Netskope Inc Revenue Disclosure
Note 4 - Revenue Recognition
Disaggregation of Revenue
Subscription revenue is recognized over time and accounted for 99%, 99% and 98% of the Company's revenue for the fiscal years ended January 31, 2026, 2025, and 2024, respectively.
The following table summarizes the disaggregation of revenue by geographic area, based on the shipping address of the end customer for contracts through channel partners and direct customers (in thousands):
|
|
Year Ended January 31, |
|
|||||||||
|
|
2026 |
|
|
2025 |
|
|
2024 |
|
|||
Americas |
|
$ |
400,518 |
|
|
$ |
306,770 |
|
|
$ |
246,192 |
|
Asia Pacific and Japan ("APJ") |
|
|
131,330 |
|
|
|
101,175 |
|
|
|
72,329 |
|
Europe, the Middle East, and Africa ("EMEA") |
|
|
177,149 |
|
|
|
130,323 |
|
|
|
88,362 |
|
Total revenue |
|
$ |
708,997 |
|
|
$ |
538,268 |
|
|
$ |
406,883 |
|
Revenue from the United States, which is included within the Americas region in the table above, was $317.0 million, $250.6 million, and $205.2 million during the fiscal years ended January 31, 2026, 2025, and 2024, respectively.
The following table summarizes revenue from contracts through indirect channels, including channel partners and MSPs, and direct end customers for the periods presented (in thousands):
|
|
Year Ended January 31, |
|
|||||||||
|
|
2026 |
|
|
2025 |
|
|
2024 |
|
|||
Indirect channels |
|
$ |
675,743 |
|
|
$ |
502,544 |
|
|
$ |
374,186 |
|
Direct end customers |
|
|
33,254 |
|
|
|
35,724 |
|
|
|
32,697 |
|
Total revenue |
|
$ |
708,997 |
|
|
$ |
538,268 |
|
|
$ |
406,883 |
|
Deferred Revenue
Deferred revenue consists primarily of payments received and accounts receivable recorded in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. The amount of revenue recognized in the fiscal years ended January 31, 2026, 2025, and 2024, that was included in the deferred revenue at the beginning of the period was $429.8 million, $335.4 million, and 255.4 million, respectively.
Payments are received from customers based upon contractual billing schedules and accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets include amounts related to the Company's contractual right to
consideration for both completed and partially completed performance obligations that may not have been invoiced and such amounts have historically not been material.
The following table summarizes the activity of deferred revenue (in thousands):
|
|
January 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Beginning balance |
|
$ |
590,307 |
|
|
$ |
436,931 |
|
Additions |
|
|
794,548 |
|
|
|
691,644 |
|
Recognition of deferred revenue |
|
|
(708,997 |
) |
|
|
(538,268 |
) |
Ending balance |
|
$ |
675,858 |
|
|
$ |
590,307 |
|
|
|
|
|
|
|
|
||
Deferred revenue, current |
|
$ |
532,732 |
|
|
$ |
430,156 |
|
Deferred revenue, noncurrent |
|
|
143,126 |
|
|
|
160,151 |
|
Total deferred revenue |
|
$ |
675,858 |
|
|
$ |
590,307 |
|
Remaining Performance Obligations
Remaining performance obligations represents the amount of contracted future revenue that has not yet been recognized, including both deferred revenue that has been invoiced and non-cancelable committed amounts that will be invoiced and recognized as revenue in future periods.
As of January 31, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $1.2 billion. The Company expects to recognize 54% of the remaining performance obligations over the next 12 months and 43% between , with the remainder to be recognized thereafter.
Deferred Contract Acquisition Costs
The following table summarizes the activity of deferred contract acquisition costs (in thousands):
|
|
January 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Beginning balance |
|
$ |
121,665 |
|
|
$ |
100,747 |
|
Capitalization of contract acquisition costs |
|
|
87,389 |
|
|
|
66,183 |
|
Amortization of deferred contract acquisition costs |
|
|
(54,208 |
) |
|
|
(45,265 |
) |
Ending balance |
|
$ |
154,846 |
|
|
$ |
121,665 |
|
|
|
|
|
|
|
|
||
Deferred contract acquisition costs, current |
|
$ |
54,048 |
|
|
|
42,860 |
|
Deferred contract acquisition costs, noncurrent |
|
|
100,798 |
|
|
|
78,805 |
|
Total deferred contract acquisition costs |
|
$ |
154,846 |
|
|
$ |
121,665 |
|
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.