SentinelOne (S) Q2 2027 earnings summary

Executive summary

• Q2 FY2027 revenue grew 21–22% year-over-year to $292 million, exceeding guidance, with record net new ARR and operating margin, and ARR per customer and $100,000+ ARR customers rising 13% to 1,715.

• Annualized recurring revenue (ARR) reached $1.22 billion, up 22% year-over-year, with AI security ARR nearly tripling and over 50% of ARR now from non-endpoint solutions.

• Record non-GAAP operating margin of 10–10.5% and non-GAAP net income margin of 9.8–10%, with non-GAAP EPS doubling year-over-year to $0.08.

• Raised full-year FY2027 revenue and operating income outlook, reflecting robust demand for AI security, data, and cloud solutions, and expanding platform adoption.

• Added over 200 customers with $100,000+ ARR year-over-year, highlighting upmarket momentum.

Financial highlights

• Q2 revenue: $292 million, up 21–22% year-over-year, with international markets representing 39% of total revenue.

• Net new ARR for Q2 was $56 million, up 4% year-over-year; total ARR grew 22% to $1.22 billion.

• Non-GAAP gross margin was 77–79% (down from 79%), GAAP gross margin was 72% (down from 75%).

• Adjusted free cash flow margin reached 6–8% on a trailing 12-month basis; free cash flow margin improved to 3%.

• Ended Q2 with $813 million in cash equivalents and investments, and no debt.

Outlook and guidance

• FY2027 revenue outlook raised to $1.202–$1.207 billion, representing 20% year-over-year growth at midpoint.

• Q3 FY2027 revenue guidance: $309–$311 million; non-GAAP operating income: $38–$40 million; non-GAAP EPS: $0.08–$0.09.

• FY2027 non-GAAP operating income: $124–$128 million; non-GAAP EPS: $0.30–$0.32; non-GAAP tax rate set at 17%.

• Management expects continued revenue growth driven by new customer acquisition and expanded platform adoption.

• Gross margin may fluctuate as investments in infrastructure and support continue.