SentinelOne, Inc. (S): Results of Operations and Financial Condition
SentinelOne, Inc. (S) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 SentinelOne Announces Second Quarter Fiscal Year 2027 Financial Results Revenue grew 21% year-over-year to $292 million, exceeding guidance ARR grew 22% year-over-year to $1.218 billion Raising Revenue and Operating Income Outlook for Fiscal Year 2027 MOUNTAIN VIEW,
How this was made
The 30-second read
Why it matters
The earnings beat and raised guidance are likely to drive short‑term buying pressure, especially among AI‑focused investors.
Market read
First‑report earnings with raised guidance for a mid‑cap cybersecurity firm; actionable for traders.
What to watch
Higher operating expenses and a slight dip in GAAP margins could temper enthusiasm.
Revenue grew 21% year-over-year to $292 million, exceeding guidance; ARR grew 22% year-over-year to $1.218 billion; revenue and operating income outlook for fiscal year 2027 was raised.
Revenue and ARR each grew more than 20% year-over-year, non-GAAP operating income rose to $30,528 (in thousands) from $5,376 (in thousands), and the company raised fiscal year 2027 revenue and non-GAAP operating income outlook. GAAP losses, lower gross margins, restructuring expense, and negative quarterly free cash flow remain material offsets.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $292 million | – | 21% |
| Annualized recurring revenue (ARR)other | $1,218 million | – | 22% |
| Customers with ARR of $100,000 or moreother | 1,715 | – | 13% |
| Cost of revenueGAAP | $81,563 (in thousands) | – | – |
| Gross profitGAAP | $210,418 (in thousands) | – | – |
| Gross profitnon-GAAP | $225,051 (in thousands) | – | – |
| Gross marginGAAP | 72% | – | – |
| Gross marginnon-GAAP | 77% | – | – |
| Research and development expenseGAAP | $96,882 (in thousands) | – | – |
| Sales and marketing expenseGAAP | $123,545 (in thousands) | – | – |
| General and administrative expenseGAAP | $56,327 (in thousands) | – | – |
| Restructuring expenseGAAP | $24,425 (in thousands) | – | – |
| Total operating expensesGAAP | $301,179 (in thousands) | – | – |
| Operating lossGAAP | $(90,761) (in thousands) | – | – |
| Operating incomenon-GAAP | $30,528 (in thousands) | – | – |
| Operating marginGAAP | (31)% | – | – |
| Operating marginnon-GAAP | 10% | – | – |
| Net lossGAAP | $(93,400) (in thousands) | – | – |
| Net incomenon-GAAP | $28,473 (in thousands) | – | – |
| Net loss marginGAAP | (32)% | – | – |
| Net income marginnon-GAAP | 10% | – | – |
| Diluted earnings per shareGAAP | $(0.27) | – | – |
| Diluted earnings per sharenon-GAAP | $0.08 | – | – |
| GAAP net cash used in operating activitiesGAAP | $(6,545) (in thousands) | – | – |
| Free cash flowother | $(13,236) (in thousands) | – | – |
| Adjusted free cash flownon-GAAP | $(13,236) (in thousands) | – | – |
| Operating cash flow marginother | (2)% | – | – |
| Free cash flow marginother | (5)% | – | – |
| Adjusted free cash flow marginnon-GAAP | (5)% | – | – |
| Cash, cash equivalents, and investmentsother | $813 million | – | – |
Q3 Fiscal Year 2027 and Fiscal Year 2027 outlook
- RevenueQ3 Fiscal Year 2027: $309 - 311 million; Fiscal Year 2027: $1.202 - 1.207 billion
- Tax rateQ3 Fiscal Year 2027: 17%; Fiscal Year 2027: 17%
- NoteNon-GAAP operating income: Q3 Fiscal Year 2027: $38 - 40 million; Fiscal Year 2027: $124 - 128 million
- NoteNon-GAAP diluted earnings per share (EPS): Q3 Fiscal Year 2027: $0.08 - 0.09; Fiscal Year 2027: $0.30 - 0.32
- NoteDiluted weighted average shares outstanding: Q3 Fiscal Year 2027: 370 million; Fiscal Year 2027: 361 million
Capital returns
- Repurchases of common stock: $— for the six months ended July 31, 2026; $(52,693) (in thousands) for the six months ended July 31, 2025.
What drove it
- Total revenue grew 21% year-over-year to $292 million.
- ARR grew 22% year-over-year to $1,218 million as of July 31, 2026.
- Customers with ARR of $100,000 or more grew 13% year-over-year to 1,715 as of July 31, 2026.
- Non-GAAP operating income increased to $30,528 (in thousands) from $5,376 (in thousands), and non-GAAP operating margin increased to 10% from 2%.
- GAAP sales and marketing expense was $123,545 (in thousands), compared to $127,879 (in thousands).
- The company cited accelerating platform adoption, AI for Security, Security for AI, and AI-native runtime protection as strategic themes.
Concerns
- GAAP gross margin was 72%, compared to 75%, and non-GAAP gross margin was 77%, compared to 79%.
- GAAP net loss was $(93,400) (in thousands), compared to $(72,019) (in thousands), while GAAP net loss margin was (32)%, compared to (30)%.
- GAAP restructuring expense was $24,425 (in thousands), compared to $3,883 (in thousands).
- Quarterly GAAP net cash used in operating activities was $(6,545) (in thousands), and quarterly free cash flow was $(13,236) (in thousands).
- Total stock-based compensation expense was $92,114 (in thousands), compared to $73,884 (in thousands).
What to watch
- Execution against Q3 fiscal year 2027 revenue guidance of $309 - 311 million and non-GAAP operating income guidance of $38 - 40 million.
- Delivery against fiscal year 2027 revenue guidance of $1.202 - 1.207 billion and non-GAAP operating income guidance of $124 - 128 million.
- ARR growth and growth in customers with ARR of $100,000 or more.
- Whether gross margin, operating cash flow, and free cash flow improve from the reported quarter.
- The scale and recurrence of restructuring charges and stock-based compensation expense.
Balance sheet and cash flow
- Cash and cash equivalents were $200,951 (in thousands) as of July 31, 2026, compared to $169,627 (in thousands) as of January 31, 2026.
- Short-term investments were $454,297 (in thousands) and long-term investments were $157,998 (in thousands) as of July 31, 2026.
- Total assets were $2,381,461 (in thousands), total liabilities were $932,957 (in thousands), and total stockholders’ equity was $1,448,504 (in thousands) as of July 31, 2026.
- Deferred revenue, current was $500,547 (in thousands) and deferred revenue, non-current was $77,014 (in thousands) as of July 31, 2026.
- For the six months ended July 31, 2026, GAAP net cash provided by operating activities was $31,948 (in thousands), free cash flow was $17,479 (in thousands), and adjusted free cash flow was $48,137 (in thousands).
- For the six months ended July 31, 2026, net cash used in investing activities was $(23,976) (in thousands), net cash provided by financing activities was $10,660 (in thousands), and net change in cash, cash equivalents, and restricted cash was $18,632 (in thousands).
Analysis
SentinelOne reported $292 million of second-quarter fiscal year 2027 revenue, up 21% from $242 million. ARR increased 22% to $1,218 million, while customers with ARR of $100,000 or more increased 13% to 1,715. The company characterized revenue as exceeding guidance, but prior guidance was not supplied with the filing text, so the degree of outperformance cannot be independently measured here.
The quarter showed substantial improvement in adjusted profitability. Non-GAAP operating income was $30,528 (in thousands), compared with $5,376 (in thousands), and non-GAAP operating margin expanded to 10% from 2%. Non-GAAP net income was $28,473 (in thousands), compared with $13,180 (in thousands), while non-GAAP diluted EPS doubled to $0.08 from $0.04. GAAP sales and marketing expense declined to $123,545 (in thousands) from $127,879 (in thousands), even as revenue increased.
GAAP profitability and gross-margin trends remain important counterpoints. GAAP operating loss was $(90,761) (in thousands), compared with $(80,618) (in thousands), and GAAP net loss was $(93,400) (in thousands), compared with $(72,019) (in thousands). GAAP gross margin declined to 72% from 75%, while non-GAAP gross margin declined to 77% from 79%. Restructuring expense increased to $24,425 (in thousands) from $3,883 (in thousands), and total stock-based compensation expense was $92,114 (in thousands), compared with $73,884 (in thousands).
Cash generation was negative in the quarter but positive on a six-month basis. Quarterly GAAP net cash used in operating activities was $(6,545) (in thousands), and quarterly free cash flow was $(13,236) (in thousands). For the six months ended July 31, 2026, GAAP net cash provided by operating activities was $31,948 (in thousands), free cash flow was $17,479 (in thousands), and adjusted free cash flow was $48,137 (in thousands). Cash, cash equivalents, and investments totaled $813 million as of July 31, 2026.
Management raised its fiscal year 2027 outlook to revenue of $1.202 - 1.207 billion and non-GAAP operating income of $124 - 128 million. Q3 fiscal year 2027 guidance calls for revenue of $309 - 311 million, non-GAAP operating income of $38 - 40 million, non-GAAP diluted EPS of $0.08 - 0.09, diluted weighted average shares outstanding of 370 million, and a non-GAAP tax rate of 17%. The central reported tension is continued ARR and revenue growth alongside improved non-GAAP operating leverage, against lower gross margins, ongoing GAAP losses, restructuring expense, and negative quarterly free cash flow.
Management, verbatim
Our Q2 performance demonstrates strong progress across every dimension of our business – a top-tier growth profile, accelerating platform adoption, and undisputed technology leadership for both AI for Security and Security for AI.
Tomer Weingarten, CEO
Q2 was an exceptional quarter of execution and demonstrated the power of our platform model. We exceeded all top and bottom line guided metrics, achieved record profitability and are raising our revenue and operating income outlook for fiscal year 2027.
Sonalee Parekh, CFO
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so no comparison of actual results with prior guidance is available.
- Prior-quarter comparisons for reported metrics were not provided.
- Revenue by operating segment was not provided.
- Debt balances were not provided.
- Dividend information was not provided.
- GAAP guidance for revenue-related profitability measures, operating income, EPS, tax rate, gross margin, and operating expenses was not provided.
- Q3 fiscal year 2027 and fiscal year 2027 guidance for gross margin and operating expenses was not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
SentinelOne filed an SEC Form 8‑K reporting its Q2 FY2027 financial results and updated guidance.
Ticker impact
SentinelOne reported Q2 FY2027 results with revenue up 21% to $292M and raised FY2027 guidance, a fresh earnings disclosure.
Potential price increase of 3-5% on the day of release.
Revenue and ARR growth exceeded expectations and guidance was raised, indicating stronger operating leverage.
Market effects
Positive signal for the cybersecurity sector as AI-driven security solutions gain traction.
U.S. tech stocks may see modest gains following the beat.
Reinforces global demand for AI-enabled cybersecurity platforms.
Counterpoint
If the market had already priced in strong AI growth, the beat may be already reflected, limiting upside.
Key entities
- ExecutiveTomer Weingarten
CEO of SentinelOne, quoted on AI-driven growth.
- ExecutiveSonalee Parekh
CFO of SentinelOne, highlighted operating leverage and outlook.
