Q1 2025 SentinelOne Inc Earnings Call

Cameron: Good afternoon. Thank you for attending the SentinelOne first quarter fiscal year 2025 earnings conference call. My name is Cameron, and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the call over to your host, Doug Clark, Vice President of Investor Relations. You may proceed.

Good afternoon. Thank you for attending <unk> first quarter fiscal year 2025 earnings Conference call. My name is Cameron and I will be your moderator for today all lines will be muted during the presentation portion of the call with an opportunity for.

Questions and answers at the end I would now like to pass the conference over to your host Doug Clark Vice President of Investor Relations You May proceed.

Douglas G. Clark: Good afternoon, everyone, and welcome to SentinelOne's earnings call for the first quarter of fiscal year 25, which ended April 30th. With us today are Tomer Weingarten, CEO, and Dave Bernhardt, CFO.

Douglas G. Clark: Good afternoon, everyone and welcome to <unk> earnings call for the first quarter and fiscal year 'twenty, five which ended April 30.

Speaker Change: With us today are Tom Hawaiian Gardens, CEO, and Dave Bernhardt CFO, our press release and 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: Our press release and a 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. Before we begin, I would like to remind you that during today's call, we will be making forward-looking statements about future events and financial performance, including our guidance for the second fiscal quarter and our full fiscal year 25, as well as long-term financial targets.

Douglas G. Clark: 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 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.

Speaker Change: Before we begin I would like to remind you that during today's call, we will be making forward looking statements about future events and financial performance, including our guidance for the second fiscal quarter and our full fiscal year 'twenty five as well as long term financial targets.

Speaker Change: 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.

Speaker Change: Please refer to the documents 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.

Douglas G. Clark: 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.

Speaker Change: 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.

Speaker Change: 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: Unless 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 unless otherwise stated. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the 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.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: A reconciliation of the 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.

Speaker Change: These non-GAAP measures are not intended to be a substitute for our GAAP results.

Speaker Change: 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.

Speaker Change: Reconciled in today's press release.

Douglas G. Clark: 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, I will turn the call over to Tomer Weingarten, CEO of SentinelOne.

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

Tomer Weingarten: Good afternoon, everyone, and thank you for joining our Fiscal First Quarter Earnings School. Our first quarter performance surpassed our revenue, gross margin, and operating margin expectations. Once again, we delivered industry-leading revenue growth and margin expansion. Revenue grew 40% year over year, making SentinelOne one of the fastest growing companies in the public market. Our gross margin increased back to a record high of 79%, and Q1 marked the 11th consecutive quarter with more than 25 points of operating margin expansion, which we believe is also one of the most sustained and significant margin improvement stories in public markets.

Tomer Weingarten: Good afternoon, everyone and thank you for joining our fiscal first quarter earnings call. Our first quarter performance surpass our revenue gross margin and operating margin expectations. Once again, we delivered industry, leading revenue growth and margin expansion.

Tomer Weingarten: Revenue grew 40% year over year distinguishing Syngenta one is one of the fastest growing companies in the public markets. Our gross margin increased back to a record high of 79% in Q1 marked the 11th consecutive quarter with more than 25 points of operating margin expansion, which we believe is also one of the more.

Tomer Weingarten: <unk> and significant margin improvement story in public markets.

Tomer Weingarten: I'm pleased to share that we achieved positive free cash flow margin for the first time in a company's history. An incredible milestone. We delivered on our commitment to generate positive free cash flow well ahead of our prior targets. In Q1, we achieved a rate of 58 on a free cash flow basis, generating a substantial positive 18% free cash flow margin. We also achieved our first quarter of break-even earnings per share.

Tomer Weingarten: I am pleased to share that we achieved positive free cash flow margin for the first time in our company's history and incredible milestone.

Tomer Weingarten: We delivered on our commitment to generate positive free cash flow well ahead of our prior target in Q1, we achieved a rule of 58 or a free cash flow basis generating a substantial positive 18% free cash flow margin.

Tomer Weingarten: We also achieved our first quarter will breakeven earnings per share.

Tomer Weingarten: This shows an impressive combination of growth, operating leverage, and cash management. I'm proud of our teams for leading us to this remarkable achievement. These results reflect the strong demand for SentinelOne's autonomous cybersecurity platform, unit economics, and scalability of our business model. Our pace of innovation and AI-driven autonomous security are setting new benchmarks across the industry. In Q1 alone, we amplify our cloud security offering with full CNAP integration, introduced the first-of-its-kind AI security system to PurpleAI, and dramatically enhanced the security experience by launching the new Singularity Operations Center.

Tomer Weingarten: This shows an impressive combination of growth operating leverage and cash management I am proud of our teams for leading us through this remarkable achievement. These.

Tomer Weingarten: These results reflect the strong demand of central ones Autonomous Cyber security platform unit economics, and scalability of our business model.

Tomer Weingarten: Our pace of innovation and AI, driven autonomous security are setting new benchmarks across the industry in Q1 alone we amplified our cloud security offering with full seen up integration introduced a first of its kind AI security system to appropriately and.

Tomer Weingarten: And dramatically enhance the security experienced by launching the new singularity operations Center.

Tomer Weingarten: Our industry-leading growth and margin expansion shows an extraordinary financial profile. Yet, we have the opportunity to enhance our go-to-market execution and evolve related processes to support increasing scale and diverse growth. I'll share more on this later. As always, please also read our shareholder letter published on the Investor Relations website, which provides more details. Now, let's dig into our first quarter performance.

Tomer Weingarten: Our industry, leading growth and margin expansion shows an extraordinary financial profile still we have the opportunity to enhance our go to market execution and evolve related processes to support the increasing scale and diverse growth I'll share more on this later.

Tomer Weingarten: As always please also read our shareholder letter published Investor relation website, which provides more detail.

Tomer Weingarten: Let's dig into our first quarter performance structurally the threat landscape is intensifying this the dividend by a sharp rise in cyber attacks and breaches.

Tomer Weingarten: Structurally, the threat landscape is intensifying. This is evident from a sharp rise in cyberattacks and breaches. The total cost of breaches and operational disruptions is reaching new heights.

Total cost of breaches and operational disruptions are reaching new highs more and more enterprises are turning to central won for best in class security simplification in savings. We are the leader in autonomous security, our AI based security platform enables new and existing customers to defend against modern attacks and consolidate this joint.

Tomer Weingarten: More and more enterprises are turning to SentinelOne for best-in-class security, simplification, and savings. We are the leader in autonomous security. Our AI-based security platform enables new and existing customers to defend against modern attacks and consolidate disjointed ecosystems of subpar solutions and outcomes. This is driving strong demand for our endpoint cloud and data solutions, as well as unprecedented interest in our AI capability. Our momentum with large enterprises remains strong. Customers with more than $100,000 in ARR grew 30% year-over-year, and customers with more than $1 million in ARR reached a new company record.

Tomer Weingarten: The ecosystems of subpar solutions and outcomes.

Tomer Weingarten: This is driving strong demand for our endpoint cloud and data solutions as well as unprecedented interest in our AI capabilities.

Tomer Weingarten: Our momentum with large enterprises remains strong customers with more than $100000 in AOR grew 30% year over year and customers with more than $1 million EMEA reached a new company record, we're hoping enterprises reduce complexity and optimize costs otherwise significantly enhancing their security posture.

Tomer Weingarten: We're helping enterprises reduce complexity and optimize costs, always significantly enhancing their security posture. Platform adoption and success with larger enterprises continue to drive higher ARR per customer, which increased double digits year-over-year to a record high. Additionally, customer expansion rates remain healthy.

Tomer Weingarten: Platform adoption and success with larger enterprises continue to drive higher IRR per customer, which increased double digits year over year to a record high.

Tomer Weingarten: Similar to last quarter, a larger portion of our business mix was driven by new customer additions in the quarter, which we believe will open doors for significant expansion over time. Traction with our platform capabilities is leading to new growth channels and diversifying our business mix. Emerging solutions continue to grow at a faster pace than the overall business. In Q1, Singularity Data Lake remained our fastest-growing solution, once again growing triple digits, followed by Cloud, Identity, and others.

Tomer Weingarten: Customer expansion rates remain healthy similar to last quarter, a larger portion of our business mix was driven by new customer additions in the quarter, which we believe will open doors for significant expansion over time.

Tomer Weingarten: With our platform capabilities, leading to new growth channels and diversifying our business mix emerging solutions continued to grow at a faster pace than the overall business in Q1 singularity data Lake remained our fastest growing solution once again growing triple digits, followed by cloud identity and others.

Tomer Weingarten: We're just scratching the surface of a massive addressable market ripe for disruption. On the competitive front, enterprises continue to select SentinelOne against legacy and next-gen security vendors in a majority of evaluations. Our technology comes out on top across every capability, be it endpoint, cloud, data, or AI. Singularity outperforms both point products and disjointed platforms alike. For years running, SentinelOne has led objective evaluations like MITRE, as well as industry reviews from Gartner and others.

Tomer Weingarten: We're just scratching the surface of a massive addressable market right for disruption.

Tomer Weingarten: On the competitive front enterprises continue to select centered in one against legacy and next Gen security vendors and a majority of evaluations are technology comes out on top across every capability built endpoint cloud data or AI.

Tomer Weingarten: Singularity outperforms, both point products and disjointed platforms alike.

Tomer Weingarten: Four years running central one is late objective evaluations like mitre as well as industry reviews from Gartner and others in the market riddled with complexity and substandard solutions, we're empowering our customers and partners with the industry's most advanced AI powered protection to one data architecture, one platform one agent.

Tomer Weingarten: In a market riddled with complexity and substandard solutions, we're empowering our customers and partners with the industry's most advanced AI power protection through one data architecture, one platform, one agent, and one user interface. We focus on better security outcomes in real time, offering a unique combination of a premier security platform and lower cost of ownership to customers. It's important to understand the structural forces surrounding cybersecurity and some of the hard realities the industry faces; point products, data silos, and joined platforms leave gaps that are regularly exploited. Large next-gen vendors try to sell endless lists of products and modules.

Tomer Weingarten: In one user interface, we focus on better security outcomes in real time offering a unique combination of a premier security platform and lower cost of ownership to customers.

Tomer Weingarten: It's important to understand the structural forces surrounding cyber security and some of the hard reality is the industry faces.

Tomer Weingarten: Product data silos and has joined the platforms leave gaps that are regularly exploited.

Large next gen vendors trying to sell endless list of products and modules. This approach may enhance their own profits, but it does not ensure the cyber security of their customers a rising number of security breaches serves as clear evidence of this unfortunate reality.

Tomer Weingarten: This approach may enhance their own profits, but it does not ensure the cybersecurity of their customers. A rising number of security breaches serves as clear evidence of this unfortunate reality. The status quo is failing.

Tomer Weingarten: Status quo is failing breaches continue to happen at a faster pace.

Tomer Weingarten: Breaches continue to happen at a faster pace. It's impossible to ignore that vendors with leading market share are not preventing the very breaches they claim to stop. Deploying more and more modules is not solving the problem, and enterprises increasingly understand it. After evaluating SentinelOne's technology, customers quickly realized that the marketing-laden, empty promises of half-baked alternative offerings do not translate to real usable outcomes. The difference between competitors' technology in the market and SentinelOne is stark and visible.

Tomer Weingarten: Possible to ignore that vendors with leading market share are not preventing the very breaches the claim to stop.

Tomer Weingarten: Deploying more and more modules is not solving the problem and enterprises increasingly understand it.

Tomer Weingarten: After evaluating central once technology customers quickly realize that the marketing lead and empty promises of half baked alternative offerings do not translate to real usable outcomes.

Tomer Weingarten: The difference between competitors technology in the market and central one is stark invisible when technology alone can't win competitive solutions, often rely on other tactics no matter, how tempting the price points might be more and more practitioners are testing products and understand the real price of choosing an unproven capability even from an <unk>.

Tomer Weingarten: When technology alone can't win, competitive solutions often rely on other tactics. No matter how tempting the price point might be, more and more practitioners are testing products and understand the real price of choosing an unproven capability, even from an established vendor. Marketing claims for these solutions to modernize operations are built on a ready obsolete architecture. Choosing this path is a recipe for disaster that can actually send their security operations years into the past. We lead with facts, not fiction. Education and collaboration, not propaganda.

Tomer Weingarten: Tablet vendors.

Tomer Weingarten: Marketing claims for <unk> solutions to modernize operations are built on a radio obsolete architecture.

Tomer Weingarten: Using this path is a recipe for disaster that can actually send back their security operations years into the past.

Tomer Weingarten: We lead with facts not fiction education, and collaboration not propaganda and it is imperative to think differently about cyber security in the age of AI.

Tomer Weingarten: It is imperative to think differently about cybersecurity in the age of AI. This is why we purpose-built the Singularity platform with a holistic approach to security, data-driven, and autonomous. At SentinelOne, we focus our resources, investments, and innovations on transforming how security teams can better prepare and protect against the threats of tomorrow, evolving and simplifying enterprise infrastructure to gain control over their parameters. The best security is invisible, working autonomously to defend you at all times.

Tomer Weingarten: Why we purpose built the singularity platform with a holistic approach to security data driven and autonomous is central one we focus our resources investments in innovations on transforming how security teams can better prepare and protect against the threat of tomorrow.

Tomer Weingarten: <unk> and simplifying enterprise infrastructure to gain control over their parameters.

Tomer Weingarten: The best Security is invisible working with <unk> to defend you at all times, we're already a leader in AI based security and the only platform with multiple layers of AI, which give enterprises higher efficiency better protection and more automation.

Tomer Weingarten: We're already a leader in AI-based security and the only platform with multiple layers of AI, which gives enterprises higher efficiency, better protection, and more automation. Singularity is secure by design, with fully integrated threat intelligence by default. Our platform's best-in-class efficacy connects the dots automatically without requiring an overlay service. Let me provide a few examples to showcase the transformative power of singularity.

Tomer Weingarten: Singularity is secured by design with fully integrated threat intelligence by default our platform is best in class efficacy co nixdorf automatically without requiring overlay services.

Tomer Weingarten: Let me provide a few examples to showcase the transformative power of singularity.

Tomer Weingarten: In the coming years, AI is going to consolidate many point solutions and feature products across the entire security landscape. With our advances around Purple AI, we're significantly widening the competitive gap even more in preparing for this. Purple AI is natively integrated across our entire platform. With our open platform approach, Purple touches every aspect of managing security and has the ability to see and manage all security events, including those of competing products.

Tomer Weingarten: In the coming years AI is going to consolidate many point solutions and feature product across the entire security landscape.

Tomer Weingarten: With our advances around peripheral AI, we're significantly widening the competitive gap, even more and preparing for the future.

Tomer Weingarten: Propylene is natively integrated across our entire platform with our open platform approach purple touches every aspect of managing security and has the ability to see and manage all security event, including those of competing products.

Tomer Weingarten: This creates compounded value for customers wishing to enhance existing security investments while benefiting from best-of-breed security products. Purple detects anomalies, enforces policies, takes mitigation, remediation, and orchestration actions autonomously, with full control and audit by the human user.

Tomer Weingarten: These create compounded value for customers wishing to enhance existing security investments, while benefiting from best of breed security product purple detect anomalies enforced policies. It takes mitigation remediation and orchestration actions autonomously with full control and audit by the human user doing so across all security ecosystem product is.

Tomer Weingarten: Doing so across all security ecosystem products is a dramatic force multiplier and allows for a central responsive control plane. Purple AI also radically simplifies and accelerates the more complex tasks of cybersecurity, threat hunting, and investigation. It helps core security teams detect threats earlier, respond faster, and stay ahead of attacks. PRPL also enjoys real-time access to two of the best threat intelligence sources in the world. Our first-class threat intelligence is fully integrated for no charge into PRPL.

Tomer Weingarten: The dramatic force multiplier and allows for central responsive control plane.

Tomer Weingarten: Hopefully I also radically simplifies and accelerates the more complex tasks with cyber security threat hunting and investigations. It helps core security teams detect threats earlier respond faster and stay ahead of attacks.

Tomer Weingarten: Purple also enjoys real time access to two of the best threat intelligence sources in the World are first class threat intelligence is fully integrated for no charge into purple. We've also teamed up with Google's trusted and world leading threat intelligence by menu available on the singularity platform.

Tomer Weingarten: We've also teamed up with Google's trusted and world-leading threat intelligence by Mandiant, available on the Singularity platform. More security, more trust. One would be hard-pressed to find better security intelligence than this. Best of all, PurpleAI works in real time. This is not a dream.

Tomer Weingarten: More security more trust.

Tomer Weingarten: One would be hard pressed to find better security intelligence than this.

Tomer Weingarten: Best of all peripheral AI works in real time.

This is not a vision. This is a new reality for cyber security. This is working we're delivering today to experience. It firsthand I encourage you to take a look at our Berkeley <unk> linked to the page six of our Q1 shareholder letter.

Tomer Weingarten: This is the new reality for cybersecurity. This is what we're delivering today. To experience this firsthand, I encourage you to take a look at the PurpleAI demo linked on page six of our Q1 shareholder letter. The combination of PurpleAI and enterprise-wide data analytics completely simplifies, streamlines, and transforms every aspect of the security journey. This is the true objective of modern cybersecurity, simplification over platformization. The only folks that care about platformization are the vendors themselves.

Tomer Weingarten: The combination of appropriately and enterprise wide data analytics completely simplifies and streamlines and transforms every aspect of the security journey. This.

This is the true objective of modern cyber security simplification over platform mutation.

Speaker Change: The only folks that care about platform mutations are the vendors themselves.

Tomer Weingarten: Enterprises care about better security. With Purple, there's no vendor lock-in or product compromises. Putting all eggs in the same basket is not advisable for security and does not ensure the benefit of the customer.

Speaker Change: Enterprises care about better security outcomes with purple there is no vendor lock in or product <unk>.

Speaker Change: Putting all eggs in the same basket is not advisable in security and does not ensure the benefit of the customer.

Tomer Weingarten: While competitors are developing chatbot assistants, our vision is to deliver a fully autonomous AI-based security platform that is always on, securing the enterprise every day at all times. PRPL is an AI security partner for humans. In an age of AI-based attacks, PRPL alleviates the challenges of machine speed response, talent shortage, alert fatigue, and frees up analyst time by doing the grunt work, all while autonomously securing the enterprise.

Speaker Change: While our competitors are developing chatbot assistance, our vision is to deliver a fully autonomous AI based security that is always on securing the enterprise everyday at all times.

Speaker Change: Purple and AI security partner for humans in an age of AI based attacks peripheral alleviates. The challenges of machine speed response talent shortage alert fatigue, and frees up analyst time by doing the grunt work all while autonomously securing the enterprise the difference is best.

Tomer Weingarten: The feedback for enterprises has been overwhelmingly positive, and this is based on actual deployments, not just marketing demos. Early adopters of PurpleAI reported 80% faster threat hunting and investigation. One enterprise said Purple was saving its security team hours over the course of a single day. Another was enthusiastic about not having to memorize Splunk queries any longer. Finally, and this is my favorite quote, Purple AI changes everything. I finally feel in control.

Speaker Change: The feedback for enterprises has been overwhelmingly positive and this is based on actual deployments, they're just marketing demos.

Speaker Change: Early adopters are appropriately I have reported 80% faster threat hunting and investigations.

Speaker Change: One enterprise fit purple was saving it security team hours over the course of a single day and otherwise enthusiastic about not having to memorize splunk queries any longer finally, and this is my favorite quote appropriately it changes everything I finally feel in control tasks are faster incidents are.

Tomer Weingarten: Tasks are faster, incidents are clearer, and I don't have to guess how I'm going to prioritize my time. Coming out of RSA, the interest in PurpleAI is growing rapidly. It's already leading to customer wins and competitive displacement. For instance, in Q1, a major insurance provider chose to replace Carbon Black after using it for 10 years and selected SentinelOne over other next-gen vendors. Purple AI was a game changer for this customer. It unified the entire enterprise security aperture and unlocked the efficiency needed to stay ahead of attacks. And as I've mentioned, the true value of PRPL gets compounded when paired with other aspects of the Singularity platform.

Speaker Change: Clear and I don't have to guess, how I'm going to prioritize my time.

Speaker Change: Coming out of RSA the interests of our portfolio is growing rapidly it is already leading to customer wins and competitive displacements for instance in Q1, a major insurance provider chose to replace carbon black after using it for 10 years and selected central one over other next gen vendors appropriately I was the game changer for.

Speaker Change: This customer a unified the entire enterprise security, operator, and unlock the efficiency needed to stay ahead of attacks.

Speaker Change: And as I've mentioned, the true value of purple gets compounded when paired with other aspects of the security platform.

Tomer Weingarten: This particular customer selected endpoint cloud identity and data. Customers that choose PRPL distinctly select a wider range of platform capabilities from SentinelOne, and we're pairing PurpleAI with our completely redesigned user interface. We call it the Singularity Operations Center. When security teams spend all day, every day interacting with a platform, the experience needs to be flawless and intuitive. Security analysts don't want to worry about an endless list of modules.

Particular customer selected endpoint cloud identity and data customers that choose purple distinctly select a wider range of platform capabilities from central one.

Speaker Change: And we are pairing perfectly with our completely redesigned user interface, we call. It the singularity operation Center with security teams spend all day everyday interacting with the platform the experience needs to be flawless and intuitive security analysts don't want to worry about and indices to modules. We're building a seamless security experience that just <unk>.

Tomer Weingarten: We're building a seamless security experience that just works and results in better posture, with one centralized view of all security workflows across the enterprise. Security teams can now manage all SentinelOne and non-SentinelOne security alerts in one place, with comprehensive investigations that clarify the nature, origin, and context of an alert. It's like sitting in the cockpit of a modern spacecraft, a fully autonomous experience while having complete visibility of all events as well as physical and virtual assets, including endpoints, cloud, identity, and network.

Speaker Change: <unk> and results in better posture with one centralized view of all security workflows across the enterprise.

Speaker Change: Security teams can now manage all center one in non central one security alerts in one place with comprehensive investigation that clarify clarity origin in context of an alert.

Speaker Change: Sitting in the cockpit with motor spacecraft fully autonomous experience, we're having complete visibility of all events as well as physical and virtual assets, including endpoints cloud identity and network.

Tomer Weingarten: Behind all of this is our Singularity Graph and Correlation Engine, which contextualizes all alerts, identifies patterns, and ultimately aids in earlier detection to prevent breaches. Together, we believe that PurpleAI and our new Singularity Operations Center create the most advanced security platform available for enterprises. Simple, automated, and secure with full visibility across the entire network.

Speaker Change: Behind all of this is our singularity graphene correlation engine, which contextualize all alerts identifies patterns and ultimately aid and earlier detection to prevent breaches.

Speaker Change: Together, we believe that <unk> and our new singularity Operation Center creates the most advanced security platform available for enterprises simple automated and secure with full visibility across the entire network.

Tomer Weingarten: Also at RSA, we launched Singularity Cloud Native Security. In just a few months, we acquired and integrated PinkSafe into our unified Singularity platform. I'm proud of the speed in which we were able to bring the solution to the market. Our new agentless cloud security helps enterprises prioritize their time and prevent attacks before they have to.

Speaker Change: Also at RSA, we launched singularity cloud native security in just a few months, we acquired and integrated <unk> into our unified singularity platform I am proud of the speed in which we were able to bring the solution to the market our new agents with cloud security helps enterprises prioritize your time and prevent attacks.

Speaker Change: Before they happen or cloud native security cuts through the noise using a unique offensive security engine that safely seemingly to <unk> and provides proactive security no. Other solution on the market takes this approach removing the noise and making it more actionable than competing solutions.

Tomer Weingarten: Our cloud-native security cuts through the noise using a unique offensive security engine that safely simulates attack paths and provides proactive security. No other solution on the market takes this approach, removing the noise and making it more actionable than competing solutions. In a recent product evaluation by G2, a leading peer review marketplace used by millions of businesses around the world, Singularity Cloud ranked as number one for ease of use and received 4.9 out of 5 in customer reviews.

Speaker Change: Our recent product evaluation by G to a leading peer review markedly used by millions of businesses around the world Singularity cloud ranked as the number one for ease of use and received $4 nine out of five on customer reviews. Even at this early stage. Our CNET is receiving extremely positive customer response ahead of solutions from public and private competitor.

Tomer Weingarten: Even at this early stage, SYNAP is receiving extremely positive customer response, ahead of solutions from public and private competitors. In Q1, a Fortune 500 enterprise selected the Singularity platform for both cloud and endpoint security. This company had been a long-time customer of a next-gen endpoint peer, but the protection and reliability of our cloud workload security completely changed the conversation. The CISO at this enterprise said, "I couldn't believe what we had been missing." Singularity Cloud caught incidents we didn't even know existed. There is one other aspect of this interaction that's worth pointing out.

Speaker Change: <unk>.

Speaker Change: In Q1, a fortune 500 enterprise selected a singular platform for both the cloud and endpoint security.

Speaker Change: This company has been a longtime customer over next gen endpoint peer with the protection and reliability of our cloud workload security completely changed the conversation.

Speaker Change: So at this enterprise said I couldn't believe what we had been missing.

Speaker Change: Singularity cloud code incidents, we didn't even know existed.

Speaker Change: One other aspect of this interaction that's worth pointing out the <unk> of these enterprise said I know a more protected now and the experience with terrific central one listened to what I wanted and needed and clearly showed how the platform can help.

Tomer Weingarten: The CEO of this enterprise said, "I know I'm more protected now. And the experience was terrific. SentinelOne listened to what I wanted and needed and clearly showed how the platform could help. I didn't have to decode a list of SKUs."

Speaker Change: It didn't have to be coded list of Skus.

Tomer Weingarten: The cloud security space continues to be a clear greenfield opportunity to engage with new enterprises, regardless of endpoint incumbency. We've seen this time and again. Combined, we believe our cloud workload and cloud-native security create the most advanced cloud security portfolio to protect critical enterprise infrastructure. We're excited about the growth potential as we move throughout the year. Finally, the momentum of our data capabilities remains extremely strong. After a record four quarters, Singularity Data Lake continued to grow triple digits in Q1.

Speaker Change: The cloud security space continues to be a clear greenfield opportunity to engage with new enterprises, regardless of endpoint incumbency, we've seen this time and again.

Speaker Change: Combined we believe our cloud workloads and cloud native security create the most advanced cloud security portfolio to protect critical enterprise infrastructure.

Speaker Change: We're excited about the growth potential as we move throughout the year.

Finally, the momentum of our data capabilities remain extremely strong after a record fourth quarter <unk> data continued to grow triple digits in Q1.

Tomer Weingarten: SentinelOne is not a newcomer to the SIEM market. For example, three years ago, SentinelOne was the first company to realize the transformation opportunity that would arise. We acquired a true next-gen data analytics platform that all other vendors are trying to emulate.

Speaker Change: <unk> is not a newcomer to the Sim market.

Speaker Change: For example, three years ago simply one was the first company to realize the transformation opportunity that would arise we acquired a true nextgen data analytics platform, what other vendors are trying to emulate.

Tomer Weingarten: Our data lake superiority is tried, tested, and proven. Fully integrated, empowering the Singularity platform and securing tens of thousands of enterprises across the world, Singularity Data Lake provides a modern, next-gen alternative to legacy STEM solutions. Coupled with PurpleAI, it is the preeminent AI SEM.

Speaker Change: Our data superiority has tried tested and proven fully integrated empowering the singularity platform and securing tens of thousands of enterprises across the world.

Speaker Change: <unk> data Lake provides a modern nextgen alternative to legacy Sim solutions, coupled with appropriately it.

Speaker Change: It is the preeminent AI.

Tomer Weingarten: Enterprises no longer have to be burdened by the cost-prohibitive and limited extendability of legacy SIEM; with Singularity Data Lake, they get lower cost and faster speeds at petabyte scale. However, many of the newer SAM solutions answer only the most basic use cases, have limited scalability out of the box, and are far from their advertised functionality. Enterprises are increasingly looking to move away from legacy technology that's decades old. For example, in one customer example, a Fortune 500 financial services company selected Singularity Data Lake to augment part of its Splunk contract ahead of a full contract expiry next year. Videos like these create significant expansion opportunities for Singularity Data Lake and are opening doors for broader platform adoption. Data transformations are not trivial and take time but are necessary to operate efficiently and securely.

Speaker Change: Enterprises, no longer have to be burdened by the cost prohibitive and limited action ability of legacy Sim.

Speaker Change: With singularity data lake to get lower cost and faster speeds at petabyte scale.

Speaker Change: Many of the newer Sim solutions and certainly the most basic use cases have limited scalability out of the box and are far from their advertised functionality.

Speaker Change: Enterprises are increasingly looking to move away from legacy <unk>.

Speaker Change: Technology, that's decades old.

Speaker Change: One customer example, a fortune 500 financial services company selected singularity data Lake to augment part of its planned contract ahead of a full contract expiring next year.

Speaker Change: Deals like these create significant expansion opportunities for singularity data Lake and are opening doors for broader platform adoption data transformation is our new <unk> and takes time, but are necessary to operate efficiently and securely.

Tomer Weingarten: We have just begun to help companies navigate this transition. This trend of evaluations and migrations is picking up. Tying it all together, we've seen great traction with our emerging solutions. The contribution from emerging solutions was a record in Q1, growing to about 40% of our bookings.

Speaker Change: We've just begun to help companies navigate the transition.

Speaker Change: This trend of evaluations and migration is picking up.

Tying it all together, we're seeing great traction with our emerging solutions. The contribution from the emerging solutions was a record in Q1 growing to about 40% of our bookings over time, our platform solutions will be an even more significant part of our business driving diversity and long term growth.

Tomer Weingarten: Over time, our platform solutions will be an even more significant part of our business, driving diversity and long-term growth. As I reflect upon the last few years, our advancements in data, AI, and cloud security clearly illustrate the success of our technology evolution from endpoint security to a comprehensive enterprise-wide cybersecurity platform. Moving forward, our goal is to replicate similar success across our go-to markets. This is especially important in today's macro environment, which raises the bar for execution. Macroeconomic uncertainty and tighter financial conditions continue to impact customer buying behavior.

Speaker Change: As I reflect upon the last few years, our advancements in data AI and cloud security clearly illustrate the success of our technology evolution from endpoint security to a comprehensive enterprise wide cyber security platform.

Speaker Change: Moving forward our goal is to replicate similar success across our go to market.

Speaker Change: This is especially important in today's macro environment, which raises the bar for execution.

Speaker Change: Macroeconomic uncertainty and tighter financial conditions continue to impact customer buying behavior with better execution. We believe we can mitigate these factors and deliver higher growth.

Tomer Weingarten: With better execution, we believe we can mitigate these factors and deliver higher growth. As you know, Michael Kreiman recently joined SentinelOne as Chief Revenue Officer to drive our go-to-market strategy for growth at scale. We've pinpointed several opportunities to enhance our performance and are already making progress. Together, we are streamlining every aspect of our go-to-market organization. We're putting everything together in service of a better sales experience and stronger engagement. Our strategy is straightforward.

Speaker Change: As you know Michael <unk> recently joined <unk> as Chief revenue Officer to drive our go to market strategy for growth at scale with.

Speaker Change: We've pinpointed several opportunities to enhance our performance and are already making progress together. We are streamlining every aspect of our go to market organizations, we're putting everything together in a series of a better sales experience and stronger engagement. Our strategy is straightforward first we're appointing proven leaders with <unk>.

Tomer Weingarten: First, we're appointing proven leaders with growth at scale to guide our teams to their full potential. Second, we're enhancing our processes and data analytics across the board, including scaling our renewables process, expanding our partner ecosystem, and evolving our marketing and sales enablement. These are high value and high return changes, which naturally take time to implement. However, at our scale, we can adapt quickly and be nimble. All of this is part of the growth journey, which requires constant evolution.

Speaker Change: At scale to guide our teams to their full potential second we are enhancing our processes and data analytics across the board, including scaling our renewals process, expanding our partner ecosystem and evolving our marketing and sales enablement.

Speaker Change: These are high value and high return changes, which naturally take time to implement at our scale, we can adapt quickly and be nimble.

Speaker Change: This is part of the growth journey, which requires constant evolution.

Tomer Weingarten: To reflect the impact of macro dynamics in our go-to-market transition, we've modestly revised our full-year revenue outlook range. With that, we have a line of sight to stronger new business generation in the second half of the year. Our confidence stems from a strong pipeline, ramping new products, and leading indicators for our go-to-market improvement. We're expecting over 30% revenue growth this year, one of the fastest growth rates in public markets once again, combined with a charge toward profitability. Our business fundamentals and opportunities remain unchanged, and our win rates are strong.

Speaker Change: To reflect the impact of macro dynamics in our go to market transition, we have modestly revised our full year revenue outlook range with that we have a line of sight to stronger new business generation in the second half of the year, our confidence stems from strong pipeline ramping newer products and leading indicators from our go to market improvements.

Speaker Change: We're expecting over 30% revenue growth this year, one of the fastest growth rates in public markets. Once again combined with a charged towards profitability.

Speaker Change: Our business fundamentals and opportunities remain unchanged and our win rates are strong.

Tomer Weingarten: Even as we evolve, we continue to deliver industry-leading results every single year. Indeed, we are investing for the future and leaning into areas of significant growth potential, namely cloud, data, and AI. These are important growth levers for our business. We have long held the view that data and AI are the epicenter of security. Enterprise security will not look the same in the coming years.

Speaker Change: Even as we evolve we continue to deliver industry, leading results every single year.

Speaker Change: Indeed, we are investing for the future and leaning into areas of significant growth potential, namely cloud data and AI.

Speaker Change: These are important growth levers for our business.

Speaker Change: We have long held the view that data and AI are the epicenter of security and.

Speaker Change: Enterprise security will not look the same in the coming years to reinforce both our commitment and conviction. We established the AI security Innovation Center at our <unk> office. This investment in people and technology will ensure that we continue to lead at the forefront of modern AIB cyber security and enterprises get the absolute best prediction.

Tomer Weingarten: To reinforce both our commitment and conviction, we established the AI Security Innovation Center at our Tel Aviv office. This investment in people and technology will ensure that we continue to lead at the forefront of modern AI-based cybersecurity, and enterprises get the absolute best in protection and experience. Our financial profile is incredibly strong. We delivered 40% top line growth and parallel margin improvement in positive free cash flow, quarters ahead of our original target.

Speaker Change: And experience.

Speaker Change: Our financial profile is incredibly strong we delivered 40% topline growth unparallel margin improvement and positive free cash flow quarters ahead of our original target.

Tomer Weingarten: Achieving a Free Cash Flow Rule of 58 shows that SentinelOne represents a rare combination of premium growth and return. We're pleased with these milestones and excited by our future growth opportunities across massive end markets. The status quo of current cybersecurity offerings is failing, leaving enterprises vulnerable and riddled with unnecessary complexity and costs. The real solution to the modern cybersecurity problem is better security, simplification, and savings. Our technology across endpoint, cloud, data, and AI is cutting-edge, and our platform experience is second to none.

Speaker Change: Achieving free cash flow grew 58 shows that central one represents a rare combination of premium growth and returns.

Speaker Change: We're pleased with these milestones and excited by our future growth opportunities across massive end markets. The status quo of cyber security offering is failing leaving enterprises vulnerable and riddled with unnecessary complexity and cost the real solution to the motor Cyber security program is better security simplification and savings.

Speaker Change: Our technology across endpoint cloud data and AI is cutting edge and our platform experience is second to none.

Tomer Weingarten: Enterprises deserve better, and we're delivering. Finally, none of this would have been possible without the extremely talented people at SentinelOne. We work with purpose that fuels resilience. I'm deeply grateful for the hard work and dedication of all Sentinel. I also want to thank our customers and our partners for their trust and collaboration. AI is the new paradigm. Cybersecurity is the furthest frontier, and SentinelOne is its foremost output. With that, I will turn the call over to Dave Bernhardt, our Chief Financial Officer.

Speaker Change: Enterprises deserve better and we're delivering it.

Speaker Change: Lastly, none of this would've been possible would it be extremely talented people of central one.

Speaker Change: Work with purpose that fuels the resilience I am deeply grateful for the hard work and dedication of all Central's I also wanted to thank our customers and our partners for their trust and collaboration.

Speaker Change: Is the new paradigm cyber security the deferred as frontier and Central one is it's foremost outpost with that I will turn the call over to Dave Bernhardt, Our Chief Financial Officer.

David Bernhardt: Thank you, Tomer, and thank you everyone again for joining us this afternoon. This afternoon, I'll discuss our quarterly financial performance and provide additional context regarding our guidance for Q2 and fiscal year 25. As a reminder, all comparisons are year over year, and financial measures discussed here are non-GAAP unless otherwise noted. Our first quarter results not only met but exceeded our revenue and margin expectations, reinforcing our position as an industry leader in revenue growth and margin expansion. We also delivered our first ever quarter of Breakeven EPS, a significant milestone on our path to sustained profitability. Revenue grew 40% to $186 million in the first quarter. Our growth was also balanced across geographies.

David Bernhardt: Thank you Tamara and thank you everyone again for joining this afternoon I'll discuss our quarterly financial performance and provide additional context regarding our guidance for Q2 and fiscal year 'twenty five.

David Bernhardt: As a reminder, all comparisons are year over year and financial measures discussed are non-GAAP unless otherwise noted.

David Bernhardt: Revenue from international markets grew 44%, representing 37% of quarterly revenue. Our Q1 revenue also benefited from a strong contribution from PinnacleOne, our recently launched and technology-enabled cyber strategy and risk management practice. PinnacleOne helps governments, companies, management teams, and boards evaluate and fortify their security framework above and beyond any single product or solution. This is more important than ever in the modern threat landscape.

David Bernhardt: Our first quarter results, not only met but exceeded our revenue and margin expectations reinforcing our position as an industry leader and our revenue growth and margin expansion.

David Bernhardt: We also delivered our first ever quarter of breakeven EPS, a significant milestone on our path to sustained profitability.

David Bernhardt: Revenue grew 40% to $186 million in the first quarter. Our growth was also balanced across geographies revenue from international markets grew 44%, representing 37% of quarterly revenue.

David Bernhardt: Our Q1 revenue also benefited from a strong contribution of Pinnacle, one our recently launched and technology enabled cyber strategy and risk management practice.

David Bernhardt: Clinical one helps governments companies management teams and board to evaluate and fortify their security framework above and beyond any single product or solution. This is more important than ever and the modern threat landscape.

David Bernhardt: Total ARR grew 35% to 762 million in Q1 as we continue to drive a healthy mix of new customers and existing customer expansion across businesses of all sizes. However, as we enter the new year, macroeconomic uncertainty and tighter financial conditions have continued to pressure enterprise spending. We are still operating in a high interest rate and a high inflation environment, which continues to impact new budgets and expansionary spending. Simultaneously, as Tomer mentioned, we're in the process of revamping our go-to-market under our new CRO. Combined, these dynamics impacted our ARR and Q1, which is also our seasonally smallest quarter of the year.

David Bernhardt: Total <unk> grew 35% to $762 million in Q1, as we continue to drive a healthy mix of new customers and existing customer expansion across businesses of all sizes.

Speaker Change: As we enter the new year, the macroeconomic uncertainty and tighter financial conditions have continued to pressure enterprise spending we are still operating in a high interest rate and a high inflation environment, which continues to impact new budgets in expansionary spending simultaneously as tomer mentioned, we're in the process of revamping our go to market under our new CRM.

Speaker Change: Combined these dynamics impacted our <unk> in Q1, which is also our seasonally smallest quarter of the year, while we expect macroeconomic challenges to persist our go to market enhancements and technology leadership positions us well for future growth.

David Bernhardt: While we expect macroeconomic challenges to persist, our go-to-market enhancements and technology leadership position us well for future growth. We're focused on the path forward. We have a clear plan and line of sight to better net new ARR growth trends in the second half of the year, supported by a strong pipeline, new product contributions, and an enhanced go-to-market. Looking beyond the top line growth, our gross margin increased sequentially back to our record high of 79%, underscoring the effectiveness of our top line and cost management.

Speaker Change: We're focused on the path forward, we have a clear plan and line of sight to better net new IRR growth trends in the second half of the year supported by a strong pipeline of new product contributions and an enhanced go to market.

Speaker Change: Looking beyond the top line growth, our gross margin increased sequentially back to a record high of 79% underscoring the effectiveness of our topline and cost management.

David Bernhardt: Year over year growth margin improved four percentage points. We're benefiting from scale efficiencies and strong platform unit economics. Our best in class gross margin also indicates healthy pricing and the success of our value added approach. Our unified platform architecture delivers better unit economics for SentinelOne as well as our customers.

Speaker Change: Year over year gross margin improved four percentage points, we're benefiting from scale efficiencies and strong platform unit economics are best in class gross margin also indicates healthy pricing and the success of our value added approach.

Speaker Change: Our unified platform architecture delivers better unit economics for Sentinel won as well as our customers.

Speaker Change: In addition.

David Bernhardt: We continue to make extraordinary improvements to our operating margin. Q1 marked our 11th consecutive quarter of more than 25 percentage points of year-over-year expansion. Our increasing scale, efficiencies, and cost discipline are driving substantial operating margin improvement. In Q1, our operating margin expanded 32 percentage points to just negative 6%. I'm pleased to share that we delivered on our commitment to achieve positive free cash flow margin well ahead of our original target, and by a large degree.

Speaker Change: We continue to make extraordinary improvements to our operating margins Q1 marked our 11th consecutive quarter of more than 25 percentage points of year over year expansion.

Speaker Change: Our increasing scale efficiencies and cost discipline are driving substantial operating margin improvement in Q1, our operating margin expanded 32 percentage points suggest negative 6%.

Speaker Change: I am pleased to share that we delivered on our commitment to achieve positive free cash flow margin well ahead of our original target and by a large degree in Q1, we delivered a free cash flow margin of positive, 18% showing an improvement of more than 40 percentage points compared to last year, we generated $34 million of positive free cash flow in the quarter reinforcing our strong.

David Bernhardt: In Q1, we delivered a free cash flow margin of positive 18%, showing an improvement of more than 40 percentage points compared to last year. We generated 34 million of positive free cash flow in the quarter, reinforcing our strong financial position on top of more than a billion dollars in cash and cash equivalents. We achieved a free cash flow rule of 58 in the quarter.

Speaker Change: Financial position on top of more than $1 billion in cash and cash equivalents.

Speaker Change: We achieved a free cash flow rule of 58 in the quarter. This is a tremendous achievement and a testament to the scalability of our business model.

David Bernhardt: This is a tremendous achievement and a testament to the scalability of our business model. Moving on to our guidance for Q2 and the full fiscal year, Looking ahead, we are optimistic about our growth trajectory and remain committed to delivering strong results. For Q2, we expect revenue of about $197 million, up 32% year over year. For the full year, we expect revenue of $808 million to $815 million, reflecting our confidence despite challenging economic conditions.

Speaker Change: Moving to our guidance for Q2, and the full fiscal year 'twenty five.

Speaker Change: Looking ahead, we are optimistic about our growth trajectory and remain committed to delivering strong results for Q2, we expect revenue of about $197 million up 32% year over year for the full year, we expect revenue of $808 million to $815 million, reflecting our confidence despite challenging economic landscape.

David Bernhardt: We are modestly revising our revenue outlook range to reflect the impact of persistent macro uncertainty and our go-to-market transition. Even so, we expect to deliver 31% growth at the midpoint. As I mentioned earlier, we have line of sight to better growth trends in the second half of the year. Specifically, we expect second half net new ARR growth trends to improve compared to the first half of the year. Our confidence is driven by early indications from our go-to-market transition, a strong and growing second half pipeline, improving conversion rates, and traction with newer solutions like CNAP, AI, and data. Now, turning to our outlook for margins. In Q2, we expect gross margin to be about 79%, an improvement of 2.0% per year.

Speaker Change: We are modestly revising our revenue outlook range to reflect the impact of persistent macro uncertainty in our go to market transition, even still we expect to deliver 31% growth at the midpoint as I mentioned earlier, we have line of sight to better growth trends in the second half of the year, specifically, we expect second half net new IRR growth trends to improve.

Speaker Change: Prove compared to the first half of the year.

Speaker Change: Our confidence is driven by early indications from our go to market transition, a strong and growing second half pipeline, improving conversion rates and traction with newer solutions like <unk> AI and data.

Speaker Change: Turning to our outlook for margins in Q2, we expect gross margin to be about 79% an improvement of two percentage points year over year.

David Bernhardt: As a result, we are raising our full year gross margin guidance to 78 to 79%, more than 100 basis points higher year over year at the midpoint. We expect our increasing scale and improving data processing efficiencies to continue benefiting our results. Finally, we expect our Q2 operating margin to be negative 6%, implying an improvement of more than 16 percentage points year over year. On a full-year basis, as we continue to invest for our future, we expect to maintain operating margins between negative 6 and negative 2 percent, an improvement of about 15 points at the midpoint compared to fiscal year 24. We have the opportunity to be cash flow positive on a full year basis in fiscal 25. However, this is elective and will depend on our pace of investment.

Speaker Change: As a result, we are raising our full year gross margin guidance to 78% to 79% up more than 100 basis points year over year at the midpoint.

Speaker Change: We expect our increasing scale and improving data processing efficiencies to continue benefiting our results.

Speaker Change: Finally, we expect our Q2 operating margin to be negative, 6%, implying an improvement of more than 16 percentage points year over year.

Speaker Change: On a full year basis, as we continue to invest for our future. We expect to maintain operating margins between negative six and negative 2% an improvement of about 15 points at the midpoint compared to fiscal year 'twenty four.

Speaker Change: We have the opportunity to be cash flow positive on a full year basis in fiscal 'twenty. Five however, it is elective and will depend on our pace of investments.

David Bernhardt: Importantly, we remain on track to turning the page on profitability within fiscal 25, delivering positive operating income by the end of the year. We're focused on improving our execution and operating a great business even more efficiently. I'm convinced that we are becoming a stronger company. Our investments in AI, data, and cloud security are reshaping the cybersecurity landscape and will drive our next phase of growth, bringing greater scale and cementing a more diverse business mix.

Speaker Change: Importantly, we remain on track for turning the page on profitability within fiscal 'twenty five delivering positive operating income by the end of the year.

Speaker Change: We're focused on improving our execution and operating a great business, even more efficiently I am convinced that we are becoming a stronger company our investments in AI data and cloud security are reshaping the cyber security landscape and will drive our next phase of growth, bringing greater scale and cementing a more diverse business mix.

David Bernhardt: With our positive free cash flow in Q1 and substantial progress towards breakeven operating margin, we continue to prove the scalability and leverage within our model. As a result, we are leaning into investing for growth without compromising on our near-term margin improvement. Going forward, our goal is to operate towards the rule of 40 on an EVIT basis. Through this lens, we will continue to evaluate the opportunities for investments, growth, and leverage. We have a very strong balance sheet with $1.1 billion in cash, cash equivalents, and investments and zero debt. This provides durability and flexibility.

Speaker Change: With our positive free cash flow in Q1 and substantial progress towards breakeven operating margin, we continue to prove the scalability and leverage within our model. As a result, we are leaning into investing for growth without compromising on our near term margin improvement.

Speaker Change: Going forward our goal is to operate towards the rule of 40 on an EBIT basis through this lens, we will continue to evaluate the opportunities for investments growth and leverage.

Speaker Change: We have a very strong balance sheet with $1 $1 billion in cash cash equivalents and investments and zero debt.

Speaker Change: Provides durability and flexibility we have already demonstrated tremendous potential for operating leverage across the business.

David Bernhardt: We have already demonstrated tremendous potential for operating leverage across the business. The cybersecurity landscape is constantly evolving. Self-proclaimed industry leaders are facing the same challenges of legacy solutions and, even given massive R&D budgets, are failing to innovate at a fast pace. They're failing to stop breaches and solve security problems.

Speaker Change: The cyber security landscape is ever evolving self proclaimed industry leaders are facing the same challenges of legacy solutions and even given massive R&D budgets are failing to innovate at a fast pace.

Speaker Change: They're failing to stop breaches in solving security problems. Our singularity platform offers superior protection and were widening the gap of AI based security in a significant way. This transformation has placed us at the intersection of massive market opportunities and critical enterprise needs.

David Bernhardt: Our Singularity platform offers superior protection, and we're widening the gap between AI-based security and traditional security in a significant way. This transformation has placed us at the intersection of massive market opportunities and critical enterprise needs. And we are delivering superior top-line growth and margin improvement. We lead with facts, not fiction. We're building the future of AI-based security around superior security, simplicity, and savings. With our robust financial position and innovations, we are well prepared to continue leading the industry and delivering value to our stakeholders. Thank you all for joining us today. We will now take questions. Operator, please open up the line.

Speaker Change: And we are delivering superior top line growth and margin improvement, we lead with facts not fiction. We're building the future of AI based security around superior security simplicity and savings with our robust financial position and innovation, we are well prepared to continue leading the industry in delivering value to our stakeholders.

Speaker Change: You all for joining US today, we will now take questions. Operator, Please open up the line.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If, for any reason, you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. And as a reminder, if you're using a speakerphone, please remember to pick up your handset before asking a question. And we will pause here briefly as questions are registered. The first question is from the line of Brian Essex with J.P. Morgan.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star followed by one on your telephone keypad.

Speaker Change: Any reason you would like to remove that question. Please press star followed by two.

Speaker Change: Again to ask a question press Star one and as a reminder, if you were using a speaker phone. Please remember to pick up your handset before asking a question and we will pause briefly as questions are registered.

Speaker Change: The first question is from the line of Brian Essex with J P. Morgan.

Speaker Change: You May proceed.

Brian Lee Essex: May I proceed? Hi, good afternoon. Yeah, hi. Thank you. Good afternoon.

Speaker Change: Yes, hi, Thank you good afternoon, and thank you for taking the question Tom.

Tomer Weingarten: Thank you for taking the question. Tomer, just a first question for you is, I wanted to really kind of dig into the macro, and apologies; I missed some of the first introductory comments, but I want to really understand what happened from a macro perspective and an execution perspective that you didn't see last quarter. In other words, what changed this quarter to lead you to kind of trim the guidance for the full year? And I have a follow-up.

Speaker Change: Tamara.

Speaker Change: I guess first question for you is wanted to really dig into the macro and I apologize I missed some of the first introductory comments.

Speaker Change: I wanted to really understand what happened from a macro perspective.

Speaker Change: And execution perspective.

Didn't see last quarter.

Speaker Change: It was what changed this quarter to lead you to kind of trimmed the guidance for the full year and I have a follow up.

Speaker Change: Okay.

Tomer Weingarten: First, you know, we definitely see some of the same factors that we've seen in previous quarters. So I don't think a lot is changing.

Speaker Change: First we definitely see some of the same factors that we've seen in previous quarters sort of thing a lot is changing.

Tomer Weingarten: You know, we got into revenue; we beat revenue, so all in all, we feel we have a good grasp on most macro factors. I think you're still seeing for us, you know, a seasonally small quarter or the smallest quarter we have. And you're seeing, you know, the timing of large deals, you're seeing, you know, the sizes of different deals change throughout the quarter. That I think is kind of the full extent of what we see from kind of macro pressure.

Speaker Change: We guided to revenue we beat revenue sold in all we feel we've got a good grasp on most macro factors.

Speaker Change: I think youre still seeing for us seasonally.

Speaker Change: Small quarter, our smallest quarter, we have.

Speaker Change: And youre seeing timing of large deals youre seeing.

Speaker Change: Sizes with different deals change throughout the quarter.

Speaker Change: That I think is going to the full extent of what we see from kind of the macro pressure.

Tomer Weingarten: I do think that for us internally, execution-wise, I mean, our go-to market is constantly evolving. We're improving our renewal process, we're improving our marketing process, we're improving our enablement. All of that is also taking shape very, very nicely, but with that, it does add some level of transition in our operations, and that's what we're factoring in. You know, it's less than a 1% adjustment to the year, and we feel that it's kind of needed at this point. But all in all, again, really strong performance, keeping the year at kind of industry-leading growth. I mean, we feel pretty good about it.

Speaker Change: I do think that for us internally execution wise I mean, our go to market is constantly evolving.

Speaker Change: Improving our renewal process, we are improving our marketing process, we're improving our enablement.

Speaker Change: All of that is also taking shape very very nicely, but with that.

Speaker Change: It does.

Speaker Change: Some level of transition.

Speaker Change: In our operations and Thats, what we are factoring in.

Speaker Change: It's less than a 1% adjustment to the year and we feel that that's going to needed at this point.

Speaker Change: All in all again really strong performance keeping the year kind of an industry leading growth I mean, we feel pretty good about it.

Adam Tyler Tindle: The next question is from the line of Adam Tindle with Raymond James.

Speaker Change: The next question is from the line of Adam Tindle with Raymond James.

Speaker Change: You May proceed.

Speaker Change: Yes.

Adam Tyler Tindle: All right, thanks. Good afternoon.

Adam Tyler Tindle: Alright, thanks, good afternoon.

Adam Tyler Tindle: I just want to acknowledge obviously business is doing well and profitability generating positive free cash flow and you had over $1 billion of cash so a little bit of a Devil's advocate question here, if I think about the fastest areas.

Tomer Weingarten: Tomer, I just want to acknowledge that obviously, the business is doing well in terms of profitability, generating positive free cash flow, and you have over a billion dollars of cash. So this is a little bit of a devil's advocate question here. If I think about the fastest areas of growth in the industry, data cloud and AI, you have meaningful products that you're outlining that are very differentiated. Why not invest more in sales and marketing behind these areas to accelerate growth?

Speaker Change: We're growing in the industry data cloud and AI, you have meaningful products that youre outlining a very differentiated why not invest more in sales and marketing behind these areas to accelerate growth or another way to ask is what are you going to do with the buildup of cash given this positive trajectory and how do you and the board justify.

Tomer Weingarten: Another way to ask is, you know, what are you going to do with the buildup of cash given this positive trajectory? And how do you and the board justify that as the right path versus perhaps investing even more heavily in sales and marketing behind those platforms to accelerate growth?

That is the right path versus perhaps investing even more heavily in sales and marketing behind those platforms to accelerate growth.

Tomer Weingarten: Thanks. Absolutely. You know, for

Tomer Weingarten: Absolutely. For us, it's all about growth. But with that, we have made a commitment to be profitable. At the same time, I think what happened this quarter for us, which is something that we've been working on for quite a while, which is turning into a cash flow generating machine, basically, gives us that license to go back and invest in the business. So what happened this quarter was exactly what we wanted to see. It was extremely positive.

Speaker Change: Absolutely for us so.

Speaker Change: All about growth, but with that we have made a commitment to to be profitable.

Speaker Change: Same time, I think what happened this quarter for us, which is something that we've been working on for quite a while which is turning into cash.

Speaker Change: Cash flow generating.

Speaker Change: Machine basically gives us the license to go back and invest in the business. So what happened. This quarter is exactly what we wanted to see it was extremely positive now that gives us I think the ability to understand where we want to invest how much we want to innovate as we keep that same trajectory towards profitability.

Speaker Change: Continuing to generate as much free cash flow as we can throughout the year.

Tomer Weingarten: Now that gives us, I think, the ability to understand where we want to invest, how much we want to invest as we keep that same trajectory towards profitability and continue to generate as much free cash flow as we can throughout the year. So I would say this quarter has really unlocked how much we can invest and how aggressively we can go. And yes, there's no question that we're leaning into growth.

Speaker Change: So I would say this quarter for us really unlocked how much we can invest and how aggressively we can go.

Speaker Change: There is no question that we're leaning into growth we mentioned we're opening.

Tomer Weingarten: We mentioned we're opening more innovation centers around AI. We think the way that people procure software in the future, even in the next couple of years, is going to change. And I think we want to make sure we address that. So we're balancing all of that while we also transition our go-to-market strategy. And that's why we definitely don't want to get ahead of our skis. And we balance all of this to get to the envelope that we have committed to.

Speaker Change: More innovation centers around AI, we think the way that people procure software into future.

Speaker Change: Even in the next couple of years is going to change and I think we want to make sure. We addressed that so we're balancing all of that while we also transitioned our go to market and Thats why we definitely don't want to get ahead of our skis and we're balancing all of this to get to the envelope that we have committed to.

Hamza Fodderwala: The next question is from the line of Hamza Fodderwala with Morgan Stanley. You may proceed.

Speaker Change: The next question is from the line of Hamzah <unk> with Morgan Stanley.

Hamza Fodderwala: You May proceed.

Hamza Fodderwala: Hey, good afternoon. Thank you for taking my question. Dave, you talked about reflecting some improvement in that new RR in the back half of your guidance, based on, you know, new products and some of the go-to-market improvements that you're expecting in the new CRO. I'm curious, to what extent have you factored in the potential for, you know, some go-to-market disruption, because when you do, you know, bring sales changes, That is a risk. So I'm wondering to what extent you've thought about handicapping that in your guidance for at least the next couple quarters. Thank you.

Speaker Change: Hey, good afternoon, and thank you for taking my question.

Hamza Fodderwala: You talked.

Speaker Change: About reflecting some improvement in that.

Speaker Change: In the back half of your guidance.

Just on new products and some of the go to market improvement that youre expecting that the new CRO I'm curious to what extent have you factored in the potential for.

Speaker Change: Some go to market disruption when you do bring sales changes that.

Speaker Change: That is a risk so I'm wondering to what extent you've thought about handicapping that in your guidance for at least the next couple of quarters. Thank you.

Speaker Change: Yeah. Thanks Hamzah.

David Bernhardt: Thanks, Hamza. You know, we guide to what we have a line of sight on. So, you know, as Tomer discussed, we're factoring in macro conditions, the go-to-market transition, and the ramp of new products. Obviously, we have the full CNAP offering happening in the second half, and we're early in the stages of AI sales to customers, which are both very positive and building tremendous pipeline. We know that the second half pipeline is a lot stronger than the first half.

Speaker Change: We guide to what we have line of sight too so.

Speaker Change: As Tomer discussed we're factoring in macro conditions that go to market transition and the ramp of new products. Obviously, we have the full <unk> offering happening in the second half. We're early in the stages of AI sales to customers, which are both very positive and building tremendous pipeline.

Speaker Change: Thats a second half pipeline is a lot stronger than the first half.

Speaker Change: And we are addressing execution dynamics in the new products being offered I think status.

David Bernhardt: You know, and we're addressing, you know, execution dynamics and the new products being offered. I think that is also just, in general, there's going to be go-to-market enhancements as Michael builds out this team. So you take that you take the heavier mix of large enterprise sales and Q in the second half, and then you take on the increased contribution from the newer products. And you know, I think we're all just very positive about the second half. Yeah, just to add to that, I mean, 40% could

Speaker Change: Just also just in general.

Speaker Change: There's going to be go to market enhancements as Michael built out. This team. So you take that you take the heavier mix of large enterprise sales in Q in the second half and then you take on the increased contribution from the newer products and I think we're all just very positive on the second half.

Tomer Weingarten: Yeah, just to add to that, I mean, 40% contribution for emerging products really starts to paint the picture of what the platform opportunity is for the company. And obviously, that requires a change in our sales DNA, and in many other derivative aspects of it. So we're absolutely cognizant of that.

Speaker Change: Just to add to that I mean, 40% contribution for emerging product really starts to paint the picture to what the platform opportunity is for the company and obviously that requires also a change in our sales DNA.

Speaker Change: In many other derivative aspects of it. So we're absolutely cognizant of that I think we're balancing that with the strength of the new ramping product, but with that again go.

Tomer Weingarten: I think we're balancing that with the strength of the new ramping product. But with that, again, that go-to-market transitory effect will take hold, you know, in the next few quarters, I think, more than at any other point, and that's what we're balancing. So both factors kind of negate each other, and, you know, we felt like we needed to slightly tick down the revenue projections.

Speaker Change: Go to market transitory effect will take hold in the next few quarters I think more than more than any other point and that's what we're balancing so both factors kind of negate each other and we felt like we need to slightly ticked down.

Speaker Change: Revenue projections, but all in all extremely strong growth.

Tomer Weingarten: But all in all, I mean, extremely strong growth; we feel so good about the year. And as Dave mentioned, I mean, transition will continue to happen, and evolution will continue to happen. This is not a stagnant market by any degree, and, you know, we embrace that. And, you know, Sentinel-1 has operated through change for many, many years, and that's not going to change. I mean, it's a very dynamic market. The next question is from the line of Shaul Eyal with TB Cohen. You may proceed.

David Bernhardt: Feel good about the year and as Dave mentioned, I mean transition will continue to happen evolution will continue to happen. This is noticed pigment market by any degree.

David Bernhardt: And we embrace that and presenting one is.

David Bernhardt: Execute a true change for them.

Many many years and that's not going to change I mean, it's a very dynamic market.

The next question is from the line of Shaul Eyal with TB Cohen you.

Speaker Change: You May proceed.

Shaul Eyal: Thank you. Hi, good afternoon. Thank you for taking my question.

Speaker Change: Thank you hi, good afternoon. Thank you for taking my question.

Speaker Change: Tomer.

Speaker Change: Dave was there any business.

Speaker Change: Towards the end of April.

Speaker Change: Ready book back.

Speaker Change: Over the course of the past four weeks.

Speaker Change: We have some but it's really normal course of business I mean at this point there is constantly deals that book into the next quarter, nothing significant and nothing challenging.

Tomer Weingarten: We have some, but it's really just the normal course of business. I mean, at this point, there are constantly deals that book, you know, into the next quarter. Nothing significant, nothing challenging, you know, in terms of like what we needed for the quarter. It's all just a really normal dynamic. But the answer is yes. The next question is from the line of Trevor Walsh with Citizens JMP.

Speaker Change: In terms of like what we needed for the quarter.

Speaker Change: Soldiers really normal dynamic, but the answer is yes.

The next question is from the line of Trevor Walsh with citizens JMP.

Trevor James Walsh: You may proceed.

Speaker Change: You May proceed.

Speaker Change: Great. Thanks for taking my question Tomer you mentioned.

Speaker Change: Fairly quick integration of Ping safe.

Speaker Change: Just curious around the dynamics of kind of was that just more internal efforts efforts to get it going faster than that could you maybe share on top of that what the some level of what the what the uplift looks like for.

Speaker Change: Selling into that scene app sector beyond kind of what you're already doing with workload protection and kind of just stuff that was already on the truck adds thanks.

Tomer Weingarten: Integration was mostly planned. You know, we have a massively talented R&D force, and that only gets stronger with the PinkSafe acquisition. I think that for us, it was always about delivering a unified experience for the customer. You've heard that, you know, we talk about that quite a bit.

Speaker Change: The integration was mostly planned.

Speaker Change: We got a massively talented R&D for us and that only gets stronger with the <unk> acquisition.

Speaker Change: I think that for us it was always about delivering a unified experience for the customer you've heard us talk about that quite a bit.

Tomer Weingarten: So keeping true to what, you know, the value should be when you're using these platforms is really what guides us as we think about integration. The uplift is substantial. I mean, we had one leg of cloud security with worker protection. Now we have the other leg.

Speaker Change: So keeping true to what the value should be when you're using these platforms is really what guide us as we think about integration.

Speaker Change: The uplift is substantial I mean, we had a one leg of cloud security we would work on prediction now we got the other legs. So you can think about it is really doubling the opportunity for us.

Tomer Weingarten: So you can think about it as really doubling the opportunity for us. And obviously, as you look at our customer base, it's very underpenetrated with cloud security. As you look at some of the forward-looking opportunities, even with different endpoint incumbency, we're still able to go in and demonstrate superiority in the cloud security footprint. So all in all, you know, a highly strategic move for us. PinkSafe is a great technology, and it's just going to make our entire cloud security suite stronger.

Speaker Change: And obviously as you look at our customer base, it's a very underpenetrated with cloud security.

Speaker Change: Look at some of the forward looking opportunities even with different endpoint incumbency.

Speaker Change: Able to go in and demonstrate superiority in the cloud security footprint. So all in all you know a highly strategic motion for us being safe is a great technology and it's just going to make our entire cloud security suite stronger.

Peter Weed: Your next question is from the line of Peter Weed with Bernstein. You may proceed.

Speaker Change: The next question is from the line of Peter <unk> with Bernstein you.

You May proceed.

Tomer Weingarten: Thank you. You know, I think there may have been some kind of separate performance, if you look maybe at your enterprise versus S&B, and we've been hearing in the market, you know, some headwinds around that. Can you give us some color, you know, on the performance, you know, in each of those categories separately? And I guess, you know, a lot of the work you're doing in GoToMarket is to kind of drive performance, particularly in enterprise, like when might we see some inflection from kind of the investment that you're making there?

Speaker Change: Thank you.

Peter Weed: I think there may have been some kind of a separate performance. If you will maybe at your enterprise versus SMB and we've been hearing in the market. Some headwinds around that can you give us some color on the performance.

Speaker Change: <unk> and each of those categories separately and I guess a lot.

Speaker Change: All of the work Youre doing and go to market is to kind of drive performance, particularly in enterprise.

Speaker Change: When might we see some inflection.

Speaker Change: From kind of the investment that Youre, making there.

Tomer Weingarten: Generally, I think you're seeing kind of a continuum of improvement towards more and larger enterprise-based deals. In terms of headwinds, I think in this type of market, you kind of see pockets of headwinds all across the board. So I wouldn't call out any specific dynamic.

Speaker Change: Generally I think youre seeing kind of a continuum of improvement towards more and larger enterprise based deals.

Speaker Change: In terms of headwinds I think in this type of market you kind of see pockets of headwinds all across the board. So I wouldn't call out any any specific dynamic.

Tomer Weingarten: At the end of the day, for us, I mean, we're definitely strong in the SMB market and mid-market. For us, it's really developing more and more that enterprise muscle. I think we've proven that again this quarter, again, 30% growth with large customers last quarter, another 30% growth with large customers. So all in all, this is tracking to where we want to be. And the nature of the offerings that are coming online for us in the second half of the year are more enterprise-oriented, to begin with.

Speaker Change: At the end of the day for US I mean, we're definitely.

Speaker Change: Strong in the SMB market and mid market for us, it's really developed developing more and more debt to enterprise muscle I think we've proven that again this quarter again, 30% growth with large customers last quarter and noted a 30% growth with large customers. So all in all this is tracking to where we want to be in the nature of the offerings that are coming.

Speaker Change: On line for us in the second half of the year are more enterprise oriented to begin with so for US I mean, I don't know if its going to be kind of a full infliction I would really assume more of growth across in parallel to all of the different segments of <unk>.

Tomer Weingarten: So for us, I mean, I don't know if it's going to be kind of a full invasion. I would really assume more growth across in parallel to all of the different segments of the market. The products that we build are so intuitive to use that they're great for the SMB, they're great for the mid-market, they're great for partners, they're great for service providers, and they're great for large enterprises who are looking for just better efficacy, more simplification, and getting more from what they have in their environment, and that's exactly what we're delivering.

Speaker Change: The products that we build are so intuitive to us that they are great for SMB, they're great for mid market. They are great for partners the great for service providers and they're great for large enterprises, who are looking for just better efficacy more simplification getting more from what they have in their environments and that's exactly what we're delivering.

Speaker Change: <unk>.

Tal Liani: The next question is from the line of Tal Liani with Bank of America.

Speaker Change: The next question is from the line of Tagliani with Bank of America.

Speaker Change: You May proceed.

Tal Liani: Shaul, you may be on mute.

Speaker Change: You may be on mute.

Tal Liani: Oh, here we go. Can you hear me now? Yes. Perfect.

Speaker Change: Oh can you hear me now.

Speaker Change: Yes.

Tomer Weingarten: So I'm taking a step back, I want to say your error growth of 35% is great, on any matrix is great, but when I look at the space, the space is growing substantially larger than you are growing at the same rate, which means... There is a problem with your ability to grow in relative terms despite your small size. And the question is, why can't you outgrow your bigger competitor? Is this an issue of product portfolio, your more limited product portfolio, or is this an issue of focus on SMB or go-to-market? When you analyze your performance, how can you do better given your smaller size in the market? Thanks.

Speaker Change: Good perfect. So I'm, taking a step back.

Speaker Change: Our growth of 35% is great on any metric is great but.

Speaker Change: When I look at this space. This space is growing there are only two.

Speaker Change: The players in the space in the company.

Speaker Change: Substantially larger than the UK is growing at the same rate which means.

Speaker Change: There is a problem with your ability to grow in relative terms, despite your small size and.

Speaker Change: And the question is what why can't you outgrow European competitor is.

Speaker Change: Is this an issue of product portfolio, there's more limited product portfolio or at least an equal focus on SMB or go to market. When you when you analyze your your performance.

Speaker Change: How can you do better given your smaller size in the market.

Tomer Weingarten: I don't see any problem with our growth. I think the only thing that's the balance here is how much we can invest. And a company that strives for profitability is obviously constrained by how much it can invest.

Speaker Change: I don't see any problem with our growth.

Speaker Change: The only thing Thats the balance here is how much we can invest in a company that strives for profitability. Obviously is constrained by how much you can invest I mean, we had $1 billion one of cash and our bank last quarter and the quarter prior and this quarter as well. So obviously were somewhat electively constrain.

Tomer Weingarten: I mean, we had, you know, a billion points one of cash in our bank last quarter, in the quarter prior, and this quarter as well. So obviously, we're somewhat electively constrained by how much power we put behind our go-to-market. With that in mind, we treat this as an opportunity to become more and more and more efficient. And that's what you're seeing us do. We're doing more with less, and that's our focus right now. That's what we said we were going to do this year. We're not going to chase to outgrow anybody.

Speaker Change: But by how much power, we put behind our behind our go to market with that we treat this as an opportunity to become more and more and more efficient and thats. What youre seeing is doing we're doing more with less and that's our focus right now that's what we said we're going to do this year, we're not going to chase to outgrow anybody.

Tomer Weingarten: We're building the best technology, and we're building a very, very effective go-to-market machine when the time is right. And as I mentioned, this quarter has been a great indication for us to start moving away and investing back into our business. I mean, that's our focus. And lastly, to me, the number one thing this company wakes up and thinks about is how we stop breaches and keep our customers safe. I think that's what we do every single day.

Speaker Change: We are building diverse technology and we're building a very very effective go to market machine. When the time is right and as I mentioned this quarter has been a great indication for us to start moving away and investing back into our business I mean, that's our focus and lastly to me the number one thing this company wakes up.

Speaker Change: And thinks about is how we stopped reaches and keep our customers safe I think thats what were doing every single day I think the promises of other vendors in this space.

Tomer Weingarten: I think the promises of other vendors in this space might prove to be a bit lax. So I wouldn't put this all on just the chase after growth and how aggressive your marketing can be. You need to grow in a responsible way.

Speaker Change: Might prove to be a bit lax. So I wouldn't put this all on just the chase after growth.

Speaker Change: Aggressive youre marketing can be you need to grow in a responsible way you need to keep your customers say you need to make make sure.

Tomer Weingarten: You need to keep your customers safe. You need to make sure that for a company like us, at our scale, you can also achieve the profitability target that we set out to achieve. And that's the entire picture that we're looking at. Still, again, industry-leading growth. I think we're incredibly proud of our growth profile, ending up this quarter with 40 percent growth and basically break even or 18 percent positive free cash flow. That's a rule of 58 company.

Speaker Change: For a company like US hit our scale that you can also achieved the profitability target that we set out to achieve and dots. The entire picture that we're looking at still again industry leading growth.

Speaker Change: I think we're incredibly proud of our growth profile.

Speaker Change: Ending up this quarter with 40% growth and basically breakeven or 18% positive free cash flow. That's a rule of 58 company.

Tomer Weingarten: I think this is a tremendous profile.

Speaker Change: I think this is a tremendous profile.

Eric Michael Heath: The next question is from the line of Eric Heath with Key Bank Capital Markets. You may proceed.

Speaker Change: Next question is from the lineup, Eric Heath with Keybanc capital markets.

Speaker Change: You May proceed.

Tomer Weingarten: Hey, thanks for taking the question. I guess just to follow on some of those comments, Tomer and Dave. I mean, it's good to see the reiteration of the Margin Guide, but I just, I guess, given the competitive nature of the market and some of the go-to-market changes and continue to have strong growth targets for this year. Curious how you're thinking about the confidence to support that growth and product innovation while maintaining a fairly modest OPEX growth.

Eric Michael Heath: Hi, Thanks for taking the question I guess just to follow on some of the common calmer and Dave I mean, it's good to see the reiteration of the margin guide.

Eric Michael Heath: I guess, just given the competitive nature of the market and some of that go to market changes and continue to have strong growth targets for this year, just curious how youre thinking about the confidence and support that growth and product innovation, while maintaining a fairly modest opex growth and then a second one if I could just.

Tomer Weingarten: And then a second one, if I could just, I don't know if we got great granularity on some of the go-to-market changes, so I'd love to hear some more details on what some of those changes you're instituting are. Thank you.

Speaker Change: I don't know if we got great granularity on some of the go to market changes So would love to hear some more details on what some of those changes your answer thank you.

Tomer Weingarten: Growth for us is, again, something that's very elective. We feel really good about our ability to continue and grow under this, you know, under this investment envelope. We're not in a chase to invest in marketing. We feel like you need to grow smarter; you don't necessarily need to grow in a more expensive way. If anything, I think that the lack of technological superiority by some of the other vendors in the space leads them to lead with marketing, leads them to saturate the space with marketing messaging, you know, that maybe is far ahead of where the products are actually, you know, in reality.

Growth for US is again something that is very elective.

Speaker Change: We feel really good about our ability to continue and grow under this under this investment envelope, where northern to chase too.

Speaker Change: To invest in marketing, we feel like you need to grow smarter, you don't need to grow necessarily in a more expensive way.

If anything I think that the lack of technology superiority by some of the other vendors in this space leads them to lead with marketing and leads them to saturate the space with marketing messaging.

Speaker Change: Maybe as far ahead over the product are actually.

Speaker Change: In reality, so for US I mean, this dynamic is no different and we continue to out execute them.

Tomer Weingarten: So, for us, I mean, this dynamic is no different, and we continue to out-execute them with technology. For me, you know, focusing on the core areas, data, you know, PRPL, which is kind of our AI offering, obviously, and cloud is the right way to go instead of diluting across a multitude of different modules that dilutes your R&D, dilutes your focus, you know. We just find more effective ways to grow in this market.

Speaker Change: With technology for me.

Speaker Change: Focusing on the core areas data.

Speaker Change: <unk>, which is kind of our AI offerings, obviously and cloud is the right way to go instead of diluting across a multitude of different modules that dilutes your R&D dilute your focus.

Speaker Change: Just find more effective ways to grow in this market. This is still a very difficult macro environment I wouldn't advise the customers out there are looking to spend so much at this point in time, so for us, it's really about taking it quarter by quarter assessing our investments and then deciding where do we want to put.

Tomer Weingarten: This is still a very difficult macro environment. I wouldn't advise customers out there to spend so much at this point in time. So, for us, it's really about taking it quarter by quarter, assessing our investments, and then deciding where we want to put more firepower, and that has been the philosophy, you know, from the start of this year. So far, I think we're on the right path, and, you know, we're excited for the second half of the year.

Speaker Change: More firepower and that has been the philosophy from the start of this year.

Speaker Change: So far I think we're on the right path.

Speaker Change: We're excited for the second half of the year.

Tomer Weingarten: The next question is for Joshua Tilton.

Speaker Change: The next question is just touching those Joshua Tilton.

Speaker Change: Apologies.

Tomer Weingarten: I just want to touch on the go-to-market question. We kind of called it out, you know, obviously, we're bringing in new leadership, sales DNA, extending the platform selling motion, onboarding more partners, striking new partnerships, moving to more, more modern enablement, enabling our partners, putting systems in place to automate, quoting for our partners. So we're scaling our go-to-market significantly; we always had the reach and the partnerships. Now it's about making them more effective, which I think is a common theme across everything we're doing this year.

Speaker Change: I just wanted to touch on the on the go to market question.

Speaker Change: Called out obviously, we're bringing in new leadership sales DNA, extending the platform selling motion when boarding more partners striking new partnerships moving to more modern enablement, enabling our partners putting systems to automate quoting for our partners. So we're scaling our.

Speaker Change: Go to market significantly we always had to reach into partnerships now it's about making them more effective which I think is a common theme across everything we're doing this year.

Joshua Alexander Tilton: The next question is from the line of Joshua Tilton with Wolf Research.

Speaker Change: The next question is from the line of Joshua Tilton with Wolfe Research.

Speaker Change: You May proceed.

Joshua Alexander Tilton: Hey guys, thanks for taking my questions. I'm also jumping around tonight, and there's a fire alarm going off in my office.

Speaker Change: Hey, guys. Thanks for taking my questions.

Speaker Change: Also jumping around Tonight, and there is a fire alarm going off my office. So I apologize if this was mentioned already but.

Speaker Change: I guess, what I'm just trying to understand is you're talking us to believe and confidence in the second half.

Speaker Change: There anything that you can give us to kind of increase investor comfort around the visibility you have because from our perspective.

We were given guidance 90 days ago.

Speaker Change: In the quarter kind of shook out a little bit worse than expected, so where does the confidence in the visibility a few quarters out from now come from when it's been kind of difficult to guide.

90 days in advance and then the second part of my question.

Speaker Change: It's just there's a lot of talk at the end of the prepared remarks about how you guys are thinking about profitability, our lenses and rule status is and I'm just trying to understand as we go forward.

Speaker Change: Are you going to continue the margin expansion story that we see today are you guys going to put the brakes on that how should we think about the pace of margin expansion in the future relative to the like amazing and outstanding pace that you've delivered over the last few quarters.

Tomer Weingarten: So I apologize if this has been mentioned already, but I guess what I'm just trying to understand is you're talking us into believing in confidence in the second half. Is there anything that you can give us to kind of increase investor comfort around the visibility you have? Because, from our perspective, we were given guidance 90 days ago, and the quarter kind of shook out a little bit worse than expected. So where does the confidence in the visibility a few quarters out from now come from when it's been kind of difficult to guide just 90 days in advance?

Speaker Change: First I hope everybody is safe.

Speaker Change: Second we guide.

Speaker Change: Guide to revenue and beat on revenue.

To us everything we're doing here is just expanding I think the range that we're giving folks given what we're seeing from the macro given what we're seeing from our own execution and our ability to mitigate these factors.

Speaker Change: So I believe we're actually.

Speaker Change: Taking a safer approach by giving you just a better range to what we have line of sight too and that has been our philosophy will continue to be our philosophy.

Speaker Change: And again it could be.

Speaker Change: Just a different measure for us room revenue given that there is a lot that goes into revenue that doesn't go for HR for us and lastly, if you zoom out and you look at every single year for central one.

Speaker Change: Noted in outperformance of the market.

Speaker Change: Better revenue growth better margin improvement in pretty much every other company in the market.

Speaker Change: Specifically when we look at the second half of the year, we're looking at very robust pipeline and we're looking at pipeline that is diversified across endpoint data cloud purple more adjacent modules and better executing sales team more scrutiny door deals more and better cross sell and upsell dynamics. So all of that.

Speaker Change: Give us a lot of confidence with that obviously, we talked about the other factors going in and that's why again, we're opening up the range.

Speaker Change: Tire adjustment here is about less than a percent.

Speaker Change: I wouldn't read too much into it.

Tomer Weingarten: And then the second part of my question is just, there's a lot of talk at the end of the prepared remarks about how you guys are thinking about profitability, lenses, and rule statuses. And I'm just trying to understand, as we go forward, are you going to continue the margin expansion story that we see today? Are you guys going to put the brakes on that? How should we think about the pace of margin expansion in the future relative to the amazing and outstanding pace that you've delivered over the last few quarters? Thank you.

Speaker Change: Yes, I would add to that.

Speaker Change: Really what we want to do is we want to be a rule of 40 company and we're going to work to achieve that.

Speaker Change: Our goal that's our investment philosophy, everything we're doing to his drive to that that strategic initiative.

Tomer Weingarten: First, I hope everybody's safe. Second, we, you know, have guide to revenue and beat on revenue. To us, everything we're doing here is just expanding, I think, the range that we're giving folks, given what we're seeing, you know, from the macro, given what we're seeing from our own execution, and our ability to mitigate these factors. So, I believe we're actually, you know, taking a safer approach by giving you, you know, just a better range to what we have a line of sight to, and that has been our philosophy, will continue to be our philosophy, and again, ARR could be, you know, just a different measure for us from revenue, given that there's a lot that goes into revenue that doesn't go for ARR for us, and lastly, if you zoom out and you look at every single year for SentinelOne has resulted in, you know, up performance of the market, you know, better revenue growth, better margin improvement than pretty much every other company in the market, and specifically, when we look at the, you know, second half of the year, we're looking at, you know, very robust pipeline, and we're looking at pipeline that's diversified across endpoint, data, cloud, purple, more adjacent modules, a better executing sales team, more scrutiny to our deals, more and better cross-sell and up-sell dynamics.

Tomer Weingarten: So, all of those give us a lot of confidence. With that, obviously, we talked about the other factors going in, and that's why, again, we're opening up the range. The entire adjustment here is about, you know, less than a percent, so I wouldn't read too much into it. Yeah, I would add to that, you know...

Speaker Change: The next question is from the line of Rudy Kessinger with D. A Davidson.

Speaker Change: Please proceed.

Speaker Change: Yeah.

Rudy Grayson Kessinger: Hey, Thanks for taking my question I don't believe it is in the shareholder letter just what was.

Speaker Change: Net retention.

Speaker Change: <unk> net retention.

I know I know you said business continues to skew more towards new versus existing but could you share that figure.

Rudy Grayson Kessinger: The next question is from the line of Rudy Kessinger with DA Davidson. You may proceed.

David Bernhardt: Yeah, I would add to that, you know, that really, what we want to do is we want to be a rule of 40 company, and we're going to work to achieve that. You know, that's our goal. That's our investment philosophy. Everything we do is driven to that, that strategic initiative.

Speaker Change: Yes, Thanks, Rudy we remain an expansionary territory, so we're north of 110%.

That's continuing to focus on the on new customer acquisition still in very good relationship and up sell to existing customers as well. So we're pretty proud of that remaining an expansionary territory.

Speaker Change: We continue to grow with the scale we are.

Speaker Change: The next question is from the line of Fatima <unk> with Citi.

Speaker Change: May proceed.

David Bernhardt: Hey, thanks for taking my question. I don't believe it's in the shareholder letter. Just what was net retention, TTM net retention? I know you said business continues to skew more towards new versus existing, but could you share that figure? Yeah.

Speaker Change: Thank you for taking my question.

Fatima Aslam Boolani: Tumor I was hoping you could comment with more granularity.

Speaker Change: Kind of getting down to the brass tacks with respect to go to market organization. So what I mean by that is clear.

Fatima Aslam Boolani: Yeah, thanks, Rudy. We remain in expansionary territory, so we're north of 110%. You know, that's continuing the focus on new customer acquisition, you know, still in very good relationships and upsell to existing customers as well. So, you know, we're pretty proud of remaining in expansionary territory, you know, as we continue to grow at the scale we are.

Speaker Change: Clearly you are very optimistic about the pipeline and your ability to prosecute the pipeline, but the only in France, we can drive that Eric talked about productivity, a delta or disparity. So wondering if you can kind of.

Fatima Aslam Boolani: The next question is from the line of Fatima Boolani with Citi. You may proceed.

Speaker Change: Chuck.

Speaker Change: Through that as it relates to overall go to market sales.

Speaker Change: <unk> productivity level and if you can talk to you.

Speaker Change: Christian Wetherbee voluntary or involuntary.

Speaker Change: Under the auspices of the NIM Crlf just.

Tomer Weingarten: Thank you for taking my question. Tomer, I was hoping you could comment with more granularity, you know, kind of getting down to the brass tacks with respect to the go-to-market organization. So what I mean by that is, you know, clearly you are very optimistic about the pipeline and your ability to prosecute the pipeline, but the only inference we can draw is that there is some sort of a productivity delta or disparity.

Maybe a little bit more granularity from a sales capacity productivity attrition input standpoint.

Speaker Change: Thank you.

Tomer Weingarten: So I'm wondering if you can kind of talk us through that as it relates to overall go-to-market sales capacity, productivity levels, and whether you can talk about attrition, whether voluntary or involuntary, under the auspices of the new CRO. So just maybe a little bit more granularity from a sales capacity, productivity, and attrition input standpoint.

Speaker Change: For both productivity and participation I would say I mean, we're definitely seeing these matrix on the rise which is very very encouraging.

Speaker Change: That comes hand in hand, with our emerging product team basically being rebuilt over the course of the last 12 months, we mentioned new leadership in place for emerging products seasoned, bringing their own team, bringing new partners onboard I mean that part of our business is now about 40%. So obviously that is very positive.

Speaker Change: Back.

Speaker Change: Two our growth trajectory.

Speaker Change: Sales attrition, it's always going to be there and its nothing thats unique to central one we continue and hone in on the talent that we need we continue to up level.

Speaker Change: <unk>.

Speaker Change: If you kind of see some of this haters attrition.

Speaker Change: Is going to be there, it's part of doing business. It's part of growing the sales force as part of the changing DNA. It's positive it's part of going after different.

Speaker Change: Different aspects of the market.

Speaker Change: Selling to different people in the enterprise. So all in all I think that what Youre seeing is just the normal.

Speaker Change: <unk> transitioned some of the folks that we let go we repurpose to other parts of the business, we invest more and more into the most yielding parts of our business.

Speaker Change: All of that is positive does it come sometimes with some involuntary attrition yeah. I mean, that's also a part of business.

Speaker Change: None of it got to US is alarming and all of that is positive.

Tomer Weingarten: Thank you.

Speaker Change #100: The next question is from the line of John <unk> with Guggenheim.

Tomer Weingarten: For both productivity and participation, I would say, we're definitely seeing these metrics on the rise, which is very, very encouraging. You know, that comes hand in hand with our emerging product team basically being rebuilt over the course of the last 12 months. We mentioned new leadership in place for emerging products, you know, seasoned, bringing their own team, bringing new partners on board. I mean, that part of our business is now about 40%, so obviously, that has a very positive impact on our growth trajectory. Sales attrition, you know, it's always going to be there, and it's nothing that's unique to SentinelOne. We continue to recruit and hone in on the talent that we need. We continue to upgrade.

Speaker Change #101: Hello, Thank you for taking my <unk>.

Tomer Weingarten: You know, if you kind of see some of this, hey, there's attrition. It's going to be there. It's part of doing business. It's part of growing the sales force. It's part of changing DNA.

Speaker Change #102: Thank you for taking my question a question for Tomer Tomer, you said that enterprise demand remains strong and theres been a lot of discussion on that but can you talk about demand in the SMB to mid market and any changes to that more recently because that seems to be an area, where we're starting to see some softness elsewhere.

Speaker Change #101: Thanks.

Tomer: We're seeing strength across the board I think that generally as I mentioned theres going to be some pockets of tailwind every every part of this market.

Tomer Weingarten: It's part of going after different, you know, different aspects of the market and selling to different people in the enterprise. So, all in all, I think that what you're seeing is just a normal GTM transition. Some of the folks that we, you know, let go, we repurpose to other parts of the business. We invest more and more in the most yielding parts of our business. All of that is positive. But does it come sometimes with some involuntary attrition? Yeah, I mean, that's also part of business. None of that is alarming to us, and all of that is positive. The next question is from the line of John DeSuke with Guggenheim.

John Stephen DiFucci: Hello, thank you for taking my order...

Tomer Weingarten: We're seeing strength across the board. I think that, generally, as I mentioned, there's going to be some pockets of tailwind in every part of this market.

Tomer Weingarten: You know, some areas in SMB are softer than others. So, yes, you can claim there's some softness in SMB, but also some softness in some other parts of enterprise. I think in a normalized view, we can't really call out any one specific area of our business that is experiencing some different dynamics in a, I think, material way. So, all in all, I think, you know, both statements are right. There is some softness, but at the same time, we don't view it as material.

Speaker Change #104: Some areas in SMB are softer than others. So yes, you can you can claim there is some softness in SMB, but also some softness in some other parts of enterprise I think in a normalized view.

We can't really call out any one specific area of our business.

Speaker Change #104: It is experiencing some different dynamics.

Speaker Change #104: I think in a material way.

Speaker Change #104: So all in all I think both statements are right. There is some softness but at the same time, we don't view it as material, where you kind of feel it's more skewed across the board.

Tomer Weingarten: We kind of feel it's more skewed across the board. And that's what we kind of call just a more difficult macro. And that's something that we just, you know, kind of work through, improve our execution, move to parts of the market that are just better yielding and focus our investments there.

Speaker Change #104: Thats, what we kind of call out is just a more difficult macro.

Speaker Change #104: That's something that we just kind of worked through improve our execution and move to parts of the market that are just better yielding and focus our investments there.

Speaker Change #104: Unfortunately.

Speaker Change #104: I think there is no more time remaining.

Speaker Change #105: I will pass it back to the management team for closing remarks.

Operator: Unfortunately, there is no more time remaining. I'll pass it back to the management team for closing remarks. Thank you, everybody.

Speaker Change #106: Thank you everybody for joining our call today.

Tomer Weingarten: Thank you, everybody, for joining our call today.

Operator: That concludes the SentinelOne first quarter fiscal year 2025 earnings conference call. Thank you for your participation, and enjoy the rest of your day.

That concludes the Sentinel won first quarter fiscal year 2025 earnings conference call. Thank you for your participation and enjoy the rest of your day.