SentinelOne Q1 FY1/26 Earnings Review

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Weighed Down

By Hermit Warrior, a.k.a. Richard Iacuelli

By all accounts, SentinelOne ($S) should be flying. It has a strong product story, backed up by industry group and customer rankings; it was an early adopter and promoter of AI-powered cybersecurity and, by its own reckoning, boasts a $100 billion addressable market to go after. And yet, given the underwhelming revenue performance of recent quarters, something is dragging it down.

We'll dig into this a little later - for now here are the headlines.

Q1 year on year revenue growth of 23% came in a touch over the 22% guide, but notably below last quarter's 29% - disappointing those that had hoped the guide was 'conservative'. The guide for Q2, as well as for the full year, is also for 22% revenue growth, a far cry from the heady days of 40% growth last year (not to mention 90% the year before that).

EBITDA and unlevered free cashflow margins (UFCF) remain negative and show only incremental progress towards flipping positive - despite revenue growth slowing. All in all, not a good look.