SentinelOne(S) - 2025 Q3 - Quarterly Results

Q3 FY2025 Financial Performance and Outlook SentinelOne reports strong Q3 FY2025 results with significant revenue and ARR growth, alongside improved profitability and positive free cash flow, leading to an increased full-year outlook Q3 FY2025 Performance Highlights SentinelOne achieved strong Q3 FY2025 results, with revenue reaching $210.6 million and ARR growing to $859.7 million, alongside significant improvements in non-GAAP operating margin and positive trailing-twelve-month free cash flow - Management highlighted strong execution, reaccelerated new business growth, and increasing enterprise adoption of the Singularity Platform[3] Q3 FY2025 Key Metrics (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $210.6M | $164.2M | +28% | | Annualized Recurring Revenue (ARR) | $859.7M | - | +29% | | Customers with ARR ≥ $100k | 1,310 | - | +24% | | GAAP Gross Margin | 75% | 73% | +2 p.p. | | Non-GAAP Gross Margin | 80% | 79% | +1 p.p. | | GAAP Operating Margin | (42)% | (50)% | +8 p.p. | | Non-GAAP Operating Margin | (5)% | (11)% | +6 p.p. | | Free Cash Flow Margin | (6)% | (16)% | +10 p.p. | - For the first time, the company achieved a positive trailing-twelve-month free cash flow margin of 1%, a significant improvement from (17)% in the prior year's quarter[3][9] - As of October 31, 2024, the company held $1.1 billion in cash, cash equivalents, and investments[10] Financial Outlook SentinelOne raised its full-year FY2025 revenue growth outlook to 32%, projecting $222 million for Q4 and $818 million for the full fiscal year based on strong business momentum Q4 and Full Year FY2025 Guidance | Metric | Q4 FY2025 Guidance | Full FY2025 Guidance | | :--- | :--- | :--- | | Revenue | $222 million | $818 million | | Non-GAAP Gross Margin | 79% | 79% | | Non-GAAP Operating Margin | (3)% | (4)% | - The company raised its revenue growth outlook for fiscal year 2025 to 32%[3] Consolidated Financial Statements (Unaudited) This section presents SentinelOne's unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows, for the reported periods Condensed Consolidated Balance Sheets As of October 31, 2024, SentinelOne reported total assets of $2.37 billion, with $1.12 billion in cash and investments, and stable total liabilities of approximately $727 million Selected Balance Sheet Data (in thousands) | Account | Oct 31, 2024 | Jan 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and investments | $1,123,801 | $1,130,754 | | Total Assets | $2,367,020 | $2,321,407 | | Total Liabilities | $727,497 | $727,364 | | Total Stockholders' Equity | $1,639,523 | $1,594,043 | Condensed Consolidated Statements of Operations SentinelOne's Q3 FY2025 revenue increased to $210.6 million, with GAAP gross profit rising to $157.4 million, though the GAAP net loss slightly widened to $78.4 million due to increased operating expenses Q3 FY2025 Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended Oct 31, 2024 | Three Months Ended Oct 31, 2023 | | :--- | :--- | :--- | | Revenue | $210,648 | $164,165 | | Gross Profit | $157,388 | $120,400 | | Loss from Operations | $(89,120) | $(81,468) | | Net Loss | $(78,364) | $(70,304) | | Net Loss Per Share | $(0.25) | $(0.24) | - Total stock-based compensation expense for Q3 FY2025 was $70.2 million, an increase from $54.9 million in the same period last year, contributing significantly to the net loss[43] Condensed Consolidated Statements of Cash Flows For the nine months ended October 31, 2024, SentinelOne achieved a significant turnaround, generating $37.1 million in cash from operating activities and $15.7 million in positive free cash flow Cash Flow Summary (Nine Months Ended Oct 31, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $37,129 | $(62,192) | | Net cash (used in) provided by investing activities | $(85,898) | $27,561 | | Net cash provided by financing activities | $31,667 | $23,782 | - The improvement in operating cash flow was primarily driven by a lower net loss after non-cash adjustments, such as stock-based compensation of $193.4 million[45] Non-GAAP Financial Measures and Reconciliations This section details SentinelOne's non-GAAP financial measures, explaining their purpose and providing comprehensive reconciliations to the corresponding GAAP results Explanation of Non-GAAP Measures SentinelOne uses non-GAAP financial measures to provide a clearer view of core operational performance by excluding non-cash, variable, or non-core items from GAAP results - Key items excluded from non-GAAP calculations include: - Stock-based compensation expense - Employer payroll tax on employee stock transactions - Amortization of acquired intangible assets - Acquisition-related compensation costs - Restructuring charges - Gains and losses on strategic investments[23][26][28] Reconciliation of GAAP to Non-GAAP Information The Q3 FY2025 reconciliation demonstrates how non-cash and other adjustments significantly reduce the GAAP operating loss of $89.1 million to a non-GAAP operating loss of $10.7 million, and GAAP net loss of $78.4 million to a non-GAAP net income of $75 thousand Q3 FY2025 GAAP to Non-GAAP Operating Loss Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | GAAP operating loss | $(89,120) | | Stock-based compensation expense | $70,188 | | Amortization of acquired intangible assets | $6,448 | | Other adjustments | $1,803 | | Non-GAAP operating loss | $(10,681) | Q3 FY2025 GAAP to Non-GAAP Net Loss/Income Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | GAAP net loss | $(78,364) | | Total adjustments from operating loss | $78,385 | | Net gain on strategic investments | $0 | | Non-GAAP net income (loss) | $75 | Key Business Metrics This section defines SentinelOne's key business metrics, including Annualized Recurring Revenue (ARR) and the count of large customers, used to assess market penetration and growth Definitions of Key Metrics SentinelOne defines key metrics such as Annualized Recurring Revenue (ARR) and the number of customers with ARR of $100,000 or more to measure business performance, market penetration, and customer relationship expansion - Annualized Recurring Revenue (ARR): Represents the annualized revenue run rate of subscription and consumption-based agreements at the end of a period, assuming contracts are renewed on existing terms. It is a key metric for measuring the ability to acquire and expand customer relationships[35] - Customers with ARR of $100,000 or More: This metric indicates market penetration and demand for the platform among larger enterprises. It counts each entity with an active subscription, treating managed service providers as a single customer[36]