Yesterday, like every quarter, SentinelOne published its quarterly results. Generally, we don’t find that hugely interesting, unless there is something striking to report. And that is the case this time with SentinelOne. Indeed, it closed a quarter with a profit for the first time, with a positive result of 0.01 percent when it comes to Earnings per Share (EPS).
Rising revenues, especially for security vendors, have been more or less common in recent years. The security challenges are getting bigger for organizations, so investments must be made. Even with that in mind, SentinelOne’s Q2 revenue increase of 33 percent in its current fiscal year is excellent. In absolute numbers, revenue jumps from $149 million in Q2 of last year to $199 million this year. In absolute terms, the jump in Annual Recurring Revenue (ARR) is even slightly larger (from $612 million to $806 million). Relatively, this is an increase of 32 percent.
Based on the numbers, larger customers seem to have a significant share in the increase in ARR (and quarterly revenue). SentinelOne reports 24 percent more customers with an ARR of $100,000 or higher. That means a total of 1233 of customers in this bracket. These are customers who purchase more than $100,000 in licenses/subscriptions annually. According to SentinelOne, the number of customers spending more than $1 million a year with the company grew even faster. However, it does not give absolute numbers on that, so we suspect those are still relatively low. Even a relative growth of hundreds of percent can be quite normal in such a situation. On the other hand, in absolute terms, those kinds of customers of course contribute a lot to the results. So again, this is a very positive sign.
Outlook
SentinelOne’s outlook for the next quarter and its final annual results are also positive. The company expects to add another $10 million or so next quarter to reach $209.5 million. For the full year, it is expected to hit the upper limit of expectations and achieve revenue of $815 million. That’s a 31 percent growth from the previous fiscal year. If such growth continues, it won’t be long before SentinelOne too gains entry into the “1 billion dollar club”.
All in all, SentinelOne recorded its twelfth consecutive quarter of double digit revenue growth last quarter. We wouldn’t be surprised if that growth picks up some more in the coming quarters. SentinelOne’s Singularity Platform is becoming increasingly powerful, and the company says it is seeing increasing demand and interest from the market. In this regard, the “CrowdStrike effect” should also not be underestimated. Besides Microsoft, CrowdStrike is one of SentinelOne’s main competitors after all. It will not have escaped anyone’s attention that CrowdStrike has had some problems recently (read all about it via this link). That should start to have implications for both CrowdStrike and SentinelOne.