SentinelOne Inc Earnings - Q4 2025 Analysis & Highlights
SentinelOne reported strong fiscal 2026 results with $1 billion in revenue and full-year operating profitability, driven by record net new ARR additions, platform consolidation gains, and emerging product momentum in AI security, data solutions, and cloud security. The company is accelerating toward the Rule of 40 with improved margins while maintaining growth, supported by upmarket expansion, partner ecosystem strength, and strategic positioning in the AI security market.
Key Financial Results
Revenue reached $1 billion in fiscal 2026, growing 22% year-over-year, with Q4 revenue of $271 million, up 20% year-over-year.
Total ARR grew 22% in Q4 with a record $64 million in net new ARR, exceeding expectations and marking the third consecutive quarter exceeding ARR expectations.
Gross margin remained stable at 78% in Q4, highlighting healthy platform unit economics and scale efficiencies.
Operating margin improved 450 basis points year-over-year to 6% in Q4, with full-year operating profitability delivering a 600-plus basis point improvement to 3.5% operating margin.
Net income margin reached 9% in Q4.
ARR per customer reached a new company record, reflecting strong upmarket momentum.
Customers with $1 million or more in ARR grew 20% year-over-year to 153 customers, while customers with $100,000 or more in ARR grew 18% to 1,667.
Gross retention rate for customers with $100,000 or more in ARR was 96% in Q4, with dollar-based net retention rate of 109%.
Free cash flow margin of 5% on a trailing 12-month basis, with the company delivering its second full year of positive free cash flow.
International markets grew 30% and represented 40% of total revenue, reflecting strong global demand.
Business Segment Results
Non-endpoint solutions surpassed half of total annual bookings in fiscal 2026, demonstrating platform diversity and customer outcomes.
Data solutions surpassed $130 million in ARR with accelerating sequential growth.
Cloud Security solution surpassed $160 million in ARR in Q4.
Endpoint achieved double-digit ARR growth in Q4, continuing to outgrow the broader market.
Wayfinder Threat services crossed $100 million in ARR in Q4, with strong enterprise interest.
Prompt Security ARR more than doubled sequentially in Q4, with the company beginning to win standalone AI security deals with Fortune 500 companies.
Purple achieved a record attach rate of over 50% on licenses sold in Q4, with adoption outpacing internal expectations.
Enterprise customers using three or more solutions increased to 65% versus 39% a year ago, while those using four or more solutions more than doubled to 42% versus 19% a year ago.
Capital Allocation
The company opportunistically repurchased 6.5 million shares in Q4, bringing total shares repurchased to 12.2 million in fiscal year 2026.
SentinelOne ended the year with $770 million in cash, cash equivalents and investments, and no debt.
The company will continue to employ a balanced capital allocation strategy, prioritizing organic investments while returning capital to shareholders.
Industry Trends and Dynamics
AI security is the fastest growing segment in cybersecurity, expanding over 70% according to Gartner, with SentinelOne already seeing AI security as its fastest growth category.
Security and trust remain the single biggest barrier to enterprise AI adoption in the United States and globally.
Nearly half of the existing endpoint sector is still using legacy antivirus solutions, representing a clear opportunity for continued market share gains.
Enterprises are increasingly consolidating on unified platforms, with customers choosing the Singularity platform for unified AI-native security.
There is accelerating enterprise demand for secure adoption of AI models, agentic workflows, and employee AI usage.
Securing highly restricted on-premise environments where true sovereignty is paramount is becoming one of the most strategic growth opportunities, with SentinelOne seeing triple-digit booking growth in this area.
Competitive Landscape
SentinelOne displaced a closest competitor to win Cloudflare, a major internet security company securing about 40% of all human originated internet traffic, with the customer citing superior technology and ease of use as deciding factors.
SentinelOne is gaining traction in the most critical domains of cybersecurity, both AI for security and security for AI, with the company offering the only cybersecurity platform that delivers true unification.
SentinelOne has established itself as a clear technology leader in cybersecurity through relentless focus on delivering AI-powered innovations that unify security, data and automation.
There are no serious scalable alternatives to Prompt Security in the market, positioning SentinelOne uniquely in AI security.
SentinelOne's unique platform architecture delivers multi-tenancy and remote management capabilities that drive real operational leverage and technology differentiation in the managed security ecosystem.
SentinelOne is winning at the top end of the market, highlighted by an eight-figure strategic partner win in Q4.
The company is beginning to win AI security deals from customers of direct competitors, creating a new strategic entry point to expand market share and footprint.
SentinelOne secures nearly one-fifth of the Fortune 500 and hundreds of Global 2000 enterprises.
Macroeconomic Environment
The company continues to monitor the evolving macroeconomic environment and geopolitical uncertainties, which can still influence deal timing and sales cycles across the industry.
Growth Opportunities and Strategies
AI represents a significant TAM expansion and a long-term tailwind for the business, with AI-native security foundational to the platform architecture from early on.
The company is positioned to emerge as the category winner in the AI era across more than $100 billion market opportunity.
SentinelOne's unified platform spans seven core solution categories, delivering more than 40 different modules designed to solve complex use cases.
The Singularity platform's intuitive design and operational simplicity are driving stronger customer adoption, with customers increasingly recognizing the architectural advantage.
SentinelOne Flex is proving to be a highly effective model for broader platform adoption, simplifying the purchasing process and driving larger deal sizes, multi-solution deployments and extended commitments.
The company is expanding and deepening engagements in the partner ecosystem, with partners serving as a force multiplier to expand reach and scale.
In fiscal 2026, SentinelOne achieved over 60% ACV growth with top-20 MSSP partners and over 75% ACV growth with top-10 MSSP partners.
SentinelOne is deepening collaboration with hyperscalers by integrating technology and platform across their cloud marketplaces and AI services.
The company achieved GovRAMP Authorization at the high impact level, opening more public sector opportunities in both federal and SLED environments.
SentinelOne is pushing into the frontier of autonomous agentic security, where AI independently detects and stops complex threats in real-time.
The company is integrating AI throughout its business to unlock structural productivity gains and improve operational efficiency.
SentinelOne is actively partnering with, investing in, and protecting the pioneers building today's frontier AI models.
Financial Guidance and Outlook
For fiscal year 2027, the company expects revenue between $1.195 billion and $1.205 billion, representing 20% year-over-year growth at the midpoint.
For Q1 fiscal 2027, the company expects revenue between $276 million and $278 million, representing 21% year-over-year growth at the midpoint.
Fiscal year 2027 revenue outlook implies a year-over-year improvement in net new ARR.
For fiscal 2027, the company expects operating income between $110 million and $120 million, representing an operating margin of 10% at the midpoint.
For Q1 fiscal 2027, the company expects operating income between $4 million and $6 million, representing an operating margin of 2% at the midpoint.
For full fiscal year 2027, the company expects fully diluted earnings per share between $0.32 and $0.38 per share, representing $0.35 at the midpoint.
For Q1 fiscal 2027, the company expects earnings per share between $0.01 and $0.02.
The company expects a non-GAAP tax rate of approximately 17% for fiscal year 2027.
The company expects weighted average diluted share count of approximately 345 million for Q1 and 352 million for the full year.
Adjusted full year free cash flow margin is expected to closely track operating margin outlook for fiscal 2027, with Q1 adjusted free cash flow margins expected in the low-teens.
The company is accelerating its path toward achieving the Rule of 40, driven by durable growth and higher profitability.
The outlook is supported by a solid pipeline, strategic partnership opportunities, and rising contributions from emerging solutions including AI, data, cloud, Wayfinder and others.
Platform and Product Strategy
The company is helping organizations advance their digital transformations securely and intelligently through AI for security and security for AI.
Wayfinder delivers immediate time to value by deploying in under 15 minutes and resolving 99% of threats without any customer action required.
According to IDC's independent study, Purple users experienced 55% faster threat remediation, 60% lower likelihood of major incidents, and an impressive 338% return on investment over three years.
SentinelOne launched Cloud Security, the industry's first open source security suite to secure emerging autonomous agents.
In Q4, SentinelOne launched a new AI-native Data Security Posture Management solution (DSPM) to help customers secure their data and AI workloads.
Through Observo AI, SentinelOne owns the data pipeline that powers modern security operations, with the company fully integrating Observo AI's data pipeline solution into the Singularity platform.
SentinelOne signed a multiyear infrastructure partnership with a global hyperscaler, with the company's threat intelligence data pairing with the hyperscaler's native threat intelligence services.
Leadership and Organizational Changes
Sonalee Parekh is joining SentinelOne as the new Chief Financial Officer, bringing more than 25 years of experience across public software and technology companies with a proven track record of scaling high growth software platforms.
