SentinelOne (NYSE:S) reported second-quarter fiscal 2027 results that exceeded its guidance for revenue, operating income and earnings per share, as the cybersecurity company cited growth in artificial intelligence security, cloud and data offerings alongside continued endpoint demand.
Revenue for the quarter ended July 31, 2026, rose 21% year over year to $292 million, above the high end of the company’s outlook. International markets accounted for 39% of revenue. Total annual recurring revenue, or ARR, increased 22%, while record second-quarter net new ARR totaled $56 million, up 4% from a year earlier.
AI Security Products Gain Momentum
Weingarten said ARR from SentinelOne’s AI security offerings, Prompt Security and Purple AI, tripled year over year in the second quarter. He said the company expects AI security to become its next nine-figure ARR category after endpoint, cloud, data and Wayfinder.
Prompt Security remained the company’s fastest-growing platform solution, according to Weingarten. He said the offering is benefiting as organizations seek visibility, compliance controls and guardrails for AI models and autonomous agents. Bell Canada selected Prompt Security to secure its network, Weingarten said, citing requirements for real-time visibility, automated guardrails and compliance.
Purple AI, SentinelOne’s AI security operations center offering, is also seeing adoption among new and existing customers, the company said. Weingarten said its agentic investigation features can analyze alerts across complex environments and produce assessments in seconds rather than hours. He cited an IDC study that found a 338% three-year return on investment for Purple AI customers.
During the question-and-answer session, Weingarten said demand related to AI preparedness was broad-based rather than limited to a single product category. He said modern endpoint protection, data ingestion and response capabilities, cloud workload security, and AI security tools all play roles in helping organizations monitor and secure AI at runtime.
“We are seeing an acceleration in our data platform, we are seeing an acceleration in our Singularity Cloud workload security, and obviously, we are seeing acceleration with our AI security products,” Weingarten said.
Platform Adoption and Larger Contracts Support Growth
SentinelOne said customers are increasingly adopting multiple products across the Singularity Platform. ARR per customer reached a company record and rose by a double-digit percentage year over year, led by larger customers and broader cross-platform adoption.
The company said dollar-based net retention among customers spending at least $100,000 in ARR improved both sequentially and year over year for a third straight quarter. CFO Sonalee Parekh attributed the trend to multi-product adoption, contributions from AI products, and investments in renewal automation.
SentinelOne also reported that its remaining performance obligations, or RPO, rose 45% to a record $1.7 billion. Parekh said the growth was supported by larger customer deployments and longer contract durations, including seven- and eight-figure deals.
Management highlighted several customer wins, including an aerospace and defense enterprise that replaced a primary competitor across endpoint, data, cloud and AI security; a global services firm that selected SentinelOne’s AI SIEM; and a global financial institution that standardized on the company’s cloud-security platform.
Weingarten said SentinelOne continues to see an opportunity to replace legacy antivirus and endpoint products, noting that nearly half of the sector still relies on legacy antivirus. He also identified sovereign AI security as a potential tailwind, arguing that organizations seeking to retain control of sensitive data may need platforms deployable in cloud, on-premises and air-gapped environments.
Margins Expand as Company Raises Outlook
SentinelOne reported a non-GAAP operating margin of 10% in the second quarter, an 820-basis-point improvement from a year earlier and above its guided range. Non-GAAP earnings per share were $0.08, doubling year over year.
Sales and marketing expense was 34% of revenue, improving by more than 900 basis points from the prior year. Parekh said the company is seeing greater sales productivity, larger customer deployments and shorter deal cycles.
On a trailing 12-month basis, adjusted free-cash-flow margin reached 6%, improving by roughly 400 basis points year over year. SentinelOne ended the quarter with $813 million in cash equivalents and investments and no debt.
The company raised its full-year fiscal 2027 revenue outlook to $1.202 billion to $1.207 billion, representing 20% year-over-year growth at the midpoint. For the fiscal third quarter, SentinelOne expects revenue of $309 million to $311 million, also representing 20% growth at the midpoint.
- Full-year operating income outlook: $124 million to $128 million, or about a 10% margin at the midpoint.
- Third-quarter operating income outlook: $38 million to $40 million, or about a 13% margin at the midpoint.
- Full-year diluted EPS outlook: $0.30 to $0.32.
- Third-quarter diluted EPS outlook: $0.08 to $0.09.
Parekh said the company expects margins to continue improving in the second half, though not at the same rate as in recent quarters, as SentinelOne reinvests in AI security, cloud, data products, partner channels and other growth initiatives.
While SentinelOne does not provide specific net new ARR guidance, Parekh said the company expects full-year net new ARR to grow year over year. She said the raised revenue outlook reflects a solid pipeline, improving retention, larger deals, expanding platform adoption and stronger demand signals across the business.
About SentinelOne (NYSE:S)
SentinelOne, Inc is a cybersecurity company specializing in AI-driven, autonomous endpoint protection. Founded in 2013 and headquartered in Mountain View, California, the firm developed its Singularity Platform to unify prevention, detection, response, and hunting across endpoints, cloud workloads, containers and IoT devices. SentinelOne’s solutions leverage machine learning and behavioral analytics to identify threats in real time, automate remediation workflows and deliver forensics to support rapid incident response.
The company’s flagship product suite includes endpoint security agents, cloud workload protection, identity threat detection and extended detection and response (XDR) capabilities.
