SentinelOne (S) Q2 2025 earnings summary

Executive summary

• Achieved first-ever quarter of positive net income and non-GAAP EPS, with record gross, operating, and net income margins, marking a significant profitability milestone.

• Revenue grew 33% year-over-year to $199 million, with international revenue up 36% and representing 37% of total revenue.

• Total ARR increased 32% to $806 million, with $100K+ ARR customers up 24% to 1,233 and $1M+ ARR customers reaching a record high.

• Platform adoption and success with large enterprises drove higher ARR per customer, up double digits year-over-year.

• Broad-based demand across all geographies and business sizes, with notable wins in endpoint, cloud, and data segments.

Financial highlights

• Gross margin reached a record 80% non-GAAP and 75% GAAP, up from 77% and 70% respectively year-over-year.

• Operating margin neared breakeven, with non-GAAP EBIT margin at -3%, and GAAP operating margin at (40)%, both improving significantly year-over-year.

• Net income margin was positive at 2% non-GAAP, with GAAP net loss margin at (35)%, both improved from prior year.

• Cash, cash equivalents, and investments totaled $1.1 billion as of July 31, 2024, with zero debt.

• Operating cash flow margin was 1%, with free cash flow margin at (3)%, both improved year-over-year.

Outlook and guidance

• Q3 revenue expected at $209.5 million, up 28% year-over-year; full-year revenue guidance raised to $815 million, up 31%.

• Full-year non-GAAP gross margin guidance raised to 79%, at the high end of the prior range.

• Non-GAAP operating margin guidance for the year narrowed to -5% to -3%, a 15-point improvement at the midpoint.

• Second-half net new ARR growth expected to improve, driven by a strong pipeline and traction with new products.

• Management expects continued investment in data, AI, cloud, and endpoint to drive growth.