Q4 2025 SentinelOne Inc Earnings Call

March 12, 2025

All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end I'll now like to turn the conference over to our host Clark Vice President of Investor Relations. Doug You May proceed.

Speaker Change: Good afternoon, everyone and welcome to center the one's earnings call for the fourth quarter of fiscal year 2025, which ended January 31 2025.

Tomer Weingarten: With us today are tomer, Weingarten, CEO and Barbara Larson CFO.

Tomer Weingarten: Our press release and earnings presentation were issued earlier today and are being posted on the Investor Relations section of our website. This call and accompanying slides are being broadcast live via webcast and a replay will be available on our website. After the call concludes.

Tomer Weingarten: <unk>, 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 first fiscal quarter and full fiscal year 2026, as well as long term financial targets.

Tomer Weingarten: 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.

Tomer Weingarten: 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. These.

for the fourth quarter of fiscal year 2025, which ended January 31st, 2025. With us today are Tomer Weingarten, CEO and Barbara Larson, CFO .

Tomer Weingarten: 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.

Our press release and an earnings presentation were issued earlier today and are being posted on the Investor Relations section of our website.

Tomer Weingarten: Any forward looking statements made during this call are being made as of today.

Tomer Weingarten: If this call is replayed or reviewed after today the information presented during the call may not contain current or accurate information.

This call and accompanying slides are being broadcast live via webcast and a replay will be available on our website after the call concludes.

Tomer Weingarten: 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.

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 first fiscal quarter and full fiscal year 2026.

Tomer Weingarten: 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.

as well as long-term financial targets. [inaudible]

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.

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 earnings presentation.

Please refer to the documents we file from time to time with the SEC, in particular our annual report on form 10K and our quarterly reports on form 10Q.

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

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.

Tomer Weingarten: 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 on strategic investments, which cannot be determined at this time and are therefore not reconciled in today's press release.

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. 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. Thank you for your time.

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

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.

Tomer Weingarten: The full year, we also successfully met or exceeded the guidance targets that we sit at the start of last year, notably we re accelerated second half net new <unk> growth back into positive territory. This performance was fueled by strong win rates disciplined execution and the growing adoption of our platform solutions, particularly.

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 on strategic investments, which cannot be determined at this time and are therefore not reconciled in today's press release.

Tomer Weingarten: In data AI and cloud <unk>.

Tomer Weingarten: Once again, we delivered industry, leading revenue growth and margin improvement we were one of the only software company that scale to achieve over 30% top line growth, while driving over 15 percentage points of operating margin expansion. Additionally.

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

Tomer Weingarten: Additionally, we set a new customer growth record and scaled our emerging platform solutions to new highs with known endpoint solutions crossing 50% of our full year bookings, we successfully transformed our business from an endpoint focused model to a comprehensive leading AI native cyber security platform.

Tomer Weingarten: Good afternoon, everyone and thank you for joining our fiscal fourth quarter earnings call fiscal year 'twenty five was a transformative year for central one ending with a strong Q4 that exceeded our expectations across all guided metrics for the full year. We also successfully met or exceeded the guidance targets that we sit at the start of last year.

Tomer Weingarten: At the same time, we accelerated our time to profitability through focused investments and disciplined way.

Tomer Weingarten: Notably, we re accelerated second half net new <unk> growth back into positive territory. This performance was fueled by strong win rates disciplined execution into growing adoption of our platform solutions, particularly in data AI and cloud.

Tomer Weingarten: We achieved significant profitability milestones, including our first quarter of positive operating income in Q4, well ahead of our expectations.

Tomer Weingarten: Our first full year of positive net income and earnings per share.

Tomer Weingarten: And our first full year of positive free cash flow.

Tomer Weingarten: These results we've crossed a key inflection point and we believe the company is well positioned for sustained growth and profitability at scale.

Tomer Weingarten: We expect to surpass $1 billion in both <unk> and revenue this year, an important milestone in our growth journey.

Tomer Weingarten: Additionally, we set a new customer growth record and scaled our emerging platform solutions to new highs with known endpoint solutions crossing 50% of our full year bookings.

Tomer Weingarten: We also expect to achieve full year operating income profitability, while continuing to invest in our platform and future opportunities in fiscal year 'twenty six we remain focused on execution and advancing singularity is D. Preeminent AI powered cyber security platform for the future.

Tomer Weingarten: We successfully transformed our business from an endpoint focus model to a comprehensive leading AI native cyber security platform.

Tomer Weingarten: At the same time, we accelerated our time to profitability through focused investments and discipline, we achieved significant profitability milestones, including our first quarter of positive operating income in Q4, well ahead of our expectations. Our first full year of positive net income and earnings per share and our first full.

Tomer Weingarten: Which brings me to the state of the market.

In many ways the cyber security status quo was a disappointment in 2024 more breaches more cost and more data was taller than ever before personal data financial data health care data and the list goes on.

Tomer Weingarten: Year of positive free cash flow.

Tomer Weingarten: Our entire world is no digital and these breaches are challenging that very basic fabric. Furthermore, <unk> no longer experimental and in the hands of attackers, it's a real threat.

Tomer Weingarten: With these results we've crossed a key inflection point and we believe the company is well positioned for sustained growth and profitability at scale.

We expect to surpass 1 billion in both <unk> in revenue this year, an important milestone in our growth journey.

Tomer Weingarten: The scale automation and speed of attacks are accelerating.

Tomer Weingarten: Looking ahead, we must redefined the security landscape with a modern approach our industry cannot afford to rely on the same outdated approaches over the past two decades, the simply don't work.

Tomer Weingarten: We also expect to achieve full year operating income profitability, while continuing to invest in our platform and future opportunities in fiscal year 'twenty. Six we remained focused on execution and advancing singularity is the pre eminent AI powered cyber security platform for the future.

Tomer Weingarten: Our AI native autonomous security is fundamentally redefining how cyber security challenges are addressed setting us apart in the industry enterprise wide security unified data and AI.

Tomer Weingarten: Which brings me to the state of the market.

Tomer Weingarten: In many ways the cyber security status quo was a disappointment in 2024 more breaches more cost and more data was taller than ever before personal data financial data health care data and the list goes on.

Tomer Weingarten: <unk> pillars of every solution within the singularity platform too.

Tomer Weingarten: Today I'm excited to announce that we are the first company to embed foundational generative AI capabilities into every platform solution by default endpoint cloud data solutions and more.

Tomer Weingarten: Our entire world is no digital and these breaches are challenging that very basic fabric. Furthermore, he is no longer experimental and in the hands of attackers, it's a real threat.

Tomer Weingarten: From the beginning we introduced an AI based approach to endpoint security a decade later, we remain at the forefront of innovation.

Tomer Weingarten: The scale automation and speed of attacks are accelerating.

Tomer Weingarten: Nearing the use of generative and <unk> AI to transform enterprise wide security applications, we're harnessing AI to empower humans and ultimately defenses at scale.

Tomer Weingarten: This is how we elevate cyber security for enterprises and help them become exponentially better.

Tomer Weingarten: Our AI native autonomous security is fundamentally redefining of cyber security challenges are addressed setting us apart in the industry.

Tomer Weingarten: As a company we are a nimble and adaptive to key competitive advantage compared to other incumbents, we can leap logistics steps forward in this year, we're leaping forward towards the future is going to be we have an incredible opportunity ahead to collaborate with our customers partners and enterprises worldwide, who usher in the new era of.

Tomer Weingarten: Enterprise wide security unified data and AI are the core pillars of every solution within the singularity platform.

Tomer Weingarten: Cyber security with singularity.

Tomer Weingarten: Our success stems from our focused innovation strategy and technology leadership, let me cover that in more detail.

Tomer Weingarten: From the beginning we introduced an AI based approach to endpoint security a decade later, we remain at the forefront of innovation pioneering the use of generative and adjourn take AI to transform enterprise wide security applications, we're harnessing AI to empower humans and ultimately defenses at scale. This is.

Tomer Weingarten: <unk> set our singularity platform apart one unified defenses, the only open unified AI security platform integrating data endpoint cloud identity, and third party solutions for broad and complete coverage and protection.

Tomer Weingarten: To outpace threats autonomous security and industry, leading signal to noise ratio delivers real time prediction and actionable insights to stay ahead of threats.

Tomer Weingarten: How we elevate cyber security for enterprises and help them become exponentially bidder.

As a company we are a nimble and adaptive the key competitive advantage compared to other incumbents, we can leap logistics steps forward in this year, we're leaping forward towards the future is going to be.

Tomer Weingarten: <unk>.

Tomer Weingarten: Hence security analysts.

Tomer Weingarten: Our generative and <unk> set the standard in defending against more than threats designed to evolve and constantly adapt singularity helps move faster more efficiently and save costs.

Tomer Weingarten: We have an incredible opportunity ahead to collaborate with our customers partners and enterprises worldwide to Usher in the new era of cyber security with singularity.

Tomer Weingarten: Take a look at the latest mitre attack evaluations, the industry's gold standard for comparing and contrasting performance across security vendors for the fifth consecutive year singularity achieved 100% detection. It's also important to take a more detailed look at the micro results beyond the detection score.

Tomer Weingarten: Our success stems from our focused innovation strategy and technology leadership, let me cover that in more detail <unk>.

Tomer Weingarten: <unk> set our singularity platform apart.

One unified defenses, the only open unified AI security platform integrating data endpoint cloud identity, and third party solutions for broad and complete coverage and protection.

Tomer Weingarten: This is where the true differentiation emerges.

Tomer Weingarten: The latest Mitre evaluation introduced new performance criteria for both detection delays and alerts.

Tomer Weingarten: To outpace threats autonomous security and industry, leading signal to noise ratio delivers real time prediction and actionable insights to stay ahead of threats.

Tomer Weingarten: Singularity delivered zero detection delays in 88% fewer alerts compared to competing solutions.

Tomer Weingarten: The relative outperformance of singularity is impressive competing vendors required four times eight times or in one case 9000 times more alerts.

<unk> <unk>.

Tomer Weingarten: Hence security analysts.

Tomer Weingarten: Our generative and <unk> set the standard in defending against modern threats designed to evolve and constantly adapt singularity helps move faster more efficiently and save costs.

Tomer Weingarten: We simply want to industry, leading signal to noise ratio enterprises don't have to compromise between protection reliability and noise.

Tomer Weingarten: Detections are real time with the singular platform, eliminating gaps and ensuring enterprises stay ahead of evolving threats, our emphasis on quality over quantity minimises alert fatigue and enable security teams to remain focused and effective against adversaries.

Tomer Weingarten: Put simply our AI driven security approach simplifies and streamlines operations.

Tomer Weingarten: This is where the true differentiation emerges.

Tomer Weingarten: The latest Mitre evaluation introduced new performance criteria for both detection delays and alerts.

Tomer Weingarten: We're focused on delivering the best solutions that address the most critical enterprise needs our platform solutions falling to seven key categories, namely AI and automation data endpoint cloud and identity security exposure management Intuit services.

Tomer Weingarten: Singularity delivered zero detection delays in 88% fewer alerts compared to competing solutions.

Tomer Weingarten: The relative outperformance of singularity is impressive competing vendors required four times eight times or in one case 9000 times more alerts.

Tomer Weingarten: Each of these seven solution categories encompasses multiple individual product offerings collectively addressing over 30 distinct use cases.

Tomer Weingarten: With central ones industry, leading signal to noise ratio enterprises don't have to compromise between protection reliability and noise.

Tomer Weingarten: As an example, our cloud security solutions represent one of the broadest portfolios in the industry covering cloud workload protection CSP M. CRM AIA SPM cloud data security and more this extensive coverage highlights the depth and versatility of the singularity platform delivering AI native cyber security across diverse.

Detections are real time with the singularity platform, eliminating gaps and ensuring enterprises stay ahead of evolving threats, our emphasis on quality over quantity minimises alert fatigue and enable security teams to remain focused and effective against adversaries.

Tomer Weingarten: Environments.

Tomer Weingarten: Importantly, all of our platform offerings are powered by the unified singularity data Lake and integrated with AI and hyper automation capabilities.

Tomer Weingarten: Put simply our AI driven security approach simplifies and streamlines operations.

Tomer Weingarten: We've experienced robust adoption and expansion of our platform solutions over the past two years.

We're focused on delivering the best solutions that address the most critical enterprise needs our platform solutions falling to seven key categories, namely AI and automation data endpoint cloud and identity security exposure management Intuit services.

Tomer Weingarten: As of this quarter, we've tripled the number of customers with three or more solution categories and quadruple the number of customers with four or more solutions.

Tomer Weingarten: So excited to share that about 40% of our enterprise customers have adopted three or more platform solutions and about 20% of adopted four or more solutions.

Each of these seven solution categories encompasses multiple individual product offerings collectively addressing over 30 distinct use cases.

Tomer Weingarten: As an example, our cloud security solutions represent one of the broadest portfolios in the industry covering cloud workload protection ESPN CRM AIA SPM cloud data security and more this extensive coverage highlights the depth and versatility of the singularity platform delivering AI native cyber security across diverse.

Tomer Weingarten: This incredible progress and customer receptivity illustrates the diversity and growth potential of our business in fiscal year 'twenty five over 50% of our bookings came from non endpoint solutions.

Tomer Weingarten: This milestone shows our ability and momentum to disrupt large markets with leading technology. We've just begun to scratch the surface of an immense 100 billion dollar market opportunity.

Tomer Weingarten: Environments.

Tomer Weingarten: Importantly, all of our platform offerings are powered by the unified singularity data Lake and integrated with AI and hyper automation capabilities.

Tomer Weingarten: In Q4, we achieved record bookings contribution from our data cloud and AI security solutions once again, showing the accelerating adoption of our broader platform data and AI were our fastest growing solutions fueled by adoption of our singularity AI Sim.

Tomer Weingarten: We've experienced robust adoption and expansion of our platform solutions over the past two years.

As of this quarter, we've tripled the number of customers with three or more solution categories and quadruple the number of customers with four or more solutions.

Tomer Weingarten: <unk> is redefining security data management with enhanced visibility real time detection on streaming data accelerated investigations and autonomous responses many of our largest and most strategic wins in the quarter included AI Sim alongside broader platform solutions.

Most are excited to share that about 40% of our enterprise customers have adopted three or more platform solutions and about 20% of adopted four or more solutions.

Tomer Weingarten: Let's look at a few examples.

Tomer Weingarten: A customer with an eight figure total deal value in the APAC region expanded endpoint and cloud coverage. It had seen up in fully replace the legacy Sim with AI soon a true platform win mixed leading financial institutions switched from Splunk to AI Sim, reducing costs and improving performance.

In Q4, we achieved record bookings contribution from our data cloud and AI security solutions once again, showing the accelerating adoption of our broader platform data and AI were our fastest growing solutions fueled by adoption of our singularity AI Sim.

Tomer Weingarten: The multi million dollar deal increased the customer size by five X.

Tomer Weingarten: Finally in another multi million dollar expansion one of the largest retailers in its category selected <unk> to replace an incumbent vendor, which resulted in savings of more than $1 million per year for this customer.

<unk> is redefining security data management with enhanced visibility real time detection on streaming data accelerated investigations and autonomous responses many of our largest and most strategic wins in the quarter included AI Sim alongside broader platform solutions.

Tomer Weingarten: By combining <unk> with adjacent singularity solutions. This enterprise cannot detect and respond to incidents up to 12 hours faster than before.

Tomer Weingarten: Customers are starting to migrate away from legacy Sim products and modernize their infrastructures, we're partnering with them at their pace the momentum is clear.

Let's look at a few examples.

Tomer Weingarten: As we engage in more strategic large enterprise conversations we're building trust and long term relationships, we're listening to customers objectives, and helping them solve their security and data challenges in Q4, we welcomed one of the largest airlines in the World Fortune 100 company that chose central one through please their incumbent <unk> vendor.

The multi million dollar deal increased the customer size by five X.

Tomer Weingarten: After six months of engagement and support by December one team. This enterprise adopted a singular platform across their network to improve security and resilience.

Finally in another multimillion dollar expansion one of the largest retailers in its category selected <unk> to replace an incumbent vendor, which resulted in savings of more than $1 million per year for this customer.

Tomer Weingarten: Q4 was one of our strongest quarters of competitive displacements still large scale security decisions evaluations and deal engagements take time and careful consideration.

Tomer Weingarten: By combining <unk> with adjacent singularity solutions. This enterprise cannot detect and respond to incidents up to 12 hours faster than before.

Tomer Weingarten: Market interest and customer engagements are strong opening new opportunities for central one all contributing to our expanding pipeline.

Tomer Weingarten: Customers are starting to migrate away from legacy Sim products and modernize their infrastructures, we're partnering with them at their pace the momentum is clear.

Tomer Weingarten: Turning to our partners. We're also seeing increased interest from managed security incident response and insurance providers for a broader platform solutions in Q4 alone more than a dozen large partners started adopting AI sim perfectly I seen up and more in particular emphasis fees remained a strong driver of growth in operating.

As we engage in more strategic large enterprise conversations we're building trust and long term relationships, we're listening to customers objectives, and helping them solve their security and data challenges in Q4, we will come to one of the largest airlines in the World Fortune 100 company that chose central one group laser incumbent endpoint vendor.

Tomer Weingarten: <unk>, they're doubling down with central one embracing more of the platform and establishing longer term contracts this benefits us and our partners with more visibility and predictability into future growth.

Tomer Weingarten: After six months of engagement and support by the simple one team. This enterprise adopted a singular platform across their network to improve security and resilience.

Our long standing partnerships with managed service providers are built on collaboration and innovation multi tenancy automated response tools and rollback capabilities enhance their own service offerings now with AI Sim propylene <unk> seen up we're taking this to the next level, helping them consolidate security coverage into a single.

Tomer Weingarten: Q4 was one of our strongest quarters of competitive displacements still large scale security decisions evaluations and deal engagements take time and careful consideration the market interest and customer engagements are strong opening new opportunities for central one all contributing to our expanding pipeline.

Tomer Weingarten: Console powered by our leading AI innovations and highly efficient data ingestion and analytics.

Let's also discuss the latest innovations across our solutions starting with propylene.

Tomer Weingarten: We believe every customer should be able to deliver generative is foundational abilities for security applications. After a year of customers selecting and using perfectly I, it's clear how much it can scale and automate time consuming human tasks. We're now the first security company to include foundational Gen AI security capabilities like natural.

Tomer Weingarten: Entity, they are doubling down with central one embracing more of the platform and establishing longer term contract this benefits us and our partners with more visibility and predictability into future growth.

Tomer Weingarten: Language queries and auto generated summaries across our platform by default.

Tomer Weingarten: Our long standing partnerships with managed service providers are built on collaboration and innovation multi tenancy automated response tools and rollback capabilities enhance their own service offerings now with AI Sim propylene <unk> seen up we're taking this to the next level, helping them consolidate security coverage into a single.

Tomer Weingarten: This is just the first step in redefining today's categories of Edr cloud security and Sim to be AI powered bringing advanced agenda capabilities to not just hundreds of enterprises, but thousands.

Tomer Weingarten: The inclusion of appropriately I foundations across the singularity platform sits the baseline for AI usage driving immediate engagement and fueling adoption of more platform solutions more advanced <unk> workflows, where purple are available to further enhance speed and performance.

Console powered by our leading AI innovations and highly efficient data ingestion and analytics.

Tomer Weingarten: Let's also discuss the latest innovations across our solutions starting with propylene.

Tomer Weingarten: Additionally, we're extending the power of <unk> across a wider range of security data.

Tomer Weingarten: We've added support for third party solutions, including Zee scalar Okta, Palo Alto networks, Fortinet, Microsoft and others by breaking data silos customers can unleash the full power of propylene.

Language queries and auto generated summaries across our platform by default.

Tomer Weingarten: Across the entire security infrastructure, we're committed to an open platform that can seamlessly coexist and orchestrate a broader ecosystem of security solutions propylene.

Tomer Weingarten: This is just a first step in redefining today's categories of Edr cloud security and Sim to be AI powered bringing advanced agenda capabilities to not just hundreds of enterprises, but thousands.

Tomer Weingarten: <unk> is already the first and only scaled agentic AI for cyber security.

Tomer Weingarten: <unk> plus hyper automation are the bedrock for our <unk> AI in cyber security. We believe this will become table Stakes for autonomous security in the coming years. This is the future and we're extending our lead.

The inclusion of verbally I foundations across the singularity platform sets the baseline for AI usage, driving immediate engagement and fueling adoption of more platform solutions more advanced <unk> workflows, where purple are available to further enhance speed and performance.

Tomer Weingarten: In cloud security, we continued to gain traction with new and existing capabilities more enterprises are securing their cloud environment with our leading cloud workload security and seen up capabilities. In Q4, we secured our largest <unk> deal since the acquisition of <unk> in a multimillion dollar opportunity a leading software company.

Tomer Weingarten: Additionally, we are extending the power of peripheral AI across a wider range of security data.

Tomer Weingarten: <unk> several platform solutions, including workload security and seen App after a rigorous competitive evaluation <unk>.

Tomer Weingarten: Across their entire security infrastructure, we're committed to an open platform that can seamlessly coexist and orchestrate a broader ecosystem of security solutions.

Tomer Weingarten: Singularity was selected for best in class performance unified capabilities in lower cost of ownership compared to point solutions.

Tomer Weingarten: The success of our cloud security platform is further validated by customer testimonials and third party equity needs during.

Tomer Weingarten: Propylene is already the first and only scaled agenda AI for cyber security.

Bold plus hyper automation are the bedrock for our <unk> AI in cyber security. We believe this will become table Stakes for autonomous security in the coming years. This is the future and we are extending our lead.

Tomer Weingarten: During the quarter centered on one was named a 2020 for Gartner peer insights customer choice foreseen up.

Tomer Weingarten: We received the highest number of customer responses in the voice of the customer with 98% of customers, saying they would recommend us to their peers.

We were also awarded the best overall cloud and application security offering and Crs 2024 product of the year.

Tomer Weingarten: As we turn to our new fiscal year, let's look at the broader market dynamics and our strategic focus for the path forward.

Our technology scale and market presence are better than ever we delivered consistent improvement throughout the year and customer growth retention and platform adoption.

Tomer Weingarten: <unk> several platform solutions, including workload security and seen up after a rigorous competitive evaluation.

Tomer Weingarten: Singularity was selected for best in class performance unified capabilities in lower cost of ownership compared to point solutions.

We're seeing increased partner and customer interest in central one broadly.

Tomer Weingarten: Impacting our companies make decisions and implement technology, it's a pending what we know about software and software development.

Tomer Weingarten: The success of our cloud security platform is further validated by customer testimonials and third party equity needs.

Tomer Weingarten: The world of technology and software is rapidly evolving and so are we as a company to lead in the future of AI powered cyber security.

Tomer Weingarten: During the quarter centered on one was named a 2020 for Gartner peer insights customer choice foreseen up.

We received the highest number of customer responses in the voice of the customer with 98% of customers, saying they would recommend us to their peers.

Tomer Weingarten: This involves focusing our resources and aligning teams toward key growth areas were sharpening our innovation focus towards AI native data security solutions.

Tomer Weingarten: We were also awarded the best overall cloud and application security offering and Crs 2024 product of the year.

Tomer Weingarten: We must also remain mindful of the macro environment for many organizations economic and political uncertainty continues to impact budget timing and business decisions.

Tomer Weingarten: As we turn to our new fiscal year, let's look at the broader market dynamics and our strategic focus for the path forward.

As we enter fiscal year 'twenty six our product sales and marketing teams are fully aligned to extending the reach and scale of our platform to new customer growth and expansions, we're focused on strong execution and deeper engagements across our partner ecosystem.

Tomer Weingarten: Our technology scale and market prisons are better than ever we delivered consistent improvement throughout the year and customer growth retention and platform adoption and we're seeing increased partner and customer interest in central one broadly.

Tomer Weingarten: We believe this positions us well to drive premium growth, while continuously improving margins in the years to come.

Tomer Weingarten: Impacting our companies make decisions and implement technology, it's a pending what we know about software and software development.

Tomer Weingarten: We've achieved a lot in the past year from delivering industry, leading growth and margin improvements to bringing cutting edge innovations to the market and most importantly, keeping our customers secure.

Tomer Weingarten: The world of technology and software is rapidly evolving and so are we as a company to lead into future of AI powered cyber security.

This involves focusing our resources and aligning teams toward key growth areas were sharpening our innovation focus towards AI native data security solutions.

Tomer Weingarten: I am proud of all <unk> for their dedication and relentlessness over the past year and for their enthusiasm for whats to come in.

Tomer Weingarten: In closing I want to extend my thanks, and gratitude to our customers and partners for their trust in Central one congratulations to all sentinels their hard work and commitment drives our success and help secure tens of thousands of businesses around the world and.

Tomer Weingarten: We must also remain mindful of the macro environment for many organizations economic and political uncertainty continues to impact budget timing and business decisions.

Tomer Weingarten: As we enter fiscal year 'twenty six our product sales and marketing teams are fully aligned to expanding the reach and scale of our platform to new customer growth and expansions, we're focused on strong execution and deeper engagements across our partner ecosystem.

Speaker Change: And thanks to our shareholders for their continued support our mission to be a force for good remains unwavering with that I would like to turn the call over to Barbara Larson, Our Chief Financial Officer.

Tomer Weingarten: We believe this positions us well to drive premium growth, while continuously improving margins in the years to come.

Barbara Larson: Thank you Tamara and thanks to everyone for joining US today, Let's review the details of our Q4 and fiscal year 'twenty five financial performance and our guidance for Q1 and fiscal year 'twenty six.

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

Tomer Weingarten: I am proud of all <unk> for their dedication and relentlessness over the past year and for their enthusiasm for whats to come in.

Barbara Larson: We continued to deliver industry, leading growth and margin expansion in fiscal year 'twenty five our revenue grew 32% to 821 million, while gross margin reached a new full year high and operating margin improved by 16 percentage points year over year.

Tomer Weingarten: In closing I want to extend my thanks, and gratitude to our customers and partners for their trust in Central one congratulations to all sentinels their hard work and commitment drives our success and hope to secure tens of thousands of businesses around the world and.

And thanks to our shareholders for their continued support our mission to be a force for good remains unwavering with that I would like to turn the call over to Barbara Larson, Our Chief Financial Officer.

Barbara Larson: In addition, we crossed two important profitability milestones this year delivering a positive net income margin of 2%.

On a positive free cash flow margin of 1% for the full year.

Barbara Larson: Our profitability improvements are driven by increasing scale operational efficiencies and disciplined investment strategy.

Barbara Larson: We will continue to build on this and improve our profit and free cash flow margins in fiscal year 'twenty six.

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

Barbara Larson: Turning to our fourth quarter results, our overall performance signifies a strong competitive position and demand for <unk> best in class Cyber security solutions.

Barbara Larson: We continued to deliver industry, leading growth and margin expansion in fiscal year 'twenty five our revenue grew 32% to 821 million.

Barbara Larson: We are taking market share and mind share from incumbents and nextgen vendors alike.

Barbara Larson: Gross margin reached a new full year high and operating margin improved by 16 percentage points year over year.

Barbara Larson: Q4 revenue of $226 million grew 29% year over year and exceeded our expectations. This.

In addition, we crossed two important profitability milestones this year.

Barbara Larson: This outperformance was driven by strong new business growth and linearity in the quarter.

During our positive net income margin of 2% and a positive free cash flow margin of 1% for the full year.

Barbara Larson: Revenue from International markets grew 36% and represented 37% of our quarterly revenue.

Barbara Larson: Our profitability improvements are driven by increasing scale operational efficiencies and a disciplined investment strategy.

Barbara Larson: In Q4, we added net new IRR of $16 million and our total <unk> grew 27% to $920 million.

We will continue to build on this and improve our profit and free cash flow margins in fiscal year 'twenty six.

Barbara Larson: We delivered on our goal to Reaccelerate net new <unk> growth in the second half of the year, achieving 2% growth and improvement of 12 percentage points compared to the first half of the year.

Barbara Larson: Turning to our fourth quarter results, our overall performance signifies a strong competitive position and demand for <unk> best in class Cyber security solutions, we are taking market share and mind share from incumbents and nextgen vendors alike.

Barbara Larson: This performance improvement was driven by improved execution, a stronger competitive position and success across our platform solutions, notably cloud data and AI.

Barbara Larson: Q4 revenue of $226 million grew 29% year over year and exceeded our expectations. This.

Barbara Larson: Our Q4 competitive win rates were strong and improved compared to prior quarters.

Barbara Larson: This outperformance was driven by strong new business growth and linearity in the quarter.

Barbara Larson: Exhibiting fiscal year 'twenty five we're now protecting over 14000 direct customers keep in mind. This does not include the thousands of businesses served by our strategic partners like MFS Sps.

Barbara Larson: Revenue from international markets grew at 36% and represented 37% of our quarterly revenue.

Barbara Larson: In Q4, we added net new IRR of $60 million and our total IRR for a 27% to $920 million.

Barbara Larson: In Q4, we continue to solidify our leadership position with MSP, we have established deeper relationships and long term growth commitments with leading MSP partners.

Barbara Larson: These strategic partnerships provide visibility into our mutual growth and success.

Barbara Larson: This contributed to the strong <unk> growth in the quarter, which reaccelerate at 30% growth and reached a new record of $1 2 billion.

This performance improvement was driven by improved execution, a stronger competitive position and success across our platform solutions, notably cloud data and AI.

Barbara Larson: In addition, we're seeing success with both new and existing customers.

Our Q4 competitive win rates were strong and improved compared to prior quarters.

Barbara Larson: <unk> with <unk> of $100000 or more grew 25% year over year in Q4 to 1411.

Barbara Larson: Existing fiscal year 'twenty five we're now protecting over 14000 direct customers keep in mind. This does not include the thousands of businesses served by our strategic partners like MF Sps.

Barbara Larson: This reflects more than 100 customer additions quarter over quarter, the largest net adds for the year.

Barbara Larson: Our average deal size and IRR per customer continued to increase as well highlighting our platform momentum and ongoing move upmarket.

Barbara Larson: In Q4, we continued to solidify our leadership position with MSP, we have established deeper relationships and long term growth commitments with leading MSP partners.

Barbara Larson: We continue to maintain healthy expansion rates and for the full year, we achieved a dollar based net retention rate of 110%.

Barbara Larson: These strategic partnerships provide visibility into our mutual growth and success.

Barbara Larson: Even as enterprises navigate a challenging macro environment. They continue to embrace more of the singularity platform.

Barbara Larson: This contributed to the strong <unk> growth in the quarter, which reaccelerate it to 30% growth and reached a new record of $1 2 billion.

Barbara Larson: Beyond the topline growth and customer momentum, we delivered record profit margins in Q4.

Barbara Larson: We achieved our first quarter of positive operating margin outperforming our prior guidance by over 400 basis points.

Barbara Larson: In addition, we're seeing success with both new and existing customers.

Barbara Larson: Customers with <unk> of $100000 or more grew 25% year over year in Q4 to 1411.

Barbara Larson: This outperformance was driven by cost discipline in the quarter and our focused investment strategy.

Barbara Larson: Turning to our guidance for Q1 and fiscal year 'twenty six this year, we expect to surpass $1 billion in both <unk> and revenue.

Barbara Larson: This reflects more than 100 customer additions quarter over quarter, the largest net adds for the year.

Barbara Larson: Our average deal size and IRR per customer continued to increase as well.

Barbara Larson: We also expect to deliver our first full year of positive operating margin.

Barbara Larson: Delighting, our platform momentum and ongoing move upmarket.

Barbara Larson: To be specific we anticipate revenue of $1 billion, and 721 billion and 12, representing 23% growth.

Barbara Larson: We continue to maintain healthy expansion rates and for the full year, we achieved a dollar based net retention rate of 110%.

Barbara Larson: Even as enterprises navigate a challenging macro environment. They continue to embrace more of the singularity platform.

Barbara Larson: While we typically do not comment on an air our outlook. This quarter. We believe it may provide helpful context around our growth expectations.

Beyond the topline growth and customer momentum, we delivered record profit margins in Q4.

Barbara Larson: For fiscal year, 'twenty, we expect to deliver approximately $200 million and net new <unk> growth.

Barbara Larson: We achieved our first quarter of positive operating margin outperforming our prior guidance by over 400 basis points. This outperformance was driven by cost discipline in the quarter and our focused investment strategy.

Barbara Larson: About 2% year over year.

Barbara Larson: This positive trajectory builds on our Reacceleration in recent quarters.

Barbara Larson: <unk>, our growing market presence and platform adoption.

Barbara Larson: At the same time, we're mindful of macro economic conditions deal timing and federal spending uncertainty.

Barbara Larson: Turning to our guidance for Q1 and fiscal year 2006. This year, we expect to surpass $1 billion in both <unk> and revenue.

Barbara Larson: In addition, we're focused on delivering efficiencies and that means prioritizing our investments in data cloud and especially AI.

We also expect to deliver our first full year of positive operating margin.

Barbara Larson: To be specific we anticipate revenue of $1 billion, and 721 billion and 12, representing 23% growth.

Barbara Larson: As a result, we made the strategic decision to retire our legacy deception solution.

Barbara Larson: Our outlook includes up to $10 million of expected churn from the retirement of disruption with nearly half of that impacting Q1.

Barbara Larson: While we typically do not comment on an air our outlook. This quarter. We believe it may provide helpful context around our growth expectations.

Barbara Larson: Excluding this impact we expect our full year net new <unk> would increase by a mid to high single digit percentage year over year.

Barbara Larson: For fiscal year, 'twenty, we expect to deliver approximately $200 million and net new <unk> growth.

Barbara Larson: For Q1, we expect revenue of approximately 228 million.

Barbara Larson: About 2% year over year.

Barbara Larson: This positive trajectory builds on our Reacceleration in recent quarters.

Barbara Larson: Growth of 22% or 24% when normalizing for the leap year benefit from last Q1.

Barbara Larson: Continuing our growing market presence and platform adoption at.

Barbara Larson: Additionally, we expect Q1 net new <unk> in the low $30 million range.

Barbara Larson: At the same time, we're mindful of macroeconomic conditions deal timing and federal spending uncertainty.

Our Q1 expectations include the impact of the retirement of our legacy deception insulation. Excluding this impact we would expect our net new <unk> to be approximately flat year over year.

Barbara Larson: In addition, we're focused on delivering efficiencies and that means prioritizing our investments in data cloud and especially AI.

As a result, we made the strategic decision to retire our legacy deception solution.

Barbara Larson: Turning to our outlook for margins, we expect to maintain industry, leading gross margins as we grow our customer and platform base.

Barbara Larson: Our outlook includes up to $10 million of expected churn from the retirement of disruption with nearly half of that impacting Q1.

Barbara Larson: We expect Q1 gross margin to be about 79%.

Barbara Larson: Excluding this impact we expect our full year net new <unk> would increase by a mid to high single digit percentage year over year.

Barbara Larson: And for the full year, we expect gross margin to be between 78, 5% and 79, 5%.

Barbara Larson: For Q1, we expect revenue of approximately $228 million.

Barbara Larson: For operating margin, we expect Q1 to be about negative, 2%, implying a year over year improvement of approximately 400 basis points.

Barbara Larson: Growth of 22% or 24% when normalizing for the leap year benefit from last Q1.

Barbara Larson: For the full year, we expect operating margin to be between positive, 3% and 4% and.

Barbara Larson: Additionally, we expect Q1 net new <unk> in the low $30 million range.

Barbara Larson: An improvement of over 650 basis points at the midpoint compared to fiscal year 'twenty five.

Our Q1 expectations include the impact of the retirement of our legacy <unk> solution. Excluding this impact we would expect our net new <unk> to be approximately flat year over year.

Barbara Larson: In addition, we expect our full year free cash flow margin to be several percentage points higher than operating margin.

As we continue to improve our profitability and cash flow profile.

Barbara Larson: Turning to our outlook for margins, we expect to maintain industry, leading gross margins as we grow our customer and platform base.

Barbara Larson: As we shift towards generating more meaningful positive free cash flow, we still have over $1 1 billion in cash and cash equivalents, which provides ample flexibility as we invest in and scale the business.

Barbara Larson: We expect Q1 gross margin to be about 79%.

Barbara Larson: And for the full year, we expect gross margin to be between 78, 5% and 79, 5%.

Barbara Larson: Taking a step back our momentum technology leadership and competitive position remains strong and we're committed to delivering ongoing leverage in the business as we execute our growth strategy.

Barbara Larson: For operating margin, we expect Q1 to be about negative, 2%, implying a year over year improvement of approximately 400 basis points.

Barbara Larson: Our investment approach strikes a thoughtful balance between maximizing long term growth opportunities and maintaining a strong responsible and profitable financial profile. Our strategy. That's key to scaling Sentinel won two a multibillion dollar business at.

Barbara Larson: For the full year, we expect operating margin to be between positive, 3% and 4% and.

Barbara Larson: An improvement of over 650 basis points at the midpoint compared to fiscal year 'twenty five.

Barbara Larson: At the same time, we're instilling operational discipline by identifying ways to enhance efficiency and productivity.

Barbara Larson: In addition, we expect our full year free cash flow margin to be several percentage points higher than operating margin.

Barbara Larson: One example is the prioritization of investments towards AI powered security and data in.

Barbara Larson: As we continue to improve our profitability and cash flow profile.

Barbara Larson: As we shift towards generating more meaningful positive free cash flow, we still have over $1 $1 billion in cash and cash equivalents, which provides ample flexibility as we invest in and scale the business.

Barbara Larson: In addition, we are optimizing our facilities footprint and aligning resources to strategic growth areas.

Barbara Larson: These enhancements make us more nimble, while freeing up investments in our key growth priorities of data cloud and AI, all while delivering additional margin expansion this year.

Barbara Larson: Our goal is to deliver growth at scale, while continuously improving operating and free cash flow margins over time.

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

Speaker Change: At this time I feel like to ask a question. It is thoughtful up by one telephone keypad. If anything you would like to remove that question. It is star followed by two again to ask a question. It is star one although in London is seeing.

Barbara Larson: At the same time, we're instilling operational discipline by identifying ways to enhance efficiency and productivity.

Speaker Change: Speakerphone, please pick up the handset before asking a question all questions illuminate two one.

Barbara Larson: One example is the prioritization of investments towards AI powered security and data in.

Speaker Change: Our first question comes from Adam Tindle with accompanying Raymond James Adam Your line is now open.

Barbara Larson: In addition, we are optimizing our facilities footprint and aligning resources to strategic growth areas.

Adam Tindle: Okay. Thanks, I'm going to ask one, but it's going to be multi part I'm going to try to beat up net new era right out of the box here. So bear with me I. Appreciate the highlight that net new <unk> flipped back to positive for the back half, but if we're looking at just Q4. It was flattish on an easier comparison. So just rationale for that in Q4 and then barb.

Barbara Larson: These enhancements make us more nimble, while freeing up investments in our key growth priorities of data cloud and AI, all while delivering additional margin expansion this year.

Barbara Larson: Our goal is to deliver growth at scale, while continuously improving operating and free cash flow margins over time.

Adam Tindle: As we look to fiscal 'twenty since it was helpful to get color on total <unk> growth.

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

Adam Tindle: The question would be on that starting kind of flattish I think if I backed out the retirement of the product you mentioned and needing to grow low single digits for the year as the comparisons get tougher throughout the year, what kind of gives you the confidence to come out here with that back half tougher comparisons and with this ramp throughout the year. Thank you.

Adam Tindle: Thanks, Adam So let me, let me actually address that.

Adam Tindle: So.

Adam Tindle: In fiscal year 'twenty five.

Adam Tindle: We delivered revenue growth of over 30% that's industry, leading with full year profitability with really strong win rates pipeline growing interest from new larger enterprises that just means more awareness for second one there were.

Adam Tindle: <unk> seen very strong adoption of our platform capabilities. If you kind of think about that.

Adam Tindle: Successfully re accelerating <unk> growth into the second half of the year for FY 'twenty six we expect to grow that meaningfully if you adjusted for the disruption and assume that it would be mid <unk>.

Adam Tindle: Mid to high growth single digits.

Adam Tindle: So we feel confident in the opportunity and the trajectory I think the underlying strengths of the business.

Adam Tindle: It was somewhat masked by that end of life decision, which we believe is the right decision longer term and all in all the guide gives I think a good achievable starting point.

Adam Tindle: For us as we execute throughout the year.

Adam Tindle: And then I'll just follow up with a question on Q4 'twenty five we did have some impact from churn in this Q4 related to disruption.

Adam Tindle: Adjust that out our Q4 net new <unk> would've grown in mid single digits.

Brian: Our next question comes from Brian.

Speaker Change: Essex, What's the company Jpmorgan, Brian Your line is now open.

Speaker Change: Hi, good afternoon, and thank you for taking the question I was wondering if maybe sticking on the topic of <unk> net.

Speaker Change: How you're thinking.

Speaker Change: Thinking about contribution from Lenovo are.

Speaker Change: Are you starting to see some traction is it are they are they selling devices I think you've previously talked about maybe in the back half of the year I was just wondering about visibility into that relationship and how that might impact how youre thinking about guide for the year.

Speaker Change: We're working very closely with.

Lenovo team all of the go to market elements are now being put in place and as I've said before we expect that impact to be much more backend loaded mostly I would say even into next fiscal year is more on the bulk shipments are starting to get out the door. So everything we.

Speaker Change: No understand and want to take into the serious factored into guidance.

We believe that our normal which is a multi year relationship with Graham from baked into it is going to be much more meaningful in the out years versus <unk> medical for immediate fiscal leader.

Speaker Change: Okay, great. Thank you I'll keep it to one follow up afterwards, thank you.

Gray Powell: Our next question comes from Gray Powell with the company BTG, Greg Your line is now open.

Gray Powell: Oh, great. Thanks for thanks for taking the question.

So maybe one for Barbara.

Speaker Change: So <unk> been sitting on one a little over six months now.

Speaker Change: It's your first time owning the guide for the full year.

Speaker Change: Are there any material changes that youre, making are you looking at any different different kpis or just any any difference with regards to your guidance philosophy versus.

Speaker Change: Your predecessor.

Speaker Change: Yeah, Greg. Thanks, so much for the question in terms of the guide we really feel like this is the right starting point for the year.

Speaker Change: We're focused on setting reasonable expectations that reflects the potential that we see in the business of course is it's based on what we have line of sight to pipeline activity contributions from new products anticipated conversions and win rates.

Speaker Change:

Speaker Change: We're mindful of the macro as well its not extremely different than what we've seen recently.

Speaker Change: Continues.

Speaker Change: It's still it's still volatile it's almost like the new normal.

Speaker Change: But we do believe this is the right starting point for this year.

Speaker Change: Understood that's very helpful. Thanks.

Speaker Change: Our next question comes from Joseph Gallo with company Jefferies. Joseph Your line is now open.

Speaker Change: Hi, guys. This is any comment on for Joe Gallo Kilmer, you guys put a ton of work into your go to market engine and I'm just curious if theres any more tweaks as you begin to work through FY 'twenty six and how do you think about capacity and hiring in the context of looking to reach over $1 billion narrow or this year.

Speaker Change: Thank you for the question there is always evolution happening I mean, we are working with better productivity, we've improved productivity year over year.

Speaker Change: We are gearing towards more platform sales were adjusting our pricing structures I mean, we're allowing for even more flexibility for our customers and we're aligning with some of the pricing structures that were seeing.

Speaker Change: Out there so all in all we're in this evolution of go to market every indicator that we track.

Speaker Change: Looking better and Thats reflected through win rates that reflect true Tom.

<unk> contribution will be.

Speaker Change: <unk> working with more and more automation to us pretty much every avenue, we have all of those should be somewhat good contributors in this fiscal year, but the vast majority of it is really for contribution for the out years strategic decisions. We are taking right now to continue and sustain growth in the years to come.

Speaker Change: Operator, I want to jump in here for a second we're under the impression that folks on the webcast could not hear the first question or the response. So I just wanted to repose, it and allowed tomo and Barbara to answer. It was a question about AUR growth expectations for fiscal 2006, as well as Q4 fiscal.

Mark: 25 ton Mark do you want to address that again.

Mark: Of course.

Mark: In fiscal 'twenty five as I mentioned, we continue to deliver leading revenue growth in the industry over 30%.

Mark: Win rates remained really strong and our pipeline is growing given further we see a lot of interest from new and larger enterprises and this just means more awareness for central London than ever before.

Mark: Strong adoption of our platform solutions.

Mark: We've quadrupled the number of customers on the enterprise that are using one or more and more sort of four or more modules.

Mark: The one we successfully re accelerated and improve net new <unk> growth in the second half with full year 'twenty five.

Mark: In FY 'twenty six we expect to grow net new <unk> as.

Mark: As with <unk>.

Adjusted for the <unk> decision.

Mark: If we're taking here would actually be up mid to high single digits. So we feel very confident in the opportunity and the trajectory.

Mark: Feel like the underlying strength of the business. If you kind of think of it to think about it is you wind up soon.

Mark: Very strong and it's being masked a bit by the end of my decision, which is a longer term decision that we believe is necessary there.

Mark: There's a lot of change happening in software today, I feel like for us to focus on data and AI mandate starting to prune away. Some of the legacy capabilities I believe a lot of companies would be going down that path. So.

Mark: So for us that's the focus.

Mark: Underlying strength of the business.

Mark: Coupled with obviously strategic long term decisions.

Mark: And then following up on Q4, 'twenty five we delivered flat year over year net new <unk>.

Mark: In Q4 as planned we did have some impact from churn related to the retirement of legacy.

Mark: Legacy deception solution.

Mark: To the extent, we adjust that out our Q4 net new <unk> would've grown mid single digits in Q4 2009.

Speaker Change: Thank you operator, we can go to the next question. Please.

Mark: Yeah.

Speaker Change: Our next question comes from John <unk> with the company Guggenheim Securities. John Your line is now open.

Speaker Change: Thank you.

Mark: Yes.

Mark: This quarter forgetting even about that.

Mark: The deception product.

Mark: Some some.

Mark: Attrition because of that.

Mark: I just knew are already taken into account normal attrition, which I know is really small.

Mark: It actually grew a little bit which is I think about half of our companies actually showed growth and new IRR.

Mark: About half.

Barbara Larson: And Barbara Thanks for all that color on the guide.

Speaker Change: On which makes me think I might be able to answer, but let me ask it anyway.

Barbara Larson: You talked about.

Speaker Change: Okay.

Speaker Change: Did the assumptions on the demand environment or the macro when you said about new normal and so I'm thinking you're saying, okay. The backdrop is consistent.

Operator: My name is Jayla, 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 turn the conference over to our host, Doug Clark, Vice President of Investor Relations. Doug, you may proceed.

Speaker Change: But this implies your guidance there.

Speaker Change: That you expect sent in the one to perform better against that backdrop, a little bit not a ton and I know you want to.

Speaker Change: Beat your numbers.

Speaker Change: Kohl's or exceed them.

Doug Clark: Good afternoon, everyone, and welcome to SentinelOne's earnings call for Q4 of fiscal year 2025, which ended 31 January 2025. With us today are Tomer Weingarten, CEO, and Barbara Larson, CFO. Our press release and an earnings presentation were issued earlier today and are being posted on the investor relations section of our website. This call and accompanying slides are being broadcast live via webcast, and a 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 first fiscal quarter and full fiscal year 2026, as well as long-term financial targets.

Speaker Change: So could you expand a little bit more just a little more color as to why you think youre going to perform a little bit better. This year than you did last year and I'm thinking about new IRR.

Speaker Change: Thanks.

Speaker Change: Thanks, John I appreciate that I appreciate the question.

Speaker Change: So if you if you kind of step back a little bit and you look first half fiscal year 'twenty five we did improve our new business growth and the SEC.

Speaker Change: Second half of fiscal 'twenty five.

Speaker Change: We expect this trend to continue into FY 'twenty, six where we expect full year net new <unk> to be up 2% year over year. So at around 200 and that is including the impact of that.

And then following up on Q4, 'twenty five we delivered flat year over year net new a our or in Q4 as planned.

Doug 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. 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.

We did have some impact from churn related to the retirement of the.

Speaker Change: The $10 million about $10 million of churn related to disruption.

Legacy deception solution.

I think definitely adjust that out our Q4 net new <unk> would've ground and mid single digits in Q4 of 25.

Speaker Change: Option.

Speaker Change: Bit of a headwind.

Speaker Change: More than or about half of that will occur in Q1.

Speaker Change: So a headwind kind of front loaded and then we would expect.

Speaker Change: Thank you operator, we can go to the next question. Please.

Speaker Change: Our net new <unk> growth.

Speaker Change: Our next question comes from John <unk> with the company Guggenheim Securities. Your line is now open.

Speaker Change: Sequentially at two to one approval from Mary thereafter.

John: Thank you.

Speaker Change: Let me add a couple of points there John I mean.

Speaker Change: So this quarter forgetting even about that.

Speaker Change: One thing Thats, obviously is very different for US is just the adoption of Omnipod for modules and if you couple that with the ramp sales force. So I think we're entering this year on a much much stronger note.

Yeah.

Speaker Change: The deception product and some.

Speaker Change: Uh huh.

Doug Clark: Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. During this call, we will discuss non-GAAP financial measures, unless otherwise stated. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. 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 earnings presentation. These non-GAAP measures are not intended to be a substitute for our GAAP results.

Speaker Change: Attrition because of that if I look at just new air aren't taken into account normal attrition, which I know it was really small.

Speaker Change: AI is going to be a tremendous driver as I think everybody understands already just to give you. Some some context there we've done more than 300.

Speaker Change: It actually grew a little bit which is I think about half are companies actually showed growth in new IRR.

Speaker Change: Only about half.

Speaker Change: Sure.

Speaker Change: In Q4, I mean that is the most likely more than any other security vendor out there and we definitely see more traction for these solutions.

Speaker Change: And Barbara Thanks for all that color on the guide.

Speaker Change: Makes me I might be able to answer, but let me ask it anyway.

Speaker Change: You talked about.

Speaker Change: Obviously, we're accounting for some of the things that we are pruning away, but all in all we feel like there is quite.

Speaker Change: Okay.

Speaker Change: Did the assumptions on the demand environment or the macro when you said about new normal.

Speaker Change: Quite a bit of momentum in the business our pipelines.

Speaker Change: So I'm thinking you're saying, okay. The backdrop is consistent.

Barbara Larson: Again to maturity of the sales force. So all of those I think are the contributing factors and then I think that's what allows Barbara to put words in your mouth.

Doug Clark: 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 on strategic investments, which cannot be determined at this time and are therefore not reconciled in today's press release. With that, let me turn the call over to Tomer Weingarten, CEO of SentinelOne.

But this implies your guidance.

That you expect sent in the one to perform better against that backdrop, a little bit not not a ton and I know you want to.

Speaker Change: <unk>.

Speaker Change: Kind of an achievable bar or a good starting point for the year for us.

Beat your numbers.

Speaker Change: Thank you that all makes sense I appreciate the color.

Tomer Weingarten: Goals or exceed them.

Speaker Change: Our next question comes from Jonathan Ho with the company William Blair. Jonathan Your line is now open.

Speaker Change: Okay.

Tomer Weingarten: Good afternoon, everyone, and thank you for joining our fiscal fourth quarter earnings call. Fiscal year 25 was a transformative year for SentinelOne, ending with a strong Q4 that exceeded our expectations across all guided metrics. For the full year, we also successfully met or exceeded the guidance targets that we set at the start of last year. Notably, we re-accelerated second-half net new ARR growth back into positive territory. This performance was fueled by strong win rates, disciplined execution, and the growing adoption of our platform solutions, particularly in data, AI, and cloud. Once again, we delivered industry-leading revenue growth and margin improvement. We were one of the only software companies at scale to achieve over 30% top-line growth while driving over 15 percentage points of operating margin expansion.

Tomer Weingarten: Thanks.

Speaker Change: Hi, good afternoon.

Speaker Change: Could you maybe give us a little bit of additional color in terms of your exposure on the federal government side, and perhaps what you're seeing in terms of.

Tomer Weingarten: Thanks, Tom I appreciate that I appreciate the question.

Tomer Weingarten: So if you if you kind of step back a little bit and you look first half fiscal year 'twenty five we did improve our new business growth and the second half of fiscal 'twenty five.

Speaker Change: What your customers are saying or what your sales force is saying there. Thank you.

Speaker Change: Yeah.

Speaker Change: Yes, there is.

Speaker Change: Definitely.

Speaker Change: Unknown and uncertainty there is there is no question.

We expect this trend to continue into FY 'twenty, six where we expect full year net new <unk> to be up 2% year over year. So at around 200, and that is including the impact of the $10 million about $10 million of churn related to disruption.

Speaker Change: There is a lot of change thats happening.

Speaker Change: We've got we've actually seen our federal pipeline expand.

Speaker Change: There is definite definite source of demand for us I would also say.

Speaker Change: Type of offerings that we can cater to for federal agencies, and especially given that we're one of the only security vendor that consume AI into our fifth group hi type of an environment.

Tomer Weingarten: Disruption is a bit of a headwind.

Tomer Weingarten: More than half or about half of that will occur in Q1.

So a headwind kind of front loaded and then we would expect.

Tomer Weingarten: Additionally, we set a new customer growth record and scaled our emerging platform solutions to new highs, with non-endpoint solutions crossing 50% of our full-year bookings. We successfully transformed our business from an endpoint-focused model to a comprehensive leading AI-native cybersecurity platform. At the same time, we accelerated our time to profitability through focused investments and discipline. We achieved significant profitability milestones, including our first quarter of positive operating income in Q4, well ahead of our expectations, our first full year of positive net income and earnings per share, and our first full year of positive free cash flow. With these results, we've crossed a key inflection point, and we believe the company is well-positioned for sustained growth and profitability at scale. We expect to surpass $1 billion in both ARR and revenue this year, an important milestone in our growth journey.

Speaker Change: In many cases, we actually create cost synergies we allow.

Tomer Weingarten: Our net new <unk> rose sequentially to improve from there.

Speaker Change: We allow these agencies to actually save on their data ingestion costs, we allowed them to save on operational cost and that positions us really well even in a macro.

Tomer Weingarten: Let me add a couple of points there John I mean.

Speaker Change: One thing that obviously is very different for us. So just you talked you want to talk for more news.

Speaker Change: Arena that calls for more cost savings and prudently. So all in all I think we're still treating federal as a source of.

Speaker Change: Couple that with the ramp sales force. So I think we're entering this year on a much much stronger note.

Speaker Change: <unk>.

Speaker Change: AI is going to be a tremendous driver as I think everybody understands already.

Speaker Change: At the same time I would say there is maybe some clarity on the timing and budget and were just working at the pace of the customer but demand remains strong.

Tomer Weingarten: Just to give you some some quantity there we've done more than 308 deals.

Tomer Weingarten: In Q4, I mean that is most likely more than any other security vendor out there and we definitely see more traction for these solutions no. Obviously, we're accounting for some of the things that we are pruning away, but all in all we feel like there is.

Speaker Change: Our next question comes from Shaul Eyal with a company TD Cowen. So your line is now open.

Shaul Eyal: Thank you hi, good afternoon.

Shaul Eyal: I had a question on deception.

Quite a bit of momentum in the business.

Tomer Weingarten: Our pipelines.

Shaul Eyal: What's driving that decision.

Tomer Weingarten: Against the maturity of the sales force. So all of those I think are the contributing factors and then I think that's what allows Barbara to put words in your mouth.

Tomer Weingarten: We also expect to achieve full-year operating income profitability while continuing to invest in our platform and future opportunities. In fiscal year 26, we remain focused on execution and advancing Singularity as the preeminent AI-powered cybersecurity platform for the future. Which brings me to the state of the market. In many ways, the cybersecurity status quo was a disappointment in 2024. More breaches, more costs, and more data was stolen than ever before. Personal data, financial data, healthcare data, and the list goes on. Our entire world is now digital, and these breaches are challenging that very basic fabric. Furthermore, AI is no longer experimental, and in the hands of attackers, it's a real threat. The scale, automation, and speed of attacks are accelerating. Looking ahead, we must redefine the security landscape with a modern approach.

Shaul Eyal: And maybe.

Shaul Eyal: It's some of deception capabilities from a product perspective are being.

Tomer Weingarten: You know to really kind.

Shaul Eyal: Displaced by some of the singularity AI driven capabilities.

Tomer Weingarten: Kind of an achievable bar or a good starting point for the year for us.

Shaul Eyal: Yeah.

Speaker Change: Thank you that all makes sense I appreciate the color.

Shaul Eyal: Yes, thanks for the question.

Shaul Eyal: The biggest thing would simply is just it's a.

Shaul Eyal: Legacy code base.

Speaker Change: Our next question comes from with.

Shaul Eyal: We acquired.

Jonathan: William Blair Jonathan Your line is now open.

Shaul Eyal: With the Tivo.

Matter of fact that actually is even hardware components for us Thats, obviously, not the long term business, we want to be in.

Tomer Weingarten: Uh-huh.

Tomer Weingarten: Hi, good afternoon.

Can you maybe give us a little bit of additional color in terms of your exposure on the federal government side, and perhaps what you're seeing in terms of you know what.

Shaul Eyal: The cost of maintenance is creeping up while the ROI is.

Shaul Eyal: Not really showing up so for us it's a very simple decision.

Tomer Weingarten: What your customers are saying or what your sales force is saying there. Thank you.

Shaul Eyal: Realigning resources into the high yielding elements of our business and to the latter part of your question AI is most definitely going to be a consolidator all capabilities and I think the assumption is one of them to certain expense.

Yeah.

Yes.

Definitely a little unknown.

Tomer Weingarten: And uncertainty there is.

Tomer Weingarten: No question.

There is a lot of change that's happening.

Tomer Weingarten: With that we've actually seen our federal pipeline expand.

Shaul Eyal: You can think about identity you can think about many elements of the broader security platform Youre seeing out there is capabilities that can be delivered his agenda.

Tomer Weingarten: Our industry cannot afford to rely on the same outdated approaches over the past two decades. They simply don't work. Our AI-native autonomous security is fundamentally redefining how cybersecurity challenges are addressed, setting us apart in the industry. Enterprise-wide security, unified data, and AI are the core pillars of every solution within the Singularity Platform. Today, I'm excited to announce that we're the first company to embed foundational generative AI capabilities into every platform solution by default: endpoint, cloud, data solutions, and more. From the beginning, we introduced an AI-based approach to endpoint security. A decade later, we remain at the forefront of innovation, pioneering the use of generative and Agentic AI to transform enterprise-wide security applications. We're harnessing AI to empower humans and automate defenses at scale. This is how we elevate cybersecurity for enterprises and help them become exponentially better.

Tomer Weingarten: There is definite.

Tomer Weingarten: A different source of demand for us I would also say.

Tomer Weingarten: Type of offering that we can cater to for federal agencies, and especially given that we're one of the only security vendor that can sell AI into FID group, Hi type of an environment.

Shaul Eyal: Instead of a fully fledged product and I think thats what were seeing is the progression.

Shaul Eyal: Use of our peripheral AI capability set dots why we're already including it.

In many cases, we actually create cost synergies we allow.

Shaul Eyal: In most of our singularity offerings.

Shaul Eyal: We believe philosophically got AI journey capabilities for software products are going to become table Stakes. If you are not going to have them, you're going to be much less relevant and we're using that to seed growth.

Tomer Weingarten: We allow these agencies to actually save on their data ingestion costs, we allow them to save on operational cost and that positions us really well even in the macro in that arena that calls for more cost savings and prudently. So all in all I think we're still treating federal.

Shaul Eyal: To kind of get customers accustomed to it and to drive more usage, why we build more and more tiers and more and more agency capabilities.

Tomer Weingarten: The source of <unk>.

So that's what we see for the coming fiscal year, and that's how we kind of couch all of it with us.

Tomer Weingarten: Strength in <unk>.

Tomer Weingarten: Same time I would say there is maybe some clarity on deal timing and budget and were just working at the piece of the customer but demand remains strong.

Speaker Change: Doug Doug bass.

Speaker Change: Juruti of interception Theres, a couple of other small components in there, but that's just I think the.

Speaker Change: Broader says how we're thinking about the shift from legacy code basis.

Tomer Weingarten: As a company, we are nimble and adaptive, a key competitive advantage compared to other incumbents. We can leap, not just take steps forward, and this year, we're leaping forward to where the future is going to be. We have an incredible opportunity ahead to collaborate with our customers, partners, and enterprises worldwide to usher in the new era of cybersecurity with Singularity. Our success stems from our focused innovation strategy and technology leadership. Let me cover that in more detail. Three things set our Singularity Platform apart. One, unified defenses. The only open, unified AI security platform integrating data, endpoint, cloud, identity, and third-party solutions for broad and complete coverage and protection. Two, outpaced threats. Autonomous security and industry-leading signal-to-noise ratio delivers real-time protection and actionable insights to stay ahead of threats. And three, enhanced security analysts.

Shaul Eyal: Our next question comes from Shaul Eyal with a company TD Cowen Your line is now open.

Two newer offerings AI based which is something again I think youll start seeing a lot of other companies go down the peso.

Shaul Eyal: Thank you hi, good afternoon.

Tomer Weingarten: I had a question on deception.

Speaker Change: Our next question comes from shrink Qatari with accompanying Baird.

Speaker Change: What's driving that decision and maybe.

Speaker Change: Your line is now open.

Tomer Weingarten: It's some of deception capabilities from a product perspective are being displaced by some of the singularity AI driven capabilities.

Speaker Change: Great Hi, this is actually later on for <unk>. Thanks for taking the question. So obviously, our emerging product portfolio is becoming an increasingly critical growth driver and you highlighted data and AI is your fastest growing solution, but maybe are there any specific solutions that stand out in terms of adoption velocity cross sell success have there been any surprise.

Yeah.

Speaker Change: Yes, thanks for the question Sean.

Tomer Weingarten: The biggest thing with discipline.

Speaker Change: Legacy code base.

Tomer Weingarten: We acquired.

Tomer Weingarten: With the Tivo.

Speaker Change: Does either outperformers that are scaling faster than expected or areas, where traction has been slower than anticipated would love to just get a sense of what's working best and where there's still white space to accelerate adoption.

Tomer Weingarten: As a matter of fact, they actually have even hardware components for us. That's obviously not the long term business, we wouldn't be in the course of maintenance is creeping up while the ROI is not really showing up so for us. It's a very simple decision or realigning resources into the high yielding elements of our business.

Speaker Change: But definitely mentioned AI is one of these peripheral AI capability 300 deals in the quarter plus.

Tomer Weingarten: Our generative and agentic AI set the standard in defending against modern threats. Designed to evolve and constantly adapt, Singularity helps move faster, more efficiently, and save costs. Take a look at the latest MITRE ATT&CK evaluations, the industry's gold standard for comparing and contrasting performance across security vendors. For the fifth consecutive year, Singularity achieved 100% detection. It's also important to take a more detailed look at MITRE results beyond the detection score. This is where the true differentiation emerges. The latest MITRE evaluation introduced new performance criteria for both detection delays and alerts. Singularity delivered zero detection delays and 88% fewer alerts compared to competing solutions. The relative outperformance of Singularity is impressive. Competing vendors required 4 times, 8 times, or in one case, 9,000 times more alerts. With SentinelOne's industry-leading signal-to-noise ratio, enterprises don't have to compromise between protection, reliability, and noise.

Tomer Weingarten: And to the latter part of your question AI is most definitely going to be a consolidator of capabilities and I think the assumption is one of them to certain expense.

Speaker Change: Is remarkable.

Speaker Change: With that.

Speaker Change: I assume for US has also been a source of strength. So the coupling of these two also just makes us much more strategic for these types of customers. So I would definitely call out AI assume in perfectly.

So you can think about identity you can think about many elements of the broader security platform Youre seeing out there is capabilities that can be delivered his agenda.

Speaker Change: The two main drivers of growth from cloud security for us when we started selling the complete unified cloud security suite for us we've done.

Tomer Weingarten: Instead of a fully fledged product and I think thats what were seeing is the progression.

Speaker Change: A record deal with cloud security in Q4, so all of those are really progressing nicely and.

Tomer Weingarten: Lease of our peripheral AI capability dots, why we're ready including it.

In most of our singularity offerings, we believe philosophically the AI journey on capabilities for sulfur products are going to become table Stakes. If you are going to have them, you're going to be much less relevant and we're using that to seed growth.

And we will continue I think continuing to drive those.

Speaker Change: Most strategic touch points with customers.

Okay. Thank you.

Speaker Change: Yeah.

Speaker Change: Our next question comes from Rudy Kissinger with a company D. A Davidson your line is now open.

Tomer Weingarten: Due to kind of get customers accustomed to it and to drive more usage, why we build more and more tiers and more and more agency capabilities.

Rudy Kissinger: Hey, guys. Thanks for taking my questions.

Tomer Weingarten: So that's what we see for the coming fiscal year.

Rudy Kissinger: I'm curious if you look at the second half of this year, our net new <unk> are obviously improved quite a bit from the first half, but if you were to maybe strip out some of the benefit from the displacement from crowd strike that were specifically due to the outage that would've otherwise likely not have occurred.

Tomer Weingarten: That's how we kind of couch all of it with debt.

Tomer Weingarten: The database.

Tomer Weingarten: Detections are real-time with the Singularity Platform, eliminating gaps and ensuring enterprises stay ahead of evolving threats. Our emphasis on quality over quantity minimizes alert fatigue and enables security teams to remain focused and effective against adversaries. Put simply, our AI-driven security approach simplifies and streamlines operations. We're focused on delivering the best solutions that address the most critical enterprise needs. Our platform solutions fall into 7 key categories, namely: AI and automation, data, endpoint, cloud, and identity security, Exposure Management, and threat services. Each of these 7 solution categories encompasses multiple individual product offerings, collectively addressing over 30 distinct use cases. As an example, our cloud security solutions represent one of the broadest portfolios in the industry, covering Cloud Workload Protection, CSPM, CIEM, AI-SPM, cloud data security, and more. This extensive coverage highlights the depth and versatility of the Singularity Platform, delivering AI-native cybersecurity across diverse environments.

Tomer Weingarten: Majority of it is the assumption there is a couple of other small components in there, but that's just I think in a broader sense, how we're thinking about the shift from legacy code bases and onto newer offerings AI based which is something again I think youll start seeing a lot of other companies go down tobacco.

Rudy Kissinger: What would that second half net new AOR growth have looked like.

Rudy Kissinger: I'm not sure we can strip that out and I'm not sure.

Rudy Kissinger: You can think about it is such a such a distinct way to us and I mentioned it in the opening question.

Our next question comes from Shirley <unk> with a company Baird.

Rudy Kissinger: What is changing the most as consideration and even customers that maybe he chose to stay with the incumbent.

Speaker Change: Your line is now open.

Rudy Kissinger: They are still entertaining and considering what theyre going to do next so a lot of folks are doing anything in an unplanned fashion, but once they go through that cycle and it could be one year two year out sometimes.

Speaker Change: Great Hi, this is actually right around for Sonic. Thanks for taking the question. So obviously, our emerging product portfolio is becoming an increasingly critical growth driver and you highlighted data and AI is your fastest growing solution, but maybe are there any specific solutions that stand out in terms of adoption velocity cross sell success have there been any.

Rudy Kissinger: Resolution is very different so as I mentioned to us the way we look at it as something structurally had shifted I think that creates more consideration for central one.

Tomer Weingarten: Mrs. Either outperformers that are scaling faster than expected or areas, where traction has been slower than anticipated would love to just get a sense of what's working best and where there's still white space to accelerate adoption.

Rudy Kissinger: And all in all I think that what we've seen is somewhat incremental contribution I think it's much more smoothen out than one would imagine I think maybe folks were expecting some upticks.

Tomer Weingarten: But definitely mentioned AI is one of these are appropriately.

Rudy Kissinger: Got an uptick type contribution smoothened gradual and we believe it's also here to stay which is the most important part.

Tomer Weingarten: Capability 300 deals in the quarter, plus I mean that is remarkable.

Tomer Weingarten: Importantly, all of our platform offerings are powered by the unified Singularity Data Lake and integrated with AI and hyper-automation capabilities. We've experienced robust adoption and expansion of our platform solutions over the past two years. As of this quarter, we've tripled the number of customers with three or more solution categories and quadrupled the number of customers with four or more solutions. I'm also excited to share that about 40% of our enterprise customers have adopted three or more platform solutions, and about 20% have adopted four or more solutions. This incredible progress and customer receptivity illustrates the diversity and growth potential of our business. In fiscal year 2025, over 50% of our bookings came from non-endpoint solutions. This milestone shows our ability and momentum to disrupt large markets with leading technology.

Tomer Weingarten: AI suite for US has also been a source of strength. So the coupling of these two also just makes us much more strategic for these types of customers. So I would definitely call out AI assume appropriately.

Speaker Change: Our next.

Speaker Change: <unk> comes from Tal <unk> with the company and Bank of America. That's all your line is now open.

Speaker Change: Hi, guys.

Tomer Weingarten: The two main drivers of growth in cloud security for us when we started selling the complete unified cloud security suite for us we've done.

Speaker Change: I wanted to.

Speaker Change: Just to understand the guidance. So your guidance is about seven 8 million below the consensus 20 million for the year guidance of next quarter.

Tomer Weingarten: A record deal with cloud security in Q4, so all of those are really progressing nicely.

Speaker Change: Hello.

Speaker Change: And part of it is because of deception part of it I'm trying to understand so can you quantify the deception first of all a deception impact on the guidance on the revenues not on the IRR.

We will continue.

<unk> drive dose as the most strategic touch points with customers.

Tomer Weingarten: Okay. Thank you.

Speaker Change: And then second.

Tomer Weingarten: Okay.

Speaker Change: What are the good.

Speaker Change: Our next question comes from Rudy passenger with a company D. A Davidson your line is now open.

Speaker Change: Good things and the bad things that drove you to kind of guide slightly below the street, because youre messages very strongly and I can see the numbers.

Tomer Weingarten: We've just begun to scratch the surface of an immense $100 billion market opportunity. In Q4, we achieved record bookings contribution from our data cloud and AI security solutions, once again, showing the accelerating adoption of our broader platform. Data and AI were our fastest-growing solutions, fueled by adoption of our Singularity AI-SIEM. Our AI-SIEM is redefining security data management with enhanced visibility, real-time detection on streaming data, accelerated investigations, and autonomous responses. Many of our largest and most strategic wins in the quarter included AI-SIEM alongside broader platform solutions. Let's look at a few examples. A customer with an eight-figure total deal value in the APAC region expanded endpoint and cloud coverage, added CNAPP, and fully replaced a legacy SIEM with AI-SIEM. A true platform win. Next, a leading financial institution switched from Splunk to AI-SIEM, reducing costs and improving performance.

Speaker Change: Hey, guys. Thanks for taking my questions I'm curious if you look at the second half this year, our net and there are obviously improved quite a bit from the first half, but if you were to maybe strip out some of the benefit from the displacement from crowd strike that was specifically due to the outage that would've otherwise likely not have occurred what would that second half net.

Speaker Change: Historically, but the numbers are slightly weaker.

Speaker Change: <unk>.

Speaker Change: So from a disruption perspective, I'll first cover that for net new <unk>.

Speaker Change: So for FY 'twenty six the impact is about $10 million of churn for the year and Q1 is about half of that.

Speaker Change: <unk> growth has looked like.

Speaker Change: I'm not sure we can strip that out and I'm not sure that you know.

Revenue perspective for the full year disruption has about a one point headwind on FY 'twenty six revenue.

Tomer Weingarten: You can think about it being such a such a distinct way to us and I mentioned it in the opening question.

Speaker Change: Got it.

What is changing the most as consideration and even customers that maybe you chose to stay with the incumbent.

Speaker Change: The rest of it the rest of the guidance like the slight weakness versus the street.

Speaker Change: Is there anything you want to highlight.

Tomer Weingarten: They are still entertaining and considering what they're going to do next so a lot of folks are doing anything in an unplanned session, but once they go through that cycle and it could be one year two year out sometimes the consideration is very different so as I mentioned to us the way we look at it as something structurally had shifted I think that creates.

Speaker Change: Why you're guiding below the street.

Speaker Change: The growth rate is decelerating from last year, so where what's the source of this deceleration.

Speaker Change: I think what we're trying to factor at the end of the day is just the unknowns.

Tomer Weingarten: The multimillion-dollar deal increased the customer size by 5x. Finally, in another multimillion-dollar expansion, one of the largest retailers in its category selected AI SIEM to replace an incumbent vendor, which resulted in savings of more than $1 million per year for this customer. By combining AI SIEM with adjacent Singularity solutions, this enterprise can now detect and respond to incidents up to 12 hours faster than before. Customers are starting to migrate away from legacy SIEM products and modernize their infrastructures. We're partnering with them at their pace. The momentum is clear. As we engage in more strategic large enterprise conversations, we're building trust and long-term relationships. We're listening to customers' objectives and helping them solve their security and data challenges. In Q4, we welcomed one of the largest airlines in the world, a Fortune 100 company, that chose SentinelOne to replace their incumbent endpoint vendor.

Speaker Change: And we truly believe this is a this is a good starting point for us.

Tomer Weingarten: For consideration for central one.

Speaker Change: There is a lot of factors in play there is a lot of shifts happening in software.

Speaker Change: All in all I think that what we've seen is somewhat incremental contribution I think it's much more smoothing out than one would imagine I think maybe folks were expecting some upticks, it's not an uptick type contribution smoothened gradual and we believe it's also here to stay which is the most important.

Speaker Change: We believe we're making the right responsible decisions here. So all in all we're just factoring in everything that we believe in no.

Obviously, our goal is always to overachieve that.

That's gonna be module barbosa to the guidance I try to overachieve it.

Tomer Weingarten: Mark.

Speaker Change: But all in all we believe again capture.

Captures everything we know today.

Tal Liana: Our next question comes from Tal Liana <unk> with the company and Bank of America. That's all your line is now open.

Speaker Change: Our next question comes from Keith with the company Keybanc, Eric Your line is now open.

Tal Liana: Hi, guys.

Speaker Change: Hey, Thanks for taking the question, maybe just one housekeeping one just wanted to clarify a deception.

Tal Liana: I wanted to.

Just to understand the guidance. So your guidance is about seven 8 million below the consensus and $20 million for the year guidance for next quarter is.

Speaker Change: The decision to end of life that was factored in the guidance as of last quarter, and then Tom or the question I wanted to ask because on pricing you called out some adjustments to pricing.

Tomer Weingarten: Hello.

Tomer Weingarten: And part of it is because of deception part of it is I'm trying to understand so can you quantify the deception first of all a deception impact on the guidance on the revenues not on the IRR.

Tomer Weingarten: After six months of engagement and support by the SentinelOne team, this enterprise adopted a Singularity Platform across their network to improve security and resilience. Q4 was one of our strongest quarters of competitive displacements. Still, large-scale security decisions, evaluations, and deal engagements take time and careful consideration. The market interest and customer engagements are strong, opening new opportunities for SentinelOne, all contributing to our expanding pipeline. Turning to our partners, we're also seeing increased interest from managed security, incident response, and insurance providers for our broader platform solutions. In Q4 alone, more than a dozen large partners started adopting AI SIEM, Purple AI, CNAPP, and more. In particular, MSPs remain a strong driver of growth and opportunity. They are doubling down with SentinelOne, embracing more of the platform and establishing longer-term contracts. This benefits us and our partners with more visibility and predictability into future growth.

Speaker Change: Curious if you could elaborate a little bit more about what that means and if it's.

Speaker Change: What a credit model that we're seeing a lot of vendors due to enable more adoption of more modules across the platform.

Tomer Weingarten: And then second.

Speaker Change: What are the good things and the bad things that drove you to kind of guide slightly below the street because your message is very strong and I can see the numbers.

Speaker Change: So I'll cover the first one we did we did factor that into the guidance there was some churn in Q4.

Speaker Change: And as for pricing I mean, the first thing I'll open and say the pricing has been very stable for us. So.

Tomer Weingarten: The historical but the numbers are slightly weaker.

Tomer Weingarten: So from a disruption perspective, I'll first cover that for net new <unk> for FY 'twenty six.

Speaker Change: It is not about discounting and sort about needing to tweak our pricing model, but obviously customers are looking for more flexible ways to procure and I think thats, where we we don't see a lot of downside and going down the path of allowing some of these more flexible terms given that the expansion.

Tomer Weingarten: Package is about $10 million of churn for the year and Q1 is about half of that.

Tomer Weingarten: On a revenue perspective for the full year disruption has about a one point headwind on FY 'twenty six revenue.

Speaker Change: The expansion you've seen our capability is.

Speaker Change: Significant I mean, our platform today is seven capabilities worried about 30 something modules.

Tomer Weingarten: Got it.

Tomer Weingarten: So the rest of it the rest of the guidance like the slight weakness versus the street.

Speaker Change: That's a lot and customers like to try out a lot of different capabilities that we have so moving into our pricing model that allows them access.

Tomer Weingarten: Is there anything you want to highlight.

Tomer Weingarten: Our long-standing partnerships with managed service providers are built on collaboration and innovation. Multitenancy, automated response tools, and rollback capabilities enhance their own service offerings. Now, with AI SIEM, Purple AI, and CNAPP, we're taking this to the next level, helping them consolidate security coverage into a single console powered by our leading AI innovations and highly efficient data ingestion and analytics. Let's also discuss the latest innovations across our solutions, starting with Purple AI. We believe every customer should be able to leverage generative AI's foundational abilities for security applications. After a year of customers selecting and using Purple AI, it's clear how much it can scale and automate time-consuming human tasks. We're now the first security company to include foundational GenAI security capabilities, like natural language queries and auto-generated summaries, across our platform by default.

Tomer Weingarten: Why you're guiding below the street.

Speaker Change: Access to the entire platform is something that we believe is going to be beneficial and that's the direction that we're heading towards.

Tomer Weingarten: Growth rate is decelerating from last year, so where what's the source of this deceleration.

Speaker Change: Our next question comes from Trevor Walsh with the company citizens Jeffrey Your line is now open.

Tomer Weingarten: I think what we're trying to factor at the end of the day is just the unknowns.

Tomer Weingarten: And we truly believe this is a this is a good starting point for us.

Great. Thanks, Thanks for taking my questions.

Speaker Change: Tomer and team I appreciate the.

Tomer Weingarten: There is a lot of factors in play there is a lot of shifts happening in software.

Speaker Change: New kind of disclosures around.

Speaker Change: Our modular solution area adoptions that you overlaid across the southern it's.

Tomer Weingarten: We believe we're making the right responsible decisions here. So all in all we're just factoring in everything that we believe or no.

Speaker Change: Great to see just curious if that's just more a reporting for us for US here on this call or if you're kind of aligned more solution selling kind of orientation for the sales team and that's kind of what what Playbooks you may be kind of running around grouping those together and then kind of on a related lines.

Tomer Weingarten: We see our goal is always to overachieve.

Tomer Weingarten: And that's gonna be mitral barbassa to the guidance I try to overachieve it.

Tomer Weingarten: But all in all we believe again.

Tomer Weingarten: Or is everything we know today.

Speaker Change: One of your peers.

Speaker Change: Our flash competitors kind of has talked a lot about within cloud security and kind of things moving more towards detection response.

Speaker Change: Our next question comes from Keith with the company Keybanc, Eric Your line is now open.

Tomer Weingarten: Yes.

Speaker Change: In the soft taking over more of I guess like that whole piece of the pie.

Hey, Thanks for taking the question maybe just one housekeeping one just wanted to clarify a deception and then the decision to end of life that was factored in the guidance as of last quarter, and then Tom or the question I wanted to ask is on pricing you called out some adjustments to pricing. So I'm. Just curious if you could elaborate a little bit bowmore about what that means and if it.

Tomer Weingarten: This is just the first step in redefining today's categories of EDR, cloud security, and SIEM to be AI-powered, bringing advanced agentic capabilities to not just hundreds of enterprises, but thousands. The inclusion of Purple AI foundations across the Singularity Platform sets the baseline for AI usage, driving immediate engagement and fueling adoption of more platform solutions. More advanced agentic AI workflows or Purple are available to further enhance speed and performance. Additionally, we're extending the power of Purple AI across a wider range of security data. We've added support for third-party solutions, including Zscaler, Okta, Palo Alto Networks, Fortinet, Microsoft, and others. By breaking data silos, customers can unleash the full power of Purple AI across their entire security infrastructure. We're committed to an open platform that can seamlessly coexist and orchestrate a broader ecosystem of security solutions.

And that benefiting them in others like you have maybe in more run time agent based approach so kind of along the lines of just selling multiple pieces of the platform do you agree with kind of where the things are going there in security area called security, specifically and how that kind of all kind of aligns to kind of again, what youre doing from a larger selling multiple solutions across the platform.

I'm sort of credit model that we're seeing a lot of vendors to enable more adoption of more modules across the platform.

Speaker Change: I think the biggest thing is the.

Speaker Change: We want to provide flexibility I think unlike some other vendors, we don't force customers to take kind of an all or nothing approach. So we have all the capabilities. We can as an example sell you a fully fledged cloud security suite that contains all the senior capabilities and best of breed runtime worked with protection at the same time.

Tomer Weingarten: So I'll cover the first one we did a we did factor that into the guidance. There was some churn in Q4.

And as for pricing I mean, the first thing I'll open and say the pricing has been very stable for us. So.

Tomer Weingarten: It's not about discounting and sort about needing to tweak our pricing model, but obviously you know customers are looking for more flexible ways to procure and I think that's where we you know we don't see a lot of downside and going down the path of allowing some of these more flexible terms given that the expansion.

Speaker Change: We don't mind going into environment, an environment and delivering basically we'd work with protection and working in tandem with another has seen a provider.

Speaker Change: To us, it's really about flexibility and we're seeing customers adopt more and more of our capabilities once they've experimented with at least one capability.

Tomer Weingarten: Purple is already the first and only scaled agentic AI for cybersecurity. Purple plus hyper-automation are the bedrock for agentic AI in cybersecurity. We believe this will become table stakes for autonomous security in the coming years. This is the future, and we're extending our lead. In cloud security, we continue to gain traction with new and existing capabilities. More enterprises are securing their cloud environment with our leading cloud workload security and CNAPP capabilities. In Q4, we secured our largest CNAPP deal since the acquisition of PingSafe. In a multimillion-dollar opportunity, a leading software company adopted several platform solutions, including workload security and CNAPP, after a rigorous competitive evaluation. Singularity was selected for best-in-class performance, unified capabilities, and lower cost of ownership compared to point solutions. The success of our cloud security platform is further validated by customer testimonials and third-party accolades.

The expression you've seen our capability.

Significant I mean, our platform today is seven capabilities, what about 30 something modules.

Typically when you look at what we do it's almost always best to breed. When you are talking about Gartner customer choice for endpoint protection and got the Gartner customer choice for cloud security and Gartner customer choice for MTR and product of the year for AI. So obviously, what we do is at the forefront in each and every one of these.

So northern customers like to try out a lot of different capabilities that we have so moving into our pricing model that allows them.

Tomer Weingarten: Access to the entire platform is something that we believe is going to be beneficial and that's the direction that we're heading towards.

Speaker Change: <unk> field and we have fully inclusive capabilities that are akin to every other platform.

Trevor Walsh: Our next question comes from Trevor Walsh with the company citizens Jeffrey Your line is now open.

Speaker Change: We are a leading cross platform I should say in the market today, but the emphasis is still what customers need cell to the need and so to what they want to address today versus trying to do with futures.

Trevor Walsh: Great. Thanks, Thanks for taking the questions Tom.

Tomer Weingarten: Color and I appreciate the.

Tomer Weingarten: The new kind of disclosures around.

Our modular solution area adoption, but overlaid across the seven great.

Speaker Change: Have we seen the expansion coming as evidenced in the numbers and that's why we're also moving towards open doors more flexible pricing platform structures that can allow customers to Dan over time consume more from our capabilities.

Speaker Change: Great to see just curious if thats just more of a reporting for us for US here on this call or if you kind of aligned more solution selling kind of orientation for the sales team and that's kind of what what Playbooks, you, maybe kind of running around keeping those together and then kind of on a related lines.

Tomer Weingarten: During the quarter, SentinelOne was named the 2024 Gartner Peer Insights Customer Choice for CNAPP. We received the highest number of customer responses in the voice of the customer, with 98% of customers saying they would recommend us to their peers. We were also awarded the Best Overall Cloud and Application Security Offering in CRN's 2024 Product of the Year. As we turn to a new fiscal year, let's look at the broader market dynamics and our strategic focus for the path forward. Our technology, scale, and market presence are better than ever. We delivered consistent improvement throughout the year in customer growth, retention, and platform adoption, and we're seeing increased partner and customer interest in SentinelOne. Broadly, AI is impacting how companies make decisions and implement technology. It's upending what we know about software and software development.

Speaker Change: Our next question our.

Our last question comes from Andrew Nowinski with the company Wells Fargo.

Tomer Weingarten: Are your peers.

Andrew Your line is now open.

Flash competitors kind of has talked a lot about within cloud security and kind of things moving more towards detection response, and the soft taking over more of a I guess, Mike that whole kind of piece of the pie.

Andrew Nowinski: Thank you for squeezing me in so just a two quick housekeeping questions first did the deception products have an impact on the decline in your NR when I went down to a one time this quarter and then second you gave the cloud and data analytics.

Speaker Change: And that benefiting them in others like you have maybe any more run time agent based approach so kind of along the lines of just selling multiple pieces of the platform do you agree with kind of where the things are going there in security and cloud security, specifically and how that kind of all kind of aligns to kind of again, what youre doing from a larger selling multiple solutions across the platform.

Andrew Nowinski: <unk> of $1 70 back in Q2, and given that it's a high priority for you.

Andrew Nowinski: Your investments I'm, just wondering if you could.

Andrew Nowinski: Break those two out again in Q4 here or perhaps tell us so much.

Andrew Nowinski: You expect them to contribute $200 million that you are for FY 'twenty six thank you.

I think the biggest thing as we.

Tomer Weingarten: We want to provide flexibility I think unlike some other vendors, we don't force customers to take kind of an all or nothing approach.

So we're not we're not going to be disclosing per product.

Andrew Nowinski: At this point, we will give an update potentially later on in the year.

So we have all the capabilities weekend as an example sell you a fully fledged cloud security suite that contains all the snow capabilities and best of breed runtime workload protection at the same time, we don't mind going into environment, an environment and delivering best of breed worker protection and working in tandem with another has seen a pro.

Tomer Weingarten: The world of technology and software is rapidly evolving, and so are we as a company to lead in the future of AI-powered cybersecurity... This involves focusing our resources and aligning teams toward key growth areas. We're sharpening our innovation focus toward AI-native data and security solutions. We must also remain mindful of the macro environment. For many organizations, economic and political uncertainty continues to impact budgets, timing, and business decisions. As we enter fiscal year 26, our product sales and marketing teams are fully aligned to expand on the reach and scale of our platform through new customer growth and expansions. We're focused on strong execution and deeper engagement across our partner ecosystem. We believe this positions us well to drive premium growth while continuously improving margins in the years to come.

On the <unk> front.

Andrew Nowinski: There was no.

Andrew Nowinski: I would say material impact on Q4 and are are we do expect that that's going to be a headwind to a number of our the decision in Brazil.

Andrew Nowinski: Specifically in Q1, and I think once we cleared that headwind.

Andrew Nowinski: I think you will see in <unk> or maybe even more in a more healthy place. So I think kind of is the way that we're looking at it today.

Tomer Weingarten: Rider.

Tomer Weingarten: To us, it's really about flexibility and we're seeing customers adopt more and more of our capabilities. Once they have experimented with at least one capability tipping.

Andrew Nowinski: I would now like to pass the conference back over to.

Tomer Weingarten: Typically you know when you look at what we do it's almost always best to breed when Youre talking about Gartner customer choice for endpoint protection and got the Gartner customer choice for cloud security and Gartner customer choice for MTR and product of the year for AI. So we see what we do is at the forefront in each and every one of these.

Speaker Change: Homer Wang Gardner for closing remarks, Tony you May proceed.

Speaker Change: Thank you we delivered a strong end to fiscal year 'twenty five and see significant opportunity ahead in fiscal 2006, we continue to lead the industry with best in class technology, I'm, especially pleased with our AI innovations, which we believe will transform cyber security into coming years, where the fourth we are at the forefront.

Tomer Weingarten: Field, and we have a fully inclusive capabilities that are akin to every other platform.

Tomer Weingarten: We've achieved a lot in the past year, from delivering industry-leading growth and margin improvements, to bringing cutting-edge innovations to the market, and most importantly, keeping our customers secure. I'm proud of all Sentinels for their dedication and relentlessness over the past year and for their enthusiasm for what's to come. In closing, I want to extend my thanks and gratitude to our customers and partners for their trust in SentinelOne. Congratulations to all Sentinels. Your hard work and commitment drives our success and helps secure tens of thousands of businesses around the world. Thanks to our shareholders for their continued support. Our mission to be a force for good remains unwavering. With that, I would like to turn the call over to Barbara Larson, our Chief Financial Officer.

Speaker Change: AI Revolution driving the next wave of security innovation, our product and go to market strategy are fully aligned to deliver premier AI cyber security and this is driving broader platform adoption, among new and existing customers, we're delivering strong revenue growth and margin expansion and achieved new profitability milestones with more to come.

Tomer Weingarten: Other leading cross platform I should say in the market to date, but the emphasis is sell what customers means sell to the need and so to what they want to address today versus trying to do with futures, we're definitely seeing the expansion coming as evidenced in the numbers and that's why we're also moving towards the doors more flu.

Thank you again to our customers partners shareholders and sentinels around the world.

Tomer Weingarten: <unk> pricing platform structures that can allow customers, who then over time consume more from our capabilities.

Speaker Change: That will conclude today's conference call. Thank you for your participation and then Joe Louis C. K.

Tomer Weingarten: Okay.

Speaker Change: Our next question.

Our last question comes from Andrew Nowinski with company Wells Fargo.

Sir Your line is now open.

Thank you for squeezing me in so just maybe two quick housekeeping questions first did the deception products have an impact on the decline in Europe and are are when it went down to a one time this quarter and then second you gave the cloud and data analytics are or a $1 70 back in Q2 and given that it's a high priority.

Barbara Larson: Thank you, Tomer, and thanks to everyone for joining us today. Let's review the details of our Q4 and fiscal year 2025 financial performance and our guidance for Q1 and fiscal year 2026. As a reminder, all comparisons are year-over-year, and financial measures discussed here are non-GAAP, unless otherwise noted. We continued to deliver industry-leading growth and margin expansion in fiscal year 2025. Our revenue grew 32% to $821 million, while gross margin reached a new full-year high, and operating margin improved by 16 percentage points year-over-year. In addition, we crossed two important profitability milestones this year, delivering a positive net income margin of 2% and a positive free cash flow margin of 1% for the full year. Our profitability improvements are driven by increasing scale, operational efficiencies, and a disciplined investment strategy.

You know for your investments I'm, just wondering if you could.

Barbara Larson: Break those two out again in Q4 here or perhaps tell us how much.

Barbara Larson: You expect them to contribute $200 million in that you know are for FY 'twenty six thank you.

Barbara Larson: So we're not we're not going to be disclosing per product.

Barbara Larson: At this point, we will give an update on potentially later on in the year.

Barbara Larson: On the <unk> front.

Barbara Larson: There was no.

Barbara Larson: I would say material impact on Q4 <unk>.

Barbara Larson: You expect that that's going to be a headwind to a number of our the decision end of sale.

Barbara Larson: Specifically in Q1, and I think once we cleared that headwind.

Barbara Larson: I think youll see it in or maybe in a more in a more healthy place. So I think kind of the way that we're looking at it to date.

Barbara Larson: Okay.

Barbara Larson: We will continue to build on this and improve our profit and free cash flow margins in fiscal year 2026. Turning to our fourth quarter results, our overall performance signifies a strong competitive position and demand for SentinelOne's best-in-class cybersecurity solutions. We are taking market share and mind share from incumbents and next-gen vendors alike. Q4 revenue of $226 million grew 29% year-over-year and exceeded our expectations. This outperformance was driven by strong new business growth and linearity in the quarter. Revenue from international markets grew 36% and represented 37% of our quarterly revenue. In Q4, we added net new ARR of $60 million, and our total ARR grew 27% to $920 million.

Barbara Larson: I would now like to pass the conference back over to.

Barbara Larson: Homer wine Gardner for closing remarks, Tony you May proceed.

Barbara Larson: Thank you we delivered a stronger into fiscal year 'twenty five and see significant opportunity ahead in fiscal 'twenty six we continue to lead the industry with best in class technology, I'm, especially pleased with our AI innovations, which we believe will transform cyber security in the coming years were the first to do it we're at the forefront.

Barbara Larson: Open Air evolution driving the next wave of security innovation, our product and go to market strategy are fully aligned to deliver premier AI cyber security.

Barbara Larson: And this is driving broader platform adoption, among new and existing customers, we're delivering strong revenue growth and margin expansion and achieved new profitability milestones with more to come. Thank you again to our customers partners shareholders and sentinels around the world.

Barbara Larson: We delivered on our goal to re-accelerate net new ARR growth in the second half of the year, achieving 2% growth, an improvement of 12 percentage points compared to the first half of the year. This performance improvement was driven by improved execution, a stronger competitive position, and success across our platform solutions, notably cloud, data, and AI. Our Q4 competitive win rates were strong and improved compared to prior quarters. Exiting fiscal year 2025, we're now protecting over 14,000 direct customers. Keep in mind, this does not include the thousands of businesses served by our strategic partners, like MSSPs. In Q4, we continued to solidify our leadership position with MSSPs. We have established deeper relationships and long-term growth commitments with leading MSSP partners. These strategic partnerships provide visibility into our mutual growth and success.

Speaker Change: That will conclude today's conference call. Thank you for your participation and then Joe Louis C. K.

Barbara Larson: Okay.

Barbara Larson: This contributed to the strong RPO growth in the quarter, which re-accelerated to 30% growth and reached a new record of $1.2 billion. In addition, we're seeing success with both new and existing customers. Customers with ARR of $100,000 or more grew 25% year-over-year in Q4 to 1,411. This reflects more than 100 customer additions quarter-over-quarter, the largest net adds for the year. Our average deal size and ARR per customer continued to increase as well, highlighting our platform momentum and ongoing move upmarket. We continue to maintain healthy expansion rates, and for the full year, we achieved a dollar-based net retention rate of 110%. Even as enterprises navigate a challenging macro environment, they continue to embrace more of the Singularity Platform.

Barbara Larson: Beyond the top-line growth and customer momentum, we delivered record profit margins in Q4. We achieved our first quarter of positive operating margin, outperforming our prior guidance by over 400 basis points. This outperformance was driven by cost discipline in the quarter and our focused investment strategy. Turning to our guidance for Q1 and fiscal year 2026. This year, we expect to surpass $1 billion in both ARR and revenue. We also expect to deliver our first full year of positive operating margin. To be specific, we anticipate revenue of $1.007 to $1.012 billion, representing 23% growth. While we typically do not comment on an ARR outlook, this quarter, we believe it may provide helpful context around our growth expectations.

Barbara Larson: For fiscal year 26, we expect to deliver approximately $200 million in net new ARR, growing about 2% year-over-year. This positive trajectory builds on our re-acceleration in recent quarters, continuing our growing market presence and platform adoption. At the same time, we're mindful of macroeconomic conditions, deal timing, and federal spending uncertainty. In addition, we're focused on delivering efficiencies, and that means prioritizing our investments in data, cloud, and especially AI. As a result, we made the strategic decision to retire our legacy deception solution. Our outlook includes up to $10 million of expected churn from the retirement of deception, with nearly half of that impacting Q1. Excluding this impact, we expect our full year net new ARR would increase by a mid- to high single-digit percentage year-over-year.

Barbara Larson: For Q1, we expect revenue of approximately $228 million, growth of 22% or 24% when normalizing for the leap year benefit from last Q1. Additionally, we expect Q1 net new ARR in the low $30 million range. Our Q1 expectations include the impact of the retirement of our legacy deception solution. Excluding this impact, we would expect our net new ARR to be approximately flat year over year. Turning to our outlook for margins. We expect to maintain industry-leading growth margins as we grow our customer and platform base. We expect Q1 growth margin to be about 79%, and for the full year, we expect growth margin to be between 78.5% and 79.5%. For operating margin, we expect Q1 to be about -2%, implying a year-over-year improvement of approximately 400 basis points.

Barbara Larson: For the full year, we expect operating margin to be between positive 3% and 4%, an improvement of over 650 basis points at the midpoint compared to fiscal year 2025. In addition, we expect our full-year free cash flow margin to be several percentage points higher than operating margin as we continue to improve our profitability and cash flow profile. As we shift towards generating more meaningful positive free cash flow, we still have over $1.1 billion in cash and cash equivalents, which provides ample flexibility as we invest in and scale the business. Taking a step back, our momentum, technology leadership, and competitive position remain strong, and we're committed to delivering ongoing leverage in the business as we execute our growth strategy.

Barbara Larson: Our investment approach strikes a thoughtful balance between maximizing long-term growth opportunities and maintaining a strong, responsible, and profitable financial profile, a strategy that's key to scaling SentinelOne to a multi-billion dollar business. At the same time, we're instilling operational discipline by identifying ways to enhance efficiency and productivity. One example is the prioritization of investments towards AI-powered security and data. In addition, we are optimizing our facilities footprint and aligning resources to strategic growth areas. These enhancements make us more nimble while freeing up investments in our key growth priorities of data, cloud, and AI, all while delivering additional margin expansion this year. Our goal is to deliver growth at scale while continuously improving operating and free cash flow margins over time. Thank you all for joining us today. We will now take questions. Operator, please open up the line.

Operator: At this time, if you would like to ask a question, it is star followed by one on your telephone keypad. If for any reason you would like to remove that question, it is star followed by two. Again, to ask a question, it is star one. As a reminder, if you're using a speakerphone, please remember to pick up your headset before asking a question. All questions are limited to one. Our first question comes from Adam Tindle with the company Raymond James. Adam, your line is now open.

Adam Tindle: Okay, thanks. I'm gonna ask one, but it's gonna be multipart, and I'm gonna try to beat up net new ARR right out of the box here, so bear with me. Appreciate the highlight that net new ARR flipped back to positive for the back half, but if we're looking at just Q4, it was, you know, flattish on an easier comparison. So just rationale for that in Q4. And then, Barbara, as we look to fiscal 2026, it was helpful to get that color on total ARR growth.

Adam Tindle: I guess the question would be on that, starting kind of flattish. I think if I backed out the retirement of the product you mentioned and needing to grow low single digits for the year as the comparisons get tougher throughout the year, what kind of gives you the confidence to come out here with that, you know, back half tougher comparisons and with this ramp throughout the year? Thank you.

Tomer Weingarten: Thanks, Adam. So let me actually address that first. Okay, in fiscal year 2025, you know, we delivered revenue growth over 30%. That's industry-leading with full-year profitability, with really strong win rates, pipeline growing, interest from new, you know, larger enterprises. That just means more awareness for SentinelOne, and we're seeing very strong adoption from all of our platform capabilities. If you kind of think about that with successfully reaccelerating our net new ARR growth in the second half of the year, for FY 2026, we expect to grow that meaningfully. If you adjust it for the deception end of sale, that'll be mid- to high-single-digits growth. So we feel confident in the opportunity and the trajectory.

Tomer Weingarten: I think the underlying strength of the business, you know, is somewhat masked by that end-of-life decision, which we believe is the right decision longer term. And all in all, the guide gives, I think, you know, a good achievable starting point, for us as we execute throughout the year.

Barbara Larson: Then I'll just follow up with the question on Q4 2025. We did have some impact from churn in this Q4 related to deception, and if we adjust that out, our Q4 net new ARR would have grown in mid-single digits.

Operator: Our next question comes from Brian Essex, with the company J.P. Morgan. Brian, your line is now open.

Brian Essex: Hi, good afternoon. Thank you for taking the question. I was wondering if maybe sticking on the topic of ARR, net new ARR, how you're thinking about contribution from Lenovo. Are you starting to see some traction? Are they selling devices? I think you previously talked about maybe in the back half of the year. Just wondering about visibility into that relationship and how that might impact how you're thinking about guide for the year.

Tomer Weingarten: We're working very closely with the Lenovo team. All of the go-to-market elements are now being put in place. And as I've said before, we expect that impact to be much more back-end loaded. Mostly, I would say, even in the next fiscal year, as more on-device shipments are starting to get out the door. So everything we know, understand, and want to take into this year is factored in the guidance. We believe the Lenovo, which is a multi-year relationship with ramp baked into it, is gonna be much more meaningful in the out years versus in this immediate fiscal year.

Brian Essex: Okay, great. Thank you. I'll keep it to one and follow up afterwards. Thank you.

Operator: Our next question comes from Gray Powell with the company BTIG. Gray, your line is now open.

Gray Powell: Oh, great! Thanks for taking the question. So maybe one for Barbara. You've been at SentinelOne a little over 6 months now. It's your first time owning the guidance for the full year. Are there any material changes that you're making? Are you looking at any different KPIs? Or just any difference with regards to your guidance philosophy versus your predecessor?

Gray Powell: Oh, great! Thanks for taking the question. Maybe one for Barbara. You've been at SentinelOne a little over 6 months now. It's your first time owning the guidance for the full year. Are there any material changes that you're making? Are you looking at any different KPIs? Or just any difference with regards to your guidance philosophy versus your predecessor?

Barbara Larson: Yeah, Greg, thanks so much for the question. In terms of the guide, we really feel like this is the right starting point for the year. You know, we're focused on setting reasonable expectations that reflect the potential that we see in the business. Of course, it's, you know, it's based on what we have line of sight to, pipeline activity, contributions from new products, anticipated conversions, and win rates. You know, we're mindful of the macro as well. It's not extremely different than what we've seen recently. It just continues to persist. It's still volatile. It's almost like it's the new normal. But we do believe this is the right starting point for this year.

Barbara Larson: Yeah, Gray, thanks so much for the question. In terms of the guide, we really feel like this is the right starting point for the year. You know, we're focused on setting reasonable expectations that reflect the potential that we see in the business. Of course, it's, you know, it's based on what we have line of sight to, pipeline activity, contributions from new products, anticipated conversions, and win rates. We're mindful of the macro as well. It's not extremely different than what we've seen recently. It just continues to persist. It's still volatile. It's almost like it's the new normal. But we do believe this is the right starting point for this year.

Gray Powell: Understood. That's very helpful. Thanks.

Operator: Our next question comes from Joseph Gallo with the company Jefferies. Joseph, your line is now open.

Annick Baumann: Hi, guys, this is Annick Baumann for Joseph Gallo. Tomer, you guys have put a ton of work into your go-to-market engine, and I'm just curious if there's any more tweaks as you begin to work through FY 2026, and how do you think about capacity and hiring in the context of looking to reach over $1 billion in ARR this year?

Tomer Weingarten: Thank you for the question. There's always evolution happening. I mean, we are working on better productivity. We've improved productivity year-over-year. We are gearing towards more platform sales. We're adjusting our pricing structures. I mean, we're allowing for even more flexibility for our customers, and we're aligning with some of the pricing structures that we're seeing out there. So all in all, you know, we're in this evolution of go to market. Every indicator that we track is looking better, and that's reflected through win rates, that's reflected through, you know, channel contribution. And we're obviously working on more and more automation throughout pretty much every avenue we have.

Tomer Weingarten: Thank you for the question. There's always evolution happening. We are working on better productivity. We've improved productivity year-over-year. We are gearing towards more platform sales. We're adjusting our pricing structures. We're allowing for even more flexibility for our customers, and we're aligning with some of the pricing structures that we're seeing out there. All in all, you know, we're in this evolution of go to market. Every indicator that we track is looking better, and that's reflected through win rates, that's reflected through, you know, channel contribution, and we're obviously working on more and more automation throughout pretty much every avenue we have.

Tomer Weingarten: All of those should be, you know, somewhat of contributors in this fiscal year, but the vast majority of it is really for contribution for the out years and strategic decisions we're taking right now to continue and sustain growth in the years to come.

Doug Clark: Operator, hi, I wanna jump in here for a second. We're under the impression that folks on the webcast could not hear the first question or the response. So I just wanna repose it and allow Tomer and Barbara to answer. It was a question about ARR growth expectations for fiscal 2026... for fiscal 2025. Tomer, if you want to address that again.

Tomer Weingarten: Yes, of course. So in fiscal 2025, as I mentioned, we continue to deliver leading revenue growth in the industry, over 30%. Win rates remained really strong, and our pipeline is growing even further. We see a lot of interest from new and larger enterprises, and this just means more awareness for SentinelOne than ever before. There's strong adoption of our platform solutions. We've quadrupled the number of customers on the enterprise that are using one or more mo- sorry, four or more modules by SentinelOne, and we successfully re-accelerated and improved net new ARR growth in the second half of full year 2025. In FY 2026, we expect to grow net new ARR as well, and if you adjust it for the end of sale decision, that we're taking here, we'd actually be up mid to high single digits.

Tomer Weingarten: So we feel very confident in the opportunity and the trajectory. I just feel like the underlying strength of the business, if you kind of think about it, to think about it as new and upsell, is just very strong, and it's being masked a bit by that end-of-life decision, which is a longer term decision that we believe is necessary. You know, there's a lot of change happening in software today. I feel like for us, the focus on data and AI mandates starting to prune away some of the legacy capabilities. I believe a lot of companies should be going down that path. So for us, that's the focus, the underlying strength of the business, you know, coupled with obviously strategic long-term decisions.

Tomer Weingarten: We feel very confident in the opportunity and the trajectory. I just feel like the underlying strength of the business, if you kind of think about it, to think about it as new and upsell, is just very strong, and it's being masked a bit by that end-of-life decision, which is a longer term decision that we believe is necessary. You know, there's a lot of change happening in software today. I feel like for us, the focus on data and AI mandates starting to prune away some of the legacy capabilities. I believe a lot of companies should be going down that path. So for us, that's the focus, the underlying strength of the business, you know, coupled with obviously strategic long-term decisions.

Barbara Larson: And then following up on Q4 2025, we delivered flat year-over-year net new ARR in Q4 as planned. We did have some impact from churn related to the retirement of our legacy deception solution. To the extent we adjust that out, our Q4 net new ARR would have grown in mid-single digits in Q4 2025.

Barbara Larson: Then following up on Q4 2025, we delivered flat year-over-year net new ARR in Q4 as planned. We did have some impact from churn related to the retirement of our legacy deception solution. To the extent we adjust that out, our Q4 net new ARR would have grown in mid-single digits in Q4 2025.

Doug Clark: Thank you, operator. We can go to the next question, please.

Operator: Our next question comes from John DiFucci with the company Guggenheim Securities. John, your line is now open.

John DiFucci: Thank you. So this quarter, forgetting even about the, you know, the deception product and some attrition because of that. If I look at just new ARR and I take into account normal attrition, which I know is really small, it actually grew a little bit, which is, I think, about half our companies actually showed growth in new ARR, only about half. And Barbara, thanks for all that color on the guide, which makes me think I might be able to answer this, but let me ask it anyway. You talked about the assumptions on the demand environment or the macro, and you said about new normal, and so I'm thinking you're thinking, okay, the backdrop is consistent.

John DiFucci: Thank you. This quarter, forgetting even about the, you know, the deception product and some attrition because of that. If I look at just new ARR and I take into account normal attrition, which I know is really small, it actually grew a little bit, which is, I think, about half our companies actually showed growth in new ARR, only about half. And Barbara, thanks for all that color on the guide, which makes me think I might be able to answer this, but let me ask it anyway. You talked about the assumptions on the demand environment or the macro, and you said about new normal, and so I'm thinking you're thinking, okay, the backdrop is consistent.

John DiFucci: But this implies your guidance that you expect SentinelOne to perform better against that backdrop, a little bit, not a ton. And I know you wanna, you know, beat your number, you know, hit your goals or exceed them. So can you expand a little bit more, just a little more color as to why you think you're gonna perform a little bit better this year than you did last year? And I'm thinking about new ARR. Thanks.

John DiFucci: This implies your guidance that you expect SentinelOne to perform better against that backdrop, a little bit, not a ton, and I know you wanna, you know, beat your number, you know, hit your goals or exceed them. Can you expand a little bit more, just a little more color as to why you think you're gonna perform a little bit better this year than you did last year? I'm thinking about new ARR. Thanks.

Barbara Larson: Thanks, John. I appreciate the question. So if you kind of step back a little bit and you look first at fiscal year 2025, we did improve our new business growth in the second half of fiscal 2025. We expect this trend to continue into FY 2026, where we expect full year net new ARR to be up 2% year-over-year, so at around $200 million, and that is including the impact of the $10 million, about $10 million of churn related to deception. So deception is a bit of a headwind. More than half, or about half of that will occur in Q1. So a headwind kind of front loaded, and then we would expect our net new ARR growth sequentially to improve thereafter.

Barbara Larson: Thanks, John. I appreciate the question. If you kind of step back a little bit and you look first at fiscal year 2025, we did improve our new business growth in the second half of fiscal 2025. We expect this trend to continue into FY 2026, where we expect full year net new ARR to be up 2% year-over-year, so at around $200 million, and that is including the impact of the $10 million, about $10 million of churn related to deception. Deception is a bit of a headwind, more than half, or about half of that will occur in Q1. So a headwind kind of front loaded, and then we would expect our net new ARR growth sequentially to improve thereafter.

Tomer Weingarten: Yeah, and let me add a couple of points there, John. I mean, the one thing that obviously is very different for us is just the adoption of the platform modules. And if you couple that with a ramped sales force, I think we're entering this year on a much stronger note. AI is gonna be a tremendous driver, as I think everybody understands already. Just to give you some, you know, some context there, we've done more than 300 AI deals in Q4. I mean, that is most likely more than any other security vendor out there, and we definitely see more traction for these solutions. Now, obviously, we're accounting for some of the things that we are pruning away, but all in all, we feel like there's, you know, quite a bit of momentum in the business.

Tomer Weingarten: Our pipelines point to that. Again, the maturity of the sales force. So all of those, I think, are the contributing factors, and then I think that's what allows, Barbara, not to put words in your mouth, to, you know, to really put, kind of an achievable bar or a good starting point for the year for us.

John DiFucci: Thank you. That all makes sense. Appreciate the color.

Operator: Our next question comes from Jonathan Ho with the company William Blair. Jonathan, your line is now open.

Jonathan Ho: Hi, good afternoon. Could you maybe give us a little bit of additional color in terms of your exposure on the federal government side and perhaps what you're seeing in terms of, you know, what your customers are saying or what your sales force is saying there? Thank you.

Tomer Weingarten: ... a level of unknown and uncertainty. There's, there's no question that there's a lot of change that's happening. With that, we've actually seen our federal pipeline expand. So there's definite, it's a definite source of demand for us. I would also say, you know, for the type of offerings that we can cater to for federal agencies, and especially given that we're one of the only security vendors that can sell AI into a FedRAMP High type of an environment, in many cases, we actually create cost synergies. We allow, we allow these agencies to actually save on their data ingestion costs. We allow them to save on operational costs, and that positions us really well, even in a macro, in that arena that calls for more cost saving and prudence.

Tomer Weingarten: There is a level of unknown and uncertainty. There's, there's no question that there's a lot of change that's happening. With that, we've actually seen our federal pipeline expand. So there's definite, it's a definite source of demand for us. I would also say, you know, for the type of offerings that we can cater to for federal agencies, and especially given that we're one of the only security vendors that can sell AI into a FedRAMP High type of an environment, in many cases, we actually create cost synergies. We allow, we allow these agencies to actually save on their data ingestion costs. We allow them to save on operational costs, and that positions us really well, even in a macro, in that arena that calls for more cost saving and prudence.

Tomer Weingarten: So all in all, I think we're still treating federal as a source of strength. At the same time, I would say there's maybe some unclarity on deal timings and budgets, and we're just working at the pace of the customer, but demand remains strong.

Operator: Our next question comes from Shaul Eyal with the company TD Cowen. Shaul, your line is now open.

Shaul Eyal: Thank you. Hi, good afternoon. Tomer, I had a question on deception. What's driving that decision? And maybe, if some of deception capabilities from a product perspective are being displaced by some of the Singularity AI-driven capabilities?

Tomer Weingarten: Yes, thanks for the question, Shaul. The biggest thing with deception is just, it's a legacy code base, you know, that we acquired, you know, with Attivo. As a matter of fact, it actually has even hardware components. For us, that's obviously not the long-term business we wanna be in. And the cost of maintenance is creeping up while the ROI, you know, is not really showing up. So for us, it's a very simple decision of realigning resources into the high-yielding elements of our business. And to the latter part of your question, AI is most definitely gonna be a consolidator of capabilities, and I think deception is one of them to a certain extent.

Tomer Weingarten: Yes, thanks for the question, Shaul. The biggest thing with deception is just, it's a legacy code base, you know, that we acquired, you know, with Attivo. As a matter of fact, it actually has even hardware components. For us, that's obviously not the long-term business we wanna be in, and the cost of maintenance is creeping up while the ROI, you know, is not really showing up. So for us, it's a very simple decision of realigning resources into the high-yielding elements of our business. And to the latter part of your question, AI is most definitely gonna be a consolidator of capabilities, and I think deception is one of them to a certain extent.

Tomer Weingarten: You know, you can think about identity, you can think about many elements of the broader security platforms you're seeing out there, as capabilities that can be delivered as Agentic AI instead of a fully fledged product. And I think that's what we're seeing is a progression, at least of our Purple AI capability set. That's why we're already including it, in most of our Singularity offerings. We believe philosophically that AI, GenAI capabilities for software products are gonna become table stakes. If you're not gonna have them, you're gonna be much less relevant, and we're using that to seed growth, you know, to, to kind of get customers accustomed to it and to drive more usage while we build more and more tiers and more and more agentic capabilities.

Tomer Weingarten: So that's what we see for the coming fiscal year, and that's how we kind of couch all of it with that, you know, that, that base. The majority of it is deception. There's a couple of other small components in there, but that's just, I think, you know, in a, in a broader sense, how we're thinking about the shift from legacy code bases, and onto newer offerings, AI-based, which is something again, I think you'll start seeing a lot of other companies, go down the path of.

Tomer Weingarten: That's what we see for the coming fiscal year, and that's how we kind of couch all of it with that, you know, that, that base. The majority of it is deception. There's a couple of other small components in there, but that's just, I think, you know, in a, in a broader sense, how we're thinking about the shift from legacy code bases, and onto newer offerings, AI-based, which is something again, I think you'll start seeing a lot of other companies, go down the path of.

Operator: Our next question comes from Shrenik Kothari with the company Baird. Shrenik, your line is now open.

Zach Schneider: Great. Hi, this is Zach Schneider on for Shrenik. Thanks for taking the question. So obviously, your emerging product portfolio is becoming an increasingly critical growth driver, and you highlighted data and AI as your fastest growing solution. But maybe are there any specific solutions that stand out in terms of adoption velocity, cross-sell success? Have there been any surprises, either outperformers that are scaling faster than expected, or areas where traction's been slower than anticipated? Would love to just get a sense of what's working best and where there's still white space to accelerate adoption. Thanks.

Zach Schneider: Great. Hi, this is Zach Schneider on for Shrenik. Thanks for taking the question. Obviously, your emerging product portfolio is becoming an increasingly critical growth driver, and you highlighted data and AI as your fastest growing solution. Maybe are there any specific solutions that stand out in terms of adoption velocity, cross-sell success? Have there been any surprises, either outperformers that are scaling faster than expected, or areas where traction's been slower than anticipated? Would love to just get a sense of what's working best and where there's still white space to accelerate adoption. Thanks.

Tomer Weingarten: I definitely mentioned AI is, is one of these, Purple AI, you know, the capability, 300 deals in the quarter plus. I mean, that, that is remarkable. With that, you know, AI SIEM for us has also been a source of strength. So the, the coupling of these two also just makes us much more strategic for, for these types of customers. So I would definitely call out AI SIEM and Purple AI as, as the two main, drivers of growth. Cloud security for us, I mean, we started selling the complete unified cloud security suite for us. We've done, you know, a record deal with cloud security in, in Q4. So all of those are really progressing nicely. And we will continue, I think, continue to drive those as the most strategic touchpoints with customers.

Tomer Weingarten: I definitely mentioned AI is, is one of these, Purple AI, you know, the capability, 300 deals in the quarter plus. I mean, that, that is remarkable. With that, you know, AI SIEM for us has also been a source of strength. The, the coupling of these two also just makes us much more strategic for, for these types of customers. So I would definitely call out AI SIEM and Purple AI as, as the two main, drivers of growth. Cloud security for us, we started selling the complete unified cloud security suite for us. We've done, you know, a record deal with cloud security in, in Q4. All of those are really progressing nicely. And we will continue, I think, continue to drive those as the most strategic touchpoints with customers.

Zach Schneider: Great, thank you.

Operator: Our next question comes from Rudy Kessinger with the company D.A. Davidson. Rudy, your line is now open.

Rudy Kessinger: Hey, guys. Thanks for taking my questions. I'm curious, if you look at the second half this year, net new ARR obviously improved quite a bit from the first half. But if you were to maybe strip out some of the benefit from the displacements from CrowdStrike that were specifically due to the outage, that would have otherwise likely not have occurred, what would that second half net new ARR growth have looked like?

Tomer Weingarten: I'm not sure we can strip that out, and I'm not sure that, you know, you can think about it in such a distinct way. You know, to us, and I mentioned it in the opening question, what is changing the most is consideration, and, you know, even customers that maybe chose to stay with the incumbent, they're still entertaining and considering what they're gonna do next. So a lot of folks aren't doing anything in an unplanned fashion, but once they go through that cycle, you know, and it could be 1 year or 2 year out sometimes, the consideration is very different. So as I mentioned, to us, the way we look at it is something structurally had shifted. I think that creates more consideration for SentinelOne.

Tomer Weingarten: I'm not sure we can strip that out, and I'm not sure that, you know, you can think about it in such a distinct way. You know, to us, and I mentioned it in the opening question, what is changing the most is consideration, and, you know, even customers that maybe chose to stay with the incumbent, they're still entertaining and considering what they're gonna do next. A lot of folks aren't doing anything in an unplanned fashion, but once they go through that cycle, you know, and it could be 1 year or 2 year out sometimes, the consideration is very different. As I mentioned, to us, the way we look at it is something structurally had shifted. I think that creates more consideration for SentinelOne.

Tomer Weingarten: All in all, you know, I think that what we've seen is somewhat of incremental contribution. I think it's much more smoothened out than one would imagine. I think maybe folks were expecting some upticks. It's not an uptick type contribution. It's smoothened, it's gradual, and we believe it's also here to stay, which is the most important part.

Operator: Our next question comes from Tal Liani with the company Bank of America. Tal, your line is now open.

Tal Liani: Hi, guys. I wanted to just understand the guidance. So your guidance is about $7-8 million below the consensus, and $20 million for the year. Guidance for next quarter is $7-8 below. And part of it is because of deception, part of it is... I'm trying to understand. So can you quantify the deception? First of all, the deception impact on the guidance, on the revenues, not on the ARR. And then second, what are the good things and the bad things that drove you to kind of guide slightly below the street? Because your message is very strong, and I can see the numbers in the historicals, but the numbers are slightly weaker. Thanks.

Tal Liani: Hi, guys. I wanted to just understand the guidance. So your guidance is about $7-8 million below the consensus, and $20 million for the year. Guidance for next quarter is $7-8 below, and part of it is because of deception, part of I'm trying to understand. Can you quantify the deception? First of all, the deception impact on the guidance, on the revenues, not on the ARR. Then second, what are the good things and the bad things that drove you to kind of guide slightly below the street? Because your message is very strong, and I can see the numbers in the historicals, but the numbers are slightly weaker. Thanks.

Barbara Larson: From a deception perspective, I'll first cover that for net new ARR. For FY 2026, the impact is about $10 million of churn for the year, and Q1 is about half of that. On a revenue perspective for the full year, deception has about a 1-point headwind on FY 2026 revenue.

Tal Liani: Got it. So the rest of it, the rest of the guidance, like the slight weakness versus the street, is there anything you want to highlight, why you're guiding below the street? The growth rate is decelerating from last year. So where, where -- what's the source of this deceleration?

Tomer Weingarten: I think what we're trying to factor at the end of the day is just, you know, the unknowns. And we truly believe this is a good starting point for us. You know, there's a lot of factors in play. There's a lot of shifts happening in software. You know, we believe we're making the right responsible decisions here. So all in all, we're just factoring in everything that we believe and know. And, you know, obviously, our goal is always to, you know, overachieve, and that's gonna be my job. Barbara sets the guidance, I try to overachieve it. But all in all, we believe, again, that that captures everything we know today.

Tomer Weingarten: I think what we're trying to factor at the end of the day is just, you know, the unknowns, and we truly believe this is a good starting point for us. There's a lot of factors in play. There's a lot of shifts happening in software. We believe we're making the right responsible decisions here, so all in all, we're just factoring in everything that we believe and know. Obviously, our goal is always to, you know, overachieve, and that's gonna be my job. Barbara sets the guidance, I try to overachieve it, but all in all, we believe, again, that that captures everything we know today.

Operator: Our next question comes from Eric Heath with the company KeyBanc. Eric, your line is now open.

Eric Heath: Hey, thanks for taking the question. Maybe just one housekeeping one. Just wanted to clarify deception and the decision to end of life that was factored in, in the guidance as of last quarter. And then, Tomer, the question I wanted to ask is on pricing. You called out some adjustments to pricing. So just curious if you could elaborate a little bit more about what that means and if it's some sort of credit model that we're seeing a lot of vendors do to enable more adoption of more modules across the platform. Thanks.

Eric Heath: Hey, thanks for taking the question. Maybe just one housekeeping one. Just wanted to clarify deception and the decision to end of life that was factored in, in the guidance as of last quarter. Then, Tomer, the question I wanted to ask is on pricing. You called out some adjustments to pricing. Just curious if you could elaborate a little bit more about what that means and if it's some sort of credit model that we're seeing a lot of vendors do to enable more adoption of more modules across the platform. Thanks.

Barbara Larson: So I'll cover the, the first one. We did, we did factor that into the guidance. There was some churn in Q4.

Barbara Larson: I'll cover the, the first one. We did, we did factor that into the guidance. There was some churn in Q4.

Tomer Weingarten: As for pricing, I mean, the first thing I'll open and say is that pricing has been very stable for us. So, it's not about discounting, it's not about, you know, needing to tweak our pricing model. But obviously, you know, customers are looking for more flexible ways to procure, and I think that's where we, you know, we don't see a lot of downside in going down the path of allowing, you know, some of these more flexible terms, given that the expansion you've seen our capability set is significant. I mean, our platform today is seven capabilities with about 30-something modules. That's a lot, and customers like to try out a lot of different capabilities that we have.

Tomer Weingarten: As for pricing, I mean, the first thing I'll open and say is that pricing has been very stable for us, so, it's not about discounting, it's not about, you know, needing to tweak our pricing model. Obviously, you know, customers are looking for more flexible ways to procure, and I think that's where we, you know, we don't see a lot of downside in going down the path of allowing, you know, some of these more flexible terms, given that the expansion you've seen our capability set is significant. I mean, our platform today is seven capabilities with about 30-something modules. That's a lot, and customers like to try out a lot of different capabilities that we have.

Tomer Weingarten: So moving into a pricing model that allows them access to the entire platform is something that we believe is gonna be beneficial, and that's the direction that we're heading towards.

Operator: Our next question comes from Trevor Walsh with the company Citizens. Trevor, your line is now open.

Trevor Walsh: Great. Thank you for taking the questions. Tomer and team, appreciate the new kind of disclosures around the module or solutionary adoptions that you overlaid across the seven. It's great to see. Just curious if that's just more reporting for us here on this call, or if you kind of aligned the more solution selling kind of orientation for the sales team, and if kind of what, you know, what playbooks you're maybe kind of running around, you know, grouping those together.

Trevor Walsh: And then kind of on related lines, one of your peers, slash competitors, kinda has talked a lot about within cloud security, kind of things moving more towards detection response, SIEM, the SOC taking over more of, I guess, like, that whole kind of piece of the pie, and that benefiting them and others like you that have maybe a more runtime agent-based approach. So kind of along the lines of just selling multiple pieces of the platform, do you agree with kind of where the things are going there in security or cloud security specifically, and how that kind of all kind of aligns to kind of, again, what you're doing from a larger selling multiple solutions across the platform? Thanks.

Trevor Walsh: Then kind of on related lines, one of your peers, slash competitors, kinda has talked a lot about within cloud security, kind of things moving more towards detection response, SIEM, the SOC taking over more like, that whole kind of piece of the pie, and that benefiting them and others like you that have maybe a more runtime agent-based approach. So kind of along the lines of just selling multiple pieces of the platform, do you agree with kind of where the things are going there in security or cloud security specifically, and how that kind of all kind of aligns to kind of, again, what you're doing from a larger selling multiple solutions across the platform? Thanks.

Tomer Weingarten: I think the biggest thing is that, you know, we, we want to provide flexibility. I think unlike some other vendors, we don't force customers to take kind of an all or nothing approach. So we have all the capabilities. We can, as an example, sell you a fully fledged cloud security suite that contains all the CNAPP capabilities and best-of-breed runtime workload protection. At the same time, we don't mind going into environment, and environments and delivering best-of-breed workload protection and working in tandem with another CNAPP provider. To us, it's really about flexibility, and we're seeing customers adopt more and more of our capabilities once they've experimented with at least one capability. Typically, you know, when you look at what we do, it's almost always best of breed.

Tomer Weingarten: The biggest thing is that, you know, we, we want to provide flexibility. Unlike some other vendors, we don't force customers to take kind of an all or nothing approach. We have all the capabilities. We can, as an example, sell you a fully fledged cloud security suite that contains all the CNAPP capabilities and best-of-breed runtime workload protection. At the same time, we don't mind going into environment, and environments and delivering best-of-breed workload protection and working in tandem with another CNAPP provider. To us, it's really about flexibility, and we're seeing customers adopt more and more of our capabilities once they've experimented with at least one capability. Typically, you know, when you look at what we do, it's almost always best of breed.

Tomer Weingarten: I mean, you're talking about Gartner Customer Choice for Endpoint Protection and customer, Gartner Customer Choice for Cloud Security, and Gartner Customer Choice for MDR, and Product of the Year for AI. So obviously what we do is at the forefront in each and every one of these fields, and we have fully inclusive capabilities that are akin to every other leading platform, I should say, in the market today. But the emphasis is sell what customers need, sell to the need, and sell to what they want to address today, versus trying to deal with futures. With everything, the expansion coming as evidenced in the numbers, and that's why we're also moving towards more flexible pricing platform structures that can allow customers to then over time, consume more from our capability set.

Tomer Weingarten: I mean, you're talking about Gartner Customer Choice for Endpoint Protection and customer, Gartner Customer Choice for Cloud Security, and Gartner Customer Choice for MDR, and Product of the Year for AI. So obviously what we do is at the forefront in each and every one of these fields, and we have fully inclusive capabilities that are akin to every other leading platform, I should say, in the market today. The emphasis is sell what customers need, sell to the need, and sell to what they want to address today, versus trying to deal with futures. With everything, the expansion coming as evidenced in the numbers, and that's why we're also moving towards more flexible pricing platform structures that can allow customers to then over time, consume more from our capability set.

Operator: Our next question. Our last question comes from Andrew Nowinski with the company Wells Fargo. Andrew, your line is now open.

Andrew Nowinski: Thank you for squeezing me in. So just maybe two quick housekeeping questions. First, did the deception product have an impact on the decline in your NRR when it went down to 110 this quarter? And then second, you gave the cloud and data analytics ARR of 170 back in Q2, and given that it's a high priority, you know, for your investments, I'm just wondering if you could break those two out again in Q4 here, or, or, or perhaps tell us how much you expect them to contribute to that $200 million in net new ARR for FY 2026. Thank you.

Andrew Nowinski: Thank you for squeezing me in. Just maybe two quick housekeeping questions. First, did the deception product have an impact on the decline in your NRR when it went down to 110 this quarter? Then second, you gave the cloud and data analytics ARR of 170 back in Q2, and given that it's a high priority, you know, for your investments, I'm just wondering if you could break those two out again in Q4 here, or, or, or perhaps tell us how much you expect them to contribute to that $200 million in net new ARR for FY 2026. Thank you.

Tomer Weingarten: So, we're not going to be disclosing per product ARR at this point. We will give an update, potentially later on in the year. On the NRR front, there was no, I would say, material impact on Q4 NRR. We do expect that that's going to be a headwind to NRR, the deception end of sale, you know, specifically in Q1. And I think once we clear that headwind, I think you'll see NRR maybe in a more healthy place. So that I think kind of is the way that we're looking at it today.

Tomer Weingarten: We're not going to be disclosing per product ARR at this point. We will give an update, potentially later on in the year. On the NRR front, there was no, I would say, material impact on Q4 NRR. We do expect that that's going to be a headwind to NRR, the deception end of sale, you know, specifically in Q1. Once we clear that headwind, I think you'll see NRR maybe in a more healthy place, so that I think kind of is the way that we're looking at it today.

Operator: I'd now like to pass the conference back over to Tomer Weingarten for closing remarks. Tomer, you may proceed.

Tomer Weingarten: Thank you. We delivered a strong end to fiscal year 25 and see significant opportunity ahead in fiscal 26. We continue to lead the industry with best-in-class technology. I'm especially pleased with our AI innovations, which we believe will transform cybersecurity in the coming years. We're at the fore, we're at the forefront of an AI revolution, driving the next wave of security innovation. Our product and go-to-market strategy are fully aligned to deliver premier AI cybersecurity, and this is driving broader platform adoption among new and existing customers. We're delivering strong revenue growth and margin expansion and achieve new profitability milestones with more to come. Thank you again to our customers, partners, shareholders, and Sentinels around the world.

Operator: That will conclude today's conference call. Thank you for your participation, and enjoy the rest of your day.

Q4 2025 SentinelOne Inc Earnings Call

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