S - Earnings call 3 2024 | SentinelOne, Inc.

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Operator

Good afternoon. Thank you for attending the SentinelOne Q3 FY 2024 Earnings Conference Call. My name is Victoria, and I'll be your moderator today. [Operator Instructions]

I would now like to pass the conference over to your host, Doug Clark, Vice President, Investor Relations. you. Thank

Doug. proceed, may You

Douglas Clark

Dave afternoon, everyone, the October Earnings for CEO; to With and Quarter of welcome and Weingarten, Third Tomer ended today SentinelOne's CFO. Fiscal us Call are Good Bernhardt, Year XX. 'XX

call will were website live Our and earlier an via concludes. Relations of webcast, are shareholder call after This replay Investor today our the and issued website. press be on is the our release section and the available letter on posted being audio broadcast

I statements to future reflect currently begin, remind including that materially. best financial we on as fourth to Before would making factors and could fiscal or based us our 'XX as you full the targets. performance, during well We like such year judgment be known fiscal we'll forward-looking and our our financial differ quarter our for today's results long-term events actual call, guidance that statements and events about and caution that you

the accurate forward-looking Please file particular, if refer information from the the our after as update the materially our those XX-K and results annual Form documents differ XX-Q. not to in in no contain these quarterly with update from time and even These is on future. the or of SEC, call the or forward-looking today. new the on time we Form reasons in to report to statements current documents actual reports available we identify information that as Except our results information. to contained being obligation made publicly may becomes anticipated differ other and presented could during actual statements today, those required statements, this or reviewed important statements. replayed may contain by assume in If materially this cause call from law, Any forward-looking call are factors to our forward-looking risk during information made

in non-GAAP are in is this not financial of financial GAAP and measures call, results accepted release accounting substitute our not results. principles. These A press stated. letter. shareholder a reconciliation unless measures prepared to our measures be GAAP intended provided accordance non-GAAP During today's with discuss are the otherwise non-GAAP for in non-GAAP These we generally and will

excludes expense stock-based stock press cannot this be acquired acquisition-related tax compensation intangible financial payroll which restructuring at on therefore, gain investments, in outlook employee expense, today's and transactions, compensation on employer time not reconciled of Our costs, are, charges and amortization strategic determined release. assets,

And the Weingarten, to me with of turn over call Tomer CEO let that, SentinelOne.

Tomer Weingarten

in which execution call. joining solid for our our both delivered another environment. demanding fiscal and Good afternoon, strong We you again, once earnings third year of line bottom was all line top quarter fiscal metrics. quarter expectations thank everyone, quarter on raising for third we're This macro and key results, exceeded And XXXX. guidance our a

to with continue endpoint platform. security modernize Enterprises a their singularity

enterprises. In we've addition, And solutions data AI lake Purple which security to combined delivering that we're announce begun digits. seeing strong demand triple pleased and to for I'm our grew cloud

commitments. longer-term leading enterprises We also partners and lead our larger expanded business and solidified to with our mid-market with MSP

negative we significant making improving continued margin income profitability net towards to X%. Finally, progress our with

Our leadership pace growth. technology of innovation continue to and fuel

out in For received a Evaluations capabilities. protection experience outstanding we security, of customer Insights, the of threat ATT&CK and real-time driven year, Peer for MITRE the SentinelOne Gartner by is XXX% the product X In fourth with which consecutive autonomous landscape. critical score led X.X modern

future. ahead SentinelOne and once of across again AI, cloud, the selling adversaries platform into breakthrough leading needs, the far experienced organization a other and We're delivering enterprise industry security now vendors. fully security addressing from apart with unified We're endpoint, critical innovations data remaining

letter a always, As lot more detail. Relations read shareholder on which website, provides published please our Investor the

the two, areas: multiple markets. one, key quarterly across and three, performance; today's and growth of innovations future I'll that state three On leadership our environment cover drive magnify of strong technology broader call, demand details cybersecurity; our

our exceeded and which into quarter Let's double-click our third performance, top bottom expectations. line

growth XX% grew and new XX% accelerated and positive to combination Revenue Net ARR tensions, of solid ARR a geopolitical technology Despite combination existing of of macro business is year-over-year, the new and XX% driven by total customers grew persistent customer and year-over-year. expansion. escalation superior driving momentum. challenges execution

scalability than points spot. we record profitability a of posted towards X%. cash flow and only We the flow This progress cash of Our our of remains ninth negative margin XX%, our quarter the net of free half building achieving to expansion. operating in margin next on margin gross by and this our In We remain XX in free reflects tremendous second a more power year. margin the committed percentage delivered XX fiscal progress income of high and points consecutive positive year-over-year, approached parallel, progress model. bright business improved

already partnerships. We MSSP are leader large businesses a succeeding we're in to our the market smaller through mid-market where endpoint enterprises proven and from

our picking expansion of adjacent momentum up. markets the endpoint, is platform Beyond into

customers Our is base total not our now it XX,XXX, recall, include customer does by MSSP number understated served the as partners. this exceeds dramatically

as customers time, $X more managed MSSPs than faster. to ARR $XXX,XXX services, than increasingly the At with scalable for highly XX% with even are We're protecting million more mid-market. ARR security to customers through customers the enterprises this and which in grew same grew is address way channel turning a more

enterprises customer, platform large per adoption increased year-over-year. Our XX% which with continues to drive success ARR about and higher

choose many engagements endpoint generated in and of cloud global care aspects platform. across secured the platform as the continue and agencies. In several multiple multinational data federal identity lake. singularity Similarly, singularity and our health arena providers, momentum technology pioneers new include QX, such we large These enterprises to strong the corporations

our highly solutions. seen illustrates technologies end-to-end demand with and lake data In more Lake and Singularity uptick so Cloud our a differentiated Singularity they [ diversity XX% represented We've and the of Data unified were Data and our expanding long-term in Lake much over are for fastest-growing growing enterprise-critical of TAMs are cloud than Singularity business and and These massive growth modules. opportunities. notable grew our horizon. QX, platform Combined, solution. ] bookings Singularity triple digits. quarterly This

retention rate remained categories Our technologies. based early-stage product as potential deploy long-term XXX% additional base. base customer our existing on significant and continues to customer high We satisfaction, from our dollar-based of expanding see adoption platform and net retention north installed

channel enterprises On We to quarter the our to standard in ecosystem. of in partners with strong. represent achieved MSSP another security momentum way partner QX, market the MSSPs in remain our and fastest-growing our the and preeminent category growth SMBs. protect mid-market

make of In choice and help at leadership with QX, position continued security service to Our for the manage platform solidify and growth. MSSPs. remote drive singularity we to platform MSSP. management is scale meaningful providers architecture Multi-tenancy, purpose-built our automation

competitive On in SentinelOne. win When evaluations both the legacy tilts favor competitive endpoint significant providers. majority the against a to look front, of next-gen and of landscape beyond further endpoint you we continue competitive security,

helps in unified products do platform brands architecture enterprises spend, security protection. better user do consoles, value and These consolidate better jointed not and not Our resulting platforms in data mean and security. Bigger result point experience. efficiency better

the by solutions of proven frequently breached. are As these breaches, string massive

should the cyberattacks many and think last shortcoming the Just months, the obvious. be few in high-profile about

cybersecurity autonomous one approach novel delivers real-time place. We superior unified fully that introduced and data enterprise uses and protection a in

organizations are lake. our can't unified AI AI-based architecture adoption cases, and data modernizing to architectures ever More protection. cloud-based data the of infrastructures and offer cloud to enterprise-wide migration security while lake security the the our digital technologies, move enables security before, pace of visibility In evolving. rapidly competitors important With at many also than even now or

worker including areas, distinct We data. unified technology resource-efficient actual of advantages in protection capable these have data architecture and ingesting enterprise-wide then

enterprises with is resulting that enterprises focusing complete believe different and in and endpoint for at deals and will with engaging Over winning regardless of time, data with the better scale on consolidation singularity cloud conversation the manage open is performance data lake singularity are the We vendor. with strategic installed cost from greater Helping platform adoption. a solutions. further these opportunities doors point we platform, security

highlight me examples. Let two

Splunk, Purple and enterprise security deployed future-proofing to consolidating others, experience. singularity AI Data valued and many platform our First, SentinelOne's on enterprise get platform, replaced unified Singularity Lake autonomous enterprise security security. a integrated with needs actions, the customer the posture. that a it their of using data XX security after this also multiple After alongside large has endpoint fully cloud years like fuses

federal endpoint cloud lake wins across quarter, consolidate one data. with federal Second, future. Singularity and that the past is in among singularly the the many of data completely security and to SentinelOne replaced agencies showcasing Data agency SIEM selected SIEM the This solution similarly is Lake, legacy their

Our competitive expansion significant across new technologies demonstrate end wins are customer both wins fueling multiple and markets. how AI-based

further are landscape From of Let's by discussion persist The consistent The landscape. unrelenting. environment perspective, with velocity the global challenges and economic threat demand the dramatically to cybersecurity yet the demand geopolitical relatively rising remains environment complexity quarter. increased. broader and and macro a last turn tensions, have remains attacks typified

example, from As shrunk dwell an more defenses times the presenting real-time days, for need on new challenges months for emphasis and corporate putting have protection. to

be enterprises. Events shows cybersecurity lost attacks priority business can of cost constant dollars, continue unnerving top these CIOs part vendors. consequences single enormous for millions The must slew for large A high-profile A operations. circumvent of about most recent to the of the disrupted they breaches attack platform that is hundreds so-called are reminders the like and around world. these of

online protect in Cyber age normal spilling enterprises. this modules jointed new and of into Vectors attack Geopolitical in taken tensions products and evolving, of point constant are and again, has cyberspace, towards to platforms warfare parts meshed disinformation are a and society. a destabilizing even also Time moving of turn failing the undermining are manipulation. business operations endless of AI. target forever consistently and together list

taking ushering to threat enterprise through a AI-based approach that operations. a new of landscape by one can real-time outpace SentinelOne, we're security, the risk holistic age managing At

needed clear of The security prepare protect CEO cyberattacks. against quantify complex security need the management assess, fast-acting and articulate to from software, in risk Board there's and executives shift Beyond a risks to is and to Directors.

programs. QX, beyond In This their PinnacleOne Stamos just a and Boards who to lead cyber framework world-class renowned potential effective to how across resource and corporate can strategies and the Krebs and a their experts are, better Chris public teams enterprises management governments leaders Both enterprises talent makes security launched thrilled Alex help fortify and will highly help help we build single to governments who and liabilities, what advisory leadership to and after, integrity. cybersecurity they're will and PinnacleOne I'm deploying risks Combining unique the they and product. mitigate SentinelOne. industry so are SentinelOne's have attackers also any to develop PinnacleOne, understand assess world. valuable practice with and technology join strategic impacts.

data areas: Let leading and and our key areas. showcased partner We recently endpoint. and share innovations commitment as cloud, growth me also multiple AI, conference across an always, customer on our to our hosted update first X

As I've data cybersecurity before, a problem. is said

are are to and We first falling fully security a platform. security up. solutions the company to clamoring introduce behind vendors data Legacy SIEM keep are and unified

SIEM level our next the vendor We're and security SentinelOne's our Lake. Singularity scale. interest being the to SIEM looking platform to we the secured unified Data solutions. in enterprise In leading modernize We're from lake. acquired demand with further data fusing delivers and of from SIEM security cost Purple which data enterprises disrupting at high is efficiency through Recent market reinforces away boosting AI by AI. the and legacy deals taking QX, large large data deals, unified performance singularity

recommendations investigations, simplifies analyst entire and times. enhances fully platform it interface. unlocking automate threat response across actions. SOC efficiency and Purple singularity In and every the integrated data is and AI mixed essence, accelerating It hunting, supercharges user

mentioned Purple to earlier, I AI select selling started As we've already customers.

and in data Purple year. of us general market. next to enterprise-wide availability unified in and position AI QX deliver data The the combination legacy expect security a We puts disrupt strong analytics of

expanding offerings. cloud we're our security Next,

ATT&CK We leadership our In We year the fourth Evaluations. in workload to have next cloud a in Engenuity the agent-based cloud end CNAPP of in more full-featured cloud the with leadership and year, achieved points. singularity are consecutive couple technology and protection quarters. to maintain continue agentless we and will become And share security. already data We'll of the will leading always, capabilities. as coming MITRE

Our philosophy on to year's reflects speed approach protection and MITRE autonomous that this security critical. evaluation our are

time extra difference to the the to autonomous, modern a is or world. offer built simulation Singularity see will results. you configuration test, and competitor over and changes. threats. and in XX to do-overs changes. modifiers real-time, next-gen real between contrast, had is be don't delays protection AI-driven make closest our SentinelOne configuration Achieving this in participants chance or XXX% a detection most any delays and combat Attackers X configuration against critical without In Unlike

Before was team in remarks, transition expertise. exciting Michael November in billion Chief he over security bring I'd unrivaled several some updates. SentinelOne has leadership Michael Cremen data where Elastic, unites as mission. our This the scaling in us from instrumental as to new terrific concluding past to to my and We've that His like beyond. joined quarters. way CRO industry a made additions been our the Officer. $X business mention some experience planned thoughtfully joins Revenue to ideally and our matches

I thank the Parrinello, want our transition. to end and smooth Mark year his remain at SentinelOne to fiscal Mark congratulate well-deserved for former ensure and retirement. CRO, of until contributions this will

global private I cybersecurity and Stamos including They SentinelOne excited to thought giants the Alex also renowned across Facebook public others. Security with Krebs experience and As Homeland and I'm to leadership deep tech CISA mentioned and earlier, Chris their for like welcome sector, team. are both

our of partners outperformance. Most thank maximizing another our helping and want than we focused Sentinels focused all importantly, as and for opportunity security now technology we're infrastructure valued to the stronger our talent leading quarter remain advance and long-term closing, shareholders. well the In customers, their as and I business are future. on Together, on to ever, in potential. enterprises

With Bernhardt, Officer. turn to that, the Dave I will Chief call over our Financial

David Bernhardt

Thank you, 'XX. for our QX around afternoon, quarterly discuss financials context and I'll year provide Tomer. fiscal guidance and our additional This

non-GAAP, As all discussed margins a and are otherwise all reminder, noted. comparisons year-over-year are unless

million of results and line substantial the XX% quarter. XX% across in third to a ARR grew quarter new $XXX reflecting expansion. million net delivered the high exceeded grew and to $XX Our Revenue million, expectations ARR board. top We growth $XXX margin our

exceeded to ARR seasonality new net and XX% quarter Our our third typical accelerated growth. year-over-year

a by across all We from strength Our XX% growth international has from contribution professional breach accelerated geographies. challenges. of and stronger activity also macro elevated despite benefited driven revenue delivered across grew QX competing of our persistent revenue. markets represented XX% Revenue legacy and platforms. services,

doesn't is acquired practice software As advisory alone solve all launched This KSG Tomer security challenges. expert mentioned, deploying and why we PinnacleOne.

expansion We new customer continue healthy all a mix across of to businesses existing of drive and customers sizes.

year-over-year Our ARR approximately XX% per rose $XX,XXX per customer customer. to

solid particularly momentum by SMBs, fuel our with extension, and partners, MSSP a base continues as to long-term addition, it strong In of was growth.

SentinelOne's market take quarter and cybersecurity. best-in-class competitive share demand and incumbents third We next-gen continue to from position strong signifies performance vendors a our and enterprise for

progress our margin significant beyond spot, remains top Looking profitability by a growth, bright line towards evident improvements.

new comfortably record XX% within economics. XX%, Our and X% unit increasing the target range gross XX% reflects long-term scale our benefit improvement achievement showing margin reached an a or platform our of of of year-over-year and to higher. This important

Our margin is expand innovation to land strategy. of the we the healthy success and also of customers. It and our demonstrates improvement deliver indicative and value pricing

as platform Our single SentinelOne unified security and value data is delivering a well as architecture meaningful for our customers. in

margin quarter consecutive percentage XX ninth more year-over-year expansion. of our marked QX of than operating points

improving improvement. margins. XX%. not Our just our operating to increasing we're margin driving expanded points QX percentage XX discipline operating scale and substantial negative cost And are margin

We've than million the costs. progress. from our to outflow Similarly, success our more $XX in improved efforts also negative to working QX significantly tremendous ago This continuing proactive manage cash negative of reduced our XX%. is about $XX thoughtfully enhance our we reflects and XX% It quarter. capital operating million in year by losses the free by

year. fiscal We our free progress second are the positive this and on achieving cash next in flow half committed of to building

environment year. potential the impact and higher timing remains Moving enter quarter. of of can our dynamics are we dynamics size as to visibility fiscal mindful additional largest prudent these The year our we quarter consistent These last facing guidance be of It's trends still Indeed, of full capital the seasonally deals. layers. cost discussed 'XX. QX, to the for or into QX the approval and customers demand with

macro Despite operating in margin a environment, challenging revenue our expectations and and 'XX. for geopolitical we're raising year fiscal

well. executing are teams Our

win Our are delivering operating leverage. and strong, rates remain we

In about reflecting of QX, million, of expect $XXX we revenue year-over-year. growth XX%

in in reflecting of about our For prior $XXX to to the year, $XXX the growth prior million, million. $XXX increase new we're above from of $XXX beat. fiscal this full This year, up XX% track ARR expectation on about 'XX. million view, the million is QX and compared year an deliver of million, expect of revenue net $XX beyond outlook our on Based for we

go-to-market full and feel ability Based we our higher position, in against year to growth competitive strong momentum our on these confident deliver targets.

Importantly, business we're seeing of in durability new our the growth generation trajectory rates. and

opportunities identity Beyond of years endpoint cloud, to like security, data, growth encouraged adjacent drive and solutions diverse by we're adoption increasing come. platform to our for AI

Turning to for the outlook margins.

Also guide constant margin increase a expect consistent We our margin are to percentage the implying year-over-year we gross about our QX basis, about On XX%, when gross gross margin points. of basis XXX be X for prior with of XX.X%, raising expect a currency a up relatively compared our percentage X.X year-over-year of full XX%. QX. year, to about points up to we and guidance points QX

We and model. continued benefits increasing in business expect data our efficiencies inherent from scale

implying negative expect in points and prior Finally, our an of improvement expectation. to than XX year-over-year operating we be stronger QX, margin XX% percentage is

year, improvement for annual fiscal to raising X% year the implies operating margin a more prior negative our XX%, guide negative are full of compared compared than This guidance we 'XX. to our points to XX%. percentage XX For of significant about up

of cash cash free outlook. improve QX collections and sequentially our based operating the flow expect We to and margin on seasonality margin improved payments

debt. with top cash, have and durability optimize investments X This $X.X very provides and a to in flexibility cash strong We equivalents growth sheet line improvement. billion balance and and margin

free moving improvement delivering achieving to cash closer industry-leading flow generation. and positive We are margin

As TAMs we'll share disruptive capitalize market and to continue said grow before, technologies. with I large on

notably strength, top always, line industry-leading competitive and of evident data, by areas and key on focused and improvement. growth This is selective AI, strong margin endpoint. remains approach as our investment cloud Our

for joining today. all Thank us you

line. take open the questions. Operator, now up please will We

Operator

Our first of [Operator the Tilton comes question Wolfe Research. with Instructions] line Joshua from

Joshua Tilton

bit Congrats to than XX Is be in next expecting. that out space? on to months. there? here, customer solid developed Anything Or additions acquisitions looking just came CNAPP make offering quarter. we a to pretty platform clarifications you the a highlight going just guys in but in were some called are Kind that of a lower broader And in-house? you

Tomer Weingarten

ARR SMBs. But mean, we I moreover, is Moreover, amount additions on And quarter [ exact the is we that across very count something year-over-year, MSP channel trajectory and we ] strong in. another see to seen To the per The always way optimize obviously very want all the significant. of we that go impact that's obviously is rounded that midsized think customer that customer count. a of total ARR spans additions. the to enterprises us, Having customer that customer invest down. our XX% up per is And it was I customer see. the

So of us. that in all goes But kind all, new the a kind very net of customer of into quarter healthy all count. for

We But confident in in more our we're the think, an more portfolio I As internally see have, look never feeling acquisitions, the about that, to for especially out days. CNAPP, capabilities acquisition. how CNAPP very near on future. developing already that, I available in we're if there of market. we a subset there's for these always full But and a focused all, to I interesting we in approach few all think I of quarters. quite a With ability we've precluded kind technologies. provide disciplined, with been already think, think We large any

Operator

of from comes Essex the question Brian JPMorgan. line with next Our

Brian Essex

maybe development And Could consulting more to business? a going intentions to bit the to -- Really that that this unpack see and just your lead interesting response? question to for little PinnacleOne. are going what of you. Tomer, impact Is nice It's is impact that how might expect I part margin Great you one be of with business? more guess, how really innovation-type margins incident expansion. with a we Or might it revenue the gen, forward? see.

Tomer Weingarten

think, already response at PinnacleOne, what's couple of about also for incident We've in not look threat just kind happening the response of within capabilities seen, Absolutely. incredible When attack a Vigilance. Definitely we had look actually And seen product if the We over failure incident have methodology. X in I now. years, landscape years you an the methodologies. past we've shift, firm. in we've of I think, at

risk, boardroom, more People, shift obviously, and more to to to the actually security prospect the quantified also advisory getting It's in customers products, a they're still comes CEO, understand we're address product, some up a have again, much level, assess is and of strategic the way. best the design posture, to the minds to the our conveyed comes breached. what need seeing service, come to security And executive security in only in with that. to a not but that exactly new PinnacleOne cybersecurity strategy yet to their liability the regardless of highly and better risk with obviously. and help

should couple is vendor-neutral. that do, completely if we with get the out think, geopolitical beyond one technology very in leadership, into our Obviously, intelligence overall above that level they customers you service, products This mapping entire and that that a that with you and landscape reduction couple unique we for you that in I ample see risk there for if deploy. of provide the threat the

Brian Essex

size of impact given expand maybe that if more kind margin could Got it's business of don't I it. a and know that And count-focused on business. -- Dave the head

David Bernhardt

QX, essentially mean for it's And I Yes. immaterial.

total $X under the million it's to of think quarter. I impact

So really quarter. or on no effect the margins for current revenue

more And we're visibility year, earnings. we on next obviously next on QX the working that For guys give announce plan we'll you year. when for

Operator

Our Saket with next Kalia line the question comes from of Barclays.

Saket Kalia

out there for SentinelOne? Black not change be competitor you talk the may VMware bit little a a is, of gain Maybe with hands about just again, significant Okay. opportunity that are I the of wanted could share think and you as a in bit you question can you. them Not for a endpoint. that sort whether part maybe reports stay that deal. to as broader think for Great. dig suspects, some may the usual Carbon there environment but just public competitive I into Tomer, little

Tomer Weingarten

can But the the I put you there one lot preeminent in most out past a imagine. been time, same as it's of Yes, of rumors, for couple of the Sure. at definitely stock donors years. don't share

think years. is I it the in decent displacements material, business I With of the so throughout Black can significant so couple impact really stagnated market we've that, is of not a technology change amount the way. think things last a size and endpoint seen the largely pretty Carbon of or in the

But EDR solution, actually endpoint mainly with that, EDR. easy Black again, side, are displacement. the aspects. vendors relatively and both for a for on target to one most Most it's prominent while Carbon was customers cover endpoint right looking one now cover in platform protection both

So that period. well Black, doesn't bode for Carbon

I I it's they're but find or finally going place a where to incremental. not, So don't relatively know feel

Saket Kalia

Got echo comments. I it. maybe you. prior That's follow-up the my it. helpful. Dave, for Got for

to of having great the come? implemented whether most to yet, more you just Just year some into you think maybe is that And much of and Can seen this program restructuring How continued how we've loss. benefit improvement the there's left? the whether restructuring more sort do see talk earlier operating about that of in that played about we this still benefits improvement?

David Bernhardt

Thanks, our we announced since annual it's and Saket. QX. the included in The of in quarterly guide been restructuring, it impact

investments that. from pickup the we're With analyze that no and continuing expense share. So expanding our market real incremental from growth yield said, to for being

is continued our evident in this operating expansion. see You margin

above have benefit And year-over-year restructuring. margin would more improvement. I well X XX% of gotten from and improvement we QX think show our we're results any quarters or straight

June that. from running X, we've been implemented operated We and fully, we think, So essentially I on. on that point off and

Operator

from next Hamza the with of line Our Morgan comes question Fodderwala Stanley.

Hamza Fodderwala

prepared size in that Tomer, help space. Singularity maybe your recent of in of rough and in seeing light for sense, business could, of opportunity if wondering I in you terms the you sort talked Lake Data replacements about lot was M&A a you're remarks. SIEM us what the just

Tomer Weingarten

disclose, more product Sure. of It's stand-alone our a really line. than now. don't size It digit complete definitely data of ingestion. exact It It's modules by right fastest-growing the triple of obviously, We basis. grew pricing the on one consists a business.

endpoint. a very we the is it's for about seat-based different the that billion. The $XX So in -- motion motion than TAM original TAM analytics security see

$XX a becomes If you analytics, it bundle with million of opportunity. about that data target

The others. that in market, that competitor dominant been you ago. These have probably and acquired are that technologies XX years getting of about bunch a vendors mentioned developed

to is of an by some endpoint into of that and focused you no deal customers all-inclusive realize new. Lake, running So if enterprise-wide the an kind a the start on data, index, really that unique chat that's something you not that obviously, palatable very twice the If you scale it can to enterprises unstructured, data data need them. with AI is and lake, today that then both with, provide about we up to Data can, broad-based just generative cost, minutes. value for can type need platform something goes most you top any in Singularity get structured for but of ingest with you half for speed offering capabilities where endpoint, if compounded switching bots and on and maybe Purple capability AI, that and obviously, to like generative a And couple obviously, think AI

and a SIEM that's the market analytics, shift in the security is for and really so, we in why This revolution data SIEM. It's the disruption incredibly do, much why opportunity. a replacing coming was the ever a whole it's modernized about that's market. designed excited or a in do believe can pending. offering, to platform for analytics we're SIEM XX that that the the not beyond about months that with about We next is major with And foresee new

Operator

Needham. Alex of comes the Our Henderson from next question with line

Alex Henderson

want do asked. actually follow-up already questions that were to X I questions to

the on one data first being structure. The lake

adding just you the is there the to get that's observability traditional data, data Splunk that if So in it well like off telemetry as endpoints. think it's value about and the data not networking their adding and telemetry the been but been information SIEM has functionality content the historically as guys AppDynamics. titration Cisco, and of primary merger of in pretty a I clear between your that But lot

to So what of of I beyond is that to data parties to out to extent indications attack need lake of your type indications guess some question and lake of just architecture? third you to incremental add get to in data the captured initial the compromise those reach data are

Tomer Weingarten

we're being data data to lean is Yes. We done actually, all quarter, that deals Look, with one not the key and even many it. built is ingest and we've any on on open, specific last when cases provider. lake don't that we in totally and of the even vendor, our endpoint

on being having it's a us, and any leaning provider these ability directly an us We from from from integration one We're provider, of to ingest ecosystem any to open OCSF. like they the a the the data network members about open own that that enterprise. Splunk. assets, It's complete did it in And Splunk were their alliance. you of that product in data with fully authentication from have complete in format. allows founding your one do really into not platform. So much e-mail ingesting flexibility provider,

What to data which been endpoint log start thought is the classic data. within actually that data line, of fledged components about indicators. same talking why ingest sense it that typically makes not for threat the any data, but lake other Moreover, product. actually We're of be lake you is SIEM ingested. really the the generated reasons curated we indicators, about saying years, a EDR just all of in event can was talking SIEM just with whole it to a we're in analytics. environment, log pieces threat into not into said, XX% that the data any fully enterprise infusing lot of that I've XX% one With embedding find from we

that's think one important, more keeping for becoming an is more requirement keeping the where I logs that in become of and this logs longer. era keys

If for logs a retain it's the be platforms why look you we it is year need Lake, SIEM. Security a to time, when practice. your not XDR, potential high for any with not these of worth incumbent going That's to one of cost-prohibitive at doing it's a Data

that's algorithms, and We also petabyte what AI log to can all want mechanism we allow It's discriminate be vast them that all of logs. scale, accurate built a in, don't believe to versus utilization injection to We putting logs. source. for and better to put threat into all more able get different events this be to able data just once data will much expose we're to it you feed results

Alex Henderson

dollar of will revenue and If generates customer opportunity, managed with throw and what environment that question, that for that or there's to significant ARR has been it accrue of downstream periods? after services pipeline one said. the think have that much PinnacleOne in PinnacleOne a from already last I a of fact. potential the The in you once me worth that Is it's like PinnacleOne every playoff just revenues $X really strikes is that the very working $X ultimately can reasonable that where this it it following

Tomer Weingarten

results in that's can business just hands dire need -- customer there's so, our best definitely just designing into their KSG look, just and and revenue actually even to the But security to like we in us, own And Obviously, the about solve we trying feel is hope here. that in though security and more so. obviously, We perhaps, customers. products North hope whether environments, a customers, putting a deploying big advice beyond Star product what we to sporadic to we're the sales, that us, obviously, base. group gap further that of with consulting help it's in comes

And it's into So if you first. then, will that. that technology, can help with fuel customers yes, obviously,

Operator

the question Tal of America. comes Liani next of Our from line Bank with

Tal Liani

on up down? you that implications mean and the industry-wide. all questions, see why down? seasonality XX%, a I basis, is if that and X%. 'XX, billings it XQ XX%, mean Does up in of security sequential same the only discuss 'XX. duration is it we're trends in Can is look for it's looks Does that up sequential the industry it's the other we don't billings, throughout the is we're names, seeing? the contract this the it now XQ business? again, And pricing are going What asking going But same it. 'XX, was it at been I've XX% seeing like

David Bernhardt

Thanks, The XX% quarterly especially with but up MSSP. quarter-over-quarter, Tal. on were vary they customer Billings grew based billings X% mix, year-over-year. can

and ARR, metric. on focus it's better we So a

in overall put not willingness obviously less larger upfront contract is payments, the we're is duration to a seeing customers' from an but average up enterprise or seeing. or frequent entire standpoint, X% We're for full Just the year industry and multiyears which impacts environment, customers. that contract upfront upfront $X interest

the But changed dynamic year. really we has MSSPs, that past see a over So payments. quarterly -- and with monthly lot of and

the always with us. going that's So be dynamic to

Tal Liani

quarters? deal is flow versus quarter any the And this it. linearity during Got in previous of quarter, there difference

David Bernhardt

fairly was linearity consistent. No,

Tal Liani

Consistent.

Okay. Perfect.

Operator

question Our Trevor line from the next JMP with of Securities. Walsh comes

Trevor Walsh

of type kind the similar of it. of we singularity you one a And takes as around other appreciate that seeing pushback, just been you're data cloud around Great. how be your maybe updates Maybe new of from does attach that conversations, translate may and into the into quick around expect And customer the also Tomer, security with And next the there. an to you that of for uptick? like, adoption Of that I Purple initial then what what if kind rate what's Purple kind Appreciate there maybe year? that. of just you're expecting move AI. of tracks product? beginning on AI puts could Or the just kind primary if if any, of or

Tomer Weingarten

per We're seeing, Sure. type I not any of pushback think, se.

how plan that AI been the some potentially we've environment are we to that customer that of more think address models and more training I questions asked revolved that. around models -- to the tailored

excitement how So largely there thinking of we're a capability lot of terms is about I towards it. the think in

kept. responsibly. sure obviously, is sure Obviously, it to safeguards. make make We we're We there's new to the it doing scale whole that takes technology. right want some privacy to want a And time

deal All for are average make things We of ours. just company we place. mean not are like with important things consumer in these to we're company. these I a an need incredibly security, and sure

line of just Purple a mean, definitely for the another almost not right? is magnitude, it's terms AI us, I module. I mean product In

like our It the days. we're treating in looks it, mean, something Purple something definitely what data. anticipate early the But it, how go-to-market, magnitude we're promising. very, structuring we how XX So of will like call again, very months contribute cloud, it's is I next the, in

think capability, one in not It's something enterprise-wide again, per it's so it an virtually footprint can enterprise and the not of for application once I that se. endless that just you fact it's the something the be sell that environment.

I think seeing that puts its us the in we're security of in offerings in of a the terms own other space. that league

Operator

with next Davidson. comes the Rudy Kessinger The line of question from D.A.

Rudy Kessinger

for probably just implied the new guess guess, and saw about, I the net I you half new the last ARR net ARR, I QX guess, Dave, QX versus on growth as year.

QX, I what are your assumptions just rates, of also close budget QX relative guess, So cetera, year? on flush, but et last to,

David Bernhardt

Yes.

the from in obviously, year, increased about million. our for up to full new we've So net million $XXX guidance ARR $XXX

we're seeing was new We're expecting stabilization. it last of flat clear QX really essentially We a We've signs to So what flush. expect budget to net recipient don't of year. in QX a never ARR be been that. of

mind largest We historically. seasonally to wouldn't of about we're quarter if is year this thinking be come. QX to year. different this way the our I it Although don't than QX the that expect really, it But any were is

is to expecting and We are upside I to want QX. teams. execution uncertainties. of uncertainty, had to think the Those typical with with we're the in into overall, the and to there's the seeing. of And pleased to pleased outlook be just with be the our still we're geopolitical we're pleased We we're dynamics. carry delivered continuing evolving there's about things think We of mindful one macro seasonality, QX. persist. that performance QX, But concerned we outperformed We're macro I

for optimistic are and getting that better. QX seeing we're stabilization So visibility things we us makes the have

Rudy Kessinger

margin And see. very just quick a Okay. nice then to follow-up. The very, improvement,

QX points down that any XX% back one-time the margins, in QX. that gross drove on in XXX basis about out why Just and items to step call

David Bernhardt

XXX amount about points of to end we have gain. The especially Obviously, FX support QX. shekel basis dollar fair the U.S. favorable of people the across There's of U.S. Europe. saw -- a to over

has currency at roughly basis, we're guiding in for on that far we'd X.X%, assuming slipped have we're the But of about same QX. been what QX. which Some thus is constant a

Operator

line next of question with Goldman Gabriela the Our is Borges Sachs. from

Unknown Analyst

for This Gabriela. is on [ ] Max

you. we question, have to the prior follow-up a for question a As

great As you new think is what your place. priorities to get year, XXXX with planning especially observation in your fiscal it your would into in on next about year assumptions, headed CRO incrementally changing your be

Tomer Weingarten

our market before feels execute next to prudent to provide get turning year outlook new year budget position we Look, strong of the We'll is calendar to the quarter. and and an It a largest well. quarter expectations.

drivers. multiple growth we have think I

still as And any It's conditions economic the to battering goal same. very, time, are mentioned, margins. assuming the significantly the obviously, And growth we're present. and Our next remains at improve same year. maximize challenges very Dave not

It by new a to is very we something quite encouraged very that Obviously, us. a Michael with We're of CRO. We're excited our have few wealth planned quarters. experience. brings definitely for

business the wish also years best of to We billion. we look the beyond And in to X the next really Mark scaling couple want his in retirement. forward

Operator

Our the from next line Ray comes McDonough Guggenheim. question with of

Raymond McDonough

some in Or to macro, the about relatively But the over area, around still stable. has those are been seeing we've you couple renewals. general, of all? behavior? downsizing in quarters, change trends specifically are at Are understand past talked Tomer, customer around on commentary similar starting And renewals. that the I that trends

next rates Do year feeling spend to up? may shaping be intense? environment heading just continuing year, feel transpired November Just more as kind And look out, what you threat are close broader your any of calendar those next and helpful. as as get the the level into maybe you around to talk would at and how conversations improve commentary next year you budget spend to into seems about security zoom going on in customers

Tomer Weingarten

consistent. is say I like they buy Yes. licenses don't that Look, something they pretty anybody use. things forward feels can for don't that think I all remain that can

think I with dynamic there's don't need that rightsizing, mind Cybersecurity top new changes use, stay. has that. years anything understanding now. to for think I to in think don't what anything you I that. of here truly So is been

no really in can So this all, I at all change I think in that call point there's time. out

Raymond McDonough

been that's And where scale, year data the consumption overages? ARR Okay. that solution that on of maybe data about to assuming what the And majority about growth successful comes Makes would can you're lake you've consumption continues overages lake talk potentially think the as commitments, seeing? being tailwind from? patterns capturing to And extent which Dave, incremental revenue sense. how scales? next the as been should a in we of And have you otherwise solutions to

David Bernhardt

consumption didn't Yes. unexpected really from We all. at any during or impacts changes have the quarter

were that One when they overages and to are committing they encouraged by of that at that we're seeing the have do things is level customers spending. the did commit we're that us

that if consumption So a from were that they levels the customer to at seeing is we're moving spending. subscription,

doing. a essentially lot As in They're the at been spend rates it Tomer putting carrying not they've of forward that. elevated they're said,

except So stabilization. -- we for seen anything haven't we really just

Operator

of Our with next Powell question Gray comes from the line BTIG.

Gray Powell

All right. Congratulations results. Great. on the strong

gave So the macro want that I just I there. in guess up environment on you to the remarks. color appreciate I really the follow prepared

today patterns patterns we've a to feel macro just in weak about So months How ability do a behavior ago? today you predict your and for visibility your been business like like XX year on customer versus customer now. your behavior time this and

Tomer Weingarten

bad once the like macro. more. We and the obviously, bad still continue. feel mean, we back I macro, we're in remain to macro I in again, expect But a we know

even macro, think bad within still obviously, you I grow XX% plus. see us the

this I that So year we're behavior. think we And end customer stabilization at we've extract. believe seeing what can the to of beginning of the I practically think at the across day, we adjusted

a customer the quarters same were expectations what remain roughly as they think I few ago.

better, has So macro. execution, adapt, helped I of it's to I is think it. trending all anything navigate trending and the our same again, platform once team's And worse. kind really, all, ability think also in through Dave's our value point, I in to our assume us not wouldn't but conveyed It's

Gray Powell

helpful. And one may. really then if I That's more,

back in business acquired you annual XXXX, that So think about early a was -- at pace. it growing I Attivo when was XX%

increasingly incremental the about think that there we should targeting recently, How more you're identity been any Just potential systems. on growth business? tailwinds? Has with attacks,

Tomer Weingarten

it's list also I around a much, threat call traction think Identity of the of opportunities, our designing temporary them, goes go-to-market the our a that targeting bigger another large we in I pretty is think vector. that in cybersecurity I We're we ability I where would and is. biggest capabilities just lot just it's most and that capabilities module, attention of -- one for of have. us, market general, lot the towards we very alleviate modules actually think opportunity these are more to in have. feel their

A to year So it's identity was today. else. Tomorrow, something exploitation. going be it ago, it's

I again, defenders identity with we're constantly data, in AI capability It's a think are is our these the focused enterprise. focused But really tiebreakers great moving business. to on for targets. on And have. obviously is growing focused on cloud,

Operator

Markets. last of Heath Our KeyBanc Capital Eric question comes from with the line

Eric Heath

a profitability 'XX. for question. out housekeeping half know had before of Great. Dave, just second the targets and for fiscal some I EBIT for you cash there profitability 'XX free flow

that just stands. if So curious

your for add to you're pricing gen approach And the which taking AI. Tomer. question, sounds around second different a is then like It I'll just

and So curious feedback is Purple -- mechanism customers the the just from or customers how just on what AI the pricing what strategy. is pricing for

David Bernhardt

half can remain fiscal Thank improvement, for free We're margin 'XX. second start. public improvement that. history an with operating We're than margin X strong as question. the to track we and company, for points XX pace, we're and It's of achieving growth continue a delivering I in cash the Sure. more flow in incredibly committed you positive of consecutive optimizing year quarters. to on our to margin entire improvement going and

XX% improved flow cash Free year-over-year. margin

Our was X%. net margin negative income

operating our XX% cost been this negative we've from We've with negative full progress quarter. raised year also very XX% to structure. measurable margin guidance shown last we've profitability. achieving to proactive our And So

way on well profitability our targets. achieving we're So to our

flow in QX digits. cash free expect We negative margin the single

to there, too. you're improvement So see going

such is distinct key advantages. significant of in And unlocking growth. really, have what we're at as progressing our we're where to data, aligning So doing selectively TAMs investment the that's continue plans path and to. the areas that invest competitive we're We'll pace growth we cloud

at of end QX. guiding be we'll Obviously, the

fiscal and on sure improvements up are company want in everything But 'XX that seeing of we achieve that. for us what make right lot out a setting look we're doing to now you're to achievable. a as So the the becomes pace

flow now, cash focused creation. we're on So right free

that. half that we're working the We of in towards next expect and second year,

Tomer Weingarten

mean, mentioned, data As is still go capability, still pricing, it us, enterprise-wide baked. that to as Purple fully something about I a very attaching It's I given think, just But for it's I that not the an it. straightforward with is we're obviously to way ingested, see experimenting just obviously to it. we

the so and today, a one deals. like you that why more have for us structured said, ELA-type doing platform obviously, also That we see capability more set,

imagine be can you Purple part of So that. can

But a from and that once all, just more about see mention, for So Purple. it's sure opportunity us, to again value, all the customer customers lot in of we I'll value to uplift. want make

you can the think that's to to focus Purple tangibly I customer, with pricing of the show is and the AI. structure secondary that value the amount

Operator

I would remarks. the pass Weingarten, conference to for closing now back Tomer like the to CEO, any

Tomer Weingarten

around us some globally collective and Sentinels and history. especially joining atrocities worst for of impacting all today. and globe recent you are a the Israel the perseverance standpoint, of Thank in From endured our who disheartening. humbled by I'm the own the tensions ongoing people conflicts geopolitical commitment people in

force the severity the safer an aspects to as capabilities many of of hope factor and generation this of and is in now is for Cyberattacks, contributing embedded is operations create the our of At customers. a role attempting Generative well. good, into our plays this Cyber to using eroding. is all the be war our world one. to AI for significant We and peaceful to so disinformation concept a a warfare stabilize mission safeguard The society. espionage, SentinelOne, and important are AI cyberspace a technology in lives, only tomorrow. truth situation, are fully influence

to again, helping want customers Sentinels, Thank I mission. our us Once for this our thank you. drive all partners and

Operator

today's you enjoy your the conference day. concludes call. rest of all That I hope

now your may disconnect You lines.

SentinelOne (S) 5 Dec 232024 Q3 Earnings call transcript