- ARR & Revenue Growth: Total ARR grew 23% YoY to $259M, with net new ARR of $54M.
- International Expansion: 34% revenue growth in international markets, accounting for 40% of total revenue.
- High-Margin Performance: 79% gross margin, 10% net income margin, and 7% operating profitability in Q3.
- Emerging Solutions Growth: Purple AI achieved >40% license attach rate; Data Solutions bookings grew triple digits YoY.
- Strategic Acquisitions: Acquired Observo AI for $225M to enhance real-time data pipeline capabilities, boosting RPO to $1.3B.
Financial Performance
The company's financial performance was impressive, with revenue growth driven by international markets, which grew 34% and represented 40% of total revenue. Customers with ARR of $100,000 or more grew 20% to 1,572, and ARR per customer reached a new company record. Gross margin remained industry-leading at 79%, and operating profitability improved by nearly 1,200 basis points year-over-year.
Emerging Platform Solutions
SentinelOne's emerging platform solutions continue to scale and achieve outsized growth, with Purple AI growth exceeding expectations, and Data Solutions bookings growth accelerating to triple digits year-over-year. The acquisition of Observo AI expanded the company's data pipeline capabilities, enabling real-time telemetry pipeline management. The company also introduced Prompt Security, addressing the growing need for secure AI usage.
Guidance and Outlook
The company guided for continued durable and profitable growth, with revenue expected to be approximately $1.001 billion for fiscal year '26, representing 22% year-over-year growth. Gross margin is expected to remain at the high 70s level, with operating margin slightly exceeding 3% for the full year. SentinelOne reaffirmed its commitment to delivering positive free cash flow for the full year.
Valuation
SentinelOne's current valuation metrics indicate a P/S Ratio of 4.88 and an EV/EBITDA of -16.91. Given the company's growth prospects, with analysts estimating revenue growth at 22.4% next year, the current valuation appears reasonable. However, investors should continue to monitor the company's ability to sustain its growth momentum and improve its profitability.