A maker of AI-powered cybersecurity software, SentinelOne's Singularity platform autonomously prevents, detects, and responds to cyberattacks across computers, cloud workloads, and identities in real time. Founded in 2013 in Mountain View by childhood friends Tomer Weingarten and Almog Cohen (with Ehud Shamir), the company grew out of frustration with slow, signature-based antivirus tools. Its name comes from the "sentinel"—a tireless guardian keeping watch over an organization's digital assets.
SentinelOne's Q2 FY2027 net loss widened to $93.4M as restructuring charges rose to $24.4M and gross margin fell to 72%.
rose to $24.4 million, pushing the quarterly net loss wider even as kept growing. Revenue rose 21% to $292.0 million, but fell to 72% from 75% a year earlier as cloud hosting, customer support, and costs scaled faster than sales. The company is still unprofitable, with a $2.2 billion , and the May 2026 restructuring plan is now the main thing reshaping the cost base.
Key takeaways
rose to $24.4 million in Q2 FY2027 from $3.9 million a year earlier, mainly from severance and under the May 2026 Plan.
Net loss widened to $93.4 million from $72.0 million a year earlier, while the first-half net loss narrowed to $169.6 million from $280.2 million because the prior-year $136.0 million Israeli tax accrual did not recur.
rose 21% to $292.0 million, driven by new customers and expanded licenses and platform solutions for existing customers.
Section summaries
Management's Discussion and Analysis
Q2 FY2027 revenue rose 21% to $292.0M, but gross margin fell to 72% and net loss widened to $93.4M.
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increased 21% to $292.0M for Q2 and $568.6M for H1, driven by new customers and expanded licenses and platform solutions for existing customers.
declined to 72% from 75% due to higher cloud hosting, customer support, and costs tied to scaling operations.
declined to 72% from 75% a year earlier as higher cloud hosting, customer support, and costs tied to scaling operations outpaced growth.
grew 22% to $1,218.1 million, and customers with of $100,000 or more increased 13% to 1,715.
Cash, cash equivalents, and investments totaled $813.2 million at July 31, 2026, with of $31.9 million for the first half.
What changed
fell to 72% from 75% a year earlier, continuing the decline flagged in Q1 FY2027 when it dropped to 71.8% from 75.3%.
growth held at 21% , the same rate as Q1 FY2027, after ten straight quarters of deceleration.
The $136.0 million Israeli tax accrual from the prior-year quarter did not recur, which narrowed the first-half net loss even as the quarterly loss widened on restructuring costs.
R&D expense growth, flagged at 33% in Q1 FY2027, remained a driver of operating expense pressure as the company continued investing in headcount and cloud usage.
The remaining Israeli Tax Authority payable, flagged at $267.1 million in Q1 FY2027, now stands at $186.3 million with installments through fiscal 2031 and $259.7 million accelerating on a change of control.
What to watch
Whether the May 2026 restructuring plan produces lower operating expenses in Q3 FY2027 or whether severance and charges continue.
Whether stabilizes above 70% or continues to decline as cloud hosting and customer support costs scale with the customer base.
Whether growth holds at 21% or resumes decelerating after holding steady for two quarters.
The $186.3 million Israeli tax settlement installments through fiscal 2031 and their effect on liquidity, given $813.2 million in cash and investments.
jumped to $24.4M in Q2 from $3.9M a year earlier, mainly from the May 2026 Plan's severance and .
Net loss widened to $93.4M in Q2 from $72.0M, while H1 net loss narrowed to $169.6M from $280.2M due to a prior-year $136.0M Israeli tax accrual.
grew 22% to $1,218.1M and customers with ARR of $100,000 or more rose 13% to 1,715.
Cash, cash equivalents, and investments totaled $813.2M as of July 31, 2026, with of $31.9M for H1.
Quantitative and Qualitative Disclosures About Market Risk
Market risk is mainly from interest rates and foreign exchange, with a $162.5M undesignated forward hedge on an Israeli New Shekel liability.
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As of July 31, 2026, the company held $813.2 million in cash, cash equivalents, and investments plus $13.8 million of restricted cash.
A hypothetical 100 change in interest rates would change the fair market value of the investment portfolio by about $1.7 million.
The company states it does not enter into investments for trading or speculative purposes.
Sales contracts have been primarily U.S. dollar-denominated, so is not subject to foreign currency risk.
Operating expenses outside the U.S. are primarily in local currencies, and the liability is denominated in Israeli New Shekel, creating foreign exchange exposure.
The company uses foreign currency forward contracts with notional amounts of $162.5 million to economically manage the liability risk, but these are not designated as accounting hedges.
We are currently a party to, and may from time to time in the future, be involved in, various litigation matters and subject to claims that arise in the ordinary course of business, including claims asserted by third parties in the form of letters and other communications. For m…
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We are currently a party to, and may from time to time in the future, be involved in, various litigation matters and subject to claims that arise in the ordinary course of business, including claims asserted by third parties in the form of letters and other communications. For more information regarding legal proceedings and other claims in which we are involved, see 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, and is incorporated herein by reference.
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Table of Contents
Cybersecurity platform faces profitability, AI, security, and macro risks amid continued losses and heavy investment.
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The company remains unprofitable, with a $93.4 million net loss in Q2 FY2027 and a $2.2 billion , while expecting operating expenses to keep rising.
Macroeconomic pressure is already visible through longer sales cycles, deal downsizing, and reduced usage by larger enterprise customers, with near-term demand expected to stay weak.
AI initiatives such as and carry execution, third-party model, regulatory, and litigation risks, including reliance on foundation models that could change terms or fail.
Security incidents, platform defects, and AWS dependence create material operational and reputational exposure, with AI-enhanced attacks increasing threat sophistication.
A $186.3 million Israeli tax settlement requires installment payments through fiscal 2031, with $259.7 million accelerating on a .
Dual-class stock concentrates roughly 26% of voting power with pre-IPO holders, limiting investor influence until Class B shares convert.