Netskope S-1 Breakdown (Meritech)
| Author | Alex Clayton; Austin Wang (Meritech Capital) |
|---|---|
| Published | 2025 |
| Format | Report |
| Original | Read the original |
TL;DR — Meritech’s slide teardown of Netskope’s August 2025 IPO filing: $707M ARR growing 33%, still burning cash, with an illustrative $7–9B valuation range.
Written by Alex Clayton and Austin Wang, the deck walks through the S-1 in five sections: company intro, business overview, round prices and key shareholders, financials, and valuation. Netskope, founded in 2012 and based in Santa Clara, started in cloud access security brokers and grew into a SASE (Secure Access Service Edge) platform, Netskope One, with 20+ products on one policy engine and a private network of 120+ data centres. The deck notes it was only the second software IPO filing of 2025, after Figma.
The financial picture: $707M of ARR growing 33%, 75% non-GAAP gross margin, 118% net revenue retention, 111 customers above $1M ARR making up 37% of ARR, and 93% of revenue through channel partners. It remains unprofitable — a (20)% non-GAAP operating margin last quarter — and carries ~$519M of convertible PIK notes. Roughly $1.05B of equity was raised, the last a 2021 Series H at a $7.5B post-money ($20.45 a share).
Using public comps, the authors put enterprise value at $7–9B (about $7.7B at 10x NTM revenue and 25% growth), which could put the IPO above the Series H price. The closing page weighs positives (large markets, durable ~30% growth, multi-product attach, AI) against risks: competition from Zscaler, Palo Alto Networks, Fortinet and Cato Networks; a gross retention figure that excludes contraction; new “incremental margin” metrics; free cash flow helped by a billing change; and the convertible notes.
What it is: A growth investor’s public analysis of a public filing. The numbers trace to the S-1 and PitchBook; the valuation range and the critique of metrics are the authors’ views, written before the stock traded.
Where this came from
- A copy shared on Google Drive.
- Published by Meritech on its Substack, “Netskope S-1 Breakdown” (August 28, 2025), which links this same Drive file as the PDF version alongside a web version: https://meritech.substack.com/p/netskope-s-1-breakdown
39 pages. A copy is archived locally against link rot; the header links the original source.