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2026-04-03 · earnings-review · SentinelOne delivered a clean execution quarter — $271 · Conviction 3/5
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# S — Q4 FY25 Earnings Review (Atlas)
> Date: 2026-04-03
> Quarter: Q4 FY25 (company Q4 FY2026, ended January 31, 2026; reported March 12, 2026)
> Market cap: $4.53B | EV: ~$3.76B | EV/TTM Rev: 3.8x | Revenue growth: 20.3% YoY
## Verdict
SentinelOne delivered a clean execution quarter — $271.2M revenue in line with guide, record $64M net new ARR, record $100K+ customer adds, and the first full fiscal year crossing $1B with non-GAAP operating profitability. The numbers are fine. But "fine" at 20% growth does not earn a premium. The interesting signal is beneath the surface: ARR bookings are accelerating while revenue decelerates, platform adoption is inflecting non-linearly (5+ solutions at 22% of enterprise base, up from 9%), and non-endpoint crossed 50% of bookings for the first time. These are leading indicators of a company transitioning from endpoint vendor to platform, and if they hold, the current 3.8x EV/revenue valuation is mispricing the optionality significantly. The gross margin compression (-2.7pp GAAP over four quarters) is the primary concern — moving in the wrong direction for a software company scaling to profitability. Conviction: 3/5 — the valuation provides margin of safety, but I need to see growth stabilize at 20%+ and gross margins stop deteriorating before raising conviction.
## Qualification Gate
| Criterion | Threshold | S Result | Pass/Fail |
|-----------|-----------|----------|-----------|
| Revenue YoY growth | >30% (>40% pref) | 20.3% (Q4) / 21.9% (FY) | **FAIL** |
| Gross margin | >60% (>70% pref) | 72.6% GAAP / 78.0% non-GAAP | PASS |
| Revenue per quarter | >$50M | $271.2M | PASS |
| Data availability | 4+ quarters | 16 quarters | PASS |
| Share dilution | <10% annual | ~2.7% net (post-buyback, 12.2M shares repurchased FY26) | PASS |
| GAAP profitability trajectory | Improving or positive | Improving (GAAP OM: -40.1% FY to -32.1% FY) | PASS |
**Gate result: FAIL on revenue growth.** At ~20% YoY, S does not qualify as hypergrowth
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# S — Q4 FY25 Earnings Review (WSM)
> Date: 2026-04-06
> Quarter: Q4 FY25 (company Q4 FY2026, ended January 31, 2026; reported March 12, 2026)
> Market cap: ~$4.53B | EV: ~$3.76B | EV/Run-Rate Rev: 3.5x | Revenue growth: 20.3% YoY
---
## Verdict
**I sold this company at $14 in June 2023 and called the earnings call "an absolute shambles."** The ARR misstatement, the miss-and-lower, the shell-shocked management tone — all of it warranted the exit. Three years later, Tomer Weingarten has rebuilt credibility: 8/8 guidance commitments met in FY26, $1B revenue crossed, first profitable fiscal year, and a record bookings quarter. The numbers have earned a second look. But 20% revenue growth is not what I invest in. The question is whether the leading indicators — record $64M NNA, record 95 enterprise customer adds, non-endpoint crossing 50% of bookings — are signalling a re-acceleration that the revenue line hasn't reflected yet. **Verdict: Not investable today at 20% growth, but the closest it's been since I sold. Two more quarters of $60M+ NNA and stable gross margins would change the calculus.**
---
## The Numbers
### Revenue Grid — Quarters Down, Years Across
| QoQ % | FY22 | FY23 | FY24 | FY25 | Trend |
|-------|------|------|------|------|-------|
| **Q1** | — | 5.8% | 7.0% | 1.6% | Deteriorating |
| **Q2** | 30.9% | 12.0% | 6.7% | 5.8% | Decelerating |
| **Q3** | 12.5% | 9.9% | 5.9% | 6.9% | **Stabilising** |
| **Q4** | 9.4% | 6.1% | 7.1% | **4.8%** | Weak |
Q4 FY25 at 4.8% QoQ annualises to ~20%. That's the slowest Q4 QoQ in the grid. **The Q1 FY25 at 1.6% was horrific** — seasonal, yes, but 1.6% annualises to 6.5%. If Q1 FY26 repeats that pattern, we're looking at $277M which is exactly what they guided ($276-278M). No upside embedded.
Q3 is the encouraging data point. 6.9% QoQ was the best Q3 in two years. But one swallow doesn't make a summer.
### YoY Growth — Same Quarter Comparison
| YoY % | FY22-FY23 | FY23-FY24 | FY24-FY25 |
|-------|-----------
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Rolling earnings (raw)
# S — SentinelOne Rolling Earnings Summary
> Last updated: 2026-04-03
> Covers: Q1 FY25 — Q4 FY25 (company FY2026, Feb 2025 — Jan 2026)
> FY convention: FY ends January 31. Company FY2026 = DB FY25.
---
## Financial Grid
| | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 |
| | Mar-25 | Jun-25 | Sep-25 | Dec-25 |
|---|---|---|---|---|
| Revenue ($M) | 229.0 | 242.2 | 258.9 | **271.2** |
| QoQ % | 1.6% | 5.8% | 6.9% | **4.8%** |
| YoY % | 22.9% | 21.8% | 22.9% | **20.3%** |
| ARR ($M) | 948 | 1,001 | 1,055 | **1,119** |
| ARR YoY % | ~24% | ~24% | ~23% | **~22%** |
| Net New ARR ($M) | — | 53 | 54 | **64** |
| $100K+ Customers | 1,459 | 1,513 | 1,572 | **1,667** |
| $100K+ Net Adds | — | 54 | 59 | **95** |
| GM% [GAAP] | 75.3% | 75.0% | 73.8% | **72.6%** |
| GM% [Non-GAAP] | 79.0% | 79.0% | 79.0% | **78.0%** |
| OM% [GAAP] | -38.2% | -33.3% | -28.3% | **-29.5%** |
| OM% [Non-GAAP] | -1.7% | 2.2% | 6.8% | **5.7%** |
| EPS [GAAP] | -$0.63 | -$0.22 | -$0.18 | **-$0.34** |
| EPS [Non-GAAP] | $0.02 | $0.04 | $0.07 | **$0.07** |
| SBC ($M) | 68.7 | 73.9 | 75.3 | **79.7** |
| SBC/Rev % | 30.0% | 30.5% | 29.1% | **29.4%** |
| FCF ($M) | 45.4 | -7.1 | 15.9 | **-2.3** |
| **Verdict** | Solid start; FY profitability guided | ARR crosses $1B | Best QoQ add; OM inflection | Record NNA/customer adds; FY milestone |
---
## Promise Tracker
| Quarter | Promise | Outcome | Status |
|---------|---------|---------|--------|
| Q1 FY25 | FY26 revenue $996M-$1,001M | $1,001.3M actual | Met |
| Q1 FY25 | FY26 non-GAAP OM 3-4% | 3.5% actual | Met |
| Q1 FY25 | Q2 revenue $242M | $242.2M (+0.1%) | Met |
| Q2 FY25 | FY26 revenue $998M-$1,002M (raised) | $1,001.3M actual | Met |
| Q2 FY25 | Q3 revenue $256M | $258.9M (+1.1%) | Met |
| Q3 FY25 | FY26 revenue ~$1,001M (tightened) | $1,001.3M | Met |
| Q3 FY25 | Q4 revenue $271M | $271.2M (+0.1%) | Met |
| Q3 FY25 | FY26 non-GAAP OM ~3% | 3.5% actual | Exceeded (+50bp) |
| Q4 FY25 | Q1 FY26 revenue $276M-$278M | Pending | Pending |
| Q4 FY25 | FY27 revenue $1,195M-$1,205M | Pending | Pending |
| Q4 FY25 | FY27 non-GAAP OM ~10% | Pending | Pending |
| Q4 FY25 | No significant FY27 headcount growth | Pending | Pending |
| Q4 FY25 | FY27 FCF margin ~10% | Pending | Pending |
| Q4 FY25 | Purple AI attach normalizing to 30-40% | Pending | Pending |
**Track record: 8/8 prior commitments met (100%).** Beats are minimal (+0.1% to +1.1% on revenue). Management guides conservatively and delivers at/near the number. Predictable execution.
---
## Language Shift Monitor
| Theme | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 |
|-------|---------|---------|---------|---------|
| Growth narrative | "$1B path" | "$1B ARR milestone" | Point estimate confidence | **"Milestone year," "bridge to profitable scale"** |
| AI framing | Present | Present | Intensifying | **Dominant — 8+ AI references unprompted** |
| Competition | Not discussed | Not discussed | Not discussed | **Named Cloudflare win; "superior technology"** |
| Profitability | "3-4% OM first time" | "Maintained ~3%" | "~3% OM confidence" | **"10% FY27" — 650bp jump volunteered pre-Q&A** |
| Headcount | Not addressed | Not addressed | Not addressed | **"No significant growth planned" — volunteered** |
**Trajectory:** Language shifted materially in Q4 from growth-milestone framing to profitability-and-platform framing. AI language intensity increased steadily across all four quarters. The Q4 call was the most forward-leaning on margin expansion and operational efficiency — management volunteered headcount freeze and 10% OM target before analysts asked.
---
## Analyst Concern Tracker
| Concern | First Raised | Status | Current Assessment |
|---------|-------------|--------|--------------------|
| Growth deceleration | Q1 FY25 | Active | YoY growth 22.9% to 20.3% across FY. FY27 guided ~20%. Not resolved. |
| Competitive positioning vs CRWD | Q4 FY25 | Active | 10.6% vs 22.5% share. Gap not closing. Cloudflare win cited as evidence but anecdotal. |
| Margin expansion mechanics | Q4 FY25 | Active | How does OM go from 3.5% to 10% without revenue acceleration? Headcount freeze is the answer. |
| Capital allocation | Q4 FY25 | Active | Buyback initiated (12.2M shares FY26). No M&A appetite. Conservative. |
---
## Quarter-by-Quarter Verdict
- **Q1 FY25:** Solid start. Initial $1B FY guide. ARR $948M. First profitability guidance.
- **Q2 FY25:** ARR crosses $1B. Revenue in line. Modest guide raise. Execution quarter.
- **Q3 FY25:** Best sequential revenue add ($16.7M). OM inflects to 6.8%. Guide tightened to point estimate.
- **Q4 FY25:** Record NNA ($64M), record $100K+ adds (95). FY crosses $1B. First profitable FY (non-GAAP). Gross margin compression is the concern. FY27 guide projects 650bp OM expansion.
**Trajectory sentence:** SentinelOne is executing a disciplined transition from hypergrowth to profitable scale, with bookings momentum accelerating (Q4 NNA record) even as revenue growth decelerates toward 20%. The platform diversification story is real (non-endpoint >50% of bookings). The risk is that gross margin compression undermines the operating leverage thesis before it delivers.
---
## Source Log
| Date | Persona | What changed |
|------|---------|-------------|
| 2026-04-03 | atlas | Created _ROLLING.md from Q4 FY25 earnings review. Populated all 4 quarters of FY25 financial grid, promise tracker (8/8 met), language shift monitor, analyst concerns, and quarter verdicts. |
| 2026-04-06 | wsm | Reviewed Q4 FY25 earnings. Confirmed all financial data. Added context: ARR/NNA divergence as leading indicator signal (record $64M NNA, 95 $100K+ adds). Flagged GM compression (-2.7pp in 4Qs) as primary risk to 10% OM guide. NRR at 109% identified as structural growth ceiling. Verdict: not investable at 20% growth but watchlist — closest since June 2023 exit. |