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SentinelOne Inc. (NYSE: S) reported its second-quarter results after the market closed on Thursday, and it was a bit of a mixed bag. The cybersecurity company beat on both the top and bottom lines, but its earnings guidance left a lot to be desired, and investors sent the stock lower in after-hours trading.
Here's a quick rundown of the numbers that matter.
SentinelOne posted revenue of $291.98 million for the quarter, edging past the consensus estimate of $290.25 million. Adjusted earnings came in at eight cents per share, also beating the expected seven cents. Total revenue was up 21% year-over-year, and annualized recurring revenue (ARR) grew 22% to roughly $1.22 billion as of July 31. The company also saw its customer base expand, with the number of customers generating ARR of $100,000 or more climbing 13% to 1,715.
CEO Tomer Weingarten struck a confident tone, saying, "Our Q2 performance demonstrates strong progress across every dimension of our business — a top-tier growth profile, accelerating platform adoption, and undisputed technology leadership for both AI for Security and Security for AI."
The company ended the quarter with $813 million in cash, cash equivalents, and investments.
Here's where things get a little dicey. For the third quarter, SentinelOne expects revenue of approximately $309 million to $311 million, which is right in line with the $309.44 million analysts were looking for. But the company's adjusted earnings guidance of eight to nine cents per share falls well short of the 11 cents per share that Wall Street had penciled in.
It's not just the near-term outlook that's soft. SentinelOne also trimmed its full-year fiscal 2027 adjusted earnings forecast, lowering it from a range of 32 to 38 cents per share to a new range of 30 to 32 cents per share. Analysts had been expecting 35 cents. On the revenue side, the company raised its full-year guidance to $1.205 billion to $1.207 billion, up from the prior $1.195 billion to $1.205 billion, and that's right in line with the $1.205 billion consensus.
So, the revenue picture is improving, but the profit picture is getting murkier. That's a combination that tends to make investors nervous.
And nervous they were. SentinelOne shares were down 5.33% in after-hours trading, changing hands at $21.50 at the time of publication on Thursday. The company's earnings call with investors and analysts is scheduled for 4:30 p.m. ET, so there may be more color coming.
For now, it looks like the market is focusing on the softer earnings outlook rather than the revenue beat. It's a classic case of "good news, bad news" — the top line is growing nicely, but the bottom line isn't keeping pace with expectations.
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