Netskope IPO: Shares of the cloud-based cybersecurity developer begin trading

Preliminary trading in shares of enterprise cloud security solutions developer Netskope has begun on the Freedom client trading system. The company is making its debut on the exchange amid increased deal activity in the cybersecurity sector and a rebound in the IPO market after a lull due to high interest rates and inflation. The securities will appear on the Nasdaq exchange under the ticker NTSK later on Sept. 18.

Netskope successfully raised $908.2 million in its IPO. The company offered 47.8 million shares at $19 per paper, which was at the upper end of its price range ($17-19). This gives the company a valuation of $7.26 billion.

The deal was organized by Morgan Stanley, J.P.Morgan, BMO Capital Markets, TD Cowen, Citizens Capital, Mizuho, Wells Fargo Securities, Deutsche Bank Securities.

NTSK plans to use the proceeds raised for general corporate purposes, including working capital, operating expenses and capital expenditures. The Company may also use a portion of the proceeds to repay all or a portion of the outstanding debt under the convertible bonds.

Netskope co-founder and CEO Sanjay Beri said in an interview with IT trade publication CRN in March 2025 that the main reason for going public was not the need for capital, but to increase brand awareness.

"The main reason we go to the stock exchange is not capital, we don't need it. It's recognizability. We think the increased visibility we'll get as a public company will be a gas pedal for us," said Beri.

In 2021, Netskope raised $300 million at a $7.5 billion valuation in a funding round led by investment firm ICONIQ. Its main investors also include venture capital funds Lightspeed Venture and Accel.

Founded in 2012, Netskope develops cloud-based software to protect companies' applications, websites and data from cyber threats. Its customers include large and medium-sized enterprises, including mobile chip developer Qualcomm and Canadian bank BMO, Reuters reports.

Led by former Juniper Networks senior executive Sanjay Beri, the company has developed Netskope One, a cloud-based platform that uses AI models to identify and control sensitive data without sacrificing performance, Bloomberg writes. Netskope's solutions secure and accelerate enterprise digital interactions by providing real-time contextual visibility and control across web, cloud, SaaS, AI and private applications. Simply put - it is the protective layer between users/devices and all their digital destinations, SaaStr clarifies.

For example, the platform can detect if an employee enters sensitive corporate data into a personal ChatGPT account and instantly redirect them to the corporate version.

The company's network now consists of more than 120 full-featured edge data centers in more than 75 regions, SaaStr adds. Netskope had more than 4,300 customers as of July 31, 2025.

Netskope recorded revenue growth of 30.7% in the first half of fiscal 2026, while its net loss narrowed, the company said in its IPO filing. For the six months ended July 31, Netskope posted a net loss of $169.5 million on revenue of $328.5 million. A year earlier, the net loss was $206.7 million on revenue of $251.3 million.

Netskope's niche plays to its advantage: according to Morgan Stanley, shares of cybersecurity-oriented companies have outperformed the software market as a whole in recent years. On average, the software sector's securities fell 10% in 2025, while cybersecurity showed growth of 5%, emphasizes Bloomberg. Morgan Stanley is the lead organizer of the Netskope IPO along with JPMorgan Chase and other banks.

"Investors continue to view security as a safe haven in the world of software," Morgan Stanley analysts wrote.

The bank predicts that cybersecurity spending will take an increasing share of IT budgets amid the rise of AI-enhanced attacks. A fresh Morgan Stanley survey says the rate of growth in security investment by companies will far outpace that of software investment overall.

"Cybersecurity is not only a key area of the future, but also one of the most predictable areas of technology, which should give investors confidence in Netskope's long-term trajectory," said Jeff Zell, senior analyst at IPO Boutique, in comments to Reuters.

He added that underwriters have recently put attractive valuations on similar IPOs, which has provided successful debuts and should increase investor interest in Netskope's offering.

However, the deal has a disadvantage: Netskope remains unprofitable 13 years after its foundation, Bloomberg specifies. Thus, the company does not pass the "rule of 40", according to which investors evaluate the balance of growth and profitability (the sum of growth rate and profitability should be at least 40%).

Nevertheless, in its IPO prospectus, Netskope emphasizes improved financial performance: operating cash flow margins rose 3% between February and July, and so-called incremental operating margin reached 74% in the latest quarter.

Joseph Schuster, founder of financial services firm IPOX Schuster LLC, said the Netskope IPO will be a success, but likely won't show a dramatic upswing at the start of trading as some recent offerings have: "The deal will be well received. It shows how mature the IPO market has become of late"(quoted by Bloomberg).

"Netskope's shares were placed at $19 apiece, and our pre-IPO target valuation was $24.5, which implies a growth potential of about 29%," notes Freedom analyst Alem Bektemirov. Further dynamics will depend on revenue growth rates. In case of faster deceleration of growth rates on the background of lower growth of the base or average revenue per client, it may negatively affect the company's valuation.

Bektemirov adds that an actual or perceived failure of the platform and products to block malware or prevent security breaches or incidents could damage the company's reputation and have an adverse effect on its business and financial condition.

Netskope competes in the Secure Access Service Edge (SASE) segment with several large public companies, including Palo Alto Networks, Zscaler and Fortinet. Netskope's debut comes amid an uptick in large cybersecurity deals and a resurgence of activity in the IPO market after a period when high interest rates due to accelerating inflation eroded interest in tech offerings, CNBC noted.

Rubrik's IPO in April 2024 was the biggest offering in the cyber industry - its shares have risen 130% since then. Among the most notable deals this year are Google's purchase of Israeli cloud startup Wiz for $32 billion (March 2025), as well as the acquisition of Palo Alto Networks by CyberArk for $25 billion announced this summer. In February, the Thoma Bravo-backed company SailPoint went public, CNBC recalls .

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Freedom clients will be able to get access to Netscope shares before the opening of the main exchange session. Trading will begin in early pre-market format 2-3 hours before the opening of the US exchanges (from 15:30-16:30 Astana time). To participate click on ticker NTSK.US.

This article was AI-translated and verified by a human editor