Cybersecurity AI platform provider SentinelOne (NYSE: S) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 21.7% year on year to $242.2 million. The company expects next quarter’s revenue to be around $256 million, close to analysts’ estimates. Its non-GAAP profit of $0.04 per share was $0.01 above analysts’ consensus estimates.
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SentinelOne (S) Q2 CY2025 Highlights:
- Revenue: $242.2 million vs analyst estimates of $242.1 million (21.7% year-on-year growth, in line)
- Adjusted EPS: $0.04 vs analyst estimates of $0.03 ($0.01 beat)
- Adjusted Operating Income: $5.38 million vs analyst estimates of $291,810 (2.2% margin, significant beat)
- Revenue Guidance for the full year is $1 billion at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: -33.3%, up from -39.9% in the same quarter last year
- Free Cash Flow was -$7.15 million, down from $45.44 million in the previous quarter
- Customers: 1,513 customers paying more than $100,000 annually
- Annual Recurring Revenue: $1 billion vs analyst estimates of $985.3 million (24.1% year-on-year growth, 1.5% beat)
- Market Capitalization: $5.68 billion
“We surpassed $1 billion in ARR and delivered record net new ARR, continuing to deliver robust growth and platform adoption across AI, data, cloud, and endpoint,” said Tomer Weingarten, CEO of SentinelOne.
Company Overview
Built on the principle of "fighting machine with machine," SentinelOne (NYSE: S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, SentinelOne’s sales grew at an incredible 44.2% compounded annual growth rate over the last three years. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis.
This quarter, SentinelOne’s year-on-year revenue growth of 21.7% was excellent, and its $242.2 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 21.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 21% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is healthy and implies the market is forecasting success for its products and services.
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Annual Recurring Revenue
While reported revenue for a software company can include low-margin items like implementation fees, annual recurring revenue (ARR) is a sum of the next 12 months of contracted revenue purely from software subscriptions, or the high-margin, predictable revenue streams that make SaaS businesses so valuable.
SentinelOne’s ARR punched in at $1 billion in Q2, and over the last four quarters, its growth was fantastic as it averaged 26.2% year-on-year increases. This performance aligned with its total sales growth and shows that customers are willing to take multi-year bets on the company’s technology. Its growth also makes SentinelOne a more predictable business, a tailwind for its valuation as investors typically prefer businesses with recurring revenue. 
Enterprise Customer Base
This quarter, SentinelOne reported 1,513 enterprise customers paying more than $100,000 annually, an increase of 54 from the previous quarter. That’s quite a bit more contract wins than last quarter but also quite a bit below what we’ve observed over the previous year. This indicates the company is optimizing its go-to-market strategy to reinvigorate growth.
Key Takeaways from SentinelOne’s Q2 Results
It was good to see SentinelOne narrowly top analysts’ annual recurring revenue expectations this quarter. Full-year sales guidance was also in line with analysts' estimates. Zooming out, we think this was a decent quarter. The stock traded up 6.9% to $18.85 immediately after reporting.
So do we think SentinelOne is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.
