SentinelOne Inc - Class A (NYSE:S) Stock Falls on Weak Guidance Despite Q3 Earnings Beat

SentinelOne Inc - Class A (NYSE:S), a leader in AI-powered cybersecurity, delivered a third-quarter fiscal 2026 earnings report that presented a mixed picture for investors. The company surpassed analyst expectations for the quarter just ended but issued guidance for the current period that fell short of Wall Street's forecasts, leading to a notable decline in its share price.

Earnings Beat Meets Cautious Guidance

For the quarter ended October 31, 2025, SentinelOne reported revenue of $258.9 million, marking a 23% year-over-year increase. This top-line performance narrowly exceeded the analyst consensus estimate of approximately $262.9 million. The company's profitability on an adjusted basis was more pronounced, with non-GAAP earnings per share (EPS) of $0.07 coming in well above the estimated $0.054.

However, the market's focus quickly shifted to the future. Management's revenue guidance for the fourth quarter of fiscal 2026 is $271 million, which is below the analyst estimate of $278.6 million. For the full fiscal year 2026, the company expects revenue of approximately $1.001 billion, compared to a consensus estimate of around $1.022 billion.

• Q3 FY2026 Results vs. Estimates:
  • Revenue: $258.9 million reported vs. ~$262.9 million estimated (Beat)
  • Non-GAAP EPS: $0.07 reported vs. $0.054 estimated (Beat)
• Q4 FY2026 Guidance vs. Estimates:
  • Revenue: $271 million guided vs. ~$278.6 million estimated (Miss)

Market Reaction

The stock reacted negatively in after-hours trading following the report, declining over 9%. This price action suggests investors are prioritizing the softer near-term outlook over the stronger-than-expected quarterly results. The guidance implies a sequential growth rate that appears to have disappointed a market accustomed to high growth from the cybersecurity sector.

Key Highlights from the Quarter

Beyond the headline numbers, SentinelOne's earnings release highlighted several important operational and financial milestones:

• Sustained Growth Metrics: Annualized Recurring Revenue (ARR) grew 23% year-over-year to surpass $1.055 billion. The number of customers contributing $100,000 or more in ARR increased by 20% to 1,572.
• Path to Profitability: The company emphasized its improving financial discipline. Non-GAAP operating margin was 7% for the quarter, a significant improvement from negative 5% in the prior year. Similarly, non-GAAP net income margin reached 10%, turning positive from 0% a year ago. The company also generated positive operating and free cash flow for the quarter.
• Leadership Transition: The company announced that Chief Financial Officer Barbara Larson will transition out of her role in mid-January 2026. Chief Growth Officer Barry Padgett will serve as interim CFO during the search for a permanent replacement. CEO Tomer Weingarten credited Larson with guiding the company's transition to positive non-GAAP profitability and strengthening its cash flow profile.

Balancing Growth and Expectations

SentinelOne's quarterly performance demonstrates its continued ability to win business in the competitive cybersecurity market, driven by its AI-native Singularity Platform. The improvement in profitability metrics is a clear positive, showing progress toward sustainable financial health. However, the guidance for the current quarter indicates that balancing this growth with market expectations remains a challenge. The company's ability to navigate the CFO transition while executing on its growth plans will be closely watched by investors in the coming months.

For a detailed look at SentinelOne's upcoming earnings estimates and historical performance, visit the earnings estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.