: International expansion isn’t just diversification—it can be your primary growth engine.
More Quick Learnings:
35% of Customers Buy 3 or more
- Platform Expansion Works: 72% use 3+ products, 51% use 4+ products, 35% use 5+ products
- Gross Margin Excellence: 71% in H1 2025 (up from 62% prior year) – best-in-class for infrastructure SaaS
- Fortune 100 Penetration: 30%+ market share in largest enterprises shows defensibility
- Geographic Footprint = Moat: 120+ data centers across 75+ regions creates natural barriers to competition
Expected Valuation Analysis
Based on public cybersecurity comps and Netskope’s metrics, we can estimate the IPO valuation:
Revenue Multiple Analysis:
- Netskope’s $707M ARR puts it at premium scale with best-in-class growth (33%)
- Expected revenue multiple: 8-12x ARR based on growth profile and margins
- Estimated valuation range: $5.7B – $8.5B
The company was valued at $7.5B in 2021, so current estimates align with maintaining that valuation despite market compression, justified by improved fundamentals. The last round investors may see muted returns.
Cybersecurity Public Company Comparison
Key Insights:
- Netskope’s 33% growth matches best-in-class (Zscaler, CrowdStrike, Rubrik)
- 71% gross margin is competitive but below premium players
- 8-12x revenue multiple reflects strong growth with improving profitability trajectory
- Recent IPO comps (Rubrik at 9.3x) support the lower end of the range
Bottom Line: At the estimated $5.7B-$8.5B valuation, Netskope would trade at a reasonable discount to premium players like Zscaler while commanding a premium to slower-growth peers, justified by its unique combination of scale, growth acceleration, and cash flow inflection.
