SentinelOne shares tumbled on Wednesday after the cybersecurity firm reported better-than-estimated earnings and earnings for the January quarter and made a significant acquisition.
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SentinelOne of Mountain View, Calif., reported earnings after the market closed on Tuesday. Shares of S fell 1.3% to 30.50 ahead of the stock market open today.
“SentinelOne posted solid fourth-quarter results, with revenue 8% above the upper end of guidance, although the stock traded lower,” Wells Fargo analyst Andrew Nowinski said in the report. “In fact, there were no negative points that could be highlighted, all key indicators turned out to be better than expected. The first quarter revenue guidance was certainly better than expected, although operating losses were slightly higher than expected.”
Also on Tuesday, SentinelOne acquired Attivo Networks for $616.5 million in cash and stock. The company said that Attivo was not included in its FY 2023 forecast.
SentinelOne posted an adjusted loss of 17 cents per share, compared to an 84 cent loss a year earlier. Revenue increased by 120% to $65.6 million, i.e. by 120%. Analysts had expected SentinelOne to generate $60.7 million in revenue and a loss of 18 cents per share. The results were for the fourth quarter ending January 31st.
SentinelOne Stock: earnings forecast exceeds estimates
For fiscal year 2023, SentinelOne is forecasting revenue of $368 million, which is in line with the company’s mid-range guidance. Analysts had forecast a loss of 69 cents per share on revenue of $346.1 million.
“We ended the fourth quarter with a double-digit year-over-year improvement in both our non-GAAP gross and non-GAAP operating margins,” SentinelOne management said in a letter to shareholders. “Given the significant market opportunities ahead, we remain committed to disciplined investment in the growth of our business. In fiscal 2023, we expect further progress towards our long-term profitability targets.”
In SentinelOne’s earnings report, shares are down 37% in 2022. According to the IBD Stock Checkup, SentinelOne shares had a relative strength rating of just 18 out of 99 possible.
Annual recurring revenue from subscription-based services grew 123% to $292 million, beating ARR growth estimates of 60%.
SentinelOne cybersecurity software detects malware on laptops, mobile phones and other “end devices” that access corporate networks. SentinelOne competes with Crowdstrike Holdings (CRWD) and others.
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Follow Reinhardt Krause on Twitter @reinhardtk_tech updates on 5G wireless networks, artificial intelligence, cybersecurity and cloud computing.
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