SentinelOne (S) shares took a hit in premarket trading Friday after the cybersecurity company reported first-quarter results that were a bit of a mixed bag. The company beat on earnings but narrowly missed revenue estimates and issued softer-than-expected guidance. It also announced plans to lay off about 8% of its workforce as part of a restructuring.

Let's break down the numbers.

First-Quarter Results

SentinelOne reported adjusted earnings of 4 cents per share, beating the 2 cents analysts were expecting. Revenue came in at $276.7 million, just shy of the $277.3 million consensus. The company's operating margin improved to about 4%, up roughly 550 basis points from a year ago, showing better operating leverage.

One bright spot: remaining performance obligations hit a record $1.5 billion, up 30% year over year, giving the company better visibility into future revenue. SentinelOne ended the quarter with $812 million in cash and investments and no debt.

ARR Growth Accelerates

The company generated a record $44 million in net new annual recurring revenue (ARR), up 55% from last year. That's the fourth straight quarter of positive net additions. Total ARR grew 23% year over year, driven by new customer wins and expansion within existing accounts.

AI Security ARR nearly doubled from the prior year as more customers adopted the company's AI-driven cybersecurity tools. The number of customers generating over $100,000 in ARR increased 17% year over year, and ARR per customer hit a record level.

Outlook and Restructuring Plan

For the full fiscal year 2027, SentinelOne affirmed its guidance: adjusted earnings of 32 to 38 cents per share (versus estimates of 34 cents) and revenue of $1.195 billion to $1.205 billion (in line with the $1.206 billion consensus).

But for the second quarter, the company projected adjusted earnings of 6 to 8 cents per share (bracketing the 7-cent estimate) and revenue of $289 million to $291 million, slightly below the $291.95 million analysts were looking for.

SentinelOne also announced a restructuring plan that includes cutting about 8% of its workforce. The company said it's sharpening its focus on artificial intelligence, data, cloud, and endpoint security. It expects to record a one-time restructuring charge of roughly $25 million, including about $15 million in cash expenses. The plan should be substantially completed during the second quarter.

Stock Reaction

SentinelOne shares were down 16.93% at $14.97 in premarket trading Friday.

Photo via Shutterstock