SentinelOne Inc (NYSE:S) reported fiscal first-quarter 2026 results that met expectations, but the company’s shares fell more than 14% in premarket trading Thursday following disappointing guidance.
The cybersecurity firm posted adjusted earnings per share of $0.02, matching analyst estimates. Revenue grew 23% year-over-year to $229 million, slightly above the consensus of $228.34 million. Annualized recurring revenue (ARR) increased 24% year-over-year to $948.1 million.
“Our top-tier growth and margin improvement reflect continued platform momentum and customer success,” said CEO Tomer Weingarten. “Our innovation engine is fueling adoption across AI, Data, Cloud, and Endpoint.”
However, SentinelOne’s guidance fell short of expectations. The company forecast second-quarter revenue of $242 million, below the $245 million analysts anticipated. For fiscal year 2026, SentinelOne projects revenue between $996 million and $1.001 billion, also below the consensus estimate of $1.01 billion.
Bank of America analysts downgraded SentinelOne shares to Neutral after the report, citing “lowered expectations and weak business trends.” Wells Fargo similarly cut its rating to Equal Weight from Overweight and lowered the price target to $18 from $22. “We are downgrading shares to EW and lowering our PT to $18, as we believe SentinelOne has missed the opportunity to drive strong growth in net new ARR,” the firm noted.
Despite the weak outlook, SentinelOne highlighted improvements in profitability. The company achieved a record free cash flow margin of 20%, up 2 percentage points year-over-year. Non-GAAP operating margin improved to -2% from -6% a year ago.
CFO Barbara Larson said, “We delivered strong revenue growth and achieved record free cash flow margin, demonstrating the scalability of our model and ongoing operational discipline.”
In a show of confidence, SentinelOne’s board authorized a $200 million share repurchase program. The company ended the quarter with $1.2 billion in cash and investments.