Q4 2024 SentinelOne Inc Earnings Call

Operator: Hello, and welcome to the SentinelOne fourth quarter fiscal year 2024 earnings conference call. My name is Harry, and I'll be coordinating your call today. If you'd like to enter the question queue ready for Q&A, you may do so by pressing star one on your telephone keypad. I will now hand you over to Doug Clark, Vice President of Investor Relations, to begin. Please go ahead.

Hello, and welcome to <unk> fourth quarter fiscal year 2024 earnings Conference call. My name is Harry and I'll be coordinating your call today.

If you'd like to answer the question queue ready for Q&A you may do so by pressing star one on your telephone keypad.

I will now hand, you over to Doug Clark Vice President of Investor Relations to begin. Please go ahead.

Douglas G. Clark: Good afternoon, everyone, and welcome to SentinelOne's earnings call for the fourth quarter of fiscal year 24, which ended January 31st. With us today are Tomer Weingarten, CEO, and Dave Bernhardt, CFO. Our press release and the shareholder letter were issued earlier today and are posted on the investor relations section of our website. This call is being broadcast live via webcast, and an audio replay will be available on our website after the call concludes.

Good afternoon, everyone and welcome to send to the one's earnings call for the fourth quarter and fiscal year 'twenty, four which ended January 31.

US today, or Tomer, Weingarten, CEO, and Dave Bernhardt CFO of <unk>.

Yes released in the shareholder letter were issued earlier today and are posted on the Investor Relations section of our website.

This call is being broadcast live via webcast and an audio replay will be available on our website. After the call concludes.

Douglas G. Clark: Before we begin, I would like to remind you that during today's call, we'll be making forward-looking statements about future events and financial performance, including our guidance for the first fiscal quarter and full fiscal year 25, as well as long-term financial targets. We caution you that such statements reflect our best judgment based on factors currently known to us, and that our actual events or results could differ materially. Please refer to the documents that we file from time to time with the SEC, in particular our annual report on Form 10-K and our quarterly reports on Form 10-Q. These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. Any forward-looking statements made during this call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information.

Before we begin I would like to remind you that during today's call, we'll be making forward looking statements about future events and financial performance, including our guidance for the first fiscal quarter and full fiscal year 'twenty five as well as long term financial targets. We caution you that such statements reflect our best judgment based on factors currently known to us and that our actual events or rich.

<unk> could differ materially.

Please refer to the documents that we file from time to time with the SEC in particular, our annual report on Form 10-K, and our quarterly reports on Form 10-Q. These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward looking statements.

Any forward looking statements made during this call are being made as of today. If this call is replayed or reviewed after today. The information presented during the call may not contain current or accurate information.

Douglas G. Clark: Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. During this call, we will discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

Except as required by law, we assume no obligation to update these forward looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward looking statements, even if new information becomes available in the future.

During this call we will discuss non-GAAP financial measures unless otherwise stated these non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles are.

Douglas G. Clark: A reconciliation of GAAP and non-GAAP results, other than with respect to our non-GAAP financial outlook, is provided in today's press release and in our shareholder letter. These non-GAAP measures are not intended to be a substitute for our GAAP results. Our financial outlook excludes stock-based compensation expense, employer payroll tax on employee stock transactions, amortization expense of acquired intangible assets, acquisition-related compensation costs, restructuring charges, and gains and losses on strategic investments, which cannot be determined at this time and are therefore not reconciled in today's press release. And with that, let me turn the call over to Tomer Weingarten, CEO of SentinelOne. Good afternoon, everyone, and thank you for joining We close the year on a very strong note, surpassing our fourth quarter expectations across all key metrics, including ARR, revenue, gross margin, and operating margin.

A reconciliation of GAAP and non-GAAP results other than with respect to our non-GAAP financial outlook is provided in today's press release and in our shareholder letter. These.

non-GAAP measures are not intended to be a substitute for our GAAP results, our financial outlook excludes stock based compensation expense employer payroll tax unemployed stock transactions amortization expense of acquired intangible assets acquisition related compensation costs restructuring charges and gains and losses on strategic investments.

Which cannot be determined at this time and are therefore, not reconciled in today's press release.

And with that let me turn the call over to Tomer Weingarten CEO of central one.

Good afternoon, everyone and thank you for joining our fiscal fourth quarter earnings call. We closed the year at a very strong note, surpassing our fourth quarter expectations across all key metrics, including <unk> revenue gross margin and operating margin in <unk>.

Douglas G. Clark: In fiscal year 24, we delivered revenue growth of 47% and operating margin improvement of more than 30 percentage points compared to the year before. Despite challenging global economic conditions over the past year, SentinelOne once again achieved leading growth among public software companies. At the same time, we accelerated our time to profitability by demonstrating financial discipline and consistently meeting our margin expectations. The level of growth and margin improvement we delivered set us apart from other companies. In fiscal year 25, we remain focused on maintaining our leading growth profile and turning the page on profitability. I'm pleased to say that we expect to deliver over 30% revenue growth, as well as achieve positive free cash flow and operating income by year-end.

Fiscal year 'twenty, four we delivered revenue growth of 47% and operating margin improvement of more than 30 percentage points compared to the year before.

Despite challenging global economic conditions over the past year Central one once again, we achieved leading growth among public software company.

Same time, we accelerated our time to profitability by demonstrating financial discipline and consistently outperforming our margin expectations.

Level of growth and margin improvement, we delivered sets us apart from other companies.

Fiscal year 'twenty five we remain focused on maintaining our leading growth profile and turning to page on profitability I am pleased to say that we expect to deliver over 30% revenue growth as well as achieve positive free cash flow and operating income by year end.

Douglas G. Clark: Our pace of innovation and technology leadership remains strong. For a third consecutive year, Gartner recognized SentinelOne as a leader in the 2023 MAGIE Quadrant for Endpoint Protection platform. Customer preference for SentinelOne's AI-powered security is evident by our top tier ratings in 2023 Gartner Peer Insights for Endpoint and Gartner Critical Capability. In addition, IDC recently named SentinelOne a leader in endpoint security for both the enterprise and mid-market. These exceptional rankings underscore the comprehensive nature of our singularity platform and its relevance across organizations of varying sizes and industries. On today's call, I'll cover three key topics.

Pace of innovation and technology leadership remains strong.

For a third consecutive year Gartner recognized <unk> as a leader in the 2023 magic quadrant for interim prediction platforms.

Customers' preference for certain ones AI powered security as evidenced by our top tier ratings in 2023, Gartner peer insights for endpoint and garnered critical capabilities. In addition, IDC recently named Central one a leader in endpoint security for both the enterprise and mid market.

These exceptional rankings underscored the comprehensive nature of our singular platform and its relevance across organizations of varying sizes and industries.

On today's call I'll cover three key topics first details of our strong quarterly performance.

Tomer Weingarten: First, details of our strong quarterly performance. Second, the broader demand environment in the state of cybersecurity. Third, our innovations to drive future growth across multiple markets. As always, please also read our shareholder letter published on the Investor Relations website. Let's review our quarterly performance, which exceeded our top and bottom line expectations. In Q4, our ARR grew 39% year over year to $724 million.

In the broader demand environment in the state of cyber security third our innovations to drive future growth across multiple markets.

Please also read our shareholder letter published on the Investor Relations website.

Let's review, our quarterly performance, which exceeded our top and bottom line expectations in Q4, our IRR grew 39% year over year to $724 million the.

Tomer Weingarten: The macroeconomic environment remains demanding, yet we returned to positive net new ARR growth in the second half of fiscal year 24. Net new ARR grew year over year to $61 million, primarily fueled by new customer acquisitions and strong net expansion rates. Our momentum in winning new businesses reflects a strong competitive position and demonstrates that customers select SentinelOne for better security outcomes. Our progress towards profitability remains outstanding. In Q4, our gross margin remained in the high 70s, and we posted the 10th consecutive quarter of more than 25 percentage points improvement in operating margin.

Gnomic environment remains demanding that we returned to positive net new <unk> growth in the second half of fiscal year 'twenty four net new <unk> grew year over year to $61 million, primarily fueled by new customer acquisitions and strong net expansion rates our momentum in winning new businesses reflect our strong competitive position.

And demonstrates that customers select central one for better security outcomes.

Our progress towards profitability remains outstanding in Q4, our gross margin remained in the high Seventy's and we posted the 10th consecutive quarter of more than 25 percentage points improvement in operating margin in parallel our free cash flow margin and net income margin improved by double digits to only negative 6% negative four.

Tomer Weingarten: In parallel, our free cash flow margin and net income margin improved by double digits to only negative six and negative four, respectively. These milestones clearly reflect our focus on profitability and the scalability of our business. As we build on this progress, fiscal year 25 will be a pivotal year for SentinelOne, as we expect to achieve positive free cash flow and operating income by year-end. Looking beyond the key financial metrics, we're adding new customers at a record pace through the combination of our channel ecosystem and strategic partners such as MSSP. We're increasingly protecting more customers through this channel, as organizations are turning to MSSPs for amended security services. This is a highly scalable way to address the mid-market and SMBs. As a recent example, in Q4, we partnered with NinjaOne to launch comprehensive endpoint control in one centralized view with single-click visibility, protection, and response.

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These milestones clearly reflect our focus on profitability and the scalability of our business as.

As we build on this progress fiscal year 'twenty five will be a pivotal year for sysco alone as we expect to achieve positive free cash flow and operating income by year end.

Looking beyond key financial matrix, we are adding new customers at a record pace through the combination of our channel ecosystem and our strategic partners such as the speeds.

We're increasingly protecting more customers through this channel as organizations are turning to <unk> for a minute security services.

This is a highly scalable way to address the mid market and Smbs.

Recent example in Q4, we partnered with Ninja won two loans comprehensive improved control in one centralized view with single click visibility protection in response, our partnerships across the <unk> ecosystem remains strong with significant future growth potential.

Tomer Weingarten: Our partnerships across the MSSP ecosystem remain strong with significant future growth potential. We set a new company record by adding the highest number of million-dollar plus ARR customers in Q4. Overall, customers with ARR of $100,000 or more grew 30% year over year, and our ARR per customer continued to grow double digits year over year. This momentum reflects greater adoption of our unified singularity platform and increasing success with larger enterprises. On the competitive landscape, we continue to win a significant majority of competitive evaluations. Our win rates and differentiation remain incredibly strong.

On our momentum in large enterprise, we set a new company record by adding the highest number of million dollar plus customers in Q4 overall customers with <unk> over $100000 or more grew 30% year over year and our IRR per customer continued to grow double digit year over year.

This momentum reflects greater adoption of our unified singularity platform and increasing success with larger enterprises.

On the competitive landscape, we continue to win a significant majority of competitive evaluation, our win rates and differentiation remain incredibly strong our AI powered singular platform delivery security and value that resonates with customers of all sizes across all geographies let.

Tomer Weingarten: Our AI-powered singularity platform delivers security and value that resonates with customers of all sizes across all geographies. Let me share more about what makes SentinelOne a preferred choice to secure their business. Point is the center of gravity for security data in any enterprise. It is the starting point for data aggregation and AI-based security across the. Our endpoint business continues to grow at a healthy pace. Plus, our emerging platform solutions like cloud security and data analytics are enabling us to secure new business from legacy and next-gen competitors. Combined with our leadership in endpoint security, our ability to secure broader enterprise infrastructure puts us in a strong position to extend our presence in multiple end markets. In fiscal 24, our platform solutions beyond the endpoint exceeded a third of our bookings, and we expect this mix to keep rising in the coming years.

Let me share more on what makes central when a preferred choice to secure their businesses.

Point is the center of gravity for security data in any enterprise. It is the starting point for data aggregation and AIB security across the infrastructure.

Our <unk> business continues to grow at a healthy pace plus our emerging platform solutions like cloud security and data analytics are enabling us to secure new business from legacy and next Gen competitors.

Combined with our leadership in endpoint security, our ability to secure broader enterprise infrastructure puts us in a strong position to extend our presence in multiple end markets.

In fiscal 'twenty for our platform solutions beyond the endpoint exceeded a third of our bookings and we expect this mix to keep pricing in coming years.

Tomer Weingarten: Singularity Data Lake, Cloud, and Identity were our fastest growing solutions, illustrating the growing diversity of our business and our expanding platform horizon. We're delivering highly differentiated and enterprise-critical technologies with massive TAMs that collectively exceed $100 billion today. Security has never been a winner-takes-all market. Considering the systematically critical nature of security, it's not even a winner-takes-most market. The total market opportunity remains vastly underpenetrated by any single vendor.

Similarity data Lake cloud and identity were our fastest growing solution illustrating the growing diversity of our business and our expanding platform of horizon.

We are delivering highly differentiated and integrate critical technologies with massive terms that collectively exceed $100 billion to date.

Security has never been a winner takes all market considering the system medically critical nature of security, it's not even a winner takes most market.

Total market opportunity remains vastly underpenetrated by any single vendor.

Tomer Weingarten: Given our scale, we believe the growth opportunity for SentinelOne remains substantial for years to come. Our unified singularity platform delivers what enterprises need the most in today's economy. Consolidation on a leading platform, AI-powered security, and a favorable cost of ownership. Best-in-class protection is crucial to prevent breaches, and this is why we continue to consistently win against both next-gen and legacy vendors. As I've said before, a bigger vendor does not always mean better security. Disjointed platforms get breached, which is why they must rely on offering deep discounts or bundled licensing agreements to compensate for the technological shortcomings.

Given our scale, we believe the growth opportunity for central and one remains substantial for years to come.

Our unified singularity platform delivers with enterprises need the most in today's economy.

<unk> on our leading platform AI powered security and a favorable cost of ownership.

Best in class protection is crucial to prevent breaches and this is why we continue to consistently win against both next Gen and legacy vendors.

As I've said before a bigger vendor does not always mean better security disjointed platforms get breached which is widely must rely on offering deep discounts or bundled licensing agreements to compensate for the technological shortcomings. The real value is in staying cyber secure enterprises recognize this and they continue to select central Illinois.

Tomer Weingarten: The real value is in staying cyber secure. Enterprises recognize this, and they continue to select SentinelOne's unified security platform as a foundation for the future. In Q4, we continue to set new customer acquisition records, from technology pioneers and multinational industrials to leading financial institutions and federal agencies. All of these wins include platform and agent consolidation across multiple products, including endpoint, cloud, data, identity, and other adjacent solutions. Let me share more detail on some recent wins. A large professional services company tested ransomware protection from SentinelOne against two of our close competitors. Both of the competing vendors failed to stop the breach in real-time.

<unk> security platform as a foundation for the future.

In Q4, we continued to set new customer acquisition records from technology pioneers in multinational industrials to leading financial institutions and federal agencies order.

These wins include platform in agent consolidation across multiple products, including endpoint cloud data identity and other adjacent solutions, let me share more detail on some recent wins.

And large professional services company tested rents or prediction from central one against two of our close competitors both of the competitive vendors failed to stop the breach in real time, whereas with the same parameters. Our AI powered singularity platforms stopped every single threaded in real time autonomously without <unk>.

Tomer Weingarten: Whereas, with the same parameters, our AI-powered singularity platform stopped every single threat in real-time autonomously without any human intervention. Q4 was another strong quarter for data, which rose to approximately 10% of quarterly bookings. We're seeing strong demand for our Singularity data lake as enterprises are seeking alternatives to legacy STEM solutions. Among several data lake wins in the quarter, a major energy company replaced Splunk after facing years of rising costs in antiquated technology.

Human intervention.

Q4 was another strong quarter for data, which rose to approximately 10% of quarterly bookings we.

Seeing strong demand for our singularity data Lake as enterprises are seeking alternatives to legacy Sim solution. Among several data like wins in the quarter, a major energy company replace Splunk after facing use of rising costs and antiquated technology.

Tomer Weingarten: This enterprise selected Singularity Data Lake for better speed, scalability, and superior cost of ownership. This customer now fuses both data and security within a single unified singularity platform. On cloud security wins and expansions in the quarter, let me share the expansion journey of a global technology pioneer who has been rolling out cloud workload security to their production environment. As I've mentioned before, initial cloud security deployments often cover just a fraction of the overall cloud estate.

This enterprise selected singularity data lake for better speed scalability and superior cost of ownership discussed.

This customer now uses both data and security within a single unified singularity platform.

On cloud security wins and expansions in the quarter, let me share the expansion journey over global technology Pioneer who has been rolling out cloud workload security to their production environment as I've mentioned before initial cloud security deployments often covered just a fraction of the overall cloud state. This particular enterprise first adopted similar to cloud more than a year ago.

Tomer Weingarten: This particular enterprise first adopted Singularity Cloud more than a year ago, and it's consistently increased coverage. The deployment is now easily over 5x the initial deal size, with more to go. And now, with the addition of ThinkSafe, the combination of our leading cloud workload protection and new CNAP capabilities offers significant expansion potential for years to come. And finally, PurpleAI is piqueing interest and leading to broader platform adoption. PurpleAI unleashes the Singularity Platform to operate autonomously at unprecedented speed and performance.

<unk> consistently increased coverage the deployment is now easily over five ex the initial deal size, we'd want to go.

And now with the addition of <unk> the combination of our leading cloud workload protection and <unk> seen up capabilities offer significant expansion potential for years to come.

And finally perfectly I speaking interest and needing to broader platform adoption appropriately I Alicia as a singular platform to operate autonomously at unprecedented speed and performance. The integration of appropriately are across all aspects of the singularity platform is enabling security teams to realize new levels of efficiency and speed. It has a compounding force for security.

Tomer Weingarten: The integration of PurpleAI across all aspects of the Singularity Platform is enabling security teams to realize new levels of efficiency and speed. It is a compounding force for security operations. In Q4, a hands-on demo of PurpleAI turned a prospective endpoint customer into a large platform deal. Impressing with its fully integrated capabilities and productivity outcomes, this customer selected a broad range of singularity platform solutions that included Endpoint, Data Lake, PurpleAI, and more. These examples demonstrate our competitive success as well as our transformation from an autonomous endpoint company to an enterprise-wide autonomous security platform. Now, let's review the broader demand environment and the latest in the cybersecurity lens. As we all know, global macroeconomic headwinds have affected nearly every business and industry over the past year. As a result, enterprises, including our own, have placed a higher emphasis on cost and efficiency. The broader demand environment remains similar to the trends that we discussed in prior quarters.

Operation in Q4, a hands on demo appropriately during the prospective endpoint customer into a large platform deal impressed by perfectly is fully integrated capabilities and productivity outcomes. This customers took the broad range of singularity platform solutions included endpoint data Lake propylene and more.

These examples demonstrate our competitive success as well as our transformation from an autonomous endpoint company to an enterprise wide autonomous security platform.

To review the broader demand environment and the latest on the cyber security landscape.

As we all know global macroeconomic headwinds impacted nearly every business and industry over the past year enterprises, including our own that place a higher emphasis on cost and efficiency the broader demand environment remains similar to the trends that we discussed in prior quarters organizations continue to focus on cost and efficiency amid macroeconomic condition.

Tomer Weingarten: Organizations continue to focus on cost and efficiency amid macroeconomic conditions, and we expect these dynamics to persist. Regardless of macroeconomic conditions, change is the only constant in the cybersecurity landscape. Bad actors are always evolving and advancing. AI-based attacks are increasing the frequency of cyber incidents. The speed, scale, and sophistication of cyberattacks are reaching new levels, and an aging digital infrastructure is simply not equipped to withstand these modern attacks. Cyberattacks are a major risk in today's digital and connected world. They can quickly disrupt our way of life on a large scale.

And we expect these dynamics to persist.

Regardless of macroeconomic conditions change is the only constant in the cyber security threat landscape bad actors are always evolving and advancing.

AI based attacks are increasing the frequency of cyber incident, the speed scale and sophistication of cyber attacks are reaching new levels and an aging digital infrastructure is simply not equipped to withstand these modern attacks.

Cyber attacks are a major risk in today's digital and connected world. We can quickly disrupt our way of life at a large scale.

Tomer Weingarten: Organizations must have modern AI-based and enterprise-wide cybersecurity. It is a critical priority for businesses and governments. The constant reminders of high-profile attacks are raising awareness for best-of-breed security, which SentinelOne delivers. For so long, disjointed platforms and legacy vendors have tried to cover security gaps just to see new ones emerge. We believe this is a failed approach.

Organizations must have modern AI based in enterprise wide cyber security is a critical priority for businesses and governments.

Constant reminders of high profile attacks are raising awareness with best of breed security, which central one deliveries from.

From a solo disjointed platforms and legacy vendors. It played whack a mole with point solutions trying to cover security gaps just to see new ones emerge. We believe this is a failed approach it drains resources and gives us full sense of protection.

Tomer Weingarten: It drains resources and gives a false sense of protection. The frequency and intensity of modern-day attacks make it abundantly clear that legacy solutions, siloed products, and disjointed platforms are failing. SentinelOne delivers the best protection in the market. Our singularity platform is data-driven, adaptive, and delivers AI-based security. All of this through a unified platform and single agent. As we turn the page to fiscal year 25, our innovations across multiple growth areas are positioning us for long-term success. A platform is only as good as the sum of its parts, and we intend to remain best of breed in all aspects of our platform. Our innovations are focused on key growth areas of cloud, AI, data, and end. For example, on cloud security, we are combining our cutting-edge cloud workload protection with SINAP from the recently acquired PING service. The combination of SentinelOne's agent-based security and PingSafe's agentless security will create the first-of-its-kind cloud security platform powered by unified AI and security data analytics.

The frequency and intensity of modern day attacks make it abundantly clear that legacy solutions Siloed products and disjointed platforms are failing.

Central one delivers the best protection into market. Our singularity platform is data driven adaptive and delivers AIB security all of this through unified platform and single agent.

As we turn to page to fiscal year 2005, our innovations across multiple growth area are positioning us for long term success.

Our platform is only as good as the sum of its parts and we intend to remain best of breed in all aspects of our platform our innovations our focus on key growth areas of cloud AI data and inputs.

To cloud security, we are combining our cutting edge cloud workload protection, which CNET from recently acquired <unk>.

The combination of centralized agent based and being safe agent list security will create the first of its kind cloud security platform powered by unified AI and security data analytics.

Tomer Weingarten: By design, our cloud workload protection is highly embedded within the enterprise architecture, which makes workload security an integral part of overall enterprise defense. In conjunction, PinkSafe's CNAP can be up and running in a matter of minutes, enabling rapid adoption and improved security barriers. During our diligence process and through our own experience using PingSafe, it went toe-to-toe with every major CSPM and CNAP vendor on the market. We were very impressed by how PinkSafe cuts through the noise and provides more actionable insights than an alternative solution. PinkSafe has also developed a unique offensive attack mapping engine that simulates and identifies attack paths to validate protection and verify compliance. Stop an attack.

By design, our cloud workload protection is highly embedded within the enterprise architecture, which makes workload security an integral part of overall enterprise defense in conjunction being say two <unk> can be up and running in a matter of minutes, enabling rapid adoption and improved security barriers.

During our diligence process and through our own experience using <unk> between toe to toe with every major SPM and seen a vendor on the market.

We were very impressed by how it being safe cuts through the noise and provides more actionable insight and an alternative solution being.

<unk> has also developed a unique offensive attack mapping engine that simulates an identified attack paths to validate protection and to verify compliance to stop an attack being safe technology things like an adversary to intelligently predict attack pads. The addition of <unk> to our unified security platform creates a highly compelling.

Tomer Weingarten: Think safe technology. Think like an adversary to intelligently predict an attack. The addition of ThinkSafe CNAP to our unified singularity platform creates a highly compelling choice for all businesses. Cloud security customers will no longer have to navigate the complexity of disparate coin solutions. Moving to AI. Our competitive differentiation was born out of AI. Long before AI became a buzzword and competitors started bolting on chat, AI and data are cornerstones of our singularity platform and a foundational need for enterprises as they reimagine the future of infrastructure. Our AI-based security leadership stems from a decade of machine-based learning, real-time protection, and automation. Purple AI is the next chapter of this journey.

Choice for all businesses cloud security customers will no longer have to navigate the complexity of disparate point solutions.

Moving to AI, our competitive differentiation was born out of AI loan before AI became the buzzword in competitors starting to bolting on chat bots AI and data are cornerstones of our singular platform and a foundational need for enterprises is the re imagine the future of infrastructure, our AI based security leadership stems.

From a decade or machine based learning real time protection and automation appropriately.

<unk> is the next chapter of this journey and will become generally available in just a few weeks laying the foundation for a transformative step forward in enterprise security and efficiency.

Tomer Weingarten: It will become generally available in just a few weeks, laying the foundation for a transformative step forward in enterprise security and efficiency. We're already seeing high levels of interest in Purple AI and exciting feedback from early adopters. Singularity data like in automation are unique competitive advantages. After launching our unified security data lake and disrupting legacy SIEM, we're supercharging the Singularity platform with hyper-automation through the acquisition of Stripe Security. Stride is a next-generation security orchestration platform designed to circumvent the complexities and cost burdens of legacy source solutions, with a complete streamlined no-code approach and unlimited flexibility.

We're already seeing high levels of interest and appropriately and exciting feedback from early adopters.

Similarly data Lake and automation are unique competitive advantages for us.

After launching our unified security data Lake and disrupting legacy Sim.

We're supercharging the singularity platform with hyper automation through the acquisition of strides security.

<unk> is a next generation security orchestration platform designed to circumvent the complexities and cost burden of legacy source solution.

We have complete streamlined no code approach and unlimited flexibility.

Tomer Weingarten: With the addition of Stripe to the Singularity platform, we're making the most automated cybersecurity platform in the market hyper-autonomous. At SentinelOne, we continue to move at an incredible pace to redefine the future of cybersecurity. Our vision is to deliver the most advanced cybersecurity that is always evolving and infinitely intelligent. Our AI-powered singularity platform is intelligent, data-driven, and continuously evolves to secure our customers. Our technology makes human lives better by empowering organizations and the world to run securely. I'm proud of the dedication and the relentless focus of Sentinels around the world who make this all possible.

With the addition of striker the singularity platform, we're making the most automated cyber security platform in the market hyper autonomous.

At Central one we continue to move at an incredible pace to redefine the future of cyber security. Our vision is to deliver the most advanced cyber security that is always evolving and independently intelligence.

Our AI powered singularity platform is intelligent data driven and evolves to secure our customers. Our technology makes you realize better by empowering organizations in the world to run securely I'm proud of the dedication and the relentless focus of center nodes around the world who make this all possible I want to welcome the pink safe <unk>.

Teams to central one and thank all centers as well as our valued customers partners and shareholders with that I will turn the call over to Dave Bernhardt, Our Chief Financial Officer.

Tomer Weingarten: I want to welcome the PingSafe and Stripe teams to SentinelOne and thank all Sentinels, as well as our valued customers, partners, and shareholders. With that, I will turn the call over to Dave Bernhardt, our Chief Financial Officer. Thank you, Tomer.

Thank you Tomer. This afternoon, I will discuss our quarterly financial performance and provide additional context regarding our guidance for Q1 and fiscal 'twenty five as a reminder, all comparisons are year over year and financial measures discussed here are non-GAAP unless otherwise noted.

David Bernhardt: This afternoon, I'll discuss our quarterly financial performance and provide additional context regarding our guidance for Q1 and Fiscal 25. As a reminder, all comparisons are year-over-year, and financial measures discussed here are non-GAAP unless otherwise noted. We delivered industry-leading growth and margin expansion in fiscal 24. Our revenue grew 47% to $621 million.

We delivered industry, leading growth and margin expansion in fiscal 'twenty four our revenue grew 47% to $621 million or AOR grew 39% to $724 million and our operating margin improved by more than 30 percentage points compared to fiscal 'twenty three.

Once again, our fourth quarter results exceeded our expectations across the board in Q4 revenue grew 38% to $174 million.

David Bernhardt: Our ARR grew 39% to $724 million, and our operating margin improved by more than 30 percentage points compared to fiscal 23. Once again, our fourth quarter results exceeded our expectations across the board, and Q4 revenue grew 38% to $174 million.

Our net new IRR of $61 million was driven by strong contributions from new logos as well as existing customer expansion.

We executed well and added a record number of million dollar customers led by endpoint data and cloud wins.

Our <unk> per customer continued to grow in double digits, reflecting momentum from large enterprises and higher customer adoption of our platform.

Our growth was also balanced across geographies.

David Bernhardt: Our net new ARR of $61 million was driven by strong contributions from new logos as well as existing customer expansion. We executed well and added a record number of million-dollar customers, led by Endpoint Data and CloudWin. Our ARR per customer continued to grow in double digits, reflecting momentum from large enterprises and higher customer adoption of our platform. Our growth is also balanced across geographies.

Our fourth quarter performance signifies our strong competitive position in enterprise demand for Sentinel one's best in class Cyber security, we're taking market share and mind share from incumbents and next gen vendors.

Looking beyond topline growth, we're continuing to make outstanding progress towards profitability or gross margin of 78% remained near our record high showing a 3% improvement and remains comfortably within our long term target range of $75 to 80 plus percent.

David Bernhardt: Our fourth quarter performance signifies our strong competitive position and enterprise demand for SentinelOne's best-in-class cybersecurity. We are taking market share and mind share from incumbents and next-gen vendors. Looking beyond top line growth, we're continuing to make outstanding progress towards profitability. Our gross margin of 78% remains near a record high, showing a 3% improvement and remains comfortably within our long term target range of 75 to 80 plus percent. Our gross margin progression reflects the benefits of our increasing scale and platform unit economics. It's also indicative of the disciplined pricing and immense value we deliver to customers. Our unified security and data architecture enables us to deliver meaningful value for SentinelOne as well as our customers.

Our gross margin progression reflects the benefits of our increasing scale and platform unit economics. It's also indicative of the disciplined pricing and immense value we deliver to customers.

Our unified security and data architecture enables us to deliver meaningful value for Sentinel won as well as our customers.

Q4 marked our 10th consecutive quarter of more than 25 percentage points of year over year operating margin expansion.

Our increasing scale and cost discipline had been driving substantial operating margin improvement Q4 operating margin reached single digits at negative, 9%, expanding 26 percentage points year over year.

And we're not just improving our margins we have also significantly reduced our operating losses by more than 60% to negative $16 million in Q4 from negative $44 million in the year ago quarter.

David Bernhardt: Q4 marked our 10th consecutive quarter of more than 25 percentage points of year-over-year operating margin expansion. Our increasing scale and cost discipline have been driving substantial operating margin improvement. Q4 operating margin reached single digits at negative 9%, expanding 26 percentage points year over year.

In parallel we've also reduced our free cash flow by more than 55% to negative $11 million in Q4 from negative $25 million in the year ago quarter.

Our free cash flow margin and net income margin, both reached single digits at negative, 6% and negative 4% respectively.

We've made significant progress towards our profitability targets as we strategically balance our investments with the pace of growth.

David Bernhardt: And we're not just improving our margins. We've also significantly reduced our operating losses by more than 60% to negative 16 million in Q4 from negative 44 million in the year-ago quarter. In parallel, we've also reduced our free cash flow by more than 55% to negative $11 million in Q4 from negative $25 million in the year-ago quarter.

It reflects the continuing success of our proactive efforts to enhance investment returns and thoughtfully manage our costs.

And we are committed to building on this progress we remain on track to deliver both positive free cash flow and operating income by the end of fiscal 'twenty five.

David Bernhardt: Our free cash flow margin and net income margin both reach single digits, at negative 6% and negative 4%, respectively. We've made significant progress towards our profitability targets as we strategically balance our investments with the pace of growth. This reflects the continuing success of our proactive efforts to enhance investment returns and thoughtfully manage our costs, and we are committed to building on this progress. We remain on track to deliver both positive free cash flow and operating income by the end of fiscal 25. Before turning to our outlook, let me provide additional details on our recent acquisitions of Ping, Safe, and Strive. PingSafe accelerates our time to market and ushers in full CNAP at SentinelOne. We are combining our best-in-class cloud workload protection with PingSafe CSPM, secret scanning, and offensive attack engine, all fully unified by AI and our data.

Before turning to our outlook, let me provide additional details on our recent acquisitions of Ping safe in stride.

<unk> accelerates, our time to market and ushers in full seen app at Sentinel won.

We are combining our best in class cloud workload protection with <unk> SPM secret scanning and offensive attack engine, all fully unified by AI and our data Lake.

We've also acquired stride that adds hyper automation across the singularity platform combined these deals closed at the beginning of Q1 of fiscal 'twenty five for approximately $115 million in cash and stock.

As technology acquisitions, being safe and stride have a de minimis impact on our Q1 revenue an IRR.

We expect to begin selling <unk> seen app solution by midyear with early contributions coming in Q3 for the fiscal 'twenty five full year EBIT margin, we expected two to three percentage point impact from these acquisitions, primarily in the first half of fiscal 'twenty five.

David Bernhardt: We've also acquired Stride, which adds hyper automation across the Singularity platform. Combined, these deals close at the beginning of Q1 of fiscal 25 for approximately $115 million in cash and stock. As technology acquisitions, PingSafe and Stride have a de minimis impact on our Q1 revenue and ARR. We expect to begin selling PingSafe's CNAP solution by mid-year, with early contributions coming in Q3. For the fiscal 25 full-year EBIT margin, we expect a 2 to 3 percentage point impact from these acquisitions, primarily in the first half of fiscal 25.

Moving to our guidance for Q1 and fiscal 'twenty five the broader demand environment remains consistent with the trends we have discussed in prior quarters organizations continue to focus on cost and efficiencies amid global macroeconomic conditions. These dynamics can impact visibility into the timing and size of potential deals. We remain mindful of these dynamics as we enter Q1.

Seasonally smallest quarter of the year.

In Q1, we expect revenue of about $181 million, reflecting growth of 36% year over year for the full year, we expect revenue to be between $812 million and $818 million, reflecting annual growth of 31% at the midpoint.

This outlook assumes macroeconomic uncertainties and geopolitical tensions persist for the full year.

David Bernhardt: Moving to our guidance for Q1 and Fiscal 25, the broader demand environment remains consistent with the trends we have discussed in prior quarters. However, organizations continue to focus on costs and efficiencies amid global macroeconomic conditions.

Enterprises continue to prioritize cost optimization efforts. Thus it is appropriate to remain prudent in this environment.

That said, we once again expect to maintain our top tier growth profile in fiscal 'twenty five or.

Our innovations across security data and AI are driving strong win rates healthy new logo momentum expansion rates and pipeline. We are encouraged by the growing diversity of our business across both the go to market and product adoption we.

David Bernhardt: These dynamics can impact visibility into the timing and size of potential deals. We remain mindful of these dynamics as we enter Q1, our seasonally smallest quarter of the year. In Q1, we expect revenue of about $181 million, reflecting growth of 36% year-over-year. For the full year, we expect revenue to be between $812 million and $818 million, reflecting annual growth of 31% at the mid-term. This outlook assumes macroeconomic uncertainties and geopolitical tensions will persist for the full year.

We're seeing success from both direct sales and strategic partners like Msp's.

Contributions from cloud and data are also rising as.

As we move throughout the year, we expect incremental uplift from purple AI and Ping safe, we're expanding our scope of conversation with enterprises across the world.

Turning to our outlook for margins, we expect Q1 gross margin to be about 77, 5% relatively similar to Q4 levels and up 250 basis points year over year.

David Bernhardt: Enterprises continue to prioritize cost optimization efforts, so it is appropriate to remain prudent in this environment. That said, we once again expect to maintain our top tier growth profile in fiscal 25. Our innovations across security, data, and AI are driving strong win rates, healthy new logo momentum, expansion rates, and pipeline. We're encouraged by the growing diversity of our business across both go-to-market and product adoption. We are seeing success from both direct sales and strategic partners like MSSPs. Contributions from cloud and data are also rising. As we move throughout the year, we expect incremental uplift from PurpleAI and PingSave. We're expanding the scope of our conversation with enterprises across the world. Turning to our outlook for margins, we expect Q1 gross margin to be about 77.5%, relatively similar to Q4 levels and up 250 basis points year over year.

For the full year, we expect gross margin to be between 77, 5% and 78, 5% up over 50 basis points year over year at the midpoint as we continue to benefit from scale and cross sell of adjacent solutions.

Finally for operating margin, we expect negative 14% in Q1, implying an improvement of 24 percentage points year over year for the full year, we expect the operating margin to be between negative two and negative 6% an improvement of 15 points at the midpoint compared to fiscal 'twenty four.

Our operating margin outlook reflects incremental investment in ping safe in stride to bring them to the global market and pair them with our autonomous AI driven security.

Most importantly, we are committed to turning the page on profitability within fiscal 'twenty five delivering positive free cash flow and operating income by the end of the year as one of the fastest growing companies in the public market. We've made significant investments in innovation and talent over the past few years, while delivering against our product roadmap.

David Bernhardt: For the full year, we expect growth margin to be between 77.5% and 78.5%, up over 50 basis points year-over-year at the midpoint as we continue to benefit from scale and the cross-sell of adjacent solutions. Finally, for operating margin, we expect a negative 14% in Q1, implying an improvement of 24 percentage points year over year. For the full year, we expect the operating margin to be between negative 2 and negative 6%, an improvement of 15 points at the midpoint compared to fiscal 24.

Our investment approach remains selective and focused on key areas of competitive strength, notably data AI cloud and as always endpoint.

Our goal is to maximize growth, while achieving profitability by the end of the year.

We closed the year with a very strong balance sheet with $1 $1 billion in cash cash equivalents and investments and zero debt.

This provides durability and flexibility to optimize topline growth and margin improvement we.

We will continue to grow market share and capitalize on large teams with disruptive technologies.

In summary, our Q4 performance was a strong end to a strong fiscal 'twenty four with a full year growth of 47% and margin improvement of more than 30 percentage points compared to the prior year.

David Bernhardt: Our operating margin outlook reflects incremental investment in paying safe and stride to bring them to the global market and pair them with our autonomous AI-driven security. Most importantly, we are committed to turning the page on profitability within fiscal 25, delivering positive free cash flow and operating income by the end of the year. As one of the fastest growing companies in the public market, we've made significant investments in innovation and talent over the past few years while delivering against our product roadmap. Our investment approach remains selective and focused on key areas of competitive strength, notably data, AI, cloud, and, as always, endpoints. Our goal is to maximize growth while achieving profitability by the end of the year. We will close the year with a very strong balance sheet, with $1.1 billion in cash, cash equivalents, and investments, and zero debt.

We expect to continue to outgrow the market in fiscal 'twenty, five while achieving free cash flow and operating margin profitability by the end of the year.

Thank you all for joining US today, we will now take questions. Operator, Please open up the line.

Thank you we will now begin the Q&A session in the interest of time, we respectfully ask that you limit yourselves to one question per person.

To ask a question. Please press star followed by one on your telephone keypad now if you change your mind I would like to exit the queue. Please press star followed by two and finally when comparing to ask a question. Please ensure that youll find is unmatched it locally.

Our first question today is from the line of Brian Essex of J P. Morgan.

Brian Your line is open now if you're talking to proceed.

Yes, good afternoon, and thank you for taking the question.

And it's nice to see the inflection or the expected inflection towards profitability and positive cash flow.

I guess for.

David Bernhardt: This provides durability and flexibility to optimize top-line growth and margin improvement. We will continue to grow market share and capitalize on large TAMs with disruptive technology. In summary, our Q4 performance was a strong end to a strong fiscal 24, with a full year growth of 47% and a margin improvement of more than 30 percentage points compared to the prior year. We expect to continue to outgrow the market in fiscal 25 while achieving free cash flow and operating margin profitability by the end of the year. Thank you all for joining us today. We will now take questions. Operator, please open up the line.

For one question.

Colin could you talk about the impact that executive sales hires are making I know that.

We're seeing amongst your peers a bit of turnover on the executive sales front and its causing some choppiness or we're also seeing some shift in strategy thats, causing some.

<unk>, so, particularly with the addition of a new CRO, what about four months ago I guess.

Any changes that you anticipate in the executive suite within our sales organization our shift in strategy that may.

Cause more variability in terms of growth profile next year. Thank you.

Operator: Thank you. We will now begin the quick Q&A session. In the interest of time, we respectfully ask that you limit yourselves to one question per person. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind and would like to exit the queue, please press star followed by two.

Most of the changes that we're doing we started with.

Will it go to US. This is just a continuation of the same strategy. So a lot of what Youre seeing right now would have US has already improved execution and I think we also understand what are the other levers we have in the business.

To continue to drive to more productivity.

Brian Lee Essex: And finally, when preparing to ask your question, please ensure that your phone is unmuted locally. Our first question today is from the line of Brian Essex of J.P. Morgan. Brian, your line is open now if you'd like to proceed. Yeah, good afternoon.

In <unk>.

<unk> mutation or platform potential there is no question that when you target to $100 billion plus worth of a market opportunity.

Still a lot more that we can do and how we land how we tackle different elements of the different markets that we plan so between our core and endpoint, but moving more and more towards more data oriented sales I.

Tomer Weingarten: And thank you for taking the question. And it's nice to see the inflection or the expected inflection toward profitability and positive cash flow. I guess for, you know, for one question, you know, Tomer, could you talk about the impact that executive sales hires are making? And I know that, you know, we're seeing amongst your peers a bit of turnover on the executive sales front, and it's causing some choppiness, or we're also seeing some, you know, shift in strategy that's causing some, you know, disruption. So particularly with the addition of a new CRO, what, about four months ago, do you anticipate any changes in the executive suite or within a sales organization or shift in strategy that may, you know, cause more variability in terms of your growth profile next year? Thank you.

I think we're basically evolving our go to market I don't predict any major changes.

Made quite a few adjustments to how we go to market, but we're definitely trying to keep those.

Very much as things that do not cause any type of disruption. So we factor it in our forward planning.

All in all I'm very pleased with the progression with our go to market.

Motion across endpoint across data across cloud security.

With that when we onboard these new capabilities to acquisition I mean, those kind of go back into it and global go to market and we will continue to evolve that over time, but once again, we don't predict any.

Tomer Weingarten: Most of the changes that we're doing, you know, we started well, you know, long ago. To us, this is just a continuation of the same strategy. So a lot of what you're seeing right now out of us is already improved execution. And I think we also understand what the other levers we have in the business to continue to drive more productivity, and I'll call it the maximization of our platform potential. There's no question that when you target $100 billion plus worth of market opportunity, there's still a lot more that we can do in how we lend, how we tackle different elements of the different markets that we play in. So between our core and endpoint, but moving more and more towards more data-oriented sales, I think we're basically evolving our approach to the market. I don't predict any major changes.

Any major major changes in our go to market sales force if anything we continue investing in the year to come.

Any new initiatives that Michael criminal May have made or is it primarily just carrying forward what's your previous strategy.

We are constantly adjusting this isn't this is a very dynamic market I think will deliver low of scrutiny recruiting and delivery of management pipeline development. All of that is a complete different level right now with the company.

But once again this is definitely not the end points for US no pun intended this is a continuous process, it's constant improvement and we should get better over time.

Tomer Weingarten: You know, we've made quite a few adjustments to how we go to market, but we're definitely trying to keep those, you know, very much as things that do not cause any type of disruption. So we factor them in our forward planning. But all in all, we're very pleased with the progression with our go-to-market, you know, motion across endpoint, across data, across cloud security. With that, when we onboard these new capabilities through acquisition, I mean, those kind of go back into that envelope of go-to-market. And we continue to evolve that over time.

Great. Thank you very much.

Thank you. Our next question is from the line of Alex Henderson of Needham <unk> Company. Alex Your line is open now.

Well I was going to ask a question about the integration of EE.

Hi.

Thank goodness.

One of the standards.

Instead.

Can you talk about.

Come into the new quarter.

Whether you are seeing any changes in some of the critical kpis.

Everybody on this call tracks such as deal sizes duration.

Tomer Weingarten: But once again, we don't predict any, you know, any major changes in our go-to-market sales force. If anything, we continue to invest in it in the year to come. Any new initiatives that Michael Crummell may have made? Or is he primarily just carrying forward with your previous strategy?

The amount of time it takes to close a transaction.

And clothes closure rates within the quarter Asics versus expectations.

Yes.

What we're seeing is stabilization and I think the trends.

Tomer Weingarten: We're constantly adjusting, you know, this is a very dynamic market. I think, you know, the level of scrutiny in recruiting, the level of management, you know, pipeline development, all of that is at a completely different level right now with the company. But once again, this is definitely not the end point for us, no pun intended. This is a continuous process, it's constant improvement, and we should get better over time. Great, thank you very much.

We've demonstrated in Q3 and Q4 of last fiscal year.

Carrying over I think we are definitely focused on our own execution and our own ability to drive to a more predictable outcome in terms of the market environment. I think there is still the same level of scrutiny by customers customers are definitely.

Right sizing their purchases, but the trend that we've seen in the past couple of years.

Nothing is going to change and that we considered that the new normal is just our ability to continuing to execute in that environment, making sure that we.

Alexander Henderson: Thank you. Our next question is from the line of Alex Henderson of Needham & Company. Alex, your line is open now.

Focus on the value that we bring to customers. This is not about giving something for free. This is about creating synergies for customers more cost efficiencies over time, and I think we're doing that in an incredible way, especially when you bring something to the fold like peripheral AI.

Tomer Weingarten: Well, I was going to ask a question about the integration of AI, but I think I'm going to stick with one of the standards. Instead, can you talk about, as we come into the new quarter, whether you're seeing any changes in some of the critical KPIs that everybody on this call tracks, such as deal sizes, duration, the amount of time it takes to close a transaction and close your rates within the quarter as a whole? I think what we're seeing is stabilization, and I think the trends that we demonstrated in Q3 and Q4 of last fiscal year are carrying over. I think we're definitely focused on our own execution and our own ability to drive to a more predictable outcome.

Which really compounds the value of every other platform component that you acquire from central one and four.

For us that's the way to deliver more value that's the way.

To really cater to what customers need right now and if I could just translated also to just more predictable execution.

Just better progression higher deal sizes Q4 was a company record in terms of $1 million customers added most of the new customers. So we're exiting will own.

All of our growth imperatives, I might add to that Alex if you look at something like RPI.

Tomer Weingarten: In terms of the market environment, I think there's still the same level of scrutiny by customers. Customers are definitely right-sizing their purchases. That's a trend that we've seen in the past couple of years, and nothing is going to change that.

We are up 47% year over year, and about 15% quarter over quarter. So the larger deal size is definitely something that we're <unk>.

Tomer Weingarten: We consider that the new normal. It's just our ability to continue and execute in that environment, making sure that we focus on the value that we bring to customers. This is not about giving something for free.

Seeing a benefit from it.

It's the larger and longer contracts that we're seeing which is a ticket.

So just to be clear you are seeing larger deal sizes and some contract duration increases.

That's correct yes.

Okay, great. Thanks.

Tomer Weingarten: This is about creating synergies for customers, and more cost efficiencies over time. And I think we're doing that in an incredible way, especially when you bring something into the fold like Purple AI, which really compounds the value of every other platform component that you acquire from SentinelOne. And for us, that's the way to deliver more value. That's the way to really cater to what customers need right now. And I think it's also translated to just more predictable execution, just better progression, and higher deal sizes.

Our next question today is from the line of Pizza Wheat of Alliance Bernstein. Peter Your line is now open.

Sure.

Congratulations on continuing the progress towards profitability and really kind of seeing some of the bottoms here in the market.

There is another large competitor in the market, but I think <unk> done a good job of communicating the portion of their upsell growth really coming from non end points.

What do you think of your own business over the last year, where is that getting to getting as high as they're about 50% of their growth coming from that or you.

David Bernhardt: Q4 was a company record in terms of $1 million in ARR customers added, most of them new customers. So we're executing well on all of our growth imperatives. Yeah, I might add to that, Alex.

Still.

A little lower and how do you think that trying to track going forward.

David Bernhardt: If you look at something like RPO, I think we're up 47% year over year and about 15% quarter over quarter. So the larger deal sizes are definitely something that we're seeing a benefit from. And it's the larger and longer contracts that we're seeing, which is a good sign. So just to be clear, you are seeing larger deal sizes and some contract duration. That's correct. Okay, great. Thanks.

For us it is.

A combination of both we still see ample growth in endpoint, but we're definitely developing our emerging capabilities and I think you can see the proportion of emerging capabilities contribution to revenue is pretty much on par with our peers.

Even though obviously on a different scale, so we definitely see that progression.

The thing that we would like to see go and accelerate but with that we're not seeding growth on the endpoint market. We believe there is ample potential there as I mentioned and it's something that we are basically trying to run in parallel.

Peter Weed: Our next question today is from the line of Peter Weed of Alliance Bernstein. Peter, your line is now open. Sure. Congratulations on continuing the progress towards profitability and really kind of seeing some of the bottoms here in the market. You know, there's another large competitor in the market that I think has done a good job of communicating the portion of their upsell growth really coming from non-endpoint. You know, when you think of your own business over the last year, where is that getting to? Is it getting as high as their, you know, about 50% of their growth coming from that? Or are you still, you know, a little lower?

Both are emerging growth and other point that's worth mentioning we're on the topic is that most of our growth actually comes from new accounts. So this is noted about going back to our customer base, where our customers state and Upselling cross selling and in that World you have to sue under capability for us focusing on net new accounts I mean, we we learned bigger.

Related with more of the platform and it still represents a major opportunity for us in the future to go back to our customers state up selling also to the other capabilities that we have as well so right now I would just start with really the best of both worlds for US we're still strong in endpoint, but we're also accelerating our adoption nor penetration.

Tomer Weingarten: And how do you think that kind of track going forward? For us, you know, it's a combination of both. We still see ample growth in endpoints, but we're definitely developing, you know, our emerging capabilities. And I think you can see the proportion of emerging capabilities contribution to revenue is pretty much on par with our peers, even though obviously on a different scale. So we definitely treat that progression as something that we would like to see go and accelerate. But with that, we're not seeding growth in the endpoint market; we believe there's ample potential there, as I mentioned, and it's something that we are basically trying to run in parallel to emerging growth. Another point that's worth mentioning while on the topic is that most of our growth actually comes from new accounts. So this is not about going back to a customer base or a customer estate and upselling or cross-selling. And in that world, you have to sell other capabilities.

These emerging capabilities like data AI and cloud security of course.

And when do you think of kind of the effect on net expansion from <unk>.

The compression on renewals, which I know, it's been kind of a frustrating thing associated with the macro.

Is that something where you are starting to see light at the end of the tunnel, where that's starting to lighten up and we should start seeing some benefits.

There are from there being less drag on that or is it still ongoing and it's hard to predict when that might happen.

<unk> for US is still very much an expansionary territory. So we treated as something that is very stable, we like to see these rates and once again it points to our desire to continue and in mass new logos and new accounts and new market share. So we don't feel like right now for us is some.

Tomer Weingarten: For us, focusing on net new accounts, I mean, we lend bigger, we lend with more of the platform, and it still represents a major opportunity for us in the future to go back to our customer estate, upsell, and cross-sell the other capabilities that we have as well. So right now, we're going to start with really the best of both worlds for us. We're still strong in endpoint, but we're also accelerating our adoption and our penetration of these emerging capabilities like data, AI, and cloud security, of course. And when you think of kind of the effect on expansion from kind of heat compression on renewals, which I know has been kind of a frustrating thing associated with the macro, is that something where you're starting to see light at the end of the tunnel where that's starting to lighten up, Or is it still ongoing, and it's hard to predict when it might end?

<unk> that we want to focus on we're not as focused in cross selling to our own state as we are in winning new market share.

So for US again, it's a natural organic growth in <unk> I think when the time is right, we'll put more focus on it.

I think we can definitely grow it further for now I believe that through right mixture for us.

Our next question today is from the line of <unk> Kalia of Barclays. Your line is now open. Please go ahead.

Okay, Okay, Great Hey, guys. Thanks for taking my question here.

Tomer Weingarten: NRR, for us, is still very much an expansionary territory, so we treat it as something that's very stable. We like to see these rates, and once again, it points to our desire to continue and amass new logos and new accounts and new market share. So we don't feel like NRR right now is something that we want to focus on. We're not as focused on cross-selling to our own estate as we are in winning new market share. So for us, again, it's a natural organic growth in NRR.

Tom maybe for you I was wondering if you could talk about the enterprise bundle a little bit on the endpoint side.

I think thats your really your highest value bundle that combines more than AAV and edr, especially given some of the commentary on bigger deals.

Such how sort of the reception to that enterprise bundle in the quarter and how are you kind of thinking about the upsell or cross sell opportunity in the coming year.

Tomer Weingarten: I think when the time is right, we should put more focus on it. And I think we can definitely grow it further. For now, I believe that's the right mixture for us. Our next question today is from the line of Saket Kalia of Barclays. Your line is now open. Please go ahead.

It has very good traction, we're definitely seeing our channel partners.

Saket Kalia: Okay, great. Hey guys, thanks for taking my question here. Tomer, maybe for you, I was wondering if you could talk about the enterprise bundle a little bit on the endpoint side. You know, I think that's really your highest value bundle that combines more than AV and EDR.

Really take interest in that bundle and as you mentioned I mean, it's endpoint Edr capability. It's MTR is vulnerability management.

Both operations its data retention, there's a lot in the bundle. So it is something that does help us drive I think what you're seeing in Q4, which is <unk> per customers, who lending bigger, but with Doug It doesn't cannibalize. The other capability that we have especially to more formidable product lines like cloud sick.

Tomer Weingarten: You know, especially given some of the commentary on bigger deals and such, how was the reception for that enterprise bundle in the quarter, and how are you kind of thinking about the upsell or cross-sell opportunity in the coming year? It has very good traction, you know; we're definitely seeing our channel partners, you know, really take an interest in that bundle. And as you mentioned, I mean, it's Endpoint, it's EDR capabilities, it's MDR, it's vulnerability management, it's remote operations, it's data retention. There's a lot in that bundle.

<unk>.

Like data ingestion capabilities versus data retention. So we think that is.

The highly strategic bundle for us to really go in and bigger deliver more value for the customer I think it's less about.

Tomer Weingarten: So it's something that does help us drive, I think, what you're seeing in Q4, which is ARR per customer, so it's landing bigger. But with that, it doesn't cannibalize the other capabilities that we have, especially the more formidable product lines, like cloud security, you know, like data ingestion capabilities versus data retention. So we treat that as a, you know, it's a highly strategic bundle for us to really go bigger and deliver more value for the customer. I think it's less about, you know, just trying to put more capabilities to drive the price up. It's really about creating a great outcome for the customer, more and more consolidation of nascent capabilities in their environment, which come out of the box with the enterprise bundle. So partners like it, customers like it, you know, these things take time to get to full production, let's say. So complete is still very much, you know, the bundle that is leading the charge for us. But with that, we're definitely seeing a makeshift to enterprise. It has good traction, and we expect that to continue.

Just trying to put more capabilities to drive the price up it's really about creating a great outcome for the customer more and more consolidation of nascent capabilities in their environment, which youre getting out of the box with the enterprise bundle So partners like it customers like these.

These things take time to get to go to full production, let's say so complete is still very much the bundled.

Is leading the charge for us, but with that we're definitely seeing a mix shift to enterprise. It has good traction we expect that to continue.

Thank you. Our next question today is from the line of Ray Mcdonough of Guggenheim. Your line is now open. Please go ahead.

Great. Thanks for taking the question tomer outside of one of your competitors, giving away some.

Some capabilities for free we have been hearing from partners that security deals in general are becoming more creative given the persistent challenging macro environment. So my question is how are some of the larger deals you mentioned structured are they increasingly becoming more creative with ramp deals or other incentives to drive adoption and maybe Dave if you want to.

Raymond Michael McDonough: Thank you, our next question today is from the line of Ray McDonough of Guggenheim. Your line is now open, please go ahead. Great, thanks for taking the question. Tomer, outside of one of your competitors giving away some capabilities for free, we have been hearing from partners that security deals, in general, are becoming more creative given the persistent challenging macro environment. So my question is, how are some of the larger deals you mentioned structured?

Comment on how any different structures might be impacting the model at all if we're not seeing the full impact of maybe an increase in ramp deals or anything like that would be helpful.

Definitely ramped deals I mean, I don't think we have Dave can combing through what we've done almost any of those.

Tomer Weingarten: Are they increasingly becoming more creative with ramp deals or other incentives to drive adoption? And maybe, Dave, if you want to comment on how any different structures might be impacting the model at all if we're not seeing the full impact of maybe an increase in ramp deals or anything like that would be helpful. Definitely not rental deals.

The other dynamic and I think flexibility is really reward that I'm looking for here.

When you have so many different parts like data analytics, which is a multimillion dollar line item, where most customers out there when you have cloud.

Cloud security capabilities are a best of breed you have a lot of freedom to come in and say I can really create cost synergies for you the customer so when we go.

Tomer Weingarten: I mean, I don't think we have, Dave can comment too, but I don't think we've done almost any of those. The other dynamic, and I think flexibility is really the word that I'm looking for here. You know, when you have so many different parts, like data analytics, which is a multi-million dollar line item for most customers out there, when you have, you know, cloud security capabilities that are best of breed, you have a lot of freedom to come in and say, I can really create cost synergies for you, the customer.

And really talk to the customer for us its about finding these cost synergies.

What about giving capabilities for free it really is about what can we do on a three year roadmap to save you cost to create more operational efficiency and how do we do that across the different elements of what our platform does with that said, we always treated endpoint to the center of gravity of what we do but I do think there is more.

More gravity coming to data and data being that central hub in the enterprise, but really starts leading these sales.

Tomer Weingarten: So when we go, you know, and really talk to the customer, for us, it's about finding these cost synergies. It's not about giving capabilities for free. It really is about what we can do on a three-year roadmap to save you costs, to create more operational efficiency, and how do we do that across the different elements of what our platform does. With that said, you know, we always treated Endpoint as a center of gravity for what we do, but I do think there's more and more gravity coming to data and data being that central hub in the enterprise that really starts leading these sales. I'll point to, you know, one of the examples we gave earlier in the call, a major Splunk replacement with a big agency, basically taking out the entire Splunk cost base. Now that actually pays, quote unquote, for Endpoint protection, and pays for cloud security.

Two one of the examples we gave.

Earlier on the call.

A major splunk replacement.

The Big agency.

Taking out the entire Splunk cost base, no that actually pays quote on quote for endpoint protection based for cloud security.

Such a dramatic cost saver.

April was a very competitive data.

Two actually.

Really grow strategically in the other footprints that you have any enterprise. So to me, it's really more about how we adhere to what customers want how do we take a platform that is incredibly broad and just use that flexibility to deliver a better outcome and a better value.

And I talked about <unk> earlier, which continues to grow.

And in the past few quarters, we've talked about payment terms and how enterprises are shifting from multi year upfront payments to more annual installments and that is continuing to persist, but I think what's probably equally important is our average contract duration has remained pretty static at around that 2021 months, but new customer.

David Bernhardt: It's such a dramatic cost saver that you're able, with a very competitive data deal, to actually really grow strategically in the other footprints that you have in the enterprise. So, to me, it's really more about how we adhere to what customers want, how do we take our platform that is incredibly broad and just use that flexibility to deliver a better outcome and better value. And I talked about RPO earlier, which continues to grow. And, you know, in the past few quarters, we've talked about payment terms and, you know, how enterprises are shifting from multi-year upfront payments to, you know, more annual installments, and that is continuing to persist. But I think what's probably equally important is our average contract duration has remained pretty static at around 20-21 months, but new customer contracts are averaging about 30 months.

Contracts are averaging about 30 months. So the good news is we have customers that are looking for multi year deals with us and that allows our sales.

Sales team to focus.

It does not have to renew customers as frequently and have them focus on new logos. So.

That's a bit of prioritization of us to extend longer term contracts to customers over the past year.

Our next question today is from the line of Hamzah <unk> of Morgan Stanley. Please go ahead. Your line is open.

Good evening. Thank you for taking my question, Dave Congrats on entering your third year as a public company CFO.

Just had a question for you on on guidance I'm curious.

Now that you're in near 30 year kind of.

David Bernhardt: So, the good news is we have customers that are looking for multi-year deals with us, and that allows our sales team to focus, you know, to not have to renew customers as frequently and have them focus on new logos. So, that's been a priority for us to extend longer-term contracts to customers, you know, over the past. Our next question today is from the line of Hamza Fodderwala of Morgan Stanley. Please go ahead; your line is open.

What your guidance philosophy is how are you approaching the forward revenue guidance, perhaps differently than you have in the past and then can you remind us again.

How much of the revenue today is <unk>.

Consumption based versus subscription or usage based rather.

And whether or not you factor any of that in.

And to your forward guidance. Thank you.

Consumption remains.

Hamza Fodderwala: Good evening. Thank you for taking my question. Dave, congrats on entering your third year as a public company CFO. I just had a question for you on guidance. I'm curious, now that you're in your third year, kind of... What is your guidance philosophy?

It's a declining piece of the business as we're getting these consumption customers to commit to longer term contracts with minimum commitments. So that has been in process. Since Q1 of last year, that's been a focus.

Just in terms of how I think about guidance.

David Bernhardt: How are you approaching the forward revenue guidance, perhaps differently than you have in the past? And can you remind us again how much of the revenue today is? Thank you.

Obviously when when.

When were setting guidance I wanted to be something that we feel is prudent that gives us the flexibility to invest and when we see.

Adam Tyler Tindle: Yeah, consumption remains, you know, it's a declining piece of the business as we're getting these consumption customers to commit to longer-term contracts with minimum commitment. So that has been in the process since Q1 of last year; that's been a focus. You know, just in terms of how I think about guidance, obviously, when we're setting guidance, I wanted it to be something that we feel is prudent, that gives us the flexibility to invest when we see, you know, great opportunities for us to invest in, you know, short and long-term gains for the company. I'm not looking for massive beat and raise quarters; I want to give guidance that's fairly down the middle and reliable. And that's what we're looking to meet and achieve. Thank you. Our next question is from the line of Adam Tindle of Raymond James. Adam, your line is open. Please go ahead.

Great opportunities for us to invest in our short and long term gains for the company.

I'm not looking for massive beaten raise quarters I want to give guidance thats fairly down the middle and reliable and that's what we're looking to meet and achieve.

Thank you. Our next question is from the line of Adam Tindle of Raymond James.

<unk>. Please go ahead.

Okay. Thanks, Good afternoon, Tomer, you talked about how the level of growth and profitability sets you apart and I think thats right. Just a two parter on that as you think about the trade off in growth and profitability going forward. How did you land on this minus two to minus 6% operating margin is the right landing point and what was the different profitability levels.

What can they do to growth how does that kind of tradeoff and matrix work and just for David sorry. This is a little bit in the weeds, but I think one that will get asked on small on EBIT guide for fiscal 'twenty five.

Tomer Weingarten: Okay, thanks. Good afternoon. Tomer, you talked about how the level of growth and profitability sets you apart, and I think that's right. Here's a two-parter on that. As you think about the trade-off in growth and profitability going forward, how did you land on this minus two to minus six percent operating margin at the right landing point? What are the different profitability levels, and what could they do for growth? How did that kind of trade-off and matrix work?

The year over year dollar improvement.

<unk> $85 million to $90 million swing, which is similar to what you just experienced in this past year and I think this past year you had the benefit of a risked this upcoming year, you've got incremental acquisition expenses. So maybe just walk us through the differences that enable you to deliver a similar operating loss improvement from fiscal 'twenty through 'twenty four.

Tomer Weingarten: And just for David, sorry, this is a little bit in the weeds, but I think one that we'll get asked on tomorrow on EBITGuides, for fiscal 25, if I look at the year-over-year dollar improvement, it's about an $85 to $90 million swing, which is similar to what you just experienced this past year. But I think this past year, you had the benefit of a rift. This upcoming year, you've got incremental acquisition expenses. So maybe just walk us through the differences that enable you to deliver a similar operating loss improvement from fiscal 23 to 24 and 24 to 25. Thank you.

24 to 25, thank you.

Largely things are very selective in how we how we designed the plan I think we had the commitment in our main focus and anchor for this year is doing flip to free cash flow positive generation in <unk>.

Positive operating income by the end of the year, so that to US was really the guiding factor. There is the degree of constraint on our growth there just stems from that.

There is no question that we can potentially grow even more but we are prioritizing profitability. We are prioritizing moving because the sustainability over modal and dot is I think what.

Tomer Weingarten: Largely, you know, things are very elective in how we design the plan. I think we had an engagement, and our main focus and anchor for this year is to achieve pre-cash flow positive generation and positive operating income by the end of the year. So that, to us, was really the guiding factor. There is a degree of constraint on our growth that just stems from that.

What youre seeing in this guide, we're taking a prudent view too.

How much we can invest back into the business while.

Staying true to our commitment and we found out to.

Tomer Weingarten: There's no question that we can potentially grow even more, but we are prioritizing profitability. We are prioritizing improving the sustainability of our model. And that is, I think, what you're seeing in this guide.

It will be the battles that youre seeing with the guidance.

In any event in this year, if we can change that if we can drive more growth we will absolutely do it.

David Bernhardt: We're taking a prudent view of how much we can invest back in the business while staying true to our commitment, and we find that to be the balance that you're seeing with the guidance. In any event, you know, this year, if we can change that, if we can drive more growth, we will absolutely do it. And I think that, you know, as we look to the future years, there's no question that we're looking to sustain high growth rates, you know, to the best of our ability. Absolutely. You know, one of the things that you're seeing the benefit of as we look at why we wouldn't need a RIF to get that same benefit this year is obviously one. We have the benefit of the RIF happening last year, which continues into our working model for this year. So, you know, we had the benefit of kind of right sizing at that time.

I think that is.

As we look to the out years, there's no question that we're looking to sustain high growth rates.

To the best of our ability.

Yeah, absolutely I think one of the things that you are seeing the benefit of as we look at why we wouldnt need a risk to get that same benefit. This year is obviously, one we have the benefit of the rest happening last year, which continues into our working model for this year. So we had the benefit of kind of right sizing at that time.

And you've looked at our execution since and we performed very well I think the other thing that you are continuing to see is the globalization of central one. So you look at see where we're prioritizing head count we're continuing to make great.

David Bernhardt: And you've looked at our execution since then, and we have performed very well. I think the other thing that you're continuing to see is the globalization of SentinelOne. So, you know, we look to see where we're prioritizing headcount. You know, we're continuing to make great strides in the Czech Republic and India and Costa Rica and other low-cost regions where we can continue to deliver great services and support to our customers while maintaining a better price point. And that's something that, you know, when you look at where we were at the IPO, where we were predominantly U.S. and Israel-based, that's allowed us to really increase our profitability from where we were a few years ago. Thank you. Our next question today is from the line of Joshua Tilton of Wolf Research. Your line is now open, please. Hey guys, can you hear me?

Great strides in Czech Republic, and India in Costa Rica, and other low cost regions, where we can continue to deliver great services and support to our customers, while maintaining a better price point and Thats something that when you when you look at.

Where we were out at the IPO, where we are where we were predominantly U S and Israel based.

It's allowed us to really increase our profitability from where we were at a few years ago.

Thank you. Our next question today is from the line of Joshua Tilton of Wolfe Research. Your line is now open. Please go ahead.

Hey, guys can you hear me.

Yes.

Hello.

Thanks for squeezing me in here just a quick one maybe a two parter kind of on the guidance.

The first part is any guardrails or any way, we should think about kind of IRR net new IRR growth for this year.

And then just more broadly you guys did talk to a few things that youre doing this year pin safe I think also with Tivo is fully integrated into the agent, but just kind of as you said make your ability to sell just a little bit faster. How if at all are you accounting for that benefit or that accelerated go to market entered the forward revenue guidance for this year.

Joshua Alexander Tilton: Yeah. Hello. Oh, thanks for squeezing me in here. Just a quick one, maybe a two-parter, kind of on guidance. Just the first part is, any guardrails or any way we should think about kind of ARR or net new ARR growth for this year? And then, just more broadly, you guys did talk about a few things that you're doing this year, PingSafe, and I think Ativo's fully integrated into the agent. That's just going to, as you said, make your ability to sell just a little bit faster. How, if at all, are you accounting for that benefit or that accelerated go-to-market entry in the forward revenue guidance for this year? Thanks.

Sure I'll start with the net new IRR.

For the full year, we've guided to revenue.

We're guiding up 31% at the midpoint for the year.

<unk> and revenue.

<unk>.

Very closely track each other and historically I think revenues brown.

<unk> by about a couple percentage points.

For Q1, specifically Q1 is our seasonally smallest quarter of the year.

David Bernhardt: Sure, I'll start with the net new ARR. For the full year, we've guided to revenue, which we're guiding up 31% at the midpoint for the year. You know, ARR and revenue, you know, they're both, you know, it very closely tracks each other. And historically, I think revenue's grown faster than ARR by about a couple percentage points. You know, for Q1 specifically, you know, Q1's our seasonally smallest quarter of the year.

We expect that to be the case this year as well.

It's smaller any number of larger deals can have an impact on the quarter.

It wouldn't have an impact necessarily on the year and obviously, we're guiding to revenue growth. Our Q1 outlook is I think 36% revenue growth. So we believe that our guidance is quite strong.

Our next question.

Okay.

My apologies.

Just comment on the.

David Bernhardt: You know, we expect that to be the case this year as well. Because it's smaller, you know, any number of larger deals can have an impact on the quarter but wouldn't necessarily have an impact on the year. And obviously, we're guiding to revenue growth. Our Q1 outlook is, I think, 36% revenue growth. So we believe that our guidance is quite strong. Our next question is from... My apologies.

On the benefits and go to market.

We've always taken I think a more thoughtful approach on how we integrate capabilities into the platform I mean this is not a.

<unk> works approach, where you're just.

Try and cobalt things together.

We want to create a seamless experience.

Embedded the capabilities that we acquire into our platform.

Tomer Weingarten: Yeah, I mean, let me just comment on the benefits of going-to-market. We've always taken, I think, a more thoughtful approach to how we integrate capabilities into the platform. I mean, this is not a patchwork approach where you just try and cobble things together.

And it does create a better experience for the customer does it does create a more frictionless go to market motion.

We definitely don't take all of these into factor, we kind of free demos you can call it upside to what we do so we assumed.

Tomer Weingarten: You know, we want to create a seamless experience. We want to embed the capabilities that we acquire into our platform. And it does create a better experience for the customer. It does create a more frictionless go-to-market motion. We definitely don't take all of these into account.

A similar level of friction, but obviously if you look at our platform just by visually assessing what's there it's a fully modernized platform. It's one that's fully seamless.

Tomer Weingarten: We kind of treat them as, you can call it, an upside to what we do. So we assume, you know, a similar level of friction. But obviously, as you look at our platform, just by, you know, visually assessing what's there, it's a fully modernized platform. It's one that's fully seamless and contains all these capabilities. These capabilities work together, which is another, I think, kind of a force multipli

Contains all these capabilities these capabilities work together, which is another.

I think kind of a force multiplier for us if you think about.

Really driving not just endpoint protection, but driving cloud security and driving identity security.

And driving data analysis youre, starting to get to this point, where the capabilities combined also have a compounding nature. So for US. It really is part of the philosophy of how we operate nothing that we I think factor in any meaningful way to our guidance, but it should provide.

Tomer Weingarten: If you think about AI really driving not just endpoint protection but cloud security, identity security, and data analysis, you're starting to get to this point where the capabilities combined also have a compounding nature. So for us, it really is part of the philosophy of how we operate. Nothing that we, I think, factor in in any meaningful way to our guidance, but it should provide, again, for just a smoother operation. Next question today comes from the line of Gabriela Borges of Goldman Sachs. Your line is now open. Good afternoon.

For smoother operation.

Next question today from the line of Capri on our bosses of Goldman Sachs. Your line is now open. Please go ahead.

Good afternoon, and thank you Kevin I wanted to ask more about the sponsor placement.

Gabriela Borges: Thank you, Tamara. I wanted to ask more about the splunk displacement that you mentioned in your prepared remarks and, more broadly, about the success you're having with Data Lake and the Security Operations Center. Maybe a few comments on the playbook that you think is working with the sales for us to get into those types of opportunities. And we've had a conversation as well around natural language querying, potentially lowering the switching costs for the installer base that's currently with different vendors in the SIN. So we'd love to hear how that's going as well. Thank you. 4.

Mentioned in the prepared remarks, a more broadly around the success, you're having with data Lake and security operations from.

Maybe a few comments on the playbook that you think is.

Working with the sales for us to get into those types of opportunities.

I had a conversation as well around natural language query essentially lowering the switching costs for the installed base. That's currently on different vendors.

What I'm asking thank you.

Tomer Weingarten: You know, I'm not going to go into detail about our strategy. But with that said, we definitely see a tremendous opportunity in the data analytics market. It's very clear that what people run today, whether it's Splunk or some of its other peers, is quite antiquated in its approach, and it's very costly.

Of course.

I'm not going to go into all details of our strategy, but with that said we.

Definitely see a tremendous opportunity in the data analytics market.

Very clear that what people run today, whether it's <unk> or some of its other peers is is quite integrated in its approach and it's very costly and when we think about the benefits and this goes beyond natural language query and it goes beyond even the cost benefit if you believed that we own.

Tomer Weingarten: And when we think about the benefits, and this goes beyond natural language querying, and it goes beyond even the cost benefit. If you believe that we all need to be faster in how we react to issues with our infrastructure, to incidents, and how we actually respond to them, then the vision of taking your entire security stack and making it hyper-automated and making it autonomous is something that we all need to strive for, and we all need to get there as fast as possible. And our data lake vision, coupled with hyper automation, delivers on that promise in a very substantial way. So when you look at what these enterprises are looking to move away from an antiquated, old-gen SIEM solution and into a new data lake, hyper-automated approach, I think you're just seeing that need to move faster, to react faster, and to modernize your environment. And if they can do so while also saving dollars in the process, I mean, that's obviously a win-win.

We need to be faster and how we react to issues with our with our infrastructure to two.

Two incidents and how we actually responded and then division of taking your entire security stack and making it hyper automated and making it autonomous is something that we all need to strive for and we all need to get there as fast as possible and our data Lake vision, coupled with hyper automation.

<unk> delivers on that promise in a very substantial way. So when you look at what these enterprises that are looking to move away from an antiquated all Jin Sim solution and into a new data Lake hyper automated approach I think youre, just seeing that need to move faster to react faster into more.

Neither environment and if we can do so while also saving dollars into process I mean, that's obviously.

A win win and we're seeing those conversation for inspire.

Tomer Weingarten: And we're seeing those conversations transpire in an incredible way across the board. I think we mentioned about 10% of our quarterly ACV for Q4 actually came from data. That is huge growth for us year over year for our data solution, and we definitely expect further acceleration in our data, in our data unit. Last thing I want to say about that is that data for us, again, being that that additional center of gravity is really driving more platform adoption, regardless of just the data analytics capability. So it really is, you know, an incredibly strategic growth vector for us in the years to come. It's a $40 billion TAM across data analytics and security analytics. And we believe it's ripe for disruption. The next question today is from the line of Batimo Bulani from City. Your line is now open, please go ahead.

No.

In an incredible way across the board.

We mentioned about 10% of our quarterly ACB for Q4 actually came from data done huge growth for us year over year.

For our data solution and we definitely expect further exploration.

In our data.

And our data unit last thing I want to say about that is the data for us again.

Being that that additional center of gravity is really driving more platform adoption, regardless of the data analytics capability. So so it really is.

Incredibly strategic growth vector for us in the years to come it's a $40 billion Tam across data analytics and security analytics and we believe it is ripe for disruption.

Next question.

<unk> today is from the line of Betsy <unk> of Citi. Your line is now open. Please go ahead.

Batimo Bulani: Good afternoon. Thank you for taking my question. Tomer, on behalf of PinnacleOne, I was hoping you could give some airtime to PinnacleOne. And I'm specifically curious about how the addition of PinnacleOne as a service offering has impacted your transaction velocity, especially vis-a-vis your traditional very software-first go-to-market notion. And if you can comment on to what extent your PinnacleOne engagements are impacting your software sell-through for the rest of the platform, of course.

Good afternoon, one question.

I was hoping you could give us some time to political line specifically.

How the addition of more clinical one service offering has impactful.

I'm watching velocity, especially in gene therapy.

Traditional dairy subsequent starts to go to market motion.

If you can comment on Q1.

Number one in each line.

<unk> are impacting software sell through for the rest of the platform.

Platform.

Tomer Weingarten: And PinnacleOne is definitely getting plenty of airtime. I think that, you know, for us, PinnacleOne is really the topmost layer of our strategy and philosophy as a company. If you kind of think about that shift from just selling security products, point solutions, you know, chasing malware, PinnacleOne is really about shifting the strategy and allowing customers and enterprises out there to think about risk mitigation instead of, you know, just stopping incidents. And I think that for us represents a whole new approach to how you think about cybersecurity, whether you buy products from us or not. I think there is an unbelievable amount of value that PinnacleOne brings to boards out there that fuses together both the geopolitical elements and the technical capability that you might want to reduce the risk in your environment and how you design your security strategy.

Of course.

Clinical one is definitely getting plenty of airtime I think.

For us clinical one is really the top most layer of our strategy and philosophy of the company.

If you kind of think about the shift from just selling security products point solution chasing malware pinnacle, one is really about shifting the strategy, allowing customers and enterprises out there we think about risk mitigation instead of.

Just stopping incidents and I think Doug for us represents a whole new approach in how you're thinking about cyber security, whether you buy products from us or north I think there is an unbelievable amount of value the clinical one brings two boards out there.

Fuses together, both the geopolitical elements.

And the technical capabilities that you might want to reduce the risk in your environment and how you design your security strategy.

Tomer Weingarten: And for us, I mean, we're already seeing, you know, significant traction with both, I think, direct engagement with PinnacleOne, but also the derivative product sales that might come with it. We're already seeing, you know, quite a lot of deals influenced by PinnacleOne. Customers, I think, always come out of these conversations as a complete eye-opener for them as to what they should be concerned about. You know, not every capability in cybersecurity is the most pressing one. Not all pain points are created equal.

For us I mean, we're already seeing.

Significant traction with both.

Think direct engagement with clinical one but also the derivative product sales that might come with it.

We're already seeing.

While a lot of deals influenced by Pinnacle, one customers I think.

Always come out of these conversation as a complete eye opener for them as to what they should be concerned about.

Not every capability in cyber security is the most pressing one local pinpoints are created equal and pinnacle. One is an incredibly strategic ally to these boards. These executive teams and definitely to the CSO.

Tomer Weingarten: And PinnacleOne is an incredibly strategic ally to these boards, these executive teams, and definitely to the CISO to understand and parse through where I should be investing, where's the biggest bang for the buck, and where can I mitigate risk the most. So, I can't, you know, can't underestimate the importance that something like PinnacleOne has. And it stitches together, you know, both our incidence response capabilities and our research capabilities and our threat intelligence capabilities into one offering that's holistic for the customer. And across all of these, you know, all of these avenues, it's a very unique offering in the market that currently no other vendor offers. Thank you. Our next question is from the line of Shaul Eyal of TD Cowan. Your line is open, please go ahead. Thank you. Hi, good afternoon.

Understand and parse through where should I be investing where is the biggest bang for the Buck and where do where can that mitigate risk. The most so ken Kinder underestimate the importance that something like clinical one has and its stitches together.

Both our incident response capabilities and our research capabilities and our threat intelligence capabilities into one offering thats holistic for the customer.

Across all of these all of these revenues, it's a very unique offering in the market with currently no other vendor offers.

Thank you. Our next question is from the line of Shell IL of Cowen. Your line is open. Please go ahead.

Thank you Hi, good afternoon question for Dave.

Shaul Eyal: Question for Dave. I want to double click back on the enterprise and commercial bundle. How is the sales force being incentivized? Any deviation from the kind of selling the unbundled product? Or pretty much the same?

I wanted to double click back on the enterprise and commercial bundle.

How is the sales force being incentivized.

Any deviation from kind of selling unbundled product.

Tomer Weingarten: It's the same. We don't have any different incentivization strategy. We always take the lead from the customer. And I think that in many cases, the enterprise bundle just makes a whole lot more sense for certain customers. For others, I mean, we always try and again to be flexible and work with what they need. So we don't want to incentivize our sellers to go in a different direction.

Or pretty much the same.

It's the same we don't we don't have any different as innovation strategy.

We always take the lead from the customer and I think that in many cases, the enterprise bundle just makes a whole lot more sense for certain customers for others. I mean, we always try and again be flexible and work with what they need.

So we don't want to incentivize sellers to go into different specific route.

David Bernhardt: We just wanted to do what's right for the customer, and the enterprise bundle is designed to deliver a ton of value. So it kind of speaks for itself. Yeah, I would say one of the efforts that we made last year or are continuing to make this year is, you know, when we do incentives for our sales force, it's more for the emerging products to make sure that they start gaining market traction. So that's consistent year to year.

Just wanted to do what's right for the customer and the enterprise bundle is designed to deliver a ton of value. So it kind of speaks for itself.

I would say one of the efforts that we made last year are continuing to make this year is when we do do incentives for our sales force. It's more on the emerging products to make sure that they start gaining market traction. So that's consistent year to year, but yet that summer said nothing special around the enterprise bundle.

David Bernhardt: But yeah, as Tomer said, nothing special around the enterprise. Thank you, and this will bring us to the end of our Q&A session, so I'd like to hand back to CEO Tomer Weingarten for his concluding remarks. Thank you all for joining us today. Appreciate your time. This concludes today's call. Thank you all for joining. You may now disconnect your line.

Thank you and this slow perhaps to the end of our Q&A session. So I'd like to hand back to central one CEO Tim of one government for concluding remarks.

Thank you all for joining us today I appreciate your time.

This concludes today's call. Thank you all for joining you may now disconnect your lines.

Thank you all for joining us today I appreciate your time.