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SentinelOne, Inc. (S)·Q2 2026 Earnings Summary

Executive Summary

  • Strong Q2 FY26: revenue grew 22% YoY to $242.2M, non-GAAP EPS $0.04, ARR surpassed $1.0B (+24% YoY), and non-GAAP operating margin turned positive at 2%, reflecting improved operating leverage and platform adoption across AI, data, cloud, and endpoint .
  • Guidance: modest raise to FY26 revenue to $998–$1,002M (from $996–$1,001M in Q1), with FY non-GAAP operating margin guided to ~3% (narrowed from 3–4% prior) as management factors ~100 bps FX headwind and ~80 bps Prompt Security impact; Q3 revenue guided to $256M with 78.5% GM and ~4% OM .
  • Estimates: Q2 revenue was essentially in line (beat by ~$0.013M), and non-GAAP EPS beat ($0.04 vs $0.0296 consensus); S&P Global shows EBITDA below consensus, noting the company doesn’t emphasize EBITDA in disclosures* .
  • Emerging-products momentum and AI: ~50% of quarterly bookings came from non-endpoint (Data, AI, Cloud, etc.); Purple AI grew triple-digits with record attach; “Flex” licensing landed 8-figure deals; Prompt Security acquisition broadens GenAI runtime protection and likely supports multi-product expansion .

What Went Well and What Went Wrong

  • What Went Well

    • Surpassed $1B ARR with record Q2 net new ARR; revenue +22% YoY to $242.2M; non-GAAP OM turned positive (2%) and non-GAAP NI margin rose to 5% .
    • Platform traction: ~50% of quarterly bookings from emerging products; Purple AI grew triple-digits with attach rates >30%; data solutions delivered a record contribution to bookings .
    • Flex licensing resonated, enabling larger, multi-product deals; cited an 8-figure TCV Flex win and improved sales velocity; ARR per customer reached a new company record .

  • What Went Wrong

    • FY26 margin outlook tightened: operating margin guided to ~3% (from 3–4%) due to ~100 bps FX headwind and ~80 bps Prompt Security impact; FY GM narrowed to 78.5–79% (from 78.5–79.5%) .
    • Non-GAAP gross margin dipped YoY (79% vs 80% in Q2 FY25) on higher services/support investment at scale .
    • Management remains cautious on 2H deal timing/macro, tempering the magnitude of the FY revenue raise despite very strong Q2 net new ARR performance .

Financial Results

MetricQ2 FY25Q4 FY25Q1 FY26Q2 FY26
Revenue ($USD Millions)$198.937 $225.521 $229.029 $242.183
Non-GAAP Diluted EPS ($)$0.01 $0.04 $0.02 $0.04
Non-GAAP Gross Margin %80% 79% 79% 79%
Non-GAAP Operating Margin %(3)% 1% (2)% 2%
Non-GAAP Net Income Margin %2% 5% 3% 5%

Estimates comparison (Q2 FY26):

  • Revenue: Actual $242.183M vs Consensus $242.170M*; Surprise ≈ +$0.013M .
  • Non-GAAP EPS: Actual $0.04 vs Consensus $0.0296*; Surprise ≈ +$0.0104 .
  • EBITDA: Actual −$64.47M vs Consensus +$4.55M*; note the company does not emphasize EBITDA in its press release .
    *Values retrieved from S&P Global.

KPIs

KPIQ4 FY25Q1 FY26Q2 FY26
ARR ($USD Millions)$920.1 $948.1 $1,001.0
Customers with ARR ≥$100K1,411 1,459 1,513

Notes:

  • GAAP gross margin was 75%; non-GAAP gross margin 79% .
  • Cash, cash equivalents, and investments totaled ~$1.2B as of 7/31/25 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q3 FY26N/A$256New
Non-GAAP Gross MarginQ3 FY26N/A78.5%New
Non-GAAP Operating MarginQ3 FY26N/A4%New
Revenue ($M)FY26$996–$1,001 $998–$1,002 Raised
Non-GAAP Gross MarginFY2678.5–79.5% 78.5–79% Narrowed/lowered top end
Non-GAAP Operating MarginFY263–4% 3% Lowered (FX −~100 bps; Prompt −~80 bps)

Additional color:

  • FY26 revenue outlook includes ~1% headwind from end-of-sale for the Hologram (deception) solution .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25, Q1 FY26)Current Period (Q2 FY26)Trend
AI/GenAI and Purple AIEmphasis on autonomous/agentic AI and platform leadership ; innovation fueling adoption across AI, Data, Cloud, Endpoint Purple AI grew triple-digits; attach >30%; landing 7-figure ARR wins Accelerating
Data/AI SIEMPlatform adoption noted Data bookings accelerated; record contribution; AI SIEM unlocking new sales motions (AWS listings) Stronger
Cloud SecurityPlatform adoption Wins at scale; runtime + CNAPP; hybrid visibility; recognized by Gartner Peer Insights Improving
Flex LicensingNot presentNew unified licensing; 8-figure deal; improves velocity and multi-product attach New positive catalyst
M&A (Prompt Security)N/AAdds GenAI runtime/DLP-adjacent controls; minimal FY26 ARR; ~80 bps OM headwind; ~$180M purchase price; expected close Q3 Strategic expansion
Macro/Deal TimingOngoing cautionRaised FY revenue but kept prudent 2H assumptions on large-deal timing/macro (incl. federal) Cautious
InternationalN/AInternational 38% of revenue; grew 27% YoY Broadening mix

Management Commentary

  • CEO (platform/AI momentum): “We surpassed $1 billion in ARR and delivered record net new ARR… momentum of our AI-powered platform, strengthening competitive position, and growing product differentiation.”
  • CEO (Flex and platform adoption): “Flex… gives organizations the agility to manage entitlements… reception… outstanding, with an 8-figure total deal value… enabling larger deals and faster expansion.”
  • CFO (profitability): “We maintained an industry leading gross margin of 79%… achieved operating profitability of 2%… expect to sustain quarterly operating profitability and deliver our first full year of operating profit this fiscal year.”
  • CFO (FY outlook context): “Full year operating margin of about 3%… incorporates… ~100 bps FX headwind… and ~80 bps from the Prompt acquisition… reaffirming positive free cash flow for the full year.”
  • Strategy on GenAI risk: Prompt “enables organizations to adopt GenAI safely… real-time visibility… and enforcing policies to prevent… data leakage and misuse… a natural extension to the Singularity platform.”

Q&A Highlights

  • Flex model mechanics and impact: Flex structured like other ARR contracts (TCV/duration), revenue recognized ratably; early results include 8-figure TCV wins and streamlined sales cycles .
  • Sources of net new ARR upside: Broad-based across new logos, expansions, Purple AI (triple-digit growth) and Data (record bookings); Flex supports larger multiproduct commitments .
  • Guidance prudence: Despite strong Q2, FY raise reflects caution on 2H deal timing, macro, and federal exposure .
  • Mix and pipeline: International reached 38% of revenue (+27% YoY) with stable duration; pipeline described as “very healthy” .
  • Prompt Security: ~$180M price; immaterial FY26 ARR/revenue; ~80 bps FY OM headwind; early customer interest; complements endpoint/DLP-adjacent and cloud AI runtime use cases .

Estimates Context

  • Q2 FY26 results vs S&P Global consensus: revenue essentially in line (Actual $242.183M vs $242.170M*), non-GAAP EPS beat ($0.04 vs $0.0296*). S&P Global shows EBITDA below consensus (Actual −$64.47M vs +$4.55M*), noting the company does not emphasize EBITDA in disclosures .
  • Next quarter (Q3 FY26) consensus: revenue ~$256.19M*, EPS ~$0.0532*, broadly consistent with company guidance for revenue and OM .
    *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Durable growth at scale: 22% revenue growth, ARR >$1B (+24%), with continued operating leverage (non-GAAP OM 2%) and positive non-GAAP NI margin (5%) .
  • AI-led differentiation: Purple AI’s rapid adoption and AI SIEM/data momentum signal multi-year platform expansion potential beyond endpoint .
  • Flex as an attach/upsell engine: New licensing model is catalyzing larger, multi-solution deals and improving sales velocity—watch for rising ARR per customer and duration .
  • Guidance: modest FY revenue raise but tighter margin outlook (FX and Prompt headwinds) suggests a balanced risk posture into 2H; Q3 OM guided to ~4% .
  • M&A broadens TAM: Prompt Security adds GenAI runtime governance and DLP-adjacent capabilities that align with customer priorities; near-term OM headwind should be weighed against strategic upside .
  • Execution watch items: 2H large-deal timing, macro/federal demand, and sustaining non-endpoint bookings mix near ~50% will be key to upside/beat potential .
  • Cash and liquidity strength (~$1.2B) provides flexibility for investment and opportunistic M&A while targeting full-year operating profitability and positive FCF .

Appendix: Additional Data Points

  • Q2 details: GAAP GM 75%; non-GAAP GM 79%; GAAP operating margin (33)% vs non-GAAP OM 2%; GAAP net loss margin (30)% vs non-GAAP NI margin 5% .
  • Cash flow: TTM FCF margin improved to 2%; Q2 free cash flow margin (3)% on quarterly basis; FY guide maintains commitment to positive FCF .
  • RPO: Management cited RPO growth ~26% to ~$1.2B, with stable duration; ARR preferred as core KPI .