Executive Summary
SentinelOne delivered a solid QQ1 2026 performance with 23% year-over-year revenue growth to $229 million and ARR reaching $948 million, marking continued platform-driven expansion across endpoint, cloud, and data. The company posted a gross margin of 79% and achieved a fourth consecutive quarter of positive net income, complemented by a record 20% free cash flow margin. Management highlighted a strategic shift from product-centric to platform-based GTM, the acceleration of AI-enabled offerings (Purple AI and AI SIEM), and stronger enterprise adoption, including FedRAMP High authorizations for Purple, CNAP, and hyperautomation. Despite a softer Q1 net new ARR due to macro volatility and elongated sales cycles, guidance for Q2 and full-year 2026 remains constructive: revenue of ~$242M in Q2 (22% growth) and $996M–$1.0B for the full year (22% growth), with gross margins around 79% and operating margins expanding to 3–4%. SentinelOne also announced a $200M open-ended share repurchase authorization, underscoring confidence in the long-term trajectory and balance-sheet strength. The narrative is one of AI-powered security platform leadership, healthy ARR expansion, improving profitability trajectory, and disciplined investments to sustain velocity in a large, resilient market.
Key Performance Indicators
QoQ: -194.11% | YoY:-196.97%
QoQ: -186.36% | YoY:-173.91%
Key Insights
Revenue: $229.029M in Q1 2026, up 22.9% YoY and 1.56% QoQ. Gross margin: 79.0% (reported 0.7917, ~79%). Operating margin: -2.0% in Q1 (YoY improvement of ~4 percentage points). Net income: -$208.193M; net income margin: -90.9%. EPS: -$0.63 (diluted). ARR: $948.0M, up 24% YoY; remaining performance obligations (RPO): $1.2B, up 33% YoY. International revenue: 38% of total; international grew 27% YoY. Free cash flow margin: 20% in Q1; trailing twelve months FCF margin up 5 percentage points. Cash &...
Financial Highlights
Revenue: $229.029M in Q1 2026, up 22.9% YoY and 1.56% QoQ. Gross margin: 79.0% (reported 0.7917, ~79%). Operating margin: -2.0% in Q1 (YoY improvement of ~4 percentage points). Net income: -$208.193M; net income margin: -90.9%. EPS: -$0.63 (diluted). ARR: $948.0M, up 24% YoY; remaining performance obligations (RPO): $1.2B, up 33% YoY. International revenue: 38% of total; international grew 27% YoY. Free cash flow margin: 20% in Q1; trailing twelve months FCF margin up 5 percentage points. Cash & equivalents + investments: approx. $1.2B; total liquidity supports a $200M open-ended share repurchase authorization. Net debt: -$176.1M (net cash). Weighted average shares outstanding (GAAP): ~327.98M; non-GAAP metrics emphasize scale and efficiency.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
229.03M |
22.90% |
1.56% |
| Gross Profit |
172.50M |
26.63% |
2.37% |
| Operating Income |
-87.48M |
-8.54% |
-9.00% |
| Net Income |
-208.19M |
-196.97% |
-194.11% |
| EPS |
-0.63 |
-173.91% |
-186.36% |
Management Commentary
Key management insights from the QQ1 2026 earnings call:
- Strategy and platform shift: Tomer Weingarten emphasized a transition from product-centric sales to a platform-centric approach, driven by AI capabilities and flexible consumption of the entire SentinelOne platform. Quote: “go-to-market evolution… moving from a product-centric sales approach to a platform sales strategy… platform-wide approach.”
- AI and data as growth engines: Purple AI and data solutions are central to the growth story, with Purple AI achieving triple-digit YoY growth in quarterly bookings and an attach rate >25% across subscriptions sold in the quarter. Data ARR surpassed $100M in Q1, underscoring momentum in AI-driven data capabilities.
- Customer and enterprise momentum: The company highlighted expanding ARR per customer, higher platform adoption, and the continued expansion into large enterprises and federal space (FedRAMP high for Purple, CNAP, hyperautomation). Notable client narratives included a Fortune 500 retailer for AI SIEM and a Fortune 500 industrial leader for unified cloud security.
- Macro environment and guidance discipline: Management acknowledged elongated sales cycles in April but remained confident in 22% revenue growth for FY2026, with improved trends observed in May. Guidance for Q2 revenue of ~$242M and full-year revenue of $996–$1,000M reflect conservatism amid macro uncertainty, with ARR guidance adjusted implicitly through the lower top-line target. Quote: “we do expect 22% growth this year, a top-tier growth rate… the environment is proving to be unpredictable.”
- Margins, cash flow, and capital allocation: Barbara Larson highlighted gross margin of 79%, Q2 breakeven on operating margin, and full-year operating margin target of 3–4%. Free cash flow margin is expected to exceed operating margin by several percentage points for the full year. The company announced a $200M open-ended share repurchase authorization, reinforcing confidence in the long-term value proposition and liquidity.
- Federal sector momentum and risk factors: The call noted continued FedRAMP authorization progress and a seven-figure renewal with a large federal agency in early Q2, though procurement timelines in the federal sector can vary. The commentary pointed to macro-driven caution with respect to net-new ARR but not to deal cancellations or erosion in win rates.
“Our Q1 performance exceeded our revenue growth expectations, and we continue to deliver strong year-over-year margin improvement and cash generation.”
— Tomer Weingarten
“Purple AI achieved triple-digit year-over-year growth in quarterly bookings, underscoring strong market demand and momentum. It also achieved an attach rate that exceeded 25% across subscriptions sold in the quarter.”
— Tomer Weingarten
Forward Guidance
Guidance and outlook reflect a disciplined view of the macro environment while maintaining confidence in platform-driven growth. Near-term visibility improved in May after softer April dynamics, with Q2 revenue guided at approximately $242M (+22% YoY) and full-year revenue guidance of $996M to $1.0B (+22% YoY). Gross margin is expected to hold near 79%, with Q2 gross margin around 79% and full-year gross margin in a range of 78.5–79.5%. Operating margins are projected to improve to breakeven in Q2 and to 3–4% for the full year, representing a ~650bp midpoint improvement versus FY2025. Free cash flow margin is expected to exceed operating margin for the full year, underscoring a path to meaningful positive FCF as scale accelerates. Key factors that could influence results include: (1) continued platform adoption across endpoint, cloud, and data; (2) acceleration of AI-enabled offerings (Purple AI, AI SIEM, CNAP, hyperautomation) and their impact on average deal size and attach rates; (3) resilience or acceleration in federal and large-enterprise deals, including FedRAMP-related wins; (4) additional enhancements to partner programs (Partner One) and GTM execution; (5) macro developments that could further elongate sales cycles or improve demand. Investors should monitor quarterly net-new ARR progression, customer retention and expansion, ARR per customer, RPO growth, and the trajectory of gross and operating margins through H2 FY2026. Overall, SentinelOne’s AI-centric platform strategy positions it to deliver sustained growth, profitability improvement, and robust FCF generation, albeit with macro-driven execution risk in the near term.