SentinelOne Q2 Preview: Can AI Security Restore Momentum?

This article first appeared on GuruFocus.

SentinelOne (NYSE:S) will report Q2 fiscal 2026 results after the U.S. market close on Thursday, August 28. Analysts expect non-GAAP EPS of $0.03 on revenue of about $242 million, marking 22% year-over-year growth. The stock has been under pressure, down nearly 26% year to date, and fell another 15% over the past month ahead of the report.

Annualized recurring revenue (ARR) will be the first thing investors look at. ARR grew 24% in Q1 to $948 million, and investors want a clearer picture of how predictable that growth really is. Along with that, the number of customers with ARR over $100K rose 22% to 1,459, signaling continued traction among larger enterprises.

When it comes to margins and profitability, momentum may be building. That said, last quarter the company reached a record free cash flow margin of 20%. Sentinel also projects Q2 non-GAAP operating margins to be around breakeven, with gross margins near 79%, and expects full-year operating margin improvements of 3% to 4%. Delivering on those forecasts would signal management is managing its expenses while it scales.

Beyond numbers, investors will watch AI and product execution closely. SentinelOne continues to expand Purple AI, whose adoption is gaining traction, and it has partnered with major players like AWS and launched Prompt Security to bolster its generative AI defenses.

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