The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the U.S. Securities and Exchange Commission (SEC), on March 19, 2026 (Annual Report). This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note About Forward-Looking Statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Our fiscal year ends on January 31, and our fiscal quarters end on April 30, July 31, October 31, and January 31. Our fiscal years ended January 31, 2027 and January 31, 2026 are referred to herein as fiscal 2027 and fiscal 2026, respectively. Unless the context otherwise requires, all references in this report to “SentinelOne,” the “Company,” “we,” “our,” “us,” or similar terms refer to SentinelOne, Inc. and its subsidiaries. Overview We founded SentinelOne in 2013 with a dramatically new approach to cybersecurity. We pioneered the world’s first purpose-built AI-powered security platform to make cyber defense truly autonomous, from the endpoint and beyond. Our Singularity Platform instantly defends against cyberattacks — performing at a faster speed, greater scale, and higher accuracy than otherwise possible from a human-powered approach. Our Singularity Platform ingests, correlates, and queries petabytes of structured and unstructured data from a myriad of ever-expanding disparate external and internal sources in real-time. We aim to build rich context and deliver greater visibility by constructing a dynamic representation of data across an organization. As a result, our AI models are able to be highly accurate, actionable, and autonomous. Our distributed AI models run both locally on every endpoint and every cloud workload, as well as on our cloud platform. Our Static and vector-agnostic Behavioral AI models, which run on the endpoints themselves, provide our customers with protection even when their devices are not connected to the cloud. In the cloud, our Streaming AI can detect anomalies that surface when multiple data feeds are correlated. By providing full visibility into the Storyline of every secured device across the organization through one console, our platform can make it very fast for analysts to easily search through petabytes of data to investigate incidents and proactively hunt threats. We have extended our control and visibility planes beyond the traditional endpoint to unmanaged Internet of Things (IoT) devices. Singularity can be flexibly deployed on the environments that our customers choose, including public, private, or hybrid clouds. Our feature parity across Windows, macOS, Linux, and Kubernetes offers best-of-breed protection, visibility, and control across today’s heterogeneous IT environments. Together, these capabilities make our platform the logical choice for organizations of all sizes, industry verticals, and compliance requirements. Our platform offers true multi-tenancy, which allows us to serve the world’s largest organizations, managed security providers and incident response partners. Our customers are able to realize improved cybersecurity outcomes with fewer people. 25 Table of Contents We generate most of our revenue by selling subscriptions to our Singularity Platform. We generally price our subscriptions and modules on a per agent basis, and each agent generally corresponds with an endpoint, server, virtual machine, or container. Our subscription contracts typically range from one to three years. We recognize subscription revenue ratably over the term of a contract. Most of our contracts are for terms representing annual increments, therefore contracts generally come up for renewal in the same period in subsequent years. The timing of large multi-year enterprise contracts can create some variability in subscription order levels between periods, though the impact to our revenue in any particular period is limited as a result of ratable revenue recognition. Our go-to-market strategy is focused on acquiring new customers and driving expanded usage of our platform by existing customers. Our sales organization is comprised of our enterprise sales, inside sales and customer solutions engineering teams. It leverages our global network of independent software vendors (ISVs), alliance partners, and channel partners for prospect access. Additionally, our sales teams work closely with our customers, channel partners, and alliance partners to drive adoption of our platform, and our software solutions are fulfilled through our channel partners. Our channel partners include some of the world’s largest resellers and distributors, managed service providers (MSPs), managed security service providers (MSSPs), managed detection and response providers (MDRs), original equipment manufacturers (OEMs), and incident response (IR) firms. Once customers experience the benefits of our platform, they often expand their subscriptions to benefit from the full range of our platform solutions. Additionally, many of our customers adopt Singularity Modules over time to extend the functionality of our platform and increase their coverage footprint. The combination of platform upgrades and extended modules drives our powerful land-and-expand motion. Our Singularity Platform is used globally by organizations of all sizes across a broad range of industries. We had 1,715 customers with annualized recurring revenue (ARR) of $100,000 or more as of July 31, 2026, up from 1,513 as of July 31, 2025. We define ARR as the annualized revenue run rate of our subscription, consumption and usage-based agreements at the end of a reporting period, assuming contracts are renewed on their existing terms for customers that are under contracts with us. As of July 31, 2026, no single end customer accounted for more than 9% of our ARR. Our revenue outside of the U.S. represented 39% and 38% for the three months ended July 31, 2026 and 2025, respectively, and 39% and 38% for the six months ended July 31, 2026 and 2025, respectively, illustrating the global nature of our solutions. We have grown rapidly since our inception. Our revenue was $292.0 million and $242.2 million for the three months ended July 31, 2026 and 2025, respectively, representing year-over-year growth of 21%. Our revenue was $568.6 million and $471.2 million for the six months ended July 31, 2026 and 2025, respectively, representing year-over-year growth of 21%. During this period, we continued to invest in growing our business to capitalize on our market opportunity. As a result, our net loss for the three months ended July 31, 2026 and 2025 was $93.4 million and $72.0 million, respectively, and our net loss for the six months ended July 31, 2026 and 2025 was $169.6 million and $280.2 million, respectively. Key Business Metrics and Non-GAAP Financial Measures We monitor the following key metrics and non-GAAP financial measures to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. Revenue We discuss revenue below under “Components of Our Results of Operations.” Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 (in thousands) Revenue $ 291,981 $ 242,183 $ 568,638 $ 471,212 26 Table of Contents Non-GAAP operating income In addition to our results determined in accordance with U.S. generally accepted accounting principles (GAAP), we use non-GAAP operating income as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. We believe that non-GAAP operating income provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this measure excludes, among other expenses, expenses that we do not consider to be indicative of our overall operating performance. Non-GAAP operating income is calculated as GAAP operating loss adjusted to exclude amortization of acquired intangible assets, acquisition-related compensation, stock-based compensation expense, payroll tax on employee stock transactions, and restructuring charges. Non-GAAP operating income has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP, including GAAP operating loss. Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures, including non-GAAP operating income, differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP operating income is presented for supplemental informational purposes only. Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 (in thousands) Non-GAAP operating income $ 30,528 $ 5,376 $ 41,073 $ 1,449 A reconciliation of non-GAAP operating income to GAAP operating loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, is provided below: Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 (in thousands) GAAP operating loss $ (90,761) $ (80,618) $ (170,479) $ (168,101) Stock-based compensation expense 92,114 73,884 167,003 142,539 Employer payroll tax on employee stock transactions 1,442 1,087 3,033 3,835 Amortization of acquired intangible assets 10,780 6,448 21,208 12,687 Acquisition-related compensation 3,349 692 6,672 1,403 Other restructuring charges 13,604 3,883 13,636 9,086 Non-GAAP operating income $ 30,528 $ 5,376 $ 41,073 $ 1,449 Annualized Recurring Revenue We believe that ARR is a key operating metric to measure our business because it is driven by our ability to acquire new subscription, consumption, and usage-based customers, and to maintain and expand our relationship with existing customers. ARR represents the annualized revenue run rate of our subscription, consumption and usage-based agreements at the end of a reporting period, assuming contracts are renewed on their existing terms for customers that are under contracts with us. ARR is an operational metric and is not a non-GAAP metric. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates, usage, renewal rates, and other contractual terms. For more information on how we recognize revenue, see Note 3, Revenue and Contract Balances to our unaudited condensed consolidated financial statements. 27 Table of Contents As of July 31, 2026 2025 (in thousands) Annualized recurring revenue $ 1,218,106 $ 1,001,360 ARR grew 22% year-over-year to $1,218.1 million as of July 31, 2026, primarily driven by a combination of new customer additions and adoption of adjacent platform solutions by existing customers. Customers with ARR of $100,000 or More We believe that our ability to increase the number of customers with ARR of $100,000 or more is an indicator of our market penetration and strategic demand for our platform. We define a customer as an entity that has an active subscription for access to our platform. We count MSPs, MSSPs, MDRs, and OEMs, who may purchase our products on behalf of multiple companies, as a single customer. We do not count our reseller or distributor channel partners as customers. As of July 31, 2026 2025 Customers with ARR of $100,000 or more 1,715 1,513 Customers with ARR of $100,000 or more grew 13% year-over-year to 1,715 as of July 31, 2026, primarily due to the growth in the ARR of existing customers from additional purchases and the growth in the average size of purchases by new customers. Dollar-Based Net Retention Rate (NRR) We believe that our ability to retain and expand our revenue generated from our existing customers is an indicator of the long-term value of our customer relationships and our potential future business opportunities. NRR measures the percentage change in our ARR derived from our customer base at a point in time. Our NRR remained in expansionary territory as of July 31, 2026, driven by existing customers’ adoption of additional endpoint licenses and adjacent platform solutions. We see significant long-term expansion potential based on high customer retention rates, expanding product categories, and early-stage adoption from our installed base. Components of Our Results of Operations Revenue We generate most of our revenue by selling subscriptions to our Singularity Platform. Customers can extend the functionality of their subscription to our platform by subscribing to additional Singularity Modules. Subscriptions provide access to hosted software. The nature of our promise to the customer under the subscription is to provide protection for the duration of the contractual term and as such is considered as a series of distinct services. Our arrangements may include fixed consideration, variable consideration, or a combination of the two. Fixed consideration is recognized over the term of the arrangement or longer if the fixed consideration relates to a material right. Variable consideration in these arrangements is typically a function of transaction volume or another usage-based measure. Depending upon the structure of a particular arrangement, we (i) allocate the variable amount to each distinct service period within the series and recognize revenue as each distinct service period is performed (i.e., direct allocation), (ii) estimate total variable consideration at contract inception (giving consideration to any constraints that may apply and updating the estimates as new information becomes available) and recognize the total transaction price over the period to which it relates, or (iii) apply the “right to invoice” practical expedient and recognize revenue based on the amount invoiced to the customer during the period. Premium support and maintenance and other Singularity Modules are distinct from subscriptions and are recognized ratably over the term as the performance obligations are satisfied. We invoice our customers upfront upon signing for the entire term of the contract, periodically, or in arrears. Most of our subscription contracts have a term of one to three years. 28 Table of Contents Cost of Revenue Cost of revenue consists primarily of third-party cloud infrastructure expenses incurred in connection with the hosting and maintenance of our platform, as well as personnel-related costs associated with our customer support and services organization, including salaries, benefits, bonuses, and stock-based compensation. Cost of revenue also includes amortization of acquired intangible assets, amortization of capitalized internal-use software, software and subscription services used by our customer support and services team, inventory-related costs, and allocated facilities and IT overhead costs. Our third-party cloud infrastructure costs are driven primarily by the number of customers, the number of endpoints per customer, the number of modules, and the incremental costs for storing additional data collected for such cloud modules. We plan to continue to invest in our platform infrastructure and additional resources in our customer support and services organization as we grow our business. The level and timing of investment in these areas could affect our cost of revenue from period to period. We expect our cost of revenue to increase in absolute dollars as we continue to scale our platform. Our gross margin could fluctuate depending on the interplay of these factors. Operating Expenses Our operating expenses consist of research and development, sales and marketing, general and administrative, and restructuring expenses. Personnel-related expenses are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation, and sales commissions. Operating expenses also include allocated facilities and IT overhead costs. Research and Development Research and development expenses consist primarily of employee salaries, benefits, bonuses, and stock-based compensation. Research and development expenses also include third-party cloud infrastructure and general services expenses, such as consulting fees and software subscription services, incurred in developing our platform and modules. We expect research and development expenses to increase in absolute dollars as we continue to increase investments in our existing products and services. However, we anticipate research and development expenses to decrease as a percentage of our total revenue over time, although our research and development expenses may fluctuate as a percentage of our total revenue from period to period depending on the timing of these expenses. In addition, research and development expenses that qualify as internal-use software are capitalized, the amount of which may fluctuate significantly from period to period. Sales and Marketing Sales and marketing expenses consist primarily of employee salaries, commissions, benefits, bonuses, stock-based compensation, travel and entertainment-related expenses, advertising, branding and marketing events, promotions, amortization of acquired customer relationships, and software and subscription services. Sales and marketing expenses also include sales commissions paid to our sales force and referral fees paid to independent third parties that are incremental to obtain a subscription contract. Such costs are capitalized and amortized over an estimated period of benefit of four years, and any such expenses paid for the renewal of a subscription are capitalized and amortized over the average contractual term of the renewal. We expect sales and marketing expenses to increase in absolute dollars as we continue making significant investments in our sales and marketing organization to drive additional revenue, further penetrate the market, and expand our global customer base, but to decrease as a percentage of our revenue over time. General and Administrative General and administrative expenses consist primarily of salaries, benefits, bonuses, stock-based compensation, and other expenses for our executive, finance, legal, people team, IT and facilities organizations. General and 29 Table of Contents administrative expenses also include external legal, accounting, other consulting, and professional services fees, software and subscription services, and other corporate expenses. We expect to continue to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations, and increased expenses for insurance, investor relations, and professional services. We expect that our general and administrative expenses will increase in absolute dollars as our business grows, but to decrease as a percentage of our revenue over time. Restructuring Restructuring charges related to the restructuring plans executed in May 2026 (May 2026 Plan), July 2025 (July 2025 Plan) and March 2025 (March 2025 Plan), consist primarily of charges related to severance payments, employee benefits, stock-based compensation, contract terminations, and asset impairment charges related to facilities. The March 2025 Plan and July 2025 Plan were completed as of July 31, 2025 and January 31, 2026, respectively. The actions associated with the May 2026 Plan are expected to be fully completed by the end of fiscal 2027. Interest Income, Net, and Other Income (Expense), Net Interest income, net consists primarily of interest earned on our cash equivalents and investments, offset by interest expense, which consists primarily of the amortization of the discount related to acquisition-related liabilities. Other income (expense), net consists primarily of gains and losses on foreign currency remeasurements and transactions, derivative instruments, and strategic investments. Provision for Income Taxes Provision for income taxes consists primarily of income taxes in foreign jurisdictions in which we conduct business, and the tax effects (including the interest expense) of the fiscal 2026 Assessment Agreement (the Agreement) with the Israeli Tax Authority (ITA). The Agreement resulted in $180.0 million of tax expense, exclusive of interest, during fiscal 2026, payable over time to the ITA, with additional interest expense accruing on the tax liability over the installment period. In connection with our global consolidated losses, we maintain a full valuation allowance against our U.S. deferred tax assets, as we have concluded that it is more likely than not that the deferred tax assets will not be realized. Exclusive of the Agreement with the ITA, we expect our provision for income taxes to increase in fiscal 2027 and beyond based upon increased foreign earnings and certain minimum taxes. Additionally, as discussed in more detail in Part II, Item 1A, “Risk Factors” in this Quarterly Report and Note 9, Income Taxes, to our unaudited condensed consolidated financial statements, on January 8, 2026, we entered into the Agreement with the ITA covering various transfer pricing matters for intercompany transactions relating to the intergroup ownership and utilization of our intellectual property. This Agreement fully and finally resolved all related Israeli disputed income tax matters between us and the ITA for fiscal years 2021 through 2025. Pursuant to the Agreement, we are required to make installment payments through fiscal year 2031, which are subject to 7.0% interest per annum and certain acceleration clauses. The Agreement also resolved the tax impact of aligning the intellectual property of Prompt into our structure. 30 Table of Contents Results of Operations The following table sets forth our results of operations for the periods presented: Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 (in thousands) Revenue $ 291,981 $ 242,183 $ 568,638 $ 471,212 Cost of revenue(1) 81,563 60,474 159,528 117,006 Gross profit 210,418 181,709 409,110 354,206 Operating expenses: Research and development(1) 96,882 79,091 192,652 151,344 Sales and marketing(1) 123,545 127,879 255,656 261,760 General and administrative(1) 56,327 51,474 106,824 100,153 Restructuring(1) 24,425 3,883 24,457 9,050 Total operating expenses 301,179 262,327 579,589 522,307 Loss from operations (90,761) (80,618) (170,479) (168,101) Interest income, net 6,151 12,196 12,978 24,486 Other income (expense), net (2,414) (327) 76 165 Loss before income taxes (87,024) (68,749) (157,425) (143,450) Provision for income taxes 6,376 3,270 12,139 136,762 Net loss $ (93,400) $ (72,019) $ (169,564) $ (280,212) __________________ (1)Includes stock-based compensation expense as follows: Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 (in thousands) Cost of revenue $ 6,199 $ 5,399 $ 12,094 $ 10,064 Research and development 28,401 24,289 57,349 45,230 Sales and marketing 21,472 21,338 41,757 44,253 General and administrative 25,221 22,858 44,982 43,028 Restructuring 10,821 — 10,821 (36) Total stock-based compensation expense $ 92,114 $ 73,884 $ 167,003 $ 142,539 31 Table of Contents The following table sets forth the components of our condensed consolidated statements of operations as a percentage of revenue for each of the periods presented: Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 (as a percentage of total revenue) Revenue 100 % 100 % 100 % 100 % Cost of revenue 28 25 28 25 Gross profit 72 75 72 75 Operating expenses: Research and development 33 33 34 32 Sales and marketing 42 53 45 56 General and administrative 19 21 19 21 Restructuring 8 2 4 2 Total operating expenses 103 108 102 111 Loss from operations (31) (33) (30) (36) Interest income, net 2 5 2 5 Other income (expense), net (1) — — — Loss before income taxes (30) (28) (28) (30) Provision for income taxes 2 1 2 29 Net loss (32) % (30) % (30) % (59) % Note: Certain figures may not sum due to rounding. Comparison of the Three Months Ended July 31, 2026 and 2025 Revenue Three Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Revenue $ 291,981 $ 242,183 $ 49,798 21 % Revenue increased by $49.8 million primarily due to a combination of sales to new customers and sales of additional licenses and platform solutions to existing customers. Cost of Revenue, Gross Profit, and Gross Margin Three Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Cost of revenue $ 81,563 $ 60,474 $ 21,089 35 % Gross profit $ 210,418 $ 181,709 $ 28,709 16 % Gross margin 72 % 75 % Cost of revenue increased by $21.1 million primarily due to a $9.1 million increase in cloud hosting usage charges to support our expanding business, a $6.0 million increase in customer support costs, which were mostly personnel-related, a $4.0 million increase in amortization of acquired intangible assets in connection with the fiscal 2026 acquisitions, and a $1.4 million increase in amortization of capitalized internal-use software due to the 32 Table of Contents continued investment in our platform. Gross margin was 72% compared to 75% in the prior period, primarily due to higher costs of revenue associated with scaling operations to meet increased customer demand and sales volume. Research and Development Three Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Research and development expenses $ 96,882 $ 79,091 $ 17,791 22 % Research and development expenses increased by $17.8 million primarily due to an increase in personnel-related expenses of $10.7 million as a result of increased headcount. This included a $4.1 million increase in stock-based compensation expense, primarily driven by the new equity awards granted, including those issued in connection with the fiscal 2026 acquisitions. The remaining increase was attributable to a $2.9 million increase in cloud hosting expenses driven by expanded research and development activities, a $2.2 million increase in general services expenses primarily driven by higher software subscription costs, and a $2.0 million increase in allocated overhead costs. Sales and Marketing Three Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Sales and marketing expenses $ 123,545 $ 127,879 $ (4,334) (3) % Sales and marketing expenses decreased by $4.3 million primarily due to a $5.4 million decrease in marketing-related expenses, reflecting lower corporate marketing, advertising and promotion costs. The decrease was partially offset by a $0.9 million increase in allocated overhead costs. General and Administrative Three Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) General and administrative expenses $ 56,327 $ 51,474 $ 4,853 9 % General and administrative expenses increased by $4.9 million primarily due to an increase in personnel-related expenses of $4.7 million as a result of increased headcount. This included a $2.4 million increase in stock-based compensation expense, primarily driven by the new equity awards granted. The remaining increase was attributable to a $3.2 million increase in legal expenses, partially offset by a $1.9 million decrease in consulting expenses and a $1.2 million decrease in acquisition-related expenses. Restructuring Three Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Restructuring $ 24,425 $ 3,883 $ 20,542 529 % Restructuring charges increased by $20.5 million, primarily due to $24.4 million of charges related to the May 2026 Plan, consisting of $13.6 million in employee severance and related benefits and $10.8 million of stock-based compensation expense from the acceleration and modification of certain equity awards. This was partially offset by a $3.9 million decrease in restructuring charges related to the July 2025 Plan, which primarily consisted of contract termination costs. 33 Table of Contents Interest Income, Net, and Other Income (Expense), Net Three Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Interest income, net $ 6,151 $ 12,196 $ (6,045) (50) % Other income (expense), net $ (2,414) $ (327) $ (2,087) 638 % Interest income, net decreased by $6.0 million primarily driven by lower average investment balances and a lower weighted-average book yield on our marketable securities during the three months ended July 31, 2026. The change in other income (expense), net was primarily due to net foreign currency exchange fluctuations and net losses on strategic investments. Provision for Income Taxes Three Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Provision for income taxes $ 6,376 $ 3,270 $ 3,106 95 % The provision for income taxes increased by $3.1 million, primarily due to $2.8 million of interest expense recognized in the current period on the ITA liability pursuant to the final settlement agreement reached in fiscal 2026. We compute our tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date income from continuing operations and adjusting for discrete items arising in those periods. Comparison of the Six Months Ended July 31, 2026 and 2025 Revenue Six Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Revenue $ 568,638 $ 471,212 $ 97,426 21 % Revenue increased by $97.4 million primarily due to a combination of sales to new customers and sales of additional licenses and platform solutions to existing customers. 34 Table of Contents Cost of Revenue, Gross Profit, and Gross Margin Six Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Cost of revenue $ 159,528 $ 117,006 $ 42,522 36 % Gross profit $ 409,110 $ 354,206 $ 54,904 16 % Gross margin 72 % 75 % Cost of revenue increased by $42.5 million primarily due to an $18.3 million increase in cloud hosting usage charges to support our expanding business, a $12.3 million increase in customer support costs, which were mostly personnel-related, a $7.9 million increase in amortization of acquired intangible assets in connection with the fiscal 2026 acquisitions, and a $3.1 million increase in amortization of capitalized internal-use software due to the continued investment in our platform. Gross margin decreased to 72% compared to 75% in the prior period, primarily due to higher costs of revenue associated with scaling operations to meet increased customer demand and sales volume. Research and Development Six Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Research and development expenses $ 192,652 $ 151,344 $ 41,308 27 % Research and development expenses increased by $41.3 million primarily due to an increase in personnel-related expenses of $30.1 million. This included a $12.1 million increase in stock-based compensation expense, primarily driven by the new equity awards granted, including those issued in connection with the fiscal 2026 acquisitions. The remaining increase was attributable to a $4.8 million increase in cloud hosting expenses driven by expanded research and development activities, a $3.8 million increase in general services expenses primarily driven by higher software subscription costs, and a $2.2 million increase in allocated overhead costs. Sales and Marketing Six Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Sales and marketing expenses $ 255,656 $ 261,760 $ (6,104) (2) % Sales and marketing expenses decreased by $6.1 million primarily due to a $9.8 million decrease in marketing-related expenses, reflecting lower corporate marketing, advertising and promotions costs. The decrease was partially offset by a $2.0 million increase in allocated overhead costs and a $1.4 million increase in software subscription costs. General and Administrative Six Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) General and administrative expenses $ 106,824 $ 100,153 $ 6,671 7 % General and administrative expenses increased by $6.7 million, primarily due to a $5.7 million increase in personnel-related expenses, including a $1.0 million increase in stock-based compensation expense, as a result of 35 Table of Contents increased headcount, and a $3.0 million increase in legal expenses, partially offset by a $2.8 million decrease in consulting expenses. Restructuring Six Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Restructuring $ 24,457 $ 9,050 $ 15,407 170 % Restructuring charges increased by $15.4 million, primarily due to $24.4 million of charges related to the May 2026 Plan, consisting of $13.6 million in employee severance and related benefits and $10.8 million of stock-based compensation expense from the acceleration and modification of certain equity awards. This was partially offset by a $9.1 million decrease in restructuring charges related to the March 2025 Plan and July 2025 Plan, which included $3.9 million of contract termination charges, $3.0 million of severance and employee benefit charges, and $2.2 million of asset impairment charges related to facilities. Interest Income, Net, and Other Income (Expense), Net Six Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Interest income, net $ 12,978 $ 24,486 $ (11,508) (47) % Other income (expense), net $ 76 $ 165 $ (89) (54) % Interest income, net decreased by $11.5 million primarily driven by lower average investment balances and a lower weighted-average book yield on our marketable securities during the six months ended July 31, 2026. The change in other income (expense), net was primarily due to net gains on strategic investments, partially offset by net foreign currency exchange fluctuations. Provision for Income Taxes Six Months Ended July 31, Change 2026 2025 $ % (dollars in thousands) Provision for income taxes $ 12,139 $ 136,762 $ (124,623) (91) % The provision for income taxes decreased by $124.6 million primarily due to the non-recurrence of a $136.0 million accrual for an unrecognized tax benefit recorded in the prior year in connection with our matter with the ITA. This decrease was partially offset by the non-recurrence of a $4.7 million discrete tax benefit from the release of a valuation allowance on Israeli deferred tax assets recorded in the prior year, as well as $5.4 million of interest expense recognized in the current period on the ITA liability pursuant to the final settlement agreement reached in fiscal 2026. We compute our tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date income from continuing operations and adjusting for discrete items arising in those periods. Liquidity and Capital Resources We have financed operations primarily through proceeds received from sales of equity securities and payments received from our customers, and we have generated operating losses, as reflected in our accumulated deficit of $2.2 billion and $2.1 billion as of July 31, 2026 and January 31, 2026, respectively. We expect these and other operating losses to continue for the foreseeable future. We also expect to incur significant research and development, sales and marketing, and general and administrative expenses over the next several years in connection with the continued 36 Table of Contents development and expansion of our business. On January 8, 2026, we entered into the Agreement with the ITA that fully and finally resolves disputed tax matters regarding intercompany transfer pricing and intellectual property valuations for fiscal years 2021 through 2025. As more fully described in the section titled “Risk Factors—Our corporate structure and intercompany arrangements are subject to the tax laws of various jurisdictions, and we could be obligated to pay additional taxes, which would harm our operating results and financial condition,” through July 31, 2026, we recorded a total tax expense of $186.3 million, inclusive of interest, related to the Agreement with the ITA. Pursuant to the Agreement, we are required to make installment payments in Israeli New Shekels through fiscal 2031, with unpaid amounts subject to a 7.0% annual interest rate, and an option to extend the final payment through 2033. These payments will adversely affect our cash flows over the next several years. Furthermore, in the event of a change in control, all unpaid amounts plus interest that would have accrued through 2033—$259.7 million (or 792.7 million Israeli New Shekels) as of July 31, 2026, less cumulative payments made—would accelerate and become immediately due. As of July 31, 2026 and January 31, 2026, our principal source of liquidity was cash, cash equivalents, and investments of $813.2 million and $769.6 million, respectively. In the short term, we believe that our existing cash, cash equivalents, and investments will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. We believe our available liquidity, together with expected cash flows from operations, will be sufficient to fund these requirements in addition to our other operating needs over the next 12 months. In the long term beyond the next 12 months, our future capital requirements will depend on many factors, including macroeconomic conditions, our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support research and development efforts, the price at which we are able to purchase third-party cloud infrastructure, expenses associated with our international expansion, the introduction of platform enhancements, and the continuing market adoption of our platform. We have, and in the future, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operating results, and financial condition. We hold our cash, cash equivalents, and investments with a diverse group of banking partners. However, any instability in the U.S. or global banking system or relating to the federal budget may impact liquidity both in the short term and long term and may result in adverse impacts to our or our customers’ business, including in our customers’ ability to pay for our platform. The following table shows a summary of our cash flows for the periods presented: Six Months Ended July 31, 2026 2025 (in thousands) Net cash provided by operating activities $ 31,948 $ 51,231 Net cash (used in) provided by investing activities $ (23,976) $ 65,642 Net cash provided by (used in) financing activities $ 10,660 $ (28,399) Operating Activities Our largest source of operating cash is payments received from our customers. Our primary uses of cash from operating activities are for personnel-related expenses, sales and marketing expenses, third-party cloud infrastructure expenses, and overhead costs. Our operating cash flow is influenced by seasonal billing patterns, with a concentration of annual billings in our fiscal fourth quarter due to enterprise buying and renewal cycles. This makes our fiscal first quarter our strongest 37 Table of Contents quarter for collections and operating cash flow. Acquisitions can also impact cash flow due to transaction costs, financing expenses, and lower near-term operating cash flow contributions from acquired entities. Cash provided by operating activities primarily consists of our net loss adjusted for certain non-cash items, including stock-based compensation expense, depreciation and amortization, amortization of deferred contract acquisition costs, and changes in operating assets and liabilities during each period. Cash provided by operating activities during the six months ended July 31, 2026 was $31.9 million, primarily consisting of $243.2 million of adjustments for non-cash items, partially offset by our net loss of $169.6 million and $41.6 million of cash used by changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were a $55.5 million decrease in deferred revenue, a $39.1 million increase in deferred contract acquisition costs, and a $16.9 million decrease in accrued expenses and other liabilities. These amounts were partially offset by a $68.8 million decrease in accounts receivable and a $6.4 million increase in accrued payroll and benefits. Cash provided by operating activities during the six months ended July 31, 2025 was $51.2 million, primarily consisting of adjustments for non-cash items of $202.9 million, and $128.6 million provided by net changes to our operating assets and liabilities, partially offset by our net loss of $280.2 million. The main drivers of the changes in operating assets and liabilities were an increase in accrued and other liabilities of $144.0 million, of which $136.0 million is related to an accrual for an unrecognized tax benefit related to our ITA matter, a $56.4 million decrease in accounts receivable, a $3.2 million decrease in prepaid expenses and other assets, and a $1.5 million increase in accounts payable due to timing of invoices received from vendors. These amounts were partially offset by a $36.1 million increase in deferred contract acquisition costs, a $25.3 million decrease in deferred revenue, a $13.1 million decrease in accrued payroll and benefits, and a $2.1 million decrease in operating lease liabilities. Investing Activities Cash used in investing activities during the six months ended July 31, 2026 was $24.0 million, primarily consisting of $260.4 million of investment purchases, which included a $100.0 million strategic investment in Knight JV, LLC, $14.0 million of capitalized internal-use software costs, and $1.0 million of payments related to holdback releases in connection with our fiscal 2026 acquisitions. These amounts were partially offset by $252.0 million of proceeds from sales and maturities of investments. Cash provided by investing activities during the six months ended July 31, 2025 was $65.6 million, primarily consisting of $286.8 million of proceeds from sales, maturities and return of capital of investments. These amounts were partially offset by $208.1 million of investment purchases, and $12.5 million of capitalized internal-use software costs. Financing Activities Cash provided by financing activities during the six months ended July 31, 2026 was $10.7 million, primarily consisting of $7.5 million of proceeds from the issuance of common stock under our Employee Stock Purchase Plan (ESPP), and $3.1 million of proceeds from the exercise of employee stock options. Cash used in financing activities during the six months ended July 31, 2025 was $28.4 million, primarily consisting of $52.7 million in repurchases of common stock, partially offset by $15.2 million of proceeds from the exercise of employee stock options and $9.1 million of proceeds from the issuance of common stock under our ESPP. Contractual Obligations and Commitments Except as discussed in Note 11, Commitments and Contingencies, to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, there were no material changes outside of the ordinary course of business in our contractual obligations and commitments from those disclosed in our Annual Report. 38 Table of Contents Critical Accounting Policies and Estimates Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, and we evaluate our estimates and assumptions on an ongoing basis. Actual results could differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, operating results, and cash flows could be affected. There have been no material changes to our critical accounting policies and estimates as compared to those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report. Recently Issued Accounting Pronouncements Refer to “Recently Issued Accounting Pronouncements Not Yet Adopted” in Note 2, Summary of Significant Accounting Policies in Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements and our expectation of their impact, if any, on our results of operations and financial condition.