SentinelOne (S) Q4 2025 Earnings Call March 12, 2025 04:30 PM ET Company Participants Douglas Clark - Vice President, Investor RelationsTomer Weingarten - Co-Founder and Chief Executive OfficerBarbara Larson - CFOBrian Essex - Executive DirectorGray Powell - Managing DirectorAnnick Baumann - VP - Equity ResearchJohn DiFucci - Senior Managing DirectorShaul Eyal - Managing Director - Equity ResearchTrevor Walsh - Director - Equity Research Conference Call Participants Jonathan Ho - Research AnalystZach Schnei ...

Revenue Growth - Total revenue for fiscal year 2025 increased 32% to $821.5 million, compared to $621.2 million in fiscal year 2024[4] - Annualized recurring revenue (ARR) increased 27% to $920.1 million as of January 31, 2025[5] - Customers with ARR of $100,000 or more grew 25% to 1,411 as of January 31, 2025[5] - Total revenue for the three months ended January 31, 2025, was $225,521 thousand, representing a 29.4% increase from $174,175 thousand in the same period of 2024[37] - The company aims to surpass $1 billion in ARR and revenue in the upcoming fiscal year[3] Profitability Metrics - GAAP gross margin improved to 75%, up from 72% in the previous year[5] - Non-GAAP operating margin reached 1% in Q4 FY2025, compared to (9)% in the same quarter last year[5] - Non-GAAP gross margin guidance for FY2026 is projected to be between 78.5% and 79.5%[7] - The first quarter of FY2026 marks the first quarter of positive non-GAAP operating margin for the company[3] - Non-GAAP gross profit for the twelve months ended January 31, 2025, was $651,581 thousand, a 35.4% increase from $481,057 thousand in 2024[40] - The company reported a gross margin of 74% for the twelve months ended January 31, 2025, compared to 71% in 2024[40] Expenses and Losses - Research and development expenses for the twelve months ended January 31, 2025, totaled $267,002 thousand, an increase of 22.4% compared to $218,176 thousand in 2024[37] - Net loss for the twelve months ended January 31, 2025, was $288,441 thousand, a decrease in loss of 15% from $338,693 thousand in 2024[39] - GAAP sales and marketing expense for the latest quarter was $128,065,000, up from $101,478,000 in the previous year, reflecting a 26% increase[41] - GAAP net loss for the latest quarter was $70,788,000, slightly improved from a loss of $71,982,000 in the previous year[42] - The company incurred total stock-based compensation expense of $267,531 thousand for the twelve months ended January 31, 2025, compared to $216,870 thousand in 2024[40] Cash and Investments - Cash, cash equivalents, and investments totaled $1.1 billion as of January 31, 2025[5] - Cash and cash equivalents at the end of the period were $193,302 thousand, down from $322,086 thousand at the beginning of the period[39] - Free cash flow for the latest quarter was $(8,921,000), an improvement from $(10,638,000) in the previous year[46] - The company had a GAAP net cash provided by operating activities of $(3,401,000) for the latest quarter, compared to $(6,182,000) in the previous year[46] - Total cash used in investing activities for the latest quarter was $(132,499,000), compared to cash provided of $113,029,000 in the previous year[46] Assets and Equity - Total assets as of January 31, 2025, were $2,406,625 thousand, an increase of 3.7% from $2,321,407 thousand in 2024[35] - Total stockholders' equity as of January 31, 2025, was $1,669,247 thousand, up 4.7% from $1,594,043 thousand in 2024[35] Share Information - The number of GAAP basic and diluted shares was 321,446,833 for the latest quarter, reflecting an increase in share count[42]

Core Viewpoint - SentinelOne is expected to report its fourth-quarter fiscal 2025 results on March 12, with anticipated revenues of $222 million, reflecting a year-over-year growth of 27.47% from the previous year's quarter [1][2]. Financial Performance - The Zacks Consensus Estimate for revenues is $222.03 million, indicating a slight increase from the company's own forecast [2]. - The consensus estimate for earnings remains unchanged at 1 cent per share, compared to a loss of 2 cents in the same quarter last year [2]. - SentinelOne has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 62.50% [3]. Market Conditions and Challenges - The company faces challenging macroeconomic conditions and intense competition in the cybersecurity sector [5]. - Despite these challenges, the adoption of the Singularity platform is expected to positively impact the fiscal fourth-quarter performance [5]. Product and Technology Developments - The Singularity platform, enhanced by Purple AI, is driving significant growth and adoption, providing comprehensive enterprise security and accelerating threat response [6]. - The platform's capabilities are expected to address a total market worth over $100 billion, with specific addressable markets for various security solutions [16]. Customer Growth and ARR - The number of customers with more than $100,000 in Annual Recurring Revenue (ARR) grew by 24% year-over-year to 1,310 in the fiscal third quarter [7]. - The Zacks Consensus Estimate for fourth-quarter fiscal 2025 ARR is $921 million, suggesting a year-over-year growth of 27.2% [8]. Stock Performance - Over the past 12 months, SentinelOne shares have declined by 27.9%, underperforming the broader Zacks Computer and Technology sector, which returned 11.1% [11]. - The stock is currently trading at a forward 12-month price/sales ratio of 6.1X, slightly above the sector's 6.06X, indicating a stretched valuation [12]. Strategic Partnerships - SentinelOne's partnerships with major companies like Alphabet, Lenovo, Amazon, and ServiceNow are enhancing its market reach and customer acquisition [17]. - Recent collaborations, such as the partnership with Lenovo to pre-install the Singularity platform on enterprise PCs, are expected to significantly increase market penetration [19].

Group 1 - Yiannis Zourmpanos is the founder of Yiazou IQ, an AI-driven stock research platform that provides comprehensive stock reports [1] - The investment style of the company focuses on GARP (Growth at a Reasonable Price) and value stocks, emphasizing high-quality businesses with strong competitive advantages and significant growth potential [1] - The company prioritizes fundamental analysis and seeks stocks that are trading at a discount to their intrinsic value, ensuring a clear margin of safety [1] Group 2 - The long-term investment approach of the company spans 5 to 7 years, aiming for wealth accumulation through compounding while emphasizing downside protection [1] - The company sometimes adopts contrarian views during periods of market uncertainty, indicating a flexible investment strategy [1]

Group 1 - SentinelOne, Inc. is recognized as a unique player in the AI software sector, particularly within the global cybersecurity market [1] - The company is considered one of the purest AI investments available, highlighting its potential for growth in a lucrative industry [1]

Core Viewpoint - SentinelOne shares are currently overvalued with a Value Score of F, trading at a forward 12-month Price/Sales ratio of 7.68X compared to the sector's 6.66X and peer Okta's 5.9X [1][4]. Financial Performance - SentinelOne shares have declined 16% over the past 12 months, underperforming the Zacks Security industry's 22.1% appreciation and the broader Zacks Computer & Technology sector's 26.1% return [4]. - The Zacks Consensus Estimate for fiscal 2026 earnings is 18 cents per share, unchanged over the past 30 days, with revenues estimated at $1.03 billion, indicating a year-over-year growth of 25.45% [17]. Growth Prospects - SentinelOne raised its fiscal 2025 revenue growth guidance to $818 million, implying a 32% year-over-year growth at the midpoint [8]. - The company’s innovative portfolio, including the Singularity platform, addresses a total market worth over $100 billion, with specific addressable markets for Endpoint Security, Data Analytics, Cloud Security, and Generative AI Security valued at $17 billion, $31 billion, $12 billion, and $3 billion respectively [10]. Product and Technology - The Singularity platform integrates data capabilities and AI-powered security across various domains, enhancing threat detection and response times [9][11]. - SentinelOne's Purple AI has become the fastest-growing solution, significantly improving threat hunting and investigations [11]. Market Position and Partnerships - SentinelOne has established a strong partner base, including major companies like Alphabet, Lenovo, Amazon, and ServiceNow, which aids in customer acquisition [13]. - The integration with Amazon Web Services has expanded SentinelOne's capabilities, particularly in securing Generative AI applications [14]. Recognition and Rankings - SentinelOne was recognized as a frontrunner in the 2024 MITRE ATT&CK Evaluations, achieving 100% detection in a third-party evaluation [12]. - The company is positioned in the Leaders Quadrant of Gartner's 2024 Magic Quadrant for Endpoint Protection Platforms alongside CrowdStrike and Microsoft [12].

Core Viewpoint - The article discusses the lack of positions held by Parkev Tatevosian, CFA, and The Motley Fool in the mentioned stocks, emphasizing their disclosure policy and potential compensation for promoting services [1]. Group 1 - Parkev Tatevosian, CFA, has no position in any of the stocks mentioned [1] - The Motley Fool also has no position in any of the stocks mentioned [1] - There is a disclosure policy in place by The Motley Fool regarding potential compensation [1]

The cybersecurity sector is a compelling industry to invest in. Customer demand remains strong, and cyberattacks show no signs of slowing down. The intense cyberattack on Chinese artificial intelligence start-up DeepSeek in January and the hack of the U.S. Treasury Department in December are just two recent examples.Two prominent cybersecurity providers that investors should consider adding to their portfolios are Palo Alto Networks (PANW -1.60%) and SentinelOne (S -0.70%). The former is the largest cyberse ...

The adoption of artificial intelligence (AI) in the cybersecurity industry has been gaining momentum in the past couple of years, unlocking a significant long-term growth opportunity for companies in this sector.Palo Alto Networks (PANW -3.90%) and SentinelOne (S -2.99%) are two names in the cybersecurity industry whose AI-specific tools are having a positive impact on their business. More importantly, AI adoption in cybersecurity is currently in its early stages. One report suggests that AI-related cyberse ...

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months. Through his 10+ years analyzing countless companies, Michael has accumulated outsta ...