Summary
SentinelOne closed fiscal 2022 with another quarter of triple-digit growth. Revenue in the fiscal 2022 fourth quarter was $65.6 million, up 119.8% from $29.9 million in the prior-year quarter. For the full fiscal year, revenue reached $204.8 million, up 120.1% from $93.1 million. Gross profit in the quarter was $41.4 million, up 158.1% from $16.0 million a year earlier. GAAP gross margin for the quarter was 63.1%, up 9.4 percentage points from 53.7%, and full-year gross margin was 60.1%, up 2.4 percentage points from 57.7%. Annualized recurring revenue was $292.3 million as of January 31, 2022, up 123% year-over-year. The company ended the quarter with over 6,700 customers, up more than 70% year-over-year, and 520 customers with ARR over $100,000, up 137%. Dollar-based net revenue retention was 129%.
Profitability remains distant. The fiscal 2022 fourth-quarter operating loss was $71.1 million, compared with a $37.0 million loss in the prior-year quarter, and the loss widened. Operating margin was negative 108.3%, up 15.7 percentage points from negative 124.0%. Net loss for the quarter was $71.7 million, compared with $37.8 million a year earlier, and the loss widened. For the full fiscal year, operating loss was $267.2 million, compared with $115.5 million, and net loss was $271.1 million, compared with $117.6 million. Diluted loss per share for the full year was negative $1.56, compared with negative $3.31, as the loss narrowed. Non-GAAP operating margin also improved sharply year-over-year, though both the quarter and the full year stayed in loss territory.
Cash generation improved in the quarter but not for the year. Operating cash flow was negative $5.6 million in the fiscal 2022 fourth quarter, compared with negative $23.3 million in the prior-year quarter, up 76.0%. For the full fiscal year, operating cash flow was negative $95.6 million, compared with negative $66.6 million, down 43.6%. Capital expenditures were $0.38 million in the quarter, compared with $1.65 million a year earlier, down 76.7%. Full-year capital expenditures were $3.65 million, compared with $3.28 million, up 11.3%. Deferred revenue was $262.0 million at January 31, 2022, up 84.8% from $141.8 million at January 31, 2021. Remaining performance obligations were $345.4 million at January 31, 2022.
Operational momentum centered on larger deals and platform expansion. SentinelOne signed its largest ever net new customer contract in the quarter, added a record number of $100,000 plus ARR customers, and added a record number of million-dollar plus ARR customers. Modules and DataSet represented over one-third of fourth-quarter new business, up from about 20% last year. Cloud and data retention modules each grew more than 10X year-over-year. Net new ARR reached a record $56 million. The planned acquisition of Attivo Networks would add identity threat detection and response, expand the addressable market into a $4 billion identity security market, and bring over 300 customers. Attivo is expected to close within the upcoming second fiscal quarter, subject to regulatory approval and customary closing conditions.
Guidance for the first quarter of fiscal 2023 calls for non-GAAP gross margin of 63% to 64%, and for the full fiscal year 2023 the company guided non-GAAP gross margin of 65% to 67%. Operating margin guidance points to meaningful year-over-year improvement in both periods, and management said it expects to keep investing in growth while making progress toward a long term target EBIT margin of 20%+. The guidance excludes the Attivo acquisition. Risks include a limited operating history, a history of losses, intense competition, fluctuations in operating results, network or security incidents, integration of acquisitions including Attivo, defects or vulnerabilities in the platform, rapid growth management, the continuing COVID-19 pandemic, customer retention and expansion, platform interoperability, business disruptions, product development and market acceptance, sales cycle length, securities class action litigation, and general market, political, economic, and business conditions including the conflict in Ukraine.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $65.6M | $56.0M | +17.2% | — | — |
| Gross profit | $41.4M | $35.7M | +16.1% | — | — |
| Gross margin | 63.1% | 63.7% | -0.6 pp | — | — |
| Research & development | $42.6M | $34.8M | +22.6% | — | — |
| Sales & marketing | $42.1M | $41.3M | +1.9% | — | — |
| General & administrative | $27.7M | $27.0M | +2.8% | — | — |
| Total operating expenses | $112.5M | $103.0M | +9.2% | — | — |
| Operating income (loss) | -$71.1M | -$67.4M | -5.5% | — | — |
| Operating margin | -108.3% | -120.3% | +12.0 pp | — | — |
| Net income (loss) | -$71.7M | -$68.6M | -4.5% | — | — |
| Net margin | -109.3% | -122.5% | +13.2 pp | — | — |
| Diluted EPS | -$0.41 | -$0.26 | -$0.15 | — | — |
| Customers | 6,700 | — | — | — | — |
| Net retention rate | 129.0% | 130.0% | -1.0 pp | — | — |
Risks
SentinelOne has incurred net losses in all periods since inception, including a net loss of $271.1 million for fiscal 2022 versus $117.6 million for fiscal 2021 and an accumulated deficit of $621.7 million as of January 31, 2022. Management expects operating expenses to increase and warns that revenue growth is expected to slow or decline, so failure to offset expenses could prevent profitability.
The endpoint security market is intensely competitive and fragmented, with competitors including CrowdStrike, VMware, Trellix, Symantec, Microsoft, and Palo Alto Networks. Larger competitors have greater resources and can bundle competing products at lower prices, potentially leading to price reductions, fewer orders, reduced revenue and gross margin, and loss of market share.
Substantially all sales are fulfilled through channel partners, which generated 92% of revenue for fiscal 2022. Exclusive Networks accounted for 18% of revenue for fiscal 2022, and partner agreements are non-exclusive, have no set term, and can be terminated at any time, so loss of partners or partner credit issues could harm revenue.
The platform is hosted through AWS, and the company has a non-cancelable purchase commitment with its cloud infrastructure vendor for $250.0 million over the next three years. AWS could change terms or pricing, discontinue services, or terminate the relationship, causing interruptions, delays, and additional expenses.
As a cybersecurity provider, SentinelOne faces particularly intense attack efforts, and a network or data security incident against it or its platform could harm reputation, create liability and regulatory exposure. The risk may increase due to state-supported and geopolitical cyberattacks connected with Russia's invasion of Ukraine.
Sales cycles are long and unpredictable, especially with large enterprises and government entities, and COVID-19 has lengthened the sales cycle for some prospective customers and delayed professional services and trainings. Failure to close sales after significant sales investment would adversely affect results.
Customers have no obligation to renew after subscription periods of generally one to three years, and some customers have elected not to renew or may renew for shorter terms. Dollar-based net retention rate was 129% for fiscal 2022, but retention and expansion may decline due to competition, spending levels, or customer M&A.
SentinelOne acquired Scalyr in fiscal 2022 and announced a definitive agreement in March 2022 to acquire Attivo. Acquisitions may be difficult to identify and integrate, divert management attention, disrupt business, dilute stockholders, and cause unanticipated write-offs or liabilities.
Headcount grew from over 700 employees as of January 31, 2021 to over 1,200 as of January 31, 2022, placing strain on management and operational resources. The company relies on its management team and key employees and may fail to hire, integrate, train, manage, retain, and motivate qualified personnel.
Failure to protect personal information under laws such as GDPR/U.K. GDPR and CCPA could lead to fines of up to €20 million or 4% of annual global turnover under GDPR, and the company is expanding internationally, with ARR outside the U.S. representing 36% as of January 31, 2022.
Adverse economic conditions or reduced IT spending could lengthen sales cycles, lower prices, increase partner defaults, and slow growth. The company cites inflation, potential global recession, COVID-19, and Russia's invasion of Ukraine as factors.
The dual class structure concentrates voting control: as of January 31, 2022, holders of Class B common stock held approximately 93% of voting power, and directors, executive officers, and pre-IPO holders of more than 5% held approximately 89%. This limits other stockholders' ability to influence corporate matters, including elections and change of control.
SaaS KPIs
All quarters →Dollar-Based Net Retention Rate
Summary, forecast, risks and KPIs are extracted from SentinelOne, Inc.'s SEC filings for Q4 FY2022 (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 2, 2026.