SentinelOne’s (NYSE:S) Q2 CY2026: Beats On Revenue But Stock Drops

Cybersecurity AI platform provider SentinelOne (NYSE:S) announced better-than-expected revenue in Q2 CY2026, with sales up 20.6% year on year to $292 million. The company expects next quarter’s revenue to be around $310 million, close to analysts’ estimates. Its non-GAAP profit of $0.08 per share was in line with analysts’ consensus estimates.

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“Our Q2 performance demonstrates strong progress across every dimension of our business – a top-tier growth profile, accelerating platform adoption, and undisputed technology leadership for both AI for Security and Security for AI,” said Tomer Weingarten, CEO of SentinelOne. “AI is transforming the way software is built, businesses are operated, and cybersecurity is delivered. With AI-native runtime protection fundamental to the Singularity platform’s architecture, SentinelOne is uniquely positioned to lead the future of AI cybersecurity.”

Company Overview

Built on the principle of “fighting machine with machine,” SentinelOne (NYSE:S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, SentinelOne grew its sales at an incredible 51.5% compounded annual growth rate. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis.

Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. SentinelOne’s annualized revenue growth of 23.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, SentinelOne reported robust year-on-year revenue growth of 20.6%, and its $292 million of revenue topped Wall Street estimates by 0.6%. Company management is currently guiding for a 19.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 18.8% over the next 12 months, a deceleration versus the last two years. Still, this projection is healthy and implies the market is forecasting success for its products and services.

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Annual Recurring Revenue

While reported revenue for a software company can include low-margin items like implementation fees, annual recurring revenue (ARR) is a sum of the next 12 months of contracted revenue purely from software subscriptions, or the high-margin, predictable revenue streams that make SaaS businesses so valuable.

SentinelOne’s ARR punched in at $1.22 billion in Q2, and over the last four quarters, its growth was impressive as it averaged 22.2% year-on-year increases. This performance aligned with its total sales growth and shows that customers are willing to take multi-year bets on the company’s technology. Its growth also makes SentinelOne a more predictable business, a tailwind for its valuation as investors typically prefer businesses with recurring revenue.

Enterprise Customer Base

This quarter, SentinelOne reported 1,715 enterprise customers paying more than $100,000 annually, an increase of 13 from the previous quarter. That’s a fair bit fewer contract wins than last quarter and a fair bit below what we’ve observed over the previous year, suggesting its sales momentum with new enterprise customers is slowing. It also implies that SentinelOne will likely need to upsell its existing large customers or move down market to maintain its top-line growth.

Key Takeaways from SentinelOne’s Q2 Results

We were impressed by how significantly SentinelOne blew past analysts’ adjusted operating income expectations this quarter. On the other hand, its full-year EPS guidance missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 6.6% to $21.24 immediately after reporting.

SentinelOne underperformed this quarter, but does that create an opportunity to invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).