SentinelOne (S) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue grew 28% year-over-year to $210.6 million, with ARR up 29% to $859.7 million as of October 31, 2024, driven by new customer sales and expanded usage by existing customers.

• Customers with ARR of $100,000+ increased 24% to 1,310, reflecting strong enterprise adoption and record large enterprise wins.

• Achieved positive free cash flow on a trailing-twelve-month basis for the first time.

• The Singularity platform, including Purple AI and AI SIEM, drove significant customer interest and adoption, with notable wins in large enterprise and federal sectors.

• Industry recognition included leadership in Gartner's Magic Quadrant and multiple product awards, reinforcing technology leadership.

Financial highlights

• Q3 revenue increased 28% year-over-year to $210.6 million; total ARR grew 29% to $859.7 million.

• Net new ARR of $54 million grew 22% sequentially and 4% year-over-year, marking a return to positive growth.

• Non-GAAP operating margin improved to (5)% from (11)% year-over-year; GAAP operating margin was (42)%, up from (50)%.

• Gross margin reached 80% (non-GAAP) and 75% (GAAP) in Q3; operating margin improved by 6 percentage points year-over-year to negative 5%.

• Cash, cash equivalents, and investments totaled $1.1 billion at quarter end; positive net income for two consecutive quarters and positive free cash flow on a trailing 12-month basis.

Outlook and guidance

• Full FY25 revenue outlook raised to $818 million, up 32% year-over-year; Q4 revenue guidance is $222 million, up 27% year-over-year.

• Full-year non-GAAP gross margin expected at 79%, up 150 basis points year-over-year; non-GAAP operating margin expected at (4)%, a 15-point improvement from FY24.

• Q4 non-GAAP operating margin expected at (3)%, a 6-point year-over-year improvement.

• Management expects global macroeconomic headwinds, including longer sales cycles and deal downsizing, to persist in the near term.

• The company plans to continue investing in product innovation, AI, and international expansion while monitoring market conditions.