SentinelOne Inc Earnings - Q2 2025 Analysis & Highlights
Key Takeaways
Byline: The SentinelOne Inc Q2 2026 Earnings Call, held on August 28, 2025, revealed strong financial results, including ARR growth and record net new ARR. The company highlighted its platform's momentum, especially with AI and data solutions, and introduced SentinelOne Flex, a new licensing model. They also announced the acquisition of Prompt Security to enhance AI security. Management discussed growth strategies, the competitive landscape, and provided financial guidance for Q3 and fiscal year 2026, while acknowledging the dynamic macro environment.
Key Financial Results:
Total ARR grew 24%, surpassing $1 billion.
Record second quarter net new ARR was achieved, with over 20% year-over-year growth.
Revenue increased 22% year-over-year to $242 million.
International markets grew 27% and represent 38% of total revenue.
Customers with ARR of $100,000 or more grew 23% to 1,513.
Gross margin was 79%.
Operating profitability of 2% was achieved.
Net income margin increased to 5% in Q2.
Remaining performance obligations grew 26% to $1.2 billion.
Ended the quarter with $1.2 billion in cash, cash equivalents, and investments, with no debt.
The purchase price for Prompt Security is approximately $180 million.
Business Segment Results:
Approximately half of quarterly bookings came from non-endpoint solutions.
Purple AI achieved record momentum, growing triple digits.
Data solutions booking growth accelerated, delivering a company record contribution to total bookings in the quarter.
Endpoint bookings growth accelerated to the highest level in the past year.
Capital Allocation:
Strong balance sheet provides flexibility to allocate capital strategically.
Acquisition of Prompt Security for approximately $180 million.
Industry Trends and Dynamics:
Rising demand for AI-powered cybersecurity.
Customers are turning to SentinelOne for a unified AI, data, and security platform.
GenAI adoption is exploding across all industries, bringing new risks and exposure.
Cybersecurity remains a top priority across industries.
Competitive Landscape:
SentinelOne is a clear technology leader in cybersecurity.
Singularity is a leading cybersecurity platform.
SentinelOne was the leading endpoint growth vendor among standalone cybersecurity vendors.
Recognized as a leader in the Gartner Magic Quadrant for endpoint protection platforms for the fifth consecutive year.
Named Top-Performing Vendor in the 2025 Frost Radar for Endpoint Security.
Macroeconomic Environment:
Acknowledged the dynamic macro backdrop and evolving macro conditions, which can influence deal timing and sales cycles.
Growth Opportunities and Strategies:
Focus on delivering AI-powered innovations that unify security, data, and automation.
SentinelOne Flex, a unified, flexible licensing model, gives organizations agility to manage entitlements and deploy new platform capabilities.
Expanding and deepening engagements within the partner ecosystem.
Deepening engagements with hyperscalers like AWS.
Acquisition of Prompt Security to secure generative AI at runtime.
Entering the DLP space directly from the endpoint.
Financial Guidance and Outlook:
For Q3, revenue is expected to be approximately $256 million, reflecting 22% year-over-year growth.
For fiscal year 2026, revenue is expected to be in the range of $998 million to $1.002 billion, representing 22% year-over-year growth.
Q3 gross margin is expected to be approximately 78.5%.
For the full year, gross margin is expected to be between 78.5% and 79%.
In Q3, the operating margin is expected to be about 4%.
For the full year, an operating margin of about 3% is expected.
Reaffirming commitment to delivering positive free cash flow for the full year.
