Summary
SentinelOne opened fiscal 2027 with revenue of $276.66 million in the quarter ended April 30, 2026, up 20.8% from $229.03 million a year earlier. Annualized recurring revenue grew faster, rising 23% to $1,163 million as of April 30, 2026. Net new ARR climbed 55% year over year to $44 million from $28 million, which management called record net new ARR growth. Emerging solutions across Data, AI, Cloud and other areas reached roughly half of total company ARR, and Prompt Security nearly doubled its ARR quarter over quarter. Customers with ARR of $100,000 or more grew 17% to 1,702.
Profitability improved but stays underwater. Gross profit rose 15.2% to $198.69 million, yet GAAP gross margin fell to 71.8% from 75.3%, down 3.5 percentage points, as cost of revenue climbed $21.4 million on higher cloud hosting and support costs. The operating loss narrowed 8.9% to $79.72 million from $87.48 million, and the operating margin improved to -28.8% from -38.2%. Net loss narrowed 63.4% to $76.16 million from $208.19 million, and diluted loss per share improved to $0.23 from $0.63. A much smaller provision for income taxes than a year earlier did most of that work in the bottom line, and the prior-year tax charge tied to the Israeli Tax Authority matter did not repeat.
Non-GAAP results, which strip out stock-based compensation and other items, turned profitable. Non-GAAP operating income was $10.5 million against a loss of $3.9 million a year earlier, and non-GAAP operating margin moved to 4% from -2%. Non-GAAP net income was $12.3 million versus $6.6 million, and non-GAAP diluted earnings per share was $0.04 versus $0.02. Non-GAAP gross margin eased to 77% from 79%. Stock-based compensation expense of $74.9 million remains the largest reconciling item between the two sets of numbers, so the gap between GAAP and non-GAAP results is still wide.
Cash generation softened. Operating cash flow was $38.49 million, down 26.4% from $52.27 million, as a $46.9 million drop in deferred revenue and a $34.1 million reduction in accrued expenses, largely the Israeli Tax Authority installment payment, offset a $108.2 million release from accounts receivable. Free cash flow fell to $30.7 million from $45.4 million, while adjusted free cash flow rose to $61.4 million from $45.4 million, helped by adding back $30.7 million of ITA-related cash income tax payments. Capital expenditures were only $0.42 million, up 190.4% from $0.15 million. Deferred revenue totaled $586.20 million, up 7.5% from $545.40 million, and remaining performance obligations were $1.50 billion, up 28.9% from $1.16 billion, pointing to multi-year commitments in the backlog.
Cash, cash equivalents and investments stood at $812.5 million as of April 30, 2026, while the accumulated deficit reached $2.2 billion. Guidance for the second quarter of fiscal 2027 calls for revenue guidance of $289 million to $291 million, non-GAAP operating income of $23 million to $25 million, and non-GAAP earnings per share of $0.06 to $0.08. For the full fiscal year 2027, management raised its non-GAAP operating income outlook to $115 million to $125 million and guided to revenue of $1.195 billion to $1.205 billion and non-GAAP earnings per share of $0.32 to $0.38, with about 350 million diluted shares and a 17% non-GAAP tax rate.
SentinelOne still points to a limited operating history and a history of losses. It names intense competition, a difficult macro backdrop, changes in U.S. federal spending including government shutdowns, shifts in trade policy, banking instability, recession, inflation and interest rate volatility among the risks to those plans. The ITA settlement adds a concrete cash claim: installments run through fiscal 2031 at 7.0% interest, and a change in control would accelerate unpaid amounts plus interest through 2033 of $267.1 million as of April 30, 2026. Research and development spending rose $23.5 million while sales and marketing fell $1.8 million, so the margin expansion leans partly on spending discipline rather than a broad pullback across the cost base.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2027 | Q4 FY2026 | QoQ | Q1 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $276.7M | $271.2M | +2.0% | $229.0M | +20.8% |
| Gross profit | $198.7M | $196.8M | +0.9% | $172.5M | +15.2% |
| Gross margin | 71.8% | 72.6% | -0.8 pp | 75.3% | -3.5 pp |
| Research & development | $95.8M | $89.4M | +7.2% | $72.3M | +32.5% |
| Sales & marketing | $132.1M | $136.8M | -3.4% | $133.9M | -1.3% |
| General & administrative | $50.5M | $50.5M | +0.0% | $48.7M | +3.7% |
| Total operating expenses | $278.4M | $276.7M | +0.6% | $260.0M | +7.1% |
| Operating income (loss) | -$79.7M | -$79.9M | +0.2% | -$87.5M | +8.9% |
| Operating margin | -28.8% | -29.5% | +0.7 pp | -38.2% | +9.4 pp |
| Net income (loss) | -$76.2M | -$110.2M | +30.9% | -$208.2M | +63.4% |
| Net margin | -27.5% | -40.6% | +13.1 pp | -90.9% | +63.4 pp |
| Diluted EPS | -$0.23 | -$0.33 | +$0.10 | -$0.63 | +$0.40 |
| Customers | 1,702 | — | — | 1,459 | +16.7% |
Risks
The company continues significant investments in generative and agentic AI offerings such as Purple AI and Wayfinder, and its AI solutions depend on third-party foundation models whose availability or commercial terms may change adversely. Competitors may incorporate AI more successfully, and AI investment may negatively impact gross margins, which for the quarter ended April 30, 2026 declined 3.5 percentage points to 71.8% from 75.3% a year earlier.
Macroeconomic uncertainty and higher cost consciousness around IT budgets have led to longer sales cycles, deal downsizing by new customers and of renewals by existing customers, and a decline in usage and consumption patterns from certain larger enterprise customers. The company expects these conditions to persist in the near term.
The January 8, 2026 agreement with the Israeli Tax Authority resolved transfer pricing matters for fiscal years 2021 through 2025 but resulted in total tax expense of $183.5 million through April 30, 2026, with installment payments through fiscal 2031 subject to 7.0% annual interest; unpaid amounts plus interest of $267.1 million would accelerate upon a change in control. Other tax authorities, including the IRS, may challenge transfer pricing positions.
Substantially all sales are fulfilled through channel partners whose agreements are generally non-exclusive, have no set terms, and may be terminated at any time, and the majority fulfill sales on a purchase order basis without minimum purchase requirements. Failure of partners to meet multi-year purchasing commitments or consolidation among partners could harm revenue and forecast metrics.
As a cybersecurity provider with privileged access to customer environments, the company faces intense and growing attack efforts, including from nation-state actors, and bad actors are using AI to execute more sophisticated and scalable attacks. Any actual or perceived breach of the company's or its third-party vendors' systems could harm reputation, create liability, and result in regulatory investigations.
Cost of revenue increased 38% year over year in the quarter ended April 30, 2026, driven by higher cloud hosting usage charges, customer support costs, and amortization of intangibles from fiscal 2026 acquisitions. Gross margin for the quarter declined to 71.8% from 75.3% a year earlier.
The company relies on its management team and key employees and increased headcount from over 2,700 as of April 30, 2025 to over 3,000 as of April 30, 2026, which places strain on management and operational resources. Failure to hire, integrate, train, manage, retain, and motivate qualified personnel could harm the business.
SaaS KPIs
All quarters →Non-GAAP gross margin
Annualized recurring revenue (ARR)
Customers with ARR of $100,000 or more
Non-GAAP operating margin
Net New ARR
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 FY2027 (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.