Netskope (Nasdaq: NTSK) IPO

Cybersecurity firm Netskope (Nasdaq: NTSK) raised $908M in its IPO last Thursday. Shares climbed 18.4% on the first day of trading, bringing the company’s market capitalization to $8.6B.

In our previous SASSY post, we covered the highlights of Netskope’s offering. Here, we take a closer look at some of the key details from Netskope’s S-1 filing.

1. $700M+ ARR and Still Accelerating — Most SaaS companies hit the “law of large numbers” wall around $300–$500M ARR. Netskope defied that trend: ARR grew from $531M → $707M (33% YoY), with revenue growth accelerating from 31% to 33% QoQ in recent quarters. They’re scaling faster at massive size.

2. Deep Product Penetration — Netskope is winning multi-product adoption at scale: 72% of customers buy 3+ products and 35% buy 5+ products. This creates durable, sticky revenue and strong cross-sell momentum.

3. Cash Flow Inflection Point — Netskope “got IPO-ready” in record time, flipping from heavy burn to positive cash flow in just six months: H1 2024: -42% OCF margin (-$106M), H1 2025: +3% OCF margin (+$9M). This is the SaaS “holy grail”: profitability improvement without sacrificing growth.

4. Retention Expanding at Scale — Despite growing 33% YoY and adding 746 net new customers, retention improved: Net Retention Rate: 113% → 118%; Gross Retention Rate: 95% → 96%. Few SaaS firms expand faster within accounts at this scale.

5. Focus on Large Customers — Cybersecurity is a big-deal business: 85% of revenue from $100k+ deals; 111+ $1M+ customers (37% of ARR). Average deal size continues to rise, fueling operating leverage.

6. International Growth as a Tailwind — International expansion is a major growth lever: 43% of revenue are now international, and international markets are growing faster than domestic: 36% YoY (vs 28%). This provides a natural growth hedge beyond the US.

Conclusion

Netskope’s public debut is a rare event in cybersecurity — last year saw only four IPOs in the entire sector. The scarcity of listings reflects the increasing difficulty cybersecurity companies face in meeting the complex and evolving requirements of large enterprise customers, who are usually comfortable with established vendors such as Palo Alto Networks. In cyber, once startups achieve meaningful traction, strategic buyers are quick to pursue M&A.

Both Fabrica Ventures Fund I and Fund II invested in Netskope, and we see this IPO not as the finish line but as the start of an exciting new phase in the company’s growth.

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