SentinelOne (S) Q1 2026 earnings summary

Executive summary

• Revenue grew 23% year-over-year to $229 million in Q1 FY26, with ARR up 24% to $948.1 million and strong enterprise adoption.

• Non-GAAP net income margin reached 3%, free cash flow margin hit a record 20%, and customer base with ARR over $100,000 increased 22% to 1,459.

• Launched innovative AI-driven security solutions, including Purple AI Athena and a unified Cloud Security Suite.

• Achieved FedRAMP High authorization for multiple AI and cloud offerings, strengthening federal sector position.

• Announced a $200 million share repurchase program, signaling confidence in long-term growth.

Financial highlights

• Q1 FY26 revenue: $229 million (+23% y/y); ARR: $948.1 million (+24% y/y); gross margin (non-GAAP) stable at 79%, GAAP gross margin improved to 75% from 73%.

• Non-GAAP operating margin improved to -2% from -6% y/y; GAAP operating margin improved to -38% from -43%.

• Free cash flow margin reached 20% (up from 18% y/y); operating cash flow margin was 23%.

• Net loss increased to $208.2 million, primarily due to a $136 million tax expense related to APA negotiations.

• Cash, cash equivalents, and investments totaled $1.2 billion as of April 30, 2025.

Outlook and guidance

• Q2 FY26 revenue guidance: $242 million (+22% y/y); full-year FY26 revenue outlook: $996–1,001 million (+22% y/y).

• Non-GAAP gross margin expected at 78.5–79.5%; non-GAAP operating margin at 3–4% for FY26.

• Free cash flow margin expected to exceed operating margin by several points for the full year.

• Guidance reflects caution for macroeconomic headwinds, longer sales cycles, and potential external disruptions.

• Guidance excludes impact from stock-based compensation, acquisition-related costs, and other non-core items.