SentinelOne(US:S)2025-12-04 21:15Revenue Growth - Revenue for the three months ended October 31, 2025, was $258.9 million, representing a year-over-year growth of 23% compared to $210.6 million for the same period in 2024[116] - Annualized recurring revenue (ARR) grew 23% year-over-year to $1.1 billion as of October 31, 2025, primarily driven by new customer additions and existing customer adoption of adjacent platform solutions[127] - Revenue for the nine months ended October 31, 2025, increased by $134.2 million to $730.1 million, a 23% increase, attributed to new customer sales and additional licenses[161] Customer Metrics - The number of customers with ARR of $100,000 or more increased by 20% year-over-year to 1,572 as of October 31, 2025, up from 1,310 in 2024[129] - The dollar-based net retention rate remained in expansionary territory as of October 31, 2025, driven by existing customers adopting additional endpoint licenses and adjacent platform solutions[130] Profitability and Loss - Non-GAAP operating income for the three months ended October 31, 2025, was $17.7 million, compared to a loss of $10.7 million for the same period in 2024[124] - The company reported a net loss of $60.3 million for the three months ended October 31, 2025, an improvement from a net loss of $78.4 million for the same period in 2024[116] - The net loss for the three months ended October 31, 2025, was $60.3 million, compared to a net loss of $78.4 million in 2024[149] - The company reported a net loss of $340.5 million for the nine months ended October 31, 2025, which was an increase from a net loss of $217.7 million in the same period of 2024[179][180] Expenses - Cost of revenue increased by 27% to $67.9 million for the three months ended October 31, 2025, compared to $53.3 million in 2024[152] - Gross profit for the three months ended October 31, 2025, was $191.1 million, a 21% increase from $157.4 million in the prior year, resulting in a gross margin of 74%[152][153] - Research and development expenses for the three months ended October 31, 2025, were $83.1 million, up from $70.5 million in 2024[149] - Sales and marketing expenses increased to $126.6 million for the three months ended October 31, 2025, compared to $123.7 million in the same period of 2024[149] - Total operating expenses for the three months ended October 31, 2025, were $264.4 million, an increase from $246.5 million in the prior year[149] - Research and development expenses increased by $12.7 million to $83.1 million, an 18% increase, primarily due to higher personnel-related expenses and cloud hosting costs[154] - Sales and marketing expenses rose by $2.8 million to $126.6 million, a 2% increase, driven by higher personnel-related expenses, partially offset by a decrease in marketing-related expenses[155] - General and administrative expenses decreased by $0.8 million to $51.5 million, a 2% decrease, mainly due to lower litigation expenses[156] - Restructuring charges increased by $3.2 million to $3.2 million, a 100% increase, due to severance payments and employee benefits[157] Cash Flow and Financing - Cash provided by operating activities for the nine months ended October 31, 2025, was $72.2 million, compared to $37.1 million for the same period in 2024[179][180] - Cash used in investing activities during the nine months ended October 31, 2025, was $24.8 million, significantly lower than $85.9 million in the same period of 2024[181][182] - Cash used in financing activities for the nine months ended October 31, 2025, was $76.3 million, primarily due to $101.9 million in common stock repurchases[183] - The company had $873.6 million in cash, cash equivalents, and investments as of October 31, 2025, with an additional $14.3 million in restricted cash[194] - The company may need to seek additional equity or debt financing in the future, depending on various factors including revenue growth and macroeconomic conditions[173] Taxation - The provision for income taxes is expected to increase in fiscal 2026 and beyond due to increased foreign earnings and certain minimum taxes[145] - The provision for income taxes increased by $128.4 million to $133.6 million, a 2452% increase, primarily due to foreign taxes and an unrecognized tax benefit accrual[168] - The company experienced a $136.0 million income tax expense adjustment related to uncertain tax positions during the nine months ended October 31, 2025[188] Market Conditions - The company experienced longer sales cycles and deal downsizing from larger enterprise customers due to current macroeconomic conditions[117] - The company’s go-to-market strategy focuses on acquiring new customers and expanding usage among existing customers through a network of channel partners[114] - The company may enter into arrangements to acquire or invest in complementary businesses, products, and technologies in the future[173] Future Expectations - The company expects research and development expenses to increase in absolute dollars as investments in existing products and services grow[137] - The company anticipates sales and marketing expenses to rise in absolute dollars while decreasing as a percentage of revenue over time[139] - Operating cash flow is influenced by seasonal billing patterns, with the fiscal first quarter being the strongest for collections[177] - A hypothetical 100 basis point change in interest rates would result in a $4.8 million change in the fair market value of the investment portfolio as of October 31, 2025[194]