SentinelOne stock plunges despite CEO hailing ‘transformative year’
Shares fell in extended trading after the company’s revenue forecast missed estimates.
SentinelOne forecasted first-quarter and annual revenue below Wall Street expectations on Wednesday, citing intense competition and softer enterprise spending amid economic uncertainty. The news sent its shares down 14% after the bell, overshadowing what CEO Tomer Weingarten described as a “transformative year” for the cybersecurity firm.
The company expects its annual revenue to be between $1.01 billion and $1.012 billion, compared with analysts' average estimate of $1.03 billion, according to data compiled by LSEG. It forecasts first-quarter revenue of $228 million, compared with an estimate of $235.1 million. Revenue for the fourth quarter ended January 31 came in at $225.5 million, beating an estimate of $222.3 million. Adjusted profit per share for the fourth quarter was 4 cents, above estimates of 1 cent per share.
“Fiscal year '25 was a transformative year for SentinelOne, ending with a strong Q4 that exceeded our expectations across all guided metrics,” Weingarten told analysts on the earnings call. “Notably, we reaccelerated second-half net new ARR growth back into positive territory.”
Strong execution but tough market dynamics
Despite the lower-than-expected guidance, Weingarten emphasized SentinelOne’s momentum, highlighting strong customer acquisition, platform adoption, and significant financial milestones. “Once again, we delivered industry-leading revenue growth and margin improvement,” he said. “We were one of the only software companies at scale to achieve over 30% top-line growth while driving over 15 percentage points of operating margin expansion.”
The company also marked a key shift in its strategy, evolving from an endpoint-focused business to a broader AI-driven cybersecurity platform. “We successfully transformed our business from an endpoint-focused model to a comprehensive, leading AI-native cybersecurity platform,” Weingarten stated.
However, industry-wide pricing pressure and cautious enterprise spending remain headwinds. Analysts have noted that larger platform players such as Palo Alto Networks and CrowdStrike have ramped up aggressive pricing strategies, creating challenges for smaller security firms.
A billion-dollar milestone ahead
Despite the stock’s sharp decline, SentinelOne remains optimistic about its long-term trajectory. “We expect to surpass $1 billion in both ARR and revenue this year, an important milestone in our growth journey,” Weingarten said. “We also expect to achieve full-year operating income profitability while continuing to invest in our platform and future opportunities.”
Still, the broader cybersecurity landscape remains volatile. With enterprises tightening budgets and AI-powered threats on the rise, SentinelOne faces a challenging path ahead. As Weingarten put it, “We believe the company is well positioned for sustained growth and profitability at scale,” but execution in fiscal year '26 will be critical.
For now, investors appear unconvinced, sending SentinelOne’s stock lower despite its CEO’s confidence in the company’s long-term strategy.
