SentinelOne Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
SentinelOne's Q3 FY2026 earnings call highlighted strong financial performance, driven by growth in ARR, new customer acquisition, and expansion of platform solutions, particularly in AI, data, and cloud security. The company emphasized its focus on AI-driven security, strategic acquisitions, and commitment to sustainable profitability.
Key Financial Results
ARR grew by 23% year-over-year.
Net new ARR reflected positive growth year-over-year and sequentially.
Revenue grew 23% year-over-year to $259 million.
International markets grew 34% and represented 40% of total revenue.
Customers with ARR of $100,000 or more grew 20% to 1,572.
Gross margin was 79%.
Operating margin reached 7%, an improvement of nearly 1,200 basis points year-over-year.
Achieved quarterly operating profitability.
Net income margin increased to 10%.
Free cash flow margin was 6%.
Remaining performance obligations (RPO) grew 35% to reach $1.3 billion.
Business Segment Results
Non-endpoint solutions represented approximately half of quarterly bookings.
Data solutions bookings growth accelerated to triple digits year-over-year.
Cloud security bookings growth was the strongest in the last 12 months.
Purple AI attach rate surpassed 40% of licenses sold.
Capital Allocation
Acquired Observo AI for approximately $225 million.
Industry Trends and Dynamics
Companies are turning to SentinelOne for a platform experience that combines AI, data, and security.
Enterprises need security that combines simplicity, intelligence, and dependable protection.
Nearly every organization is adopting AI tools, and CISOs are focused on doing it safely.
Competitive Landscape
The company is expanding its market share and gaining traction in cybersecurity.
SentinelOne was named a leader in worldwide XDR software by the 2025 IDC MarketScape.
A global hospitality brand adopted AI-SIEM to replace its legacy Splunk deployment.
Macroeconomic Environment
The company continues to monitor the macro environment, which can influence deal timing and sales cycles.
Growth Opportunities and Strategies
Expanding market share and gaining traction among the most important domains in cybersecurity.
Winning new logos and expanding footprint across enterprises of all sizes and industries globally.
Emerging platform solutions continue to scale and achieve outsized growth.
Expanding and deepening engagements with partners.
Acquisition of Observo AI to enhance AI advantage.
Introduction of GenAI security powered by Prompt.
Introduction of the new Wayfinder Threat Detection and response suite of managed services.
Financial Guidance and Outlook
For fiscal year 2026, revenue is expected to be approximately $1 billion and $1 million, representing 22% year-over-year growth.
For Q4, revenue is expected to be approximately $271 million, representing 20% year-over-year growth.
Gross margin for the full year is expected to be approximately 78.5%.
Gross margin for Q4 is expected to be approximately 77.5%.
Operating margin for the full year is now expected to slightly exceed 3%.
Operating margin for Q4 is expected to be approximately 5%.
The company reaffirmed its commitment to delivering positive free cash flow for the full year.
Leadership Transition
Barbara Larson will be stepping down as CFO.
Barry Padgett, Chief Growth Officer, will serve as Interim CFO.
