Cybersecurity firm NetScope is set to make its public debut this morning. The company's IPO was priced at $19 a share and raised just over $900 million. The company valued at $7.2 billion and counts Excel and Lightspeed venture partners among its backers. Joining me now from the NASDAQ is Sanjay Berry, NetScope co-founder and CEO. Sanjay, thanks for being here. Congrats on the IPO.

Thank you and thanks for having me. So I appreciate it.

There's a lot. It is an exciting day. There's a lot of cybersecurity companies out there publicly traded and privately held. What is Netscope's special sauce? What makes you all different from other cybersecurity providers?

Yeah, if you look at what NetScope does, it redefines what's the biggest market in security, data network security, and our whole purpose of the company is to let people say yes to cloud and AI.So instead of saying no you can't use chat GBT or yes you can and you worry about what happens with it, we give you the ability to say yes and put guardrails. You can use it, but you can't use it to query with sensitive data. So it's how in this modern world can I use cloud and AI in a secure way. That's ultimately what NetScope does.

So it's almost in a sort of filter on these kinds of of chatbots.

Yeah, so think about 100,000 plus SAS apps in the world, tens of thousands of AI and generative AI apps, billions of websites, many tens of thousands of applications, customers, enterprises have built. We look at all of those. So as people access them in a company, we sell to organizations, we look at that traffic and say, well, OK, that, that is valid.This other part where you're trying to for example take corporate data and put it in your personal Dropbox account that's not allowed. You're sending Gemini something that says reformat this healthcare data and it's a public LLM you can't do that and so it's around how do I let people in a company use the tools they want yet protect the company from their data and protect against threats.

I'm curious as AI evolves and more companies end up using more tailored models, right, or proprietary models or software companies that provide agentic AI, um, uh, services, what role do you all then play in that kind of a scenario?

Yeah, absolutely. So for us, if you look at, we run one of the world's largest cloud networks, right? Traffic we have companies or half a million users. All their traffic goes through us. You open your laptop, you take your phone out, you go to your office, that traffic goes through us, and we enable it and secure it and accelerate it. And so instead of just humans, what I foresee in the future is that over half of the traffic on the internet.Will come from nonhumans. It'll come from AI agents. It'll come from devices and so the same thing that we have done for users we are now doing for those for AI agents for devices, make sure that they're communicating with only the right things, only with the right data.So that you protect the company.

So it's interesting the um timing of the IPO. We've seen the IPO windows finally kind of open up here. We've seen a handful of different offerings in the in the past couple of months and things start to reaccelerate. um, so what do you all hope to achieve by doing it at this point in time? What, what are you planning to use the proceeds for?

That's a great question. So just, you know, as backdrop, I'll be here in 15 years. And so we have a philosophy and Netscope. Go long, right? Don't just think about the quarter. Think about what's happening in 3 or 5 years, skate to where the puck's going. And so in that landscape, when we think about going public, for us it's awareness. We know that if we can get into a customer and they see what our platform does.They're gonna more often than not 80+% of the time buy it and they want it, but we need the awareness. We need the bats. Being public brings us that. It brings us the ability for these companies to instantly see, OK, Netscope, big player, 30% of the Fortune 100, 18% of global 2000.Solid company and so it brings you that cred it brings you that awareness and for us that is the single biggest reason that we're going public.

Sanjay, I gotta ask you the question that I ask everybody who's coming public, which is when are you guys gonna turn a profit, because as you said, you've been there a while, you you've got playing the long game, but you guys are still not profitable. When might that happen?

So just if you take a step back, we, we are cash flow positive, uh, and you've seen our margins inflect as well to the mid 70s with 20 plus points of operating margin improvement and so it'll follow with hitting cash flow positive now, our operating margin will follow. We have a durable long model. We just put a massive amount on our balance sheet as a cash flow company and so, uh, it's a great thing for us and the margin will follow.

Um, do you have any idea when?

We're not giving guidance right now, so that's one of the things about being public. You got, you have to wait and so perhaps later. OK,

thank you so much, Sanjay. I appreciate it and congrats again on the IPO.