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Netskope enables security teams to stop risky AI agent actions before they execute. Netskope announced Netskope Skylight Agent Action Control, a new capability that classifies every action an AI agent attempts, and applies granular controls to stop high-risk actions before they execute. The capability meets security teams' need for a policy-based way to govern, rather than react to, what autonomous agents are permitted to do. Agent Action Control arrives as Netskope renames its AI security portfolio to better communicate the company's broad capabilities across AI security. Formerly Netskope One AI Security, Netskope Skylight is the new family name for the suite of Netskope AI security products including Netskope Skylight AI Command Center, Netskope Skylight AI Guardrails, Netskope Skylight AI Gateway, Netskope Skylight Agentic Broker, and Netskope Skylight AI Red Teaming. Netskope Skylight Agent Action Control Today, 91% of organizations cannot stop a risky agent action before it executes, and 54% reported a confirmed or suspected AI agent security incident in the past year. With Netskope Skylight Agent Action Control, teams can more effectively govern what an agent is attempting to do thanks to: * Control over nine different types of action: To enable granular policy definition, every agent action is classified into one of nine intent-based categories prior to execution. These include, access control changes, configuration changes, credential and secret manipulation, data destruction, infrastructure provisioning, potential data exfiltration, potential external communication, remote code execution, or source code change. * Risk-based policy profiles by agent type: Block, allow or alert based on low, medium, high or critical risk categories, with the option to send a default or custom notification to the end-user for user coaching when the action is blocked. Profiles attach to specific agents, so a coding assistant and a chat application do not have to operate under the same rules. * Granular policy alerts: Every action is logged, with security teams able to filter policy alerts by cost exposure, source code changes, infrastructure updates, or external communication to align investigation effort with organization risk prioritization. * No new console and no new agent: Netskope Skylight Agent Action Control runs on network traffic the Netskope platform already inspects, so security teams gain enforcement over agent behavior without deploying a separate tool or standing up a second console. The result is a policy that governs what an agent is allowed to do before it acts. When a coding agent working from a vague prompt attempts to delete a production repository, for example, the action is classified as data destruction at a critical risk level, and the call is stopped before it reaches the repository. The security team gets a record of the attempt instead of an incident report. This approach provides governance and controls over agents at risk of "authority drift", or whose harness or instructions are too vague or permissive. "AI agents tend to act first and explain later, and most security teams only learn what happened after it is done," said John Martin, Chief Product Officer, Netskope. "Agent Action Control puts a decision in front of every action an agent takes, so a team can say yes to agentic AI without saying yes to the one action that could cost them a production system." "As enterprises accelerate adoption of AI agents, we're finding that probabilistic controls are sometimes insufficient to protect the enterprise, but even occasional failure is unacceptable," said Dr. Grace Trinidad, Research Director for AI Security and Trust at IDC. "These hardened, policy-based, deterministic controls are the backstop that prevents AI agents from causing an enterprise incident." Netskope Skylight Agent Action Control will be available at the end of the current quarter. David Marshall is the founder of VMblog.com, one of the industry's longest-running independent publications covering modern data center technologies. What began as a focus on virtualization and cloud computing has expanded to cover the full spectrum of enterprise IT, including AI, security, and DevOps, making VMblog a trusted destination for vendor news, technology analysis, and industry commentary.Beyond publishing, David has spent his career at the intersection of technology and business, inventing, marketing, and launching a number of successful software companies and products, and building a reputation as a skilled marketing executive in the enterprise IT space.David is also a published author, having written two well-regarded books on virtualization and served as technical editor for two "For Dummies" titles covering virtualization and cloud computing. He co-founded CloudCow.com, a publication focused on cloud computing, and has been named a VMware vExpert every year since 2009, one of the longest continuous honoree streaks in the program's history.Connect with David on LinkedIn: https://www.linkedin.com/in/davidmarshall/

Netskope's (NTSK) AI Security push is already paying off. Netskope Inc. (NASDAQ: NTSK) delivered Q2 fiscal 2027 results on September 2, 2026, demonstrating robust top-line expansion despite persistent profitability headwinds. Annual Recurring Revenue reached $899 million, representing 27% year-over-year growth, while total quarterly revenue climbed to $220.5 million, up 29% year-over-year and exceeding management guidance across every reported metric. The results validate that Netskope's early investment in AI-native security capabilities is translating into measurable customer adoption rather than remaining a speculative future opportunity. Hire An Accountant Discover more Stock price tracking Financial research tools Track Stocks Bonds What the latest reported quarter says about the current operating story and the main business drivers. The Q2 fiscal 2027 results reflect a business driven by platform consolidation and AI security adoption. With 59% of customers now deploying four or more Netskope One products - up from 51% a year prior - the company is deepening wallet share within its installed base. Net retention rate improved to 114%, indicating that expansion revenue from existing accounts is outpacing any churn. A critical deceleration signal emerged in net new ARR growth, which expanded only 9% year-over-year to $54 million, down from prior quarter momentum. Management attributed this moderation to typical second-half seasonality and the ongoing transition of customers to annual billing arrangements, which temporarily defers cash collections. The AI security suite shows early traction, with approximately one-third of the AI security pipeline already in or entering proof-of-concept phase, though full revenue contribution remains dependent on typical 6-to-12-month enterprise sales cycles. Discover more Earnings call transcripts Buy Glucose Monitors Product innovation accelerated during the quarter. Netskope launched the Netskope One DataSec Command Center - a unified control plane for discovering, tracking, and protecting sensitive data across AI environments, cloud, network, and on-premises infrastructure - and advanced its NewEdge AI Fast Path capability, which demonstrated latency reductions of up to 90% to popular AI services. The company was recognized as a Leader in the Gartner Magic Quadrant for Secure Access Service Edge Platforms for the third consecutive year, positioned highest in Ability to Execute, and maintained its Leader status in the Security Service Edge Magic Quadrant for the fifth consecutive year. Netskope also achieved Amazon Web Services Security Competency status for AI Security and formed a new partnership with Telefónica Tech UK&I. Non-GAAP gross margin held at 77% in Q2 fiscal 2027, consistent with the company's stable unit economics. Non-GAAP operating margin narrowed to negative 9%, an 11 percentage-point improvement year-over-year, signaling disciplined cost structure evolution even as the company continues to invest in AI product development and global infrastructure. What the latest reported revenue mix, margins, balance-sheet context, and management commentary imply for investors now. Netskope's $899 million ARR base as of Q2 fiscal 2027 underscores a fully subscription-based revenue model - a structural shift that enhances revenue predictability but creates near-term cash flow volatility during billing transitions. Management is actively migrating customers to annual billing arrangements, which temporarily pressures free cash flow but positions the company for improved cash collection cycles once the transition concludes by mid-fiscal 2027. Hire An Accountant The balance sheet is well-positioned. Total cash, cash equivalents, and marketable securities reached $1.1 billion at the end of Q2 fiscal 2027, providing runway for continued investment in product development and strategic partnerships without near-term refinancing pressure. Discover more Investment strategy insights Financial data visualization Cash flow deterioration warrants investor scrutiny. Operating cash flow in Q2 fiscal 2027 was negative $16.5 million, compared to negative $16.9 million in the prior-year quarter - marginal improvement but still deeply negative. Free cash flow deteriorated more sharply to negative $29.8 million in Q2 FY2027, versus negative $19.7 million in Q2 FY2026, a 51% year-over-year decline. Free cash flow margin contracted to negative 14% from negative 12% in the prior year period. This deterioration stems primarily from the annual billing transition and elevated capital expenditures supporting the NewEdge global network infrastructure. Management guidance for full-year fiscal 2027 projects total revenue between $888 million and $892 million, with non-GAAP gross margin stabilizing at approximately 77% and non-GAAP operating margin remaining negative at approximately 9%. Critically, management expects free cash flow margin to improve to approximately 2% by fiscal year-end, implying a material inflection point once the annual billing transition completes. Non-GAAP net loss per share guidance of negative $0.15 for full-year fiscal 2027 reflects continued investment in AI security capabilities and a 5% workforce reduction implemented during the quarter as part of the company's shift toward AI-native operations. Q2 fiscal 2027 reported non-GAAP EPS of negative $0.03 beat analyst consensus estimates of negative $0.26 by $0.23, demonstrating better-than-expected cost management. What investors should watch next. Net new ARR growth slowed to 9% year-over-year in Q2 FY2027. While management attributes this to seasonality and billing transitions, investors should monitor whether the Q3 and Q4 FY2027 results confirm a seasonal pattern or signal a more persistent deceleration. Sustained net new ARR growth below 10% would raise questions about market saturation or competitive displacement. Free cash flow inflection is the most critical financial milestone. Management projects 2% free cash flow margin by fiscal year-end 2027, implying approximately $18 million in positive free cash flow for the full year - a material turn from current run rates. Failure to achieve this inflection by Q4 FY2027 would extend the company's path to sustainable cash generation and pressure the balance sheet over a multi-year horizon. The AI security pipeline is the medium-term growth catalyst. Approximately one-third of the pipeline is already in proof-of-concept phase with typical 6-to-12-month sales cycles, meaning meaningful revenue contribution likely materializes in fiscal 2028. Q4 FY2027 and Q1 FY2028 results will be critical inflection points for validating whether AI security translates from pipeline to recognized revenue at scale. Operating leverage trajectory deserves close monitoring. Non-GAAP operating margin improvement of 11 percentage points year-over-year positions the company for potential positive operating margin within 12 to 18 months if revenue growth sustains above 20% and operating expense growth remains disciplined. Any material reversal - whether from a step-up in R&D investment, a slower growth quarter, or competitive pricing pressure - would lengthen this timeline. Key signals for investors. * ARR growth of 27% year-over-year in Q2 FY2027 is solid, but net new ARR expanded only 9%, a deceleration worth monitoring over the next two quarters to distinguish seasonal patterns from structural demand softness. * Free cash flow deteriorated 51% year-over-year to negative $29.8 million in Q2 FY2027; management's Q4 FY2027 target of 2% free cash flow margin is the single most important near-term financial proof point. * Non-GAAP operating margin improved 11 percentage points year-over-year to negative 9% in Q2 FY2027, establishing a credible path to profitability over the next 12 to 18 months if revenue growth holds above 20%. * Approximately one-third of the AI security pipeline is in proof-of-concept phase; Q4 FY2027 and Q1 FY2028 will determine whether AI security products convert at expected sales cycle lengths of 6 to 12 months. * Third consecutive Gartner SASE Magic Quadrant leadership and AWS AI Security Competency status validate competitive positioning, which should support customer retention and new logo acquisition in a market where enterprise procurement increasingly follows analyst rankings.