Summary
SentinelOne reported fiscal 2025 second quarter revenue of $198.9 million, up 33.1% from $149.4 million a year earlier. Year-to-date revenue was $385.3 million, up 36.2% from $282.8 million. Annualized recurring revenue rose 32% to $806.0 million as of July 31, 2024. Customers with ARR of $100,000 or more grew 24% to 1,233. International revenue was 37% of total revenue and grew 36% year over year. Management tied the growth to new customer wins and to additional endpoint and module purchases by existing accounts.
Margins and profitability moved sharply higher. GAAP gross profit was $148.2 million, up from $104.8 million, and GAAP gross margin was 74.5% against 70.1%. Non-GAAP gross margin was 80%, compared with 77%. The GAAP operating loss narrowed to $79.4 million from $100.4 million, and GAAP operating margin improved to -39.9% from -67.2%. Non-GAAP operating margin was -3%, compared with -22%. The GAAP net loss narrowed to $69.2 million, or $0.22 per diluted share, from $89.5 million, or $0.31 per diluted share. Non-GAAP net income was $3.5 million and non-GAAP diluted earnings per share was $0.01, the first positive result on that basis. The spread between the GAAP and non-GAAP figures comes from items the company excludes, including stock-based compensation.
Cash generation also flipped positive. Operating cash flow was $2.3 million for the quarter, against an outflow of $11.9 million a year ago, and free cash flow was an outflow of $5 million, against an outflow of $15 million. For the six months, operating cash flow was $44.3 million against an outflow of $40.0 million, and the net loss narrowed to $139.3 million from $196.4 million. Deferred revenue was $502.6 million, up 19.3% from $421.4 million, a sign that billed business kept building. Remaining performance obligations were $944.3 million, up 39.7% from $676.1 million. Capital expenditures were $0.55 million in the quarter.
Product traction is broadening. Purple AI adoption outran expectations within months of general availability, and the company says customers see 80% faster threat hunting and investigations. Cloud security posture management went worldwide in the quarter and a cloud infrastructure entitlement management offering launched. Management cites IDC data showing SentinelOne grew faster than any other top 10 modern endpoint security vendor in 2023. New partnerships with Google's Mandiant Consulting, CISA and a network of cyber insurers widen the routes to market. A larger share of the quarter's mix came from new customers, which management frames as future expansion capacity.
Guidance points higher. The company guides to about $209.5 million of revenue for the third quarter of fiscal 2025, growth of 28% year over year, and to about $815 million for the full fiscal year 2025, growth of 31% at the midpoint. Non-GAAP gross margin is guided to about 79% for both the quarter and the full year. Non-GAAP operating margin is guided to -3% for the third quarter and to a range of -5% to -3% for the full year, which the company describes as about 15 percentage points of year-over-year improvement.
Risks are still real. Management flags macroeconomic uncertainty, longer sales cycles, and deal downsizing by new customers and on renewals by existing customers, especially large enterprises. Competition in the security market is intense, and the company still posts losses. About 12% of personnel were based in Israel as of July 31, 2024, where the armed conflict in the Middle East continues. The company also lists a potential recession, inflation, interest rate volatility, instability in the banking sector, supply chain disruption, the upcoming U.S. election, and securities class action litigation among the factors that could shift results.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $198.9M | $186.4M | +6.8% | $149.4M | +33.1% |
| Gross profit | $148.2M | $136.2M | +8.8% | $104.8M | +41.5% |
| Gross margin | 74.5% | 73.1% | +1.4 pp | 70.1% | +4.4 pp |
| Research & development | $63.6M | $58.3M | +9.1% | $54.2M | +17.4% |
| Sales & marketing | $119.6M | $115.8M | +3.3% | $98.3M | +21.7% |
| General & administrative | $44.4M | $42.7M | +4.1% | $48.4M | -8.3% |
| Total operating expenses | $227.6M | $216.8M | +5.0% | $205.1M | +11.0% |
| Operating income (loss) | -$79.4M | -$80.6M | +1.5% | -$100.4M | +20.9% |
| Operating margin | -39.9% | -43.3% | +3.4 pp | -67.2% | +27.3 pp |
| Net income (loss) | -$69.2M | -$70.1M | +1.3% | -$89.5M | +22.7% |
| Net margin | -34.8% | -37.6% | +2.8 pp | -59.9% | +25.1 pp |
| Diluted EPS | -$0.22 | -$0.23 | +$0.01 | -$0.31 | +$0.09 |
Risks
Worsening economic conditions, inflation, interest rate volatility, and potential recession have caused a decline in usage and consumption patterns from certain customers, especially larger enterprise customers, longer sales cycles, and deal downsizing by new customers and renewals by existing customers, which could slow revenue growth.
Generative AI initiatives such as Purple AI rely on third-party foundation models that may change availability or commercial terms, and competitors may incorporate AI more successfully; AI also brings litigation, privacy, and evolving regulatory risks and could pressure gross margins.
As a cybersecurity provider, SentinelOne faces particularly intense attack efforts and is a valuable target because of highly privileged access; AI-based attack tools and regional conflicts increase risk, and an actual or perceived breach could cause reputational harm, regulatory exposure, and liability.
Customers have no obligation to renew after subscription terms of generally one to three years and may renew for shorter lengths or cease using features; failure to retain, renew, and expand customers or to have partners execute purchasing commitments could prevent sustained revenue growth.
Substantially all sales are fulfilled through channel partners, and several large MSSP, OEM, and reseller partnerships carry multi-year purchasing commitments; partner failure to meet commitments, consolidation, or credit issues could cause churn in forecast metrics and harm revenue.
The cybersecurity market is intensely competitive and fragmented, with larger competitors that have greater resources, broader product suites, and the ability to bundle competing products or adopt AI more quickly, potentially causing price reductions, fewer orders, reduced revenue and gross margin, and loss of market share.
Recent acquisitions including PingSafe and Stride, plus KSG and S Ventures investments, require successful integration; failure to integrate technologies and personnel could divert management, cause unanticipated write-offs or liabilities, dilute stockholders, and adversely affect results.
SentinelOne maintains a Tel Aviv office with approximately 12% of personnel in Israel as of July 31, 2024, and is monitoring the armed conflict in the Middle East; if the conflict worsens or continuity measures fail, business interruptions or spillover effects could harm operations.
Handling personal information subjects the company to GDPR fines of up to 20 million euros or 4% of annual global turnover, SEC cybersecurity disclosure rules, and evolving AI and privacy regulations, increasing compliance costs and liability exposure.
Future growth depends in part on government sales, but demand is subject to budgetary uncertainty, FedRAMP certification and compliance costs, audits, and funding delays or shutdowns that could restrict or delay purchases.
SaaS KPIs
All quarters →Non-GAAP gross margin
Annualized recurring revenue (ARR)
Customers with ARR of $100,000 or more
Operating cash flow margin
Summary, forecast, risks and KPIs are extracted from SentinelOne, Inc.'s SEC filings for Q2 FY2025 (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.