SentinelOne raised its annual revenue forecast on Tuesday, expecting new customers to turn to its cybersecurity products to protect their digital operations amid growing online threats. The Mountain View, California-based company’s shares were up nearly 3% in extended trading. Analysts say SentinelOne is gaining market share at the expense of CrowdStrike after the July 19 outage that paralyzed Microsoft Windows operating system.
Enterprise customers also continue to invest in AI-powered cybersecurity products as rising digital scams and high-profile security incidents threaten to impact their business operations and put their reputation at risk. This trend has helped boost demand for companies like SentinelOne and its peer, Fortinet. Bigger rival Palo Alto Networks had forecast annual revenue and profit above estimates last week.
“We’re seeing a distinct rise in customer interest and appreciation for the advantages of our patented AI-powered Singularity Platform,” SentinelOne CEO Tomer Weingarten said in a statement. Singularity is an autonomous platform for enterprise cybersecurity. SentinelOne raised its annual revenue forecast to $815 million, from between $808 million and $815 million.
Analysts on average were expecting $813 million, according to LSEG data. For the second quarter, SentinelOne posted an adjusted profit per share of 1 cent for the first time in its 11-year history, while analysts had expected it to break even. Revenue for the quarter ended July 31 rose 33% to $198.9 million, beating estimates of $197.5 million.
SentinelOne forecast third-quarter revenue to be $209.5 million, in line with estimates. Tomer Weingarten, CEO of SentinelOne, recently addressed significant events in the cybersecurity sector during the company’s earnings call, notably discussing last month’s CrowdStrike IT outage—a botched software update that led to a worldwide tech meltdown. “We’re talking about the largest-ever IT outage, systematically impacting millions of people, disrupting thousands of businesses, and costing billions of dollars,” said Weingarten.
“This was a global, practically fleetwide outage, totally unprecedented in reach and scale—I’ve truly never seen anything like this in my lifetime.” He added that the incident was avoidable and resulted from disregarding best practices in software deployment.
SentinelOne raises annual revenue forecast
While acknowledging that some customers have switched away from SentinelOne, Weingarten emphasized that the company does not engage in aggressive poaching of clients.
“We’re not there to ambulance chase. If somebody shows up at my hospital, I’m darn well going to let them in, but we’re doing this at the pace of customers,” he said. Weingarten also commented on the risks associated with substandard platform architectures, pointing to recent breaches at Microsoft and the massive CrowdStrike outage as examples of the potential fallout from fragile software.
“The dependency on fragile software can rapidly disrupt our way of life,” he remarked, underscoring the necessity of operational hygiene and stringent process controls in software development. In its second-quarter earnings, SentinelOne beat Wall Street’s expectations, reporting adjusted earnings of 1 cent compared with an 8-cent loss a year earlier. This marked the company’s first quarter of positive adjusted net income.
“Importantly, we achieved a significant profitability milestone,” Weingarten noted, with revenue totaling $199 million—up 33% from the previous year. Annualized recurring revenue from subscription-based services increased by 32% to $806 million. SentinelOne shares were down 2.7% at $24.08 at last check, although they are up 45.3% from a year ago.
Analysts have adjusted their stock-price targets following the earnings report and recent events. Scotiabank analyst Patrick Colville raised his price target to $25 from $18, affirming a neutral rating on the shares. He suggested that while new annual recurring revenue fell year-over-year in the second quarter, the CrowdStrike outage has been a net positive as more customers consider SentinelOne.
DA Davidson raised its price target to $23 from $18.50, maintaining a neutral rating. The firm noted that SentinelOne delivered a strong earnings beat and raised its guidance, suggesting that the CrowdStrike outage may modestly boost new business in the near term. BTIG increased its price target to $30 from $28 and affirmed a buy rating on SentinelOne shares, praising the company’s solid earnings beat, improved guidance, and potential to win incremental share in the endpoint security market post-CrowdStrike outage.
SentinelOne’s financial performance and cautious yet optimistic outlook in the face of sector challenges have garnered mixed but hopeful responses from analysts and investors alike, highlighting its potential for continued growth and resilience in the high-demand cybersecurity market.
