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SentinelOne (S) Q3 Earnings Beat Estimates, Revenues Up Y/Y
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SentinelOne (S - Free Report) reported a third-quarter fiscal 2023 adjusted loss of 16 cents per share, beating the Zacks Consensus Estimate by 27.27%. The company reported a loss of 15 cents in the year-ago quarter.
SentinelOne reported revenues of $115.3 million, which surged 105.9% year over year, beating the consensus mark by 3.93%.
International revenues accounted for 36% of total revenues, reflecting growth of 124% year over year.
Singularity Cloud remained SentinelOne’s fastest-growing solution in the reported quarter, followed by strong contributions from other emerging solutions.
SentinelOne, Inc. Price, Consensus and EPS Surprise
In third-quarter fiscal 2023, SentinelOne’s annualized recurring revenues (“ARR”) increased 106% year over year to $487.4 million.
SentinelOne’s top-line growth benefited from an expanding customer base. Customer count grew 55% year over year to more than 9,250 customers at the end of the third quarter of fiscal 2023.
SentinelOne added 600 new customers across many verticals including media and financial services in the reported quarter. In partnership with CISA, SentinelOne won contracts from three new major agencies in the federal domain.
Customers with ARR over $100K grew 100% year over year to 827. The dollar-based net revenue retention rate was 134% at the end of the fiscal third quarter.
Non-GAAP gross margin was 71%, significantly up from the 67% reported in the year-ago quarter. The year-over-year growth was attributed to increasing scale, growing platform adoption and improved operational efficiencies.
Research & development expenses, as a percentage of revenues, were 32.8% compared with 45.9% reported in the year-ago quarter.
General & administrative expenses, as a percentage of revenues, were 21.8%, down 400 basis points (bps) year over year.
Sales and marketing expenses, as a percentage of revenues, were 59.8%, down 440 bps on a year-over-year basis.
Total operating expenses surged 73.4% year over year to $132 million.
SentinelOne reported an operating loss of $49.6 million in the reported quarter compared with an operating loss of $38.7 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Oct 31, 2022, SentinelOne had cash, cash equivalents and short-term investments of $1.2 billion unchanged sequentially.
Free cash outflow was $64.7 million in the reported quarter.
Guidance
For fourth-quarter fiscal 2023, SentinelOne expects revenues to be $125 million, reflecting growth of roughly 90% year over year.
Non-GAAP gross margin is expected to be 72%.
For fiscal 2023, SentinelOne expects total revenues in the band of $420-$421 million, reflecting growth of 105% over fiscal 2022.
Non-GAAP gross margin is expected within 71-71.5%.
Zacks Rank & Stocks to Consider
SentinelOne currently has a Zacks Rank #3 (Hold).
SentinelOne shares were up 0.78% in pre-market trading. S shares have declined 72.1% year to date, underperforming the Zacks Computer and Technology sector’s return of 31.6%.
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SentinelOne (S) Q3 Earnings Beat Estimates, Revenues Up Y/Y
SentinelOne (S - Free Report) reported a third-quarter fiscal 2023 adjusted loss of 16 cents per share, beating the Zacks Consensus Estimate by 27.27%. The company reported a loss of 15 cents in the year-ago quarter.
SentinelOne reported revenues of $115.3 million, which surged 105.9% year over year, beating the consensus mark by 3.93%.
International revenues accounted for 36% of total revenues, reflecting growth of 124% year over year.
Singularity Cloud remained SentinelOne’s fastest-growing solution in the reported quarter, followed by strong contributions from other emerging solutions.
SentinelOne, Inc. Price, Consensus and EPS Surprise
SentinelOne, Inc. price-consensus-eps-surprise-chart | SentinelOne, Inc. Quote
Top-Line Details
In third-quarter fiscal 2023, SentinelOne’s annualized recurring revenues (“ARR”) increased 106% year over year to $487.4 million.
SentinelOne’s top-line growth benefited from an expanding customer base. Customer count grew 55% year over year to more than 9,250 customers at the end of the third quarter of fiscal 2023.
SentinelOne added 600 new customers across many verticals including media and financial services in the reported quarter. In partnership with CISA, SentinelOne won contracts from three new major agencies in the federal domain.
Customers with ARR over $100K grew 100% year over year to 827. The dollar-based net revenue retention rate was 134% at the end of the fiscal third quarter.
Non-GAAP gross margin was 71%, significantly up from the 67% reported in the year-ago quarter. The year-over-year growth was attributed to increasing scale, growing platform adoption and improved operational efficiencies.
Research & development expenses, as a percentage of revenues, were 32.8% compared with 45.9% reported in the year-ago quarter.
General & administrative expenses, as a percentage of revenues, were 21.8%, down 400 basis points (bps) year over year.
Sales and marketing expenses, as a percentage of revenues, were 59.8%, down 440 bps on a year-over-year basis.
Total operating expenses surged 73.4% year over year to $132 million.
SentinelOne reported an operating loss of $49.6 million in the reported quarter compared with an operating loss of $38.7 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Oct 31, 2022, SentinelOne had cash, cash equivalents and short-term investments of $1.2 billion unchanged sequentially.
Free cash outflow was $64.7 million in the reported quarter.
Guidance
For fourth-quarter fiscal 2023, SentinelOne expects revenues to be $125 million, reflecting growth of roughly 90% year over year.
Non-GAAP gross margin is expected to be 72%.
For fiscal 2023, SentinelOne expects total revenues in the band of $420-$421 million, reflecting growth of 105% over fiscal 2022.
Non-GAAP gross margin is expected within 71-71.5%.
Zacks Rank & Stocks to Consider
SentinelOne currently has a Zacks Rank #3 (Hold).
SentinelOne shares were up 0.78% in pre-market trading. S shares have declined 72.1% year to date, underperforming the Zacks Computer and Technology sector’s return of 31.6%.
Some better-ranked stocks in the broader sector are Richardson Electronics (RELL - Free Report) , Sanmina (SANM - Free Report) and Super Micro Computer (SMCI - Free Report) . While Richardson Electronics carries a Zacks Rank #2 (Buy), both Sanmina and Super Micro sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Richardson Electronics, Sanmina and Super Micro Computer are up 89%, 54.9% and 96.3%, respectively, on a year-to-date basis.