Summary
SentinelOne's fiscal 2026 opened with revenue of $229.0 million for the quarter ended April 30, 2025, up 22.9% from $186.4 million in the prior-year quarter. Gross profit increased to $172.5 million from $136.2 million. Gross margin expanded to 75.3% from 73.1%, a gain of 2.2 percentage points, and operating margin improved to negative 38.2% from negative 43.3%. Even so, the GAAP operating loss widened to $87.5 million from $80.6 million. Revenue outside the U.S. made up 38% of the total, compared with 37% a year earlier.
The bottom line moved in the opposite direction. Net loss was $208.2 million for the quarter, compared with $70.1 million a year earlier, and diluted loss per share was $0.63 versus $0.23. Income taxes explain most of the gap. SentinelOne recorded a $136.0 million accrual for an unrecognized tax benefit tied to its bilateral Advance Pricing Agreement negotiations with the IRS and the Israel Tax Authority, partly offset by a $4.7 million valuation allowance release on Israeli deferred tax assets. The provision for income taxes came to $133.5 million. Strip out those items and non-GAAP net income was $6.6 million, a 3% margin, while the non-GAAP operating loss narrowed to $3.9 million from $11.1 million.
Operating metrics kept growing. Annualized recurring revenue reached $948.1 million as of April 30, 2025, up 24% year over year. Customers with ARR of $100,000 or more rose 22% to 1,459 from 1,193. Remaining performance obligations climbed 33.0% to $1.16 billion from $874.9 million, and deferred revenue increased 10.6% to $545.4 million from $493.1 million. Operating cash flow was $52.3 million, up 24.5% from $42.0 million. Free cash flow, a different non-GAAP measure, was $45.4 million, and the free cash flow margin was 20% compared with 18%. Capital expenditures were just $0.15 million against $0.89 million. Cash, cash equivalents, and investments stood at $1.2 billion. No single end customer accounted for more than 3% of ARR.
Product news stayed busy. Management said Purple AI delivered triple-digit quarterly bookings growth year over year, and data solutions passed $100 million of ARR in the quarter. The company booked a $5.2 million restructuring charge tied to a plan launched in March 2025, which it expects to finish by the second quarter of fiscal 2026. On May 22, 2025, the board authorized a $200.0 million share repurchase program, the company's first, and no shares had been bought back as of May 28, 2025.
Guidance points toward steadier profitability. For the second quarter of fiscal 2026, management guided revenue growth of 22% year over year, with a non-GAAP operating margin of 0%. For the full fiscal year 2026, revenue growth is guided at 22%, and the full-year revenue outlook includes the impact of ending sales of the Hologram deception solution. Management added that the company is on track to deliver top-tier growth and full-year profitability. Risks look familiar. Management flagged longer sales cycles, deal downsizing by new customers and on renewals, softer usage and consumption from some larger enterprise customers, intense competition, and the possibility that an APA settlement could require significant payments to the Israeli government spread over several years.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $229.0M | $225.5M | +1.6% | $186.4M | +22.9% |
| Gross profit | $172.5M | $168.5M | +2.4% | $136.2M | +26.6% |
| Gross margin | 75.3% | 74.7% | +0.6 pp | 73.1% | +2.2 pp |
| Research & development | $72.3M | $74.6M | -3.2% | $58.3M | +23.9% |
| Sales & marketing | $133.9M | $128.1M | +4.5% | $115.8M | +15.6% |
| General & administrative | $48.7M | $46.1M | +5.6% | $42.7M | +14.1% |
| Total operating expenses | $260.0M | $248.8M | +4.5% | $216.8M | +19.9% |
| Operating income (loss) | -$87.5M | -$80.3M | -9.0% | -$80.6M | -8.5% |
| Operating margin | -38.2% | -35.6% | -2.6 pp | -43.3% | +5.0 pp |
| Net income (loss) | -$208.2M | -$70.8M | -194.1% | -$70.1M | -197.0% |
| Net margin | -90.9% | -31.4% | -59.5 pp | -37.6% | -53.3 pp |
| Diluted EPS | -$0.63 | -$0.22 | -$0.41 | -$0.23 | -$0.40 |
| Customers | 1,459 | — | — | — | — |
Risks
MD&A discloses that in FY2026 Q1 the company discussed a framework for final settlement of its bilateral APA matter with the Israel Tax Authority, recorded a $136.0 million unrecognized tax benefit, and may be required to make significant payments to the Israeli government if an APA is concluded. Negotiations remain ongoing with no finalized agreement, and the net loss widened to $208.2 million in FY2026 Q1 from $70.1 million in FY2025 Q1.
MD&A states that current macroeconomic conditions have led to a decline in usage and consumption patterns from certain customers, especially larger enterprise customers, longer sales cycles, and deal downsizing by new customers and on renewals by existing customers. The company expects these global macroeconomic conditions impacting demand to persist in the near term.
Risk factors state the company may not be successful in its artificial intelligence initiatives, including Purple AI, and its generative AI solutions rely on third-party foundation models that may change availability or commercial terms. Competitors may incorporate AI into their products more quickly or successfully, which could impair competitiveness and require significant investments that may not be recouped.
As a cybersecurity provider with highly privileged access to customer environments, the company faces intense attack efforts, including from nation-state actors, and bad actors are beginning to use AI-based tools. Any actual or perceived breach of its systems or third-party vendors could create liability, regulatory exposure, reputational harm, and increased remediation costs.
The company has incurred net losses in all periods since inception, and net loss widened to $208.2 million in FY2026 Q1 from $70.1 million in FY2025 Q1. As of April 30, 2025, it had an accumulated deficit of $1.8 billion and expects operating expenses to increase in the future, so it may not achieve or sustain profitability.
Substantially all sales are fulfilled through channel partners, and many agreements are non-exclusive, have no set term, and impose no minimum purchase requirements, while some large MSSP, OEM, and reseller partnerships include multi-year purchasing commitments. Failure of partners to meet commitments or consolidation among partners could reduce revenue and cause churn in forecast metrics.
MD&A reports $5.2 million of restructuring charges in FY2026 Q1 under a March 2025 restructuring plan, including $3.0 million of severance and employee benefits and $2.2 million of facility-related asset impairments. The plan is expected to be fully completed by Q2 FY2026, but execution risks could disrupt operations.
Government sales are subject to budgetary uncertainty, costly FedRAMP compliance, and changing certification or source-code transparency requirements. The recently established Department of Government Efficiency and pressures on the U.S. federal budget could adversely affect funding for and purchases of the platform by government organizations.
The company had approximately 11% of personnel in Israel as of April 30, 2025, and risk factors cite the evolving armed conflict in Israel and regional geopolitical conflicts as potential business interruptions. Revenue outside the U.S. represented 38% of revenue for FY2026 Q1, exposing operations to foreign regulatory, tax, and currency risks.
The platform is primarily hosted on AWS, and AWS has discretion to change terms of service or pricing, limit access, or compete with the company. Any termination or interruption of AWS services could cause platform outages and require costly technical changes.
The company is currently subject to securities class action litigation, which can result in substantial costs and divert management attention. Related directors and officers liability insurance costs may increase or coverage may become more expensive.
As of April 30, 2025, holders of Class B common stock controlled approximately 47% of the voting power, limiting or precluding other stockholders from influencing corporate matters, including the election of directors and approval of change of control transactions.
SaaS KPIs
All quarters →Non-GAAP gross margin
Annualized recurring revenue (ARR)
Customers with ARR of $100,000 or more
Free cash flow
Free cash flow margin
Non-GAAP net income margin
Operating cash flow margin
Summary, forecast, risks and KPIs are extracted from SentinelOne, Inc.'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.