SentinelOne ARR Tops 1 Billion in Q2

SentinelOne (NYSE:S) reported fiscal second quarter ended July 31, 2025, results on August 28, 2025, delivering 24% year-over-year (YoY) annual recurring revenue (ARR) growth to surpass $1 billion (non-GAAP), 22% YoY revenue growth to $242 million, with an industry-leading 79% gross margin. Management raised full-year revenue guidance for the fiscal year ending Jan. 31, 2026, to $998 million to $1.002 billion (non-GAAP) and highlighted the approximately $180 million acquisition of Prompt Security, expected to close in the fiscal third quarter ending Oct. 31, 2025, to expand into GenAI security and data loss prevention (DLP).

Record ARR and platform traction drive outperformance

Net new ARR (non-GAAP) exceeded internal expectations by approximately 40%, with both new logo acquisition and existing customer expansion each contributing roughly half of growth (non-GAAP), alongside a 23% year-over-year increase in customers with ARR above $100,000 (non-GAAP). Non-endpoint products such as Purple AI, AI SIEM (Security Information and Event Management), and data solutions represented about 50% of total quarterly bookings (non-GAAP). This indicates successful platform diversification.

"Our total ARR grew 24% and crossed $1 billion, a significant milestone in our growth journey. We also achieved a record second quarter net new ARR reflecting positive year-over-year growth of over 20% and a strong uptick in new business generation. That's a clear reflection of our team's execution, business momentum, and rising demand for SentinelOne's AI-powered cybersecurity. Our fiscal second quarter performance was broad-based, with strong contributions from new customer additions, expansion with existing accounts, and increased adoption of our AI and data solutions. These results underscore our stronger competitive position and growing product differentiation. We continue to maintain a top-tier growth profile while driving operating leverage. Following a strong fiscal second quarter outperformance, we're raising our full-year revenue outlook while remaining prudent in our assumptions for the second half given a dynamic macro backdrop."
-- Tomer Weingarten, CEO

This momentum signals a tangible business mix shift and validates SentinelOne's strategy to drive high-margin, multiproduct expansion within both new and existing enterprise accounts (non-GAAP). This supports increased operating leverage and durability of growth.

SentinelOne Flex shifts consumption model, fuels larger deals

Launched in the fiscal second quarter ended July 31, 2025, SentinelOne Flex yielded its first eight-figure total contract value (TCV) platform deal, enabling customers to dynamically access the full suite of nearly 30 modular solutions, with early adoption by mid- and large-sized organizations looking to scale security investment efficiently. Flex is expected to support deal size growth, increase average contract duration, and streamline procurement for renewals and new logos, with Prompt Security being added to the available product set.

"We've also launched SentinelOne Flex, a major step forward in how customers adopt the Singularity platform. It's a unified flexible licensing model that gives organizations the agility to manage entitlements, seamlessly deploy new platform capabilities, and drive greater return on their security investments. Flex provides customers with full access to the entire Singularity platform, enhancing our opportunity to expand our footprint across customer environments. The reception for Flex is outstanding, with an 8-figure total deal value validating the model and many customers and prospects choosing the new structure. It enables our team to land bigger deals with higher efficiency and expand with greater velocity."
-- Tomer Weingarten, CEO

This augments the long-term value per customer and enhances sales pipeline visibility.

Expanding AI-native platform with Prompt Security acquisition

The $180 million acquisition of Prompt Security, expected to close in the fiscal third quarter ending Oct. 31, 2025, provides SentinelOne with proprietary capabilities for runtime GenAI governance, endpoint-based data protection, and DLP, directly addressing urgent enterprise risks around uncontrolled AI usage and shadow IT. Prompt's technology integrates natively into the Singularity platform, targeting both endpoint (SOC and DLP teams) and cloud security buyers and positions SentinelOne as an early mover in GenAI security as adoption accelerates across industries.

"To extend our innovation lead and further differentiate our AI-powered platform, we also announced the acquisition of Prompt Security, a pioneer in securing generative AI at runtime, preventing GenAI-related data leakage, and delivering security for AI agents. GenAI adoption is exploding across all industries, which brings a new class of risks and exposure. As GenAI and agentic AI fundamentally reshape how businesses operate, new risks are emerging around visibility, compliance, data leakage, and control. Prompt Security enhances the Singularity platform with the ability to monitor, govern, and control GenAI usage in the enterprise. These are critical capabilities that every CIO and CISO is now prioritizing."
-- Tomer Weingarten, CEO

This move opens an incremental total addressable market (TAM), fortifies SentinelOne’s claim to AI-native security leadership, and creates the foundation for upside as GenAI and DLP compliance requirements proliferate in the enterprise segment.

Looking Ahead

Management guided fiscal third quarter ending Oct. 31, 2025, revenue (non-GAAP) to $256 million (22% YoY growth), with full-year revenue (non-GAAP, fiscal year ending Jan. 31, 2026) now expected in the $998 million to $1.002 billion range (22% YoY), gross margin of 78.5% to 79% for the full year, and full-year operating margin (non-GAAP) of approximately 3%, including an 80 basis point dilution from the Prompt Security acquisition. Management maintains expectations for positive full-year free cash flow and operating profit, and expects the Prompt acquisition to close in the fiscal third quarter ending Oct. 31, 2025, with minimal fiscal year ending Jan. 31, 2026, revenue impact but a strategic position for long-term growth in the GenAI security market.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends SentinelOne. The Motley Fool has a disclosure policy.