SentinelOne Tops Fiscal Q2 Targets as AI Security, Cloud Momentum Build

SentinelOne (NYSE:S) blew past its own financial targets for the fiscal second quarter, posting a 21% jump in revenue and signaling that AI security is becoming a meaningful growth engine for the cybersecurity company.

For the quarter ended July 31, 2026, SentinelOne reported revenue of $292 million, above the high end of its outlook. International markets contributed 39% of total revenue. Total annual recurring revenue rose 22%, while net new ARR reached a second-quarter record of $56 million, up 4% from a year earlier.

The results extend the company’s recent trajectory of faster growth and margin expansion, helped by demand for consolidated security platforms that span endpoints, cloud workloads, AI models and data pipelines.

“This was a quarter of top-tier growth, expanding margins, and undisputed technology leadership,” CEO Tomer Weingarten said, pointing to strong customer demand for platforms that can secure AI workloads alongside traditional IT environments.

AI security is now one of the most closely watched parts of the SentinelOne story. Weingarten said ARR from the company’s AI security products — Prompt Security and Purple AI — tripled year over year during the quarter. He said the company believes AI security can become its next nine-figure ARR category after endpoint, cloud, data and Wayfinder.

Prompt Security, which helps organizations apply visibility, compliance controls and guardrails to AI models and autonomous agents, remained SentinelOne’s fastest-growing platform solution. Weingarten cited Bell Canada as a marquee win, noting the carrier selected Prompt Security to secure its network with real-time visibility and automated controls.

Purple AI, the company’s AI-native security operations offering, is also gaining traction. Weingarten said its agentic investigation features can analyze alerts across complex environments and produce assessments in seconds rather than hours. He pointed to an IDC study that found a 338% three-year return on investment for Purple AI customers.

During the earnings call, Weingarten said the AI-security opportunity is broad-based. Modern endpoint protection, data ingestion, cloud workload security and dedicated AI security tools are all being pulled into customer buying decisions as organizations try to monitor and secure AI at runtime. “We are seeing acceleration in our data platform, we are seeing acceleration in our Singularity Cloud workload security, and obviously, we are seeing acceleration with our AI security products,” he said.

That expanding footprint is visible in customer metrics. Average ARR per customer reached a company record and grew by a double-digit percentage year over year. Dollar-based net retention among customers spending at least $100,000 in ARR improved for a third straight quarter, both sequentially and year over year. CFO Sonalee Parekh credited multi-product adoption, contributions from AI products and investments in renewal automation.

The company also reported record remaining performance obligations of $1.7 billion, up 45% from a year earlier. Parekh said larger customer deployments and longer contract durations, including seven- and eight-figure deals, helped drive that growth.

Management highlighted several notable customer wins: an aerospace and defense enterprise that replaced a primary competitor across endpoint, data, cloud and AI security; a global services firm that adopted SentinelOne’s AI SIEM; and a global financial institution that standardized on the company’s cloud-security platform.

Weingarten also framed legacy endpoint displacement as a long-running opportunity. Nearly half of the sector still relies on legacy antivirus, he said, leaving SentinelOne with a meaningful replacement runway. In addition, he identified sovereign AI security as a potential tailwind, particularly for organizations that need platforms deployable in cloud, on-premises and air-gapped environments to retain control of sensitive data.

The financial commentary was equally upbeat. SentinelOne reported a non-GAAP operating margin of 10% in the fiscal second quarter, an 820-basis-point improvement from a year earlier and above its guided range. Non-GAAP EPS was $0.08, doubling year over year. Sales and marketing expense fell to 34% of revenue, improving by more than 900 basis points from the prior year.

On a trailing 12-month basis, adjusted free-cash-flow margin reached 6%, up roughly 400 basis points year over year. SentinelOne ended the quarter with $813 million in cash and investments and no debt.

The company raised its full-year fiscal 2027 revenue outlook to $1.202 billion to $1.207 billion, implying 20% 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.

Parekh said margins should continue to improve in the second half, though at a slower pace than in recent quarters, as the company reinvests in AI security, cloud, data products, partner channels and other growth initiatives. While SentinelOne does not guide to net new ARR specifically, Parekh said the company expects full-year net new ARR to grow year over year, supported by a solid pipeline, improving retention, larger deals and stronger demand signals.

The results reinforce the view that cybersecurity spending is shifting toward platform vendors that can protect an increasingly AI-driven enterprise. After years in which endpoint protection was the entry point, SentinelOne is now trying to convert that installed base into buyers of cloud, data and AI security tools — and the early numbers suggest that conversion is accelerating.

SentinelOne, founded in 2013 and headquartered in Mountain View, California, sells a broad cybersecurity platform under the Singularity brand. Its products use machine learning and behavioral analytics to detect threats in real time, automate response and provide forensics for incident investigations, spanning endpoints, cloud workloads, containers and IoT devices.