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SentinelOne Reports Slight Q1 Revenue Miss, Cuts About 8% of Staff and Sees Shares Plunge

Management says the layoffs will fund AI, data and cloud priorities to improve profitability and operating leverage.

SentinelOne logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration

Overview

  • On Thursday SentinelOne posted Q1 FY27 revenue of about $276.7 million, a small miss of Street estimates, while adjusted EPS beat at $0.04 per share.
  • Annualized recurring revenue climbed roughly 23% to $1.16 billion and net new ARR hit a record $44 million with AI Security ARR nearly doubling year over year.
  • The company announced an approximate 8% workforce reduction and a one-time restructuring charge near $25 million with about $15 million in cash costs and expected annualized savings of $45 million.
  • SentinelOne reaffirmed full-year FY27 revenue and adjusted EPS guidance but gave Q2 revenue guidance just below analysts’ estimates, a factor that drove an after-hours share drop in the mid-to-high teens.
  • With about $812 million in cash, no debt, stronger non-GAAP operating margins and a crowded competitor field including CrowdStrike, Palo Alto Networks and Microsoft, the key risk to watch is Q2 execution and whether ARR growth sustains as customers lengthen sales cycles.