SentinelOne Inc. (NYSE: S) shares fell nearly 11% on Friday after the cybersecurity company topped earnings estimates but issued softer-than-expected second-quarter revenue guidance and announced a roughly 8% workforce reduction.
The company reported first-quarter fiscal 2027 revenue of $276.7 million, just below the Wall Street consensus of $277.3 million but within its own guidance range.
Adjusted EPS of $0.04 beat the $0.02 analyst estimate.
Annual recurring revenue rose 23% year-over-year to $1.16 billion, slightly above estimates. Net new ARR reached a record $44 million, up 55% year-over-year, marking the fourth consecutive quarter of positive net new ARR growth. Remaining performance obligations grew 30% year-over-year to a record $1.5 billion.
Non-endpoint solutions, including AI, data, and cloud, now represent approximately half of total ARR. AI security ARR nearly doubled sequentially, while the company’s Flex offering surpassed $200 million in total contract value in under three quarters since launch.
For the second quarter, SentinelOne guided for revenue of $289 million to $291 million, below the Street’s estimate of approximately $292 million. The guidance includes an estimated $25 million restructuring charge tied to the workforce reduction, which is expected to generate approximately $45 million in annualized savings. Full-year non-GAAP EPS guidance of $0.32 to $0.38 bracketed the consensus estimate of $0.34.
Wedbush maintained its Outperform rating and $20 price target, saying the company is “sharpening its operating model” under new CFO Sonalee Parekh and remains well positioned in AI security.
Bank of America was more constructive, upgrading the stock to Buy from Neutral and raising its price target to $20 from $16. The bank called the post-market selloff an attractive entry point, citing durable 20%-plus revenue growth and a clear path to margin expansion, and characterized the conservative guidance as a deliberate reset under new leadership rather than a sign of weakening demand.
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