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Netskope's AI Security Pipeline Points to Stronger H2, RBC Says

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Netskope (NTSK) delivered solid fiscal Q2 results and raised its fiscal 2027 revenue outlook, with improving demand for its AI security products pointing to a stronger H2, RBC Capital Markets said Thursday in a report.

Annual recurring revenue rose 27% to $899 million in Q2, topping the $892 million consensus estimate, while remaining performance obligations increased 36% to $1.35 billion, the report said.

Traction in Netskope's AI security portfolio continues to build, with one-third of the pipeline already in or entering the proof-of-concept stage, the report said. The expanding pipeline, along with improving productivity from newer sales representatives, may support ARR acceleration in fiscal H2 2027, RBC said.

Fiscal 2027 revenue guidance implies growth of 25.5%, up from 24%, and Netskope remains well positioned to benefit from legacy security replacement, cybersecurity consolidation and emerging demand tied to generative and agentic AI, the report said.

RBC raised its price target on Netskope stock to $20 from $18 and maintained its outperform rating.

Price: $14.27, Change: $+0.52, Percent Change: +3.75%

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