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SentinelOne, Inc. (S)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered revenue of $225.5M (+29% YoY) and the company’s first quarter of positive non-GAAP operating margin (1%); ARR reached $920.1M (+27% YoY) and non-GAAP net income margin was 5% .
  • Management guided Q1 FY2026 revenue to $228M and FY2026 revenue to $1,007–$1,012M with non-GAAP GM ~79% in Q1 and 78.5–79.5% for the year; non-GAAP operating margin guided to -2% in Q1 and +3–4% for FY2026 .
  • The earnings call emphasized accelerating platform adoption (data, AI SIEM, CNAPP), strong competitive displacements, and MSSP momentum; net new ARR reaccelerated in 2H and Q4 added $60M with robust win rates .
  • Notable headwind: retirement of the legacy deception solution expected to drive ~$10M churn in FY2026 (about half in Q1), a temporary drag on NRR and net new ARR; management expects net new ARR of ~$200M in FY2026 (+2% YoY) including the churn headwind .
  • Catalyst narrative: broad AI adoption (Purple AI, AI SIEM) with third-party data integrations and MITRE validation (100% detection, 88% fewer alerts than median), plus margin expansion milestones could drive estimate revisions and sentiment improvement .

What Went Well and What Went Wrong

What Went Well

  • Positive non-GAAP operating margin achieved for the first time in company history in Q4; “culminating in our first quarter of positive non-GAAP operating margin in Q4” (CFO) .
  • Platform momentum: “record bookings contribution from our data cloud and AI security solutions,” with examples of AI SIEM replacing legacy SIEM and multimillion expansions, and 40% of enterprise customers adopting 3+ solutions (CEO) .
  • External validation: MITRE ATT&CK Evaluations—100% detection, zero detection delays, 88% fewer alerts vs median, highlighting superior signal-to-noise .

What Went Wrong

  • Q4 free cash flow margin of -4% and operating cash flow margin of -2% (quarterly) despite full-year positive FCF margin of 1%; near-term cash flow still lumpy .
  • Guidance headwind from end-of-life deception solution: ~$10M churn in FY2026, ~half in Q1; expected NRR headwind near-term .
  • Discrepancy between press release FY2026 revenue guidance ($1,007–$1,012M) and verbal range cited on the call ($1.07–$1.12B); investors should anchor to furnished 8-K/press release while noting call commentary .

Financial Results

Revenue, EPS, Margins vs Prior Periods and Estimates

MetricQ2 FY2025 (oldest)Q3 FY2025Q4 FY2025 (newest)
Revenue ($USD Millions)$198.9 $210.6 $225.5
Revenue Consensus ($USD Millions)$197.38*$209.72*$222.33*
Diluted EPS (Non-GAAP, $)$0.01 $0.00*$0.04
EPS Consensus (Primary EPS, $)-$0.00332*$0.01276*$0.01340*
GAAP Gross Margin (%)75% 75% 75%
Non-GAAP Gross Margin (%)80% 80% 79%
GAAP Operating Margin (%)(40)% (42)% (36)%
Non-GAAP Operating Margin (%)(3)% (5)% 1%
YoY Revenue Growth (%)+33% +28% +29%

Notes: Asterisks indicate values retrieved from S&P Global.
Values retrieved from S&P Global.

Beat/miss highlights:

  • Q4 revenue beat consensus ($225.5M vs $222.3M; +1.4%) and non-GAAP EPS beat ($0.04 vs $0.0134) .
  • Q3 revenue beat modestly; EPS was flat vs a small positive consensus—interpret as a miss vs S&P consensus .
  • Q2 revenue and EPS both beat consensus.

KPIs

KPIQ4 FY2025
ARR ($USD Millions)$920.1
Net New ARR ($USD Millions)$60
Customers with ARR ≥ $100K1,411
International Revenue Mix (%)37%
RPO ($USD Billions)$1.2
NRR (%)110%
Cash, Cash Equivalents & Investments ($USD Billions)$1.1

Year-ago Comparison (Q4 FY2024 vs Q4 FY2025)

MetricQ4 FY2024Q4 FY2025
Revenue ($USD Millions)$174.2 $225.5
GAAP Gross Margin (%)72% 75%
Non-GAAP Gross Margin (%)78% 79%
GAAP Operating Margin (%)(47)% (36)%
Non-GAAP Operating Margin (%)(9)% 1%
Non-GAAP Net Income Margin (%)(4)% 5%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q1 FY2026N/A$228 Established
Non-GAAP Gross Margin (%)Q1 FY2026N/A~79% Established
Non-GAAP Operating Margin (%)Q1 FY2026N/A(2)% Established
Revenue ($USD Millions)FY2026N/A$1,007–$1,012 Established
Non-GAAP Gross Margin (%)FY2026N/A78.5–79.5% Established
Non-GAAP Operating Margin (%)FY2026N/A3–4% Established
Net New ARR ($USD Millions)FY2026N/A~200 (incl. ~$10M deception churn) Established
Free Cash Flow Margin (%)FY2026N/A“several percentage points higher than operating margin” Established

Note: Call commentary referenced FY2026 revenue range of $1.07–$1.12B, which differs from furnished press release/8-K ($1,007–$1,012M). Anchor to 8-K furnished guidance; treat call range as verbal commentary pending formal update .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 FY2025)Current Period (Q4 FY2025)Trend
AI/technology initiativesEmphasis on AI-powered Singularity; raised FY25 revenue outlook; first ever positive net income/EPS (Q2) AI SIEM replacing legacy SIEM; 300+ AI deals in Q4; Purple AI foundations across platform; third‑party integrations (Zscaler, Okta, Palo Alto, Microsoft) Accelerating
Platform adoptionBroader platform capabilities, strong gross margins (Q3) 40% of enterprise customers on 3+ solutions; >50% bookings from non-endpoint; record data/cloud/AI bookings Expanding
Product performance (validation)—MITRE: 100% detection, zero delays, 88% fewer alerts vs median Strengthening
Regional trends—International revenue +36% YoY; 37% of Q4 revenue Positive mix shift
Pricing/flexibility—Moving to more flexible platform pricing; stable pricing, aim to ease multi‑module adoption Evolving
Federal pipeline/macro—Federal pipeline expanding; macro/political uncertainty remains a watchpoint Mixed (demand strong, timing uncertain)
MSSP channel—Deeper MSSP relationships; longer-term commitments benefiting visibility Strengthening
R&D execution—Focused investments toward AI, data, cloud; optimizing facilities/resources Focused/efficient
Legacy product retirement—Deception end-of-life; ~$10M churn FY26 (half in Q1); NRR headwind in Q1 Transitional headwind

Management Commentary

  • “We’re on track to surpass $1 billion in ARR and revenue this year, a key milestone in our growth journey… pioneering fully autonomous, agentic AI workflows.” — CEO .
  • “Q4… exceeded our expectations across all guided metrics… we delivered industry-leading revenue growth and margin improvement… first quarter of positive operating income in Q4.” — CEO .
  • “We achieved… positive net income margin of 2% and positive free cash flow margin of 1% for the full year… we expect gross margin ~79% in Q1 and 78.5–79.5% for the year; operating margin -2% in Q1 and +3–4% for FY26.” — CFO .
  • “Record bookings contribution from our data cloud and AI security solutions… customers are starting to migrate away from legacy SIEM… multimillion expansions replacing incumbents.” — CEO .

Q&A Highlights

  • Deception retirement impacts: ~$10M churn in FY2026 (~half in Q1); ~1 point revenue headwind; temporary NRR headwind in Q1 .
  • Guidance philosophy: setting “reasonable expectations” given macro volatility; aim to overachieve; call referenced a higher revenue range than PR/8-K, creating a discrepancy to monitor .
  • Pricing approach: stable pricing with more flexible terms to support multi-module adoption across 30+ capabilities .
  • Lenovo OEM relationship: impact expected to be back-end loaded, more meaningful in out-years .
  • Federal demand: pipeline expanding; SentinelOne can create cost synergies via data ingestion and operations in high-security environments .

Estimates Context

  • Q4 FY2025 results vs consensus: revenue $225.5M vs $222.33M (beat), EPS $0.04 vs $0.0134 (beat).
  • Prior quarters: Q3 revenue beat ($210.6M vs $209.72M), EPS miss (0.00 vs $0.01276); Q2 revenue and EPS both beat ($198.9M vs $197.38M; $0.01 vs -$0.00332).
  • FY2026 consensus revenue ~$1.00B prior to guide; Street likely to align with company guidance and incorporate deception churn and margin trajectory.
MetricQ2 FY2025Q3 FY2025Q4 FY2025Q1 FY2026FY2026
Revenue Consensus Mean ($USD)197.38M*209.72M*222.33M*228.40M*1,000.58M*
Primary EPS Consensus Mean ($)-0.00332*0.01276*0.01340*0.01615*0.18783*
Actual Revenue ($USD)198.94M*210.65M*225.52M*229.03M*—
Actual Primary EPS ($)0.01*0.00*0.04*0.02*—

Notes: Asterisks indicate values retrieved from S&P Global.
Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q4 marks a profitability inflection: first positive non-GAAP operating margin with ongoing gross margin strength—supports a path to FY2026 operating margin of +3–4% .
  • Platform-led growth is real: non-endpoint bookings now >50%, record data/cloud/AI momentum, and 40% of enterprise customers on 3+ solutions—underpins durable expansion and upmarket motion .
  • AI SIEM and Purple AI are strategic wedges, validated by MITRE (100% detection, less noise), creating a displacement narrative vs legacy SIEM that can sustain wins and larger deal sizes .
  • Near-term headwind from deception retirement (~$10M churn) should be transitory; watch Q1 NRR and net new ARR (guided low $30M range) for clearing the headwind .
  • Guidance vs Street: furnished FY2026 revenue guide ($1,007–$1,012M) implies mid‑20s growth with margin expansion; monitor any formal updates vs verbal call commentary and potential estimate revisions .
  • Cash position of ~$1.1B provides flexibility to invest in AI/data and sustain scale while targeting higher free cash flow margins than operating margin in FY2026 .
  • Trading lens: positive beats on Q4 revenue/EPS and margin inflection are supportive; watch early FY2026 cadence (Q1 gross margin ~79%, op margin -2%) and any incremental color on federal and OEM (Lenovo) timing .