SentinelOne Q4 FY2026 Earnings Call - Passed $1B, turned profitable, AI security drives record ARR

Saad Nazir, Head of Investor Relations, SentinelOne: I will now turn the call over to Saad Nazir, Head of Investor Relations.

Saad Nazir, Head of Investor Relations, SentinelOne: Good afternoon, everyone, and welcome to SentinelOne’s earnings call for the fiscal year ended January 31st, 2026. With us today are Tomer Weingarten, CEO; and Barry Padgett, Interim CFO. Our press release and an earnings presentation were issued earlier today and are posted on the investor relations section of our website. This call and accompanying slides are being broadcast live via webcast, and a replay will be available on our website after the call. Before we begin, I would like to remind you that during today’s call, we’ll be making forward-looking statements about financial performance and future events, including our guidance for the fiscal first quarter and full fiscal year 2027, as well as long-term financial targets. We caution you that such statements reflect our best judgment based on factors currently known to us, and that our actual results or events could differ materially.

Please refer to the documents we file from time to time with the SEC, in particular, our quarterly reports on Form 10-Q and our annual report on Form 10-K. These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. Any forward-looking statements made during this call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons why actual results may differ materially from those anticipated even if new information becomes available in the future.

During this call, we will discuss non-GAAP financial measures, and all comparisons made are year over year unless otherwise noted. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the GAAP and non-GAAP results, other than with respect to our non-GAAP financial outlook, is provided in today’s press release and in our earnings presentation. These non-GAAP measures are not intended to be a substitute for our GAAP results. Our financial outlook excludes stock-based compensation expense, employer payroll tax on employee to- stock transactions, amortization expense of acquired intangible assets, acquisition-related compensation costs, restructuring charges, gains on strategic investments, impacts of the previously announced ITA tax settlement, and income tax provision, which cannot be determined at this time and are therefore not reconciled in today’s press release. With that, let me turn the call over to Tomer Weingarten, CEO of SentinelOne.

Brian Essex, Analyst, JP Morgan8: Good afternoon, everyone, and thank you for joining our fourth quarter earnings call. Fiscal 2026 was a landmark year for SentinelOne. We achieved a billion-dollar revenue scale, growing 22% year-over-year, and delivered full-year operating profitability, a significant milestone towards profitable growth. In Q4, our total ARR grew 22%, driven by strong new logo acquisition and expansion with existing customers. We delivered 64 million net new ARR in Q4, a company record. This marks our third consecutive quarter exceeding ARR expectations, showing execution consistency and positive growth. We drove about half of our new business through new logos, showing a balanced split between new logo acquisition and expansion within our existing customer base. We’re gaining traction in the most critical domains of cybersecurity, both AI for security and security for AI. We’re helping organizations advance their digital transformations securely and intelligently.

SentinelOne offers the only cybersecurity platform that delivers this unification truly. AI represents a significant TAM expansion and a long-term tailwind for our business. From early on, AI-native security has been foundational to our platform architecture. This early advantage positions us to emerge as the category winner in the AI era across more than a $100 billion market opportunity. We’ve established SentinelOne as a clear technology leader in cybersecurity. Our relentless focus on delivering AI-powered innovations that truly unify security, data, and automation has positioned us at the forefront of the industry. As we enter the new fiscal year, we’re accelerating our path towards achieving the Rule of 40, driven by durable growth and higher profitability. Now, let’s dive deeper into the details of our quarterly performance. We are winning new logos and expanding our footprint across diverse platform categories.

Enterprises are choosing the Singularity Platform for unified AI-native security that provides a single pane of glass and seamless workflow. We firmly believe that cybersecurity shouldn’t be complicated. Beyond the Singularity Platform’s best-in-class efficacy, its intuitive design and operational simplicity are driving stronger customer adoption. Today, our unified platform spans 7 core solution categories, delivering more than 40 different modules designed to solve the most complex use cases, all while providing end-to-end autonomous cybersecurity. In fiscal 2026, our non-endpoint solutions surpassed half of our total annual bookings, a clear testament to the diversity and customer outcomes of the Singularity Platform. Customers are increasingly consolidating on our platform. In fiscal 2026, the percentage of our enterprise customers using 3 or more solutions increased to 65% versus 39% a year ago. Enterprises using 4 or more solutions more than doubled to 42% versus 19% a year ago.

Enterprises using five or more solutions increased to 22% versus 9% a year ago. For many of the enterprise logos we’re adding, this is just the beginning of a long-term expansion journey. In Q4, our cross-platform adoption drove a record ARR per customer, signifying solid momentum and contributions from our AI, data, cloud, Wayfinder, and endpoint solutions. Customers of all sizes, especially large enterprises, are increasingly recognizing Singularity’s architectural advantage. Our Q4 performance clearly demonstrates this momentum. We drove sequentially higher win rates across every market segment, anchored by accelerating gains in the enterprise. Let’s look at an enterprise win that exemplifies this. Internet security giant Cloudflare, the company securing about 40% of all human-originated internet traffic, moved to SentinelOne in less than 24 hours, completely uninterrupted.

After a rigorous POC, they selected SentinelOne to replace our closest competitor as their security platform of choice, citing our superior technology and ease of use as the deciding factors. This seven-figure deal included endpoint security, Purple, and our Wayfinder Elite services. This is a clear testament to our technological edge and the platform value we deliver. Next, looking at our key growth drivers, Purple is becoming the bedrock of modern security operations, empowering teams to respond faster, accelerate detection, and automate investigations. The trajectory of Purple adoption continues to outpace our internal expectations, hitting a record attach rate of over 50% on licenses sold in Q4. 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 just three years.

We’re seeing strong Purple uptake across both new logos and existing customers. Many of our Purple AI customers are expanding their usage, signifying future growth potential and the value it delivers. For AI security, we are benefiting from the accelerating enterprise demand for secure adoption of AI models, agentic workflows, and employee AI usage. In Q4, ARR from Prompt Security more than doubled sequentially. In addition to existing customer upsells, we’ve started winning standalone AI security deals with Fortune 500 companies. Moreover, we are beginning to win AI security deals from customers of our direct competitors, creating a new strategic entry point to expand our market share and footprint. There are no serious scalable alternatives to Prompt Security in the market, and customers need to adopt AI now.

For example, in the past quarter, a Fortune 100 financial services company deployed nearly 100,000 licenses for AI security and governance. Prompt Security is helping solve complex AI governance and compliance challenges for customers across our industry. In another example, a multinational retail giant deployed Prompt Security to eliminate a visibility black hole surrounding unmonitored employee AI usage. They chose SentinelOne for quick deployment, visibility, and real-time AI security, all while satisfying strict European GDPR requirement. We also launched Claw Security, the industry’s first open-source security suite to secure emerging autonomous agents like OpenClaw and others. For data solutions, we surpassed $130 million in ARR with growth accelerating sequentially. We are seeing rising demand for our AI SIEM as it delivers deeper visibility, real-time detection, and autonomous response, all with far more efficient unit economics than legacy alternatives.

In Q4, we also launched our new AI-native Data Security Posture Management solution, or DSPM, to help customers secure their data and AI workloads. Furthermore, through Observe.AI, we now own the data pipeline that powers modern security operations. The market is clearly recognizing this value. We were just named SIEM Innovation of the Year in the Cybersecurity Breakthrough Awards. We have now fully integrated Observe.AI’s data pipeline solution into the Singularity Platform. This creates a truly comprehensive data architecture, natively unifying petabyte-scale ingestion, data pipeline, orchestration, and hyperautomation into a single seamless experience. For data solutions, we signed a multi-year infrastructure partnership with a global hyperscaler. As part of our expanding alliance, SentinelOne’s threat intelligence data now pairs with this company’s native threat intelligence services. This shared telemetry model powers our own joint offerings and establishes a highly strategic growth vector for our data business.

In addition to taking share from legacy incumbents, our platform is now beginning to serve as the foundational data layer for the world’s largest technology innovators. For cloud security, we are seeing strong expansion, especially with our best-of-breed runtime workload capabilities covering both on-prem and cloud environments. In Q4, our cloud security solution surpassed $160 million in ARR. As cloud environments expand and AI workloads multiply, the need for robust security is increasing. We are meeting this demand by delivering comprehensive cloud-native detection and response that scales with our customers’ infrastructure, simplifying their operations and elevating defenses with our unified platform. For endpoint, we achieved double-digit ARR growth in Q4. We continue to outgrow the broader market by delivering the most autonomous endpoint security solution available, combining industry-leading efficacy, performance, and user experience. Nearly half of the existing endpoint sector is still using legacy antivirus solutions.

We see this as a clear opportunity for continued market share gains. Our leadership in AI-native security is attracting the most advanced technology innovators in the world. In Q4, one of the top frontier labs selected a Singularity Platform to secure its mission-critical infrastructure and the development of its flagship models. This win underscores that the architects of the AI frontier recognize SentinelOne as the definitive security layer for the future of intelligence. In the era of AI, securing of highly restricted on-premise environments where true sovereignty is of paramount importance are becoming one of the most strategic growth opportunities. While our competitors have no ability to secure these environments, we saw triple-digit booking growth in the quarter, signifying an emerging growth avenue for us. We have the distinct advantage of delivering fully autonomous, high-velocity AI protection both in the cloud and on-premise.

This differentiation was clear in our recent win with one of the largest postal operators globally. The customer signed a five-year commitment to secure their vast network with SentinelOne. Our ability to deliver a specialized on-premise security at scale while meeting the most rigorous government standards was the deciding factor. In addition, we are seeing strong enterprise interest in Wayfinder threat services, which crossed $100 million in ARR in Q4. As enterprises race to adopt generative AI, they often lack the blueprint to do so safely. Wayfinder fills that gap by serving as both an implementation arm and a managed supervision layer for AI cybersecurity. Our Wayfinder AI-augmented services deliver immediate time to value by deploying in under 15 minutes and resolving 99% of threats without any customer action required. Trust is a big factor.

We believe that expert human oversight is the way forward to build customer trust when adopting new autonomous technologies. Wayfinder embodies this vision by pairing our AI-native platform with elite AI security experts. As expected, SentinelOne Flex is proving to be a highly effective model for broader platform adoption. By simplifying the purchasing process, Flex is driving larger deal sizes, multi-solution deployments, and extended commitments. Flex simplifies the path for large-scale platform adoption and secures long-term, high-value partnerships. For a platform consolidation win, we secured an eight-figure TCV deal with an iconic global logistics company that standardized on the Singularity Platform for unified AI security. To protect their highly distributed and critical infrastructure, this enterprise consolidated multiple competing vendors on the Singularity Platform. SentinelOne was the clear choice to modernize their operations and securely implement AI.

Alongside industry-leading efficacy, Singularity Platform’s intuitive design, unified interface, and ease of use are key differentiators that are driving strong platform adoption. We’re delivering the only single-pane platform on the market capable of being deployed anywhere, which stand in stark contrast to our next-gen peers. Large enterprises, especially leading innovators, are recognizing this, in many cases, securing millions of assets in a single deployment. Our continued upmarket trajectory is driving larger deal sizes and steady retention rates. Landing these premier enterprise logos at scale provides us with a significant, highly durable runway to drive strong growth for years to come. Today, we proudly secure nearly one-fifth of the Fortune and hundreds of Global 2000 enterprises. Our expanding customer base now includes some of the most sophisticated and iconic companies on the planet, alongside highly regulated mission-critical infrastructure.

From the pioneers building today’s frontier AI models to the global category leaders in semiconductors, automotive, aviation, finance, and smartphone giants the world relies on. In the partner ecosystem, we continue to expand and deepen our engagements. Our partners are a force multiplier, helping expand our reach and scale. We are seeing strong traction driven by increasing platform adoption across AI, data, cloud, and broader platform solutions. We are increasingly winning at the top end of the market, highlighted by an eight-figure strategic partner win in Q4. This deal provides access to our entire Singularity Platform through a flexible deployment schedule. In addition, we are strategically scaling our mid-market adoption by driving operational leverage for our partners. Our success across the managed security ecosystem is a clear testament to this strategy.

In fiscal 26, we achieved over 60% ACV growth with our top 20 MSSP partners and over 75% ACV growth with our top 10 MSSP partners. These partners are rapidly expanding beyond the endpoint. They’re adopting our AI, data, cloud, and broader platform solutions. Our MSSP partners are standardizing on SentinelOne. Our unique platform architecture delivers the multi-tenancy and remote management capabilities that drive real operational leverage and technology differentiation. This technology advantage translates directly into a dominant competitive position for SentinelOne in the managed security ecosystem. We’re also deepening collaboration with hyperscalers by integrating our technology and platform across their cloud marketplaces and AI services. Together, these alliances are enhancing our market presence and positioning SentinelOne as a trusted partner for enterprises worldwide.

In the public sector, we achieved FedRAMP authorization at the high impact level, and this opens more public sector opportunities for us in both federal and SLED environments. Let’s shift gears to the broader industry dynamics and why SentinelOne is a distinguished beneficiary for the AI era. There has been a lot of debate about the impact of AI on traditional SaaS business models. While some of these concerns are justified, especially if you’re selling an antiquated platform built upon a legacy code base, modern security operations remain mission-critical. Cybersecurity is an imperative for safe adoption and usage of AI. It is a significant tailwind for SentinelOne, and we’re already seeing AI security as the fastest growth category for us today. We are the builders enabling secure AI adoption for builders. Our enterprise success clearly validates this.

Our platform and AI models are forged from real-time proprietary threat intelligence data at petabyte scale that is gathered across tens of thousands of organizations and tens of millions of assets globally. That scale, intellectual property, and depth of data, combined with human insights, are a unique competitive moat. The reality is that cybersecurity is paramount in the age of AI. The market needs reflect this reality. Gartner recently highlighted that AI security is the fastest-growing segment in cybersecurity, expanding over 70%. Security and trust remain the single biggest barrier to enterprise AI adoption in the United States and globally. At SentinelOne, we’re helping organizations to move from basic AI assistance to true autonomous agentic action with trust and safety embedded as our guiding principles.

We’re putting defenders firmly in control of the AI boom, delivering the platform tools, strategies, and services they need to build, secure, and benefit from AI. We are delivering an end-to-end AI native platform that seamlessly delivers security for data, infrastructure, and runtime as a single unified system. We actively partner with, invest in, and protect the pioneers building today’s frontier AI models. Grounded in this ecosystem, we are pushing into the frontier of autonomous agentic security, where AI doesn’t only assist humans, but also independently detects and stops complex threats in real-time. Reflecting upon the past year, we’ve delivered strong growth and margin improvement while driving innovations that are shaping the future of cybersecurity. With an increasing scale and durable top-line growth, we’re continuously refining our operating model to be well-positioned for the opportunities ahead.

We remain laser-focused on our most efficient go-to-market channels while unlocking structural productivity gains by integrating AI throughout our business. We have always operated with a builder mindset. Looking ahead, we’re establishing a stronger SentinelOne that is well-positioned to lead in an AI-first security landscape while creating long-term value for our customers, partners, and shareholders. Before I turn the call over to Barry, I’m pleased to welcome Sonali Parekh to our leadership team. Sonali is joining SentinelOne as our new chief financial officer. She brings more than 25 years of experience across public software and technology companies. Sonali has proven track record of scaling high-growth software platforms, driving financial discipline, and overseeing multi-product strategies. That’s an ideal fit to lead the next phase of SentinelOne’s financial strategy, delivering growth and profitability. I look forward to our partnership.

I would also like to thank Barry Padgett for his leadership and steady hand as interim CFO. He has been a trusted partner, ensuring a seamless transition and leading our finance function. In closing, I want to take a moment to acknowledge the contributions of all Sentinels. Their relentless focus, dedication, and execution drives our success. Thanks to all our customers, partners, and shareholders for their continued support. Our mission to be a force for good remains as important as ever in ensuring AI is also a force for good. Thank you again for joining us today. With that, I’ll hand it over to our interim CFO, Barry Padgett.

Barry Padgett, Interim CFO, SentinelOne: Thank you, Tomer, and thanks everyone for joining us today. Let’s review the details for Q4, the full fiscal year 2026, and our guidance for Q1 and fiscal year 2027. As a reminder, all comparisons are year-over-year, and financial measures discussed here are non-GAAP unless otherwise noted. Fiscal year 2026 was a transformational year for SentinelOne, highlighted by two major financial milestones. Firstly, we scaled the business past $1 billion in revenue, growing 22% year-over-year. Secondly, we achieved full year operating profitability, driving a 600+ basis point year-over-year improvement to expand our operating margin to 3.5%. Let’s review the financial performance of our fourth quarter. In Q4, our revenue grew 20% year-over-year to $271 million.

International markets grew 30% and represented 40% of total revenue, reflecting strong international demand and a growing global footprint. In Q4, our total ARR grew 22%, and we added a record $64 million in net new ARR, which exceeded our expectations. These results were driven by a balanced split between new logo acquisition and platform adoption by existing customers. As we continue our strategic shift upmarket, our ARR per customer reached a new company record. We are seeing strong momentum at the top end of the market as our cohort of customers with ARR of $1 million or more grew 20% year-over-year to 153 customers in Q4.

Additionally, customers with ARR of $100,000 or more grew 18% to 1,667. Furthermore, retention rates across our large customers remain strong, underscoring the mission-critical nature of the Singularity Platform. For customers with $100,000 or more in ARR, our gross retention rate was 96% in Q4. Our dollar-based net retention rate for these customers was 109%, driven by these large organizations continuing to adopt the broader platform and consuming multiple products from us. Overall, we are maintaining a balanced split between new logo acquisition and existing customer expansion. Given our scale and relative market share, this focus allows us to increase our market share with significant future expansion potential. Turning to margins, we maintained a solid gross margin profile in Q4 at 78%, highlighting healthy platform unit economics and scale efficiencies.

In Q4, our operating margin was 6%, representing an improvement of 450 basis points year-over-year. We also achieved a net income margin of 9% in the quarter. On a trailing twelve-month basis, we delivered a free cash flow margin of 5% and successfully delivered our second full year of positive free cash flow. This is an important milestone that underscores our path towards sustained profitable growth. We ended the year with a robust balance sheet, including $770 million in cash equivalents, and investments, and most importantly, no debt. Given our strong balance sheet and confidence in our long-term trajectory, we opportunistically repurchased 6.5 million shares this quarter, bringing the total shares repurchased to 12.2 million in fiscal year 2026.

We will continue to employ a balanced capital allocation strategy, prioritizing organic investments while returning capital to shareholders. Turning to our guidance for Q1 and fiscal year 2027, as we enter our next chapter of scale and profitability, we are enhancing our guidance framework. In addition to our revenue and operating income outlook, we are providing guidance for earnings per share and some helpful modeling assumptions. We believe this enhanced framework offers a more comprehensive view of the company’s earnings growth and cash generation. For the full fiscal year 2027, we expect revenue to be between $1.195 billion-$1.205 billion, representing 20% year-over-year growth at the midpoint. For Q1, we expect revenue to be between $276 million-$278 million, representing 21% year-over-year growth at the midpoint.

Our fiscal year 2027 revenue outlook also implies a year-over-year improvement in net new ARR. Overall, our outlook is supported by a solid pipeline, strategic partnership opportunities, and rising contributions from our emerging solutions, including AI, data, cloud, Wayfinder, and others. At the same time, we continue to monitor the evolving macroeconomic environment and geopolitical uncertainties, which can still influence deal timing and sales cycles across the industry. Turning to our profitability metrics. For fiscal 2027, we expect operating income to be between $110 million and $120 million, representing an operating margin of 10% at the midpoint. For Q1, we expect operating income to be between $4 million and $6 million, representing an operating margin of 2% at the midpoint. Our strong operating income outlook is driven by increasing operational efficiencies with scale and with cost discipline.

We’re accelerating toward the Rule of 40, mainly led by sustained top-line growth and improving profitability. For full fiscal year 2027, we expect fully diluted earnings per share to be between $0.32 and $0.38 per share, representing $0.35 at the midpoint. For Q1, we expect earnings per share to be between $0.01 and $0.02. We expect a non-GAAP tax rate of approximately 17% for fiscal year 2027. We expect our weighted average diluted share count to be approximately 345 million for Q1 and 352 million for the full year. Adjusting for the scheduled tax settlement payments of $40 million for fiscal year 2027 disclosed in our January 8-K, we expect our adjusted full-year free cash flow margin to closely track our operating margin outlook for fiscal 2027.

For Q1, we expect adjusted free cash flow margins to be in the low teens, reflecting our standard historical seasonality and strong underlying cash generation. Taking a step back, our technology leadership and competitive position remains strong. We are scaling the business while consistently driving strong operating leverage. Our investment approach strikes a disciplined balance between capturing long-term growth opportunities and maintaining a responsible, profitable financial profile. This strategy is foundational to scaling SentinelOne into a multi-billion dollar, highly profitable business. Before closing, I’d like to welcome Sonali as our new CFO. Her expertise scaling global businesses is a great fit for us. Over the coming weeks, I’ll be working closely with Sonali and our seasoned finance team to ensure a seamless handoff. In summary, we are very well-positioned at the intersection of AI, data, and cybersecurity, leading the industry into the next era of autonomous security.

Security is no longer just a safeguard, it is the strategic enabler of AI innovation. With a strong financial foundation, a highly differentiated platform, and a vast market opportunity, we remain firmly committed to maximizing our business potential. Thank you all for joining us today. We’ll now take your questions. Operator, please open up the line.

Operator: Thank you. At this time, if you would like to ask a question, please click on the Raise Hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk, and then you will hear your name called. Please accept, unmute your audio, and ask your question. As a reminder, we are allowing analysts one question today. We will wait one moment to allow the queue to form.

Saad Nazir, Head of Investor Relations, SentinelOne: Our first question comes from Brian Essex at JP Morgan. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan: Hi, good afternoon, and thank you for taking the question. You know, maybe for Tomer. Would love to understand some of the dynamics around the growth that you’ve had this quarter, particularly in light of the, you know, the lower sales and marketing growth. What percentage of the deals were partner-led or partner-influenced? And what are the plans for hiring and product and expectations for productivity as you kind of, you know, move through fiscal 2027?

Brian Essex, Analyst, JP Morgan8: Thanks for the question, Brian. You know, we delivered a record fourth quarter net new ARR, 6% year-over-year growth and, you know, strong and probably the strongest sequential growth we’ve had in the last 24 months. It really demonstrates more than anything execution consistency and solid demand pretty much across the board. I’d say that there wasn’t any big change between our business with partners and our business with end customers. We are doing larger deals, and I think, you know, that’s probably reflected. Flex is taking, I think, a more pronounced part of our overall bookings. All in all, I would say the dynamic is one that we’ve seen throughout the quarters and throughout the year.

As we look into next year, when we kind of review how we want to focus, I think we’re pretty clear that we’re on a quest to optimize. I don’t think you’re gonna see us grow headcount, in you know in a significant way. It will imply, you know, that sales productivity, which is reflected in the margin guide, is going to get better. We are clear on our continued up-market trajectory. We are clear on the need and the desire to do more, with our partner base. We are clear about the potential in our partner base. You can see some of the figures with our growth with MSP partners. Top 10 partners growing 75% year-over-year. Obviously, there’s a lot of potential both in our partner base and with our move to upmarket.

All in all, we plan to do much of the same this year, in an improved manner with an optimized sales force.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from John DiFucci at Guggenheim. Please go ahead with your question.

John DiFucci, Analyst, Guggenheim: Thank you. Since Brian asked about the top line, I’m gonna ask about the bottom line. It’s just a little confusing, like this quarter and in the first quarter, profit margins are a little lower than I think people were looking for, at least we were. For the year, they look great. If you guys just explain that a little bit, maybe Barry. Again, just so we understand what’s happening in the model.

Barry Padgett, Interim CFO, SentinelOne: Yeah, John. On the free cash flow side, I think we feel pretty comfortable on the cash collection. We’ve seen, you know, meaningful improvement over the past few years. That being said, it can be a little lumpy just in terms of, you know, larger deals and kinda when they fall into a particular quarter. As they, you know, those larger deals kinda roll out maybe over months and quarters as opposed to days like smaller deals.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Meta Marshall at Morgan Stanley. Please go ahead with your question.

Meta Marshall, Analyst, Morgan Stanley: Great. Thanks. I guess I just wanted to ask, clearly a lot of success selling, you know, with the 65% of customers having three or more solutions. You know, just how do you, kind of in combination with maybe NRR ticking down a hair, just how are you thinking about, just ability to continue to add new or get further adoption of new products into the base? Thanks.

Brian Essex, Analyst, JP Morgan8: Absolutely. You know, we definitely think that this is a source for additional growth for us. You know, we’re very stable on the NRR front. I think the biggest thing I would call out there is that actually, you know, for us means that we’re doing more new logo business, which is exactly what we wanna see. We’ve you know kind of executed that strategy for you know the last few years. It’s not gonna change this year. We’re really driving those in tandem. What you can see is that not only we’re creating more and more adoption within our customer base, even with that, our customer base is still relatively under-penetrated. We got tremendous capabilities.

Our platform is incredibly broad, and that just means that for a lot of these new logos that we’re just starting the journey with, the expansion opportunity is really, you know, in the future, which is great. Which really means that we can continue and onboard new customers, and then with time, we yield more and more from the customer base. That’s exactly the dynamic we wanna see. That’s exactly what’s reflected in these results.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Brad Zelnick at Deutsche Bank. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan: Hi, this is Nasr Islam on for Brad Zelnick. Thank you for taking the question. We’ve heard from you, Tomer, and your peers in recent quarters of the importance of endpoint security, especially in the GenAI era. Can you provide an update on how endpoint progressed in the quarter and any changes in the competitive landscape that you’re seeing, if any?

Brian Essex, Analyst, JP Morgan8: Of course. You know, endpoint still remains a strong growth driver for us. We grew double-digit, and that is non-trivial in the market today. We’re still gaining share in endpoint, and there’s still a lot to go after in terms of incumbent providers. It’s clear that the best control point right now for GenAI is actually attached to those same endpoints. So when you look at us selling AI security, I think the success we’re seeing there is pretty much tied to our ability to deploy that within minutes sometimes on those exact same endpoints. Whether our agent is already there or not, our ability to continue and extend our endpoint footprint is what makes our AI security product incredibly successful.

All in all, not only you’re gaining the best and the most complete telemetry from the endpoint today, it’s also becoming probably one of the only true control points to regulate what employees, what the workforce is doing with generative AI, block it, sanitize it, make sure there’s no data leakage, put the right guardrails, and that’s exactly what we’re doing with our AI security platform and with Prompt Security specifically.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Shrenik Kothari at Baird. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan0: Yeah, thanks for taking my question. Tomer, you brought in Sonali. As she steps in, what are the top 2-3 priorities you will ask her to focus on first? Just related to kind of financially, how should investors think about the next phase of the model under her? Thanks a lot.

Brian Essex, Analyst, JP Morgan8: Of course. Thank you for the question. I think, you know, clearly we’re incredibly excited to have Sonali, and her focus is going to be durable growth, and acceleration in our go-to-market. I think what we’re seeing right now is, I would say growing demand for our platform, with multiple avenues for growth. You know, we’ve talked about, AI security, that’s growing triple digit. We’ve talked about on-premise, which is a new avenue for growth for us, now growing triple digit as well, and infrastructure deals that are also growing triple digit. Obviously her job is gonna be to balance that with continuing and improving and honing in on our entire go-to-market and sales and marketing expense.

There is no surprise here that as we look into next year, in the coming year, the landscape is changing in terms of what customers are looking for. It’s very clear that we have some of the most unique solutions right now for some of the most urgent problems in the market. As we look at this year, it’s a lot about realigning a lot of our resources to go after these opportunities as we improve our business. You can see some of that already reflected, you know, in our operating margin. This is the trajectory we’re on. We’re accelerating our path to even better profitability. We’re optimizing on cash flow. I think these are the things that, you know, we will collectively be focused on.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Patrick Colville at Scotiabank. Please go ahead with your question.

Patrick Colville, Analyst, Scotiabank: Thank you so much. Tomer, let me ask this one to you. I mean, nice re-acceleration in new ARR this quarter. You kinda gave us this little breadcrumb that you expecting a year-on-year improvement in new ARR in fiscal 2027. I guess two parts, if I may. One is, can you just unpack that last bit a little bit more to provide any more color? Then what would be the driver of that? Is it kind of core endpoint to your point earlier that there’s like this renaissance of spend on endpoint, or is it that plus these emerging products and these kind of multiple tailwinds coming together in fiscal 2027?

Brian Essex, Analyst, JP Morgan8: Yes. Let me try and unpack that. I think that, you know, obviously, that’s exactly what we wanna see. We wanna improve net new ARR. You’ve seen a little bit of that in Q4, but I think that’s what we’re, you know, looking at for, you know, for this coming year. I think on top of that, we’re also starting to see a seasonality change. We’re really, you know, we’re moving from this 40/60, you know, first half, second half dynamic we’ve had in the past couple of years, more to a roughly kind of 50/50. That obviously means that, you know, the first half of the year is very solid, and obviously that has, you know, positive impact on growth for the year for both revenue and ARR.

These are, you know, some of the dynamics that we’re seeing there. You know, some of it is coming from endpoint. I wouldn’t call it the full renaissance to be honest, but there is definitely more traction in endpoint. I think if you’re seeing some of our businesses kind of crossing the $100 million ARR mark and still, you know, accelerating in a pretty significant way, those are kind of our sources of added revenue growth and added ARR growth. All in all, you know, we believe that an improved net new ARR, that’s, you know, kind of a good starting point for us as our revenue guide.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Richard Poland at Wells Fargo. Please go ahead with your question.

Richard Poland, Analyst, Wells Fargo: Hey, guys. Thanks for taking my question. I guess, just on the gross margin side, I’ve noticed that gross margin ticked down a little bit in the quarter, but I think it was, maybe a touch better than expectations. As we look forward to next year, could we see that start to stabilize or tick up or just kinda anything underlying there that we should think about?

Brian Essex, Analyst, JP Morgan8: Yes, of course. I would say our gross margins are incredibly stable. They’re also best in industry, so they’re incredibly high. We, you know, kind of put it exactly at the high end of our range, of our long-term targets. All in all, you know, we feel like they’re stable. They’re gonna continue to be stable. We don’t forecast any change in that.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Mike Cikos at Needham. Please go ahead with your question.

Mike Cikos, Analyst, Needham: Thanks for taking the question here. Tomer, if I could come back to the prepared comments and the opening script. Great to hear about the seven-figure deal over at Cloudflare, displacing your next closest competitor. Can you just discuss that a little bit more as far as how Cloudflare came to you, how the deal came together? Again, just given their positioning in the software ecosystem, they’re thought of as being pretty market-leading, and I just love to get some more color there. Thank you.

Brian Essex, Analyst, JP Morgan8: Of course. You know, it’s a combination of obviously, you know, the set of capabilities that we have today that, you know, through the prepared remarks, I think we’ve tried, you know, really outlining how unique the capabilities that we have today are, especially at scale. When customers are looking to add and prepare themselves for, you know, adopting more generative AI, more AI agents, the most advanced ones really need these capabilities now. They can’t buy over a demo, they can’t buy over something with a roadmap. They need something tangible that works today and works at scale and is proven, and that’s exactly what, you know, Prompt Security and Purple AI brings to bear. These are already fully deployed, fully scalable products that are covering right now, you know, millions of devices, assets, globally.

That drives, I think, a lot of demand from customers of all competitors. In the case of, you know, Cloudflare, I think efficacy was a big deal. The ease of deployment, coverage for systems of all, you know, all operating systems, these were some of the key things that they wanted to find. I think, you know, they also wanted a like-minded partner that can move fast with them in AI. You know, again, as you pointed, despite them being, you know, a leading partner for some of our competitors, they’ve chosen the best technology that they could. You know, doing this at a scale where, you know, you need to be completely flawless in your transition to create, you know, no interruption.

I think that was also, you know, a very impressive feat by both teams. I think that kind of, you know, just punctuates the win.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Shaul Eyal at TD Cowen. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan1: Thank you. Good afternoon, everybody. Tomer or Barry, can you talk to us about the sources of operating leverage and margin for fiscal 2027 as we think about, you know, double digit for the year?

Barry Padgett, Interim CFO, SentinelOne: Sure. Happy to share here. There’s a couple of things I think that we’re super focused on. Firstly, really sharpening the focus on the highest yielding go-to-market opportunities. You heard Tomer talk about some of the product lines and some of the businesses that are rapidly growing for us, some of them in the triple digits, making sure that we really are investing behind those and giving them the oxygen they need. Secondly, you know, not necessarily germane just to us, but, you know, integrating AI throughout our business and our business operations. You know, we’re seeing meaningful productivity gains across the board, everything from engineering and development to how we serve customers to how we just run the internal organism itself.

Brian Essex, Analyst, JP Morgan8: Yeah. I would just add to that. You know, you’ve seen us through the past couple of years also, you know, taking pretty hard decisions on what not to invest in and what to potentially deprecate and prune away. I think these are decisions we’re gonna continue to make. You’ve seen us do that with a couple of product lines last year. We don’t expect the exact same thing this year, but we are definitely honing in on more areas that we just see higher yield. I think it’s not gonna be far-fetched to see us kind of narrowing our focus, at least in go-to-market, on the most, not only the most yielding, but the most important parts of our platform and what’s, you know, the most important right now for customers.

All in all, you know, we have not grown our headcount, we have not, you know, inflated our ranks in the past couple of years. That’s definitely not gonna happen this year. You know, we’re definitely finding more and more ways to become more productive with AI. It’s already happening. A meaningful amount of the code we generate today is already generated with AI. That has tremendous impact on us. We’re a big R&D shop. We’re a big innovation hub. That means that we can build more with less, that we can take products to market faster, that we can iterate and get better outcomes to customers. All of those are gonna help us also drive, I think just benefits to the bottom line as well.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Roger Boyd at UBS. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan2: Great. Thanks for the question. Tomer, it looked like it was a pretty strong quarter overall for new customer acquisition. You noted, I think, half of new business came from new customers. Against that, you had 50% attach rate of Purple. I guess any kind of directional color on what that attach rate looks like with new customers, and to what extent are you finding that Purple is maybe driving some of these new customer wins and really influencing your win rates in areas like endpoint? Thanks.

Brian Essex, Analyst, JP Morgan8: Of course. First of all, it’s pretty balanced. I mean, we’re seeing the uptake both from existing customers and new customers. I think we mentioned a couple of, you know, earnings calls ago that we’ve created a new bundle, and we took our complete bundle and made it a complete AI bundle, basically adding in some of the Purple AI capabilities. That’s definitely creating a nice differentiator for us, kind of in the mass market. That is driving some of that attach. At the end of the day, I think it’s really clear when, you know, you can create, you know, 60% faster outcomes, when you can have, you know, 300%+ return on investment, it becomes almost a no-brainer that if you’re using one of these things, you’re actually saving money and the economics are actually looking favorable, for customers.

That, I think, is the main driver behind the Purple uptake. We’re also, as I’ve said in the past, we’re continuously adding more capabilities to the Purple suite. You know, we’re adding more and more agentic capabilities that are completely integrated to the platform. We don’t require customers to buy another product or to deploy something else or to build their own agent, or we just give them a studio. We’re giving them complete integrated AI capabilities they can turn on with one click of a button. That in itself, that type of seamlessness, that user experience, is resonating in the market.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Joseph Gallo at Jefferies. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan3: Hey, guys. Thanks for the question. It was great to see the $130 million in data ARR. Can you just talk through the sustainability of growth in that business? Tomer, just regarding SIEM, how do you think that market, you know, evolves in an LLM-based world? You know, does it become more or less important? Is there any risk of disruption? Thank you.

Brian Essex, Analyst, JP Morgan8: Thank you for the question. Our database is gonna go only one way, which is up, you know, and that is terabytes and terabytes and petabytes of data that we’re seeing, you know, down our pipeline. There is a very, you know, familiar dynamic in the data space where obviously the initial land is just a piece of, you know, customers’ overall data needs. Obviously, as they onboard our data lake, it’s just the starting point for them into how much more they can put into it over the years. We’re already starting to see those expansion opportunities pop up. We’re absolutely seeing more and more demand for data lake capability. Specifically for SIEM, and I think there’s a small nuance here.

You know, SIEM, you can think about it as a front end for security operations that you put on top of the data lake. I would say that certain customers, you know, they want still that front end, they want those capabilities. At the same time, what we’re seeing more and more is that when we apply some of our Purple AI agentic operations directly on the data lake, directly on the ingested data, obviously now with Scalyr integrated into it, the ability to now ingest data in real time and apply LLMs, that are on the backbone of Purple AI to then, orchestrate an autonomous operation, to us, that’s the future of where cybersecurity is gonna go. I’m saying the future, but it’s also happening right now for certain customers.

I do think that it’s really a question of what models are you going to support for customers. Some customers are gonna want more controls, more dashboard, more of that legacy experience. I would call that the SIEM experience. And other customers, you know, they’re much more focused on automation, on embedding LLMs and embedding agentic workflows into their data ingestion, as close as can be to the point of ingestion. And that to us, again, is almost a new model for cybersecurity that maybe, you know, in the course of the next few years, is going to make SIEM something that is less mandatory than it is today. Right now, we’re obviously in the market with both approaches, and we’re doing what customers are asking us to do.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Eric Heath at KeyBanc. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan4: Hey, guys. Thanks for taking the question here, and nice finish to the year. Maybe Barry, Tomer, could you just speak to the linearity in the quarter that you saw, just given that the DSOs were a little bit higher than they have been and revenue being in line with your guidance? Thanks.

Brian Essex, Analyst, JP Morgan8: Yeah. I think the, you know, the revenue beat for us, you know, the entire year was kind of, you know, very kind of minimal beats, I would say. Q4 was a little bit more back-end loaded. I think you kind of see that as well reflected. As Barry, you know, mentioned, some of the collections kind of came a bit later than we wanted. I mean, but nothing too dramatic. I think that’s the full extent of the dynamic that we’ve seen. Otherwise, you know, I think the other thing, obviously, when you’re not getting these collections in time, they’re just gonna show up a bit later. As you expect for something a bit more healthy, maybe in, you know, maybe in Q2.

I think, again, I’ve called out the kind of changing seasonality for us. That’s another dynamic that’s gonna be at play, probably gonna, you know, look a bit different for us this year in a very positive way, I should say. These, I think, kind of at the fullest, the dynamics that we’re seeing.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Adam Tindle at Raymond James. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan5: Okay. Thank you. I just wanted to continue on that last comment there, Tomer, on net new ARR and seasonality. I think you said earlier, 50/50 for first half, second half. If I’m doing the math right for the full year, you’re probably gonna be somewhere in the neighborhood of $200 million of net new ARR. Correct me if I’m wrong there. I think that would imply, you know, $100-ish million or so in the first half, which would be very strong, I think up over 20%. I know it’s important with Sonalee coming on, and, you know, under prior CFOs, we had kinda early stumbles in terms of relative to expectations and numbers and just wanting to avoid that.

You talked on the call about gaining credibility, which you’re certainly doing as you’re executing. Wanted to give this a forum to kind of flush out those net new ARR comments so we don’t get too far ahead of ourselves.

Barry Padgett, Interim CFO, SentinelOne: For the first half as Sonalee comes on. Thanks.

Brian Essex, Analyst, JP Morgan8: Of course. Good questions overall. I would say, you know, first I think you’re not wrong, you know, on the net new ARR number, probably slight improvement over that. I think the second half is just what we have line of sight to right now and just a very solid start for the year. You know, once we kind of are able to transact earlier in the year, I mean, you can just do the math of what that means for the rest of the year, and that’s really what we’re seeing, that’s really what’s happening. We’re just, you know, calling it out. As I mentioned, you know, just a good starting point for us. We’re starting to maintain that consistency, and I think, you know, that should persist.

We don’t see a reason why it’s not.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Jonathan Ho at William Blair. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan6: Hi. I wanted to maybe dig a little bit into Wayfinder and, you know, could you maybe give us a sense of what some of these enhancements, like human plus AI capabilities and intel, you know, how does that allow you to maybe reimagine modern, MDR solutions? Thank you.

Brian Essex, Analyst, JP Morgan8: Thank you. Great question, I think that’s exactly it. I mean, it’s really clear that the role of MDR is shifting. If MDR, you know, in the past years, was really manual human work to sift through alerts, with the increased automation and autonomous action of our platform, our MDR analysts and overall service is graduating to be more of a supervision layer, and that’s helping us, I think, not only scale, but also achieve much better outcomes for customers. I think more than anything, it’s really clear that we all need to still establish a level of trust when we talk about autonomous agents. Obviously, the margin of error is quite big with some of what these autonomous agents are doing.

For us, a good way to control that and a good way to make sure that agents always stay within their guardrail, that all autonomous action and critical action is always happening with human supervision, is attaching services like Wayfinder to really monitor these agentic actions that are happening, and we’re doing so in a highly scalable way. Once again, that’s something that really resonates with customers. Right now, with us, they can actually onboard agentic workflows and have humans regulate that. That’s a big thing. We’re not just offering them a piece of technology, we’re offering them complete managed supervision of their security stack.

Saad Nazir, Head of Investor Relations, SentinelOne: Our next question comes from Ittai Kidron at Oppenheimer & Co. Please go ahead with your question.

Brian Essex, Analyst, JP Morgan7: Hey, guys. Couple for me, maybe one for you, Tomer, one for you, Barry. Tomer, on your side, can you talk. You know, you clearly have a very broad portfolio at this point, and it’s nice to see the traction there. Can you talk about how the comp plan for quotas for salespeople is changing because of that, and what are you incentivizing and how to get salespeople focused on the right thing? For you, Barry, with your initial guide for fiscal 2027, and again, kind of going back to the previous questions, in what way are you more conservative, or in what way is your guidance philosophy right now for 2027 different from the exercise you guys went through in 2026?

Brian Essex, Analyst, JP Morgan8: Thank you for the questions. Comp plans, you know, haven’t changed in a dramatic way. I just want to remind everybody that we always had this component that we called emerging products, and we’re just changing what we put in that basket of emerging products. You know, we like the behavior that we’re seeing. We also see some natural affinity to what, you know, customers are asking for, and we’re making sure that we’re aligning that basket of emerging products to reflect, you know, what is happening right now in the market and what we believe are the best products that obviously are the best fit to what customers are trying to solve right now. You’re not gonna be surprised that you find things there like AI security. You’re not gonna be surprised that data is still there.

Obviously, you know, that is a great tool for us, has been and will continue to be to just drive people in the right direction, and in where the market is currently showing, you know, the most demand.

Barry Padgett, Interim CFO, SentinelOne: I think just to your question on sort of guidance overall, you know, I think this is the right starting point for the year. We’re really comfortable with the guide and, you know, if you look at the things that are supporting it’s really a few things, solid pipeline, strategic partnership opportunities. We’ve been talking a lot about the rising, you know, contribution of our emerging solutions, AI, data, cloud, Wayfinder, others. We feel like we’re at the right spot.

Saad Nazir, Head of Investor Relations, SentinelOne: We have no further questions at this time. I will turn the call back over to Tomer Weingarten for closing remarks.

Brian Essex, Analyst, JP Morgan8: Thank you all for joining us today, and talk to you next quarter.