- ARR Growth & Milestone: Total ARR crossed $1 billion, up 24% YoY, with $53 million net new ARR added in Q2.
- Flex Licensing Success: Unified licensing model Flex achieved 8-figure total deal value, driving platform adoption and expanded entitlement flexibility.
- Non-Endpoint Solutions Growth: ~50% of Q2 bookings came from non-endpoint solutions like AI SIEM, Purple AI, and CNAPP, reflecting diversified platform traction.
- Operating Profitability: 2% operating profit margin achieved, with $1.2 billion in cash and $1.2 billion RPO (up 26% YoY) supporting future growth.
- Strategic Acquisition: Acquisition of Prompt Security (AI runtime security) to bolster GenAI security, with minimal FY26 revenue impact and 80 bps margin dilution.
Key Drivers of Growth
The company's growth was fueled by strong contributions from new customer additions, expansion with existing accounts, and increased adoption of its AI and data solutions. Notably, approximately half of the quarterly bookings came from non-endpoint solutions, highlighting the diversification of SentinelOne's revenue streams. The launch of SentinelOne Flex, a unified flexible licensing model, has been well-received, with an 8-figure total deal value.
Valuation and Outlook
With a current P/S Ratio of 6.83, investors are pricing in significant growth expectations. Given the company's raised guidance for fiscal year '26, with revenue expected to grow to $998 million to $1.02 billion, it appears that the market may be underestimating SentinelOne's potential. The company's strong balance sheet, with $1.2 billion in cash and no debt, provides a solid foundation for future growth.
Strategic Acquisitions and Innovation
SentinelOne's acquisition of Prompt Security, a pioneer in securing generative AI, marks a strategic step forward in its vision to build the world's definitive AI security company. The company's continued innovation in AI-native SIEM capabilities and Singularity Cloud runtime security is driving customer adoption and growth.
Guidance and Future Prospects
The company expects to sustain quarterly operating profitability and deliver its first full year of operating profit this fiscal year. With a strong pipeline and encouraging early momentum on Flex, SentinelOne is well-positioned for continued growth and expansion. Analysts estimate next year's revenue growth at 22.0%, indicating a stable outlook for the company's financial performance.