What happened
Shares of SentinelOne (S 3.47%) climbed on Wednesday after the cyber defense specialist reported torrid sales growth and progress toward profitability. As of 2:53 p.m. ET, its stock price was up more than 8%.
So what
SentinelOne's revenue rocketed 92% year over year to $126.1 million in its fiscal 2023 fourth quarter ended Jan. 31, fueled by strong demand for its endpoint and cloud security solutions.
SentinelOne's customer count surged by 50% to more than 10,000. The cybersecurity provider also earned more business from its existing clients, as evidenced by its impressive net revenue-retention rate of over 130%.
"We continued to secure businesses of all sizes across geographies driven by stronger sales execution and higher win rates against legacy and large next-gen security vendors," CEO Tomer Weingarten and Chief Financial Officer Dave Bernhardt said in a letter to shareholders.
Moreover, SentinelOne's profit margins improved markedly as it scaled its operations. Its adjusted gross margin rose to 75% from 66% in the prior-year quarter, while its adjusted operating margin increased to negative 35% from negative 66%. SentinelOne's adjusted net loss per share, in turn, narrowed to $0.13 from $0.17 in the year-ago period.
Now what
Management noted that the current economic environment is driving its customers to be more conservative with their technology investments. However, Weingarten and Bernhardt said, "the enterprise need for cybersecurity remains mission critical."
Thus, SentinelOne expects its revenue to grow to between $631 million and $640 million in fiscal 2024, up from $422 million in fiscal 2023. The company also sees its adjusted operating margin improving to negative 25% to 29% from negative 49%.
"Looking ahead, we plan to remain dynamic by strategically investing in key growth areas and ensure that our path to profitability does not deviate across different economic scenarios," Weingarten and Bernhardt said.
