TLDR
- SentinelOne stock dropped around 20% in premarket Friday after announcing an 8% workforce reduction focused on AI investment
- Q1 fiscal 2027 adjusted EPS came in at 4 cents, double last year and above Wall Street’s 2-cent estimate
- Revenue rose 21% to $277 million, roughly in line with the $277.3 million analyst consensus
- Q2 revenue guidance of $290 million (midpoint) came in below the $292 million estimate, spooking investors
- Full-year revenue outlook held at $1.195B–$1.205B, with EPS guidance of 32–38 cents
SentinelOne stock was trading around $14.91 in early Friday sessions, down roughly 17–20% from Thursday’s close of $18.02, after the cybersecurity company dropped two pieces of news at once: a solid Q1 earnings beat and a plan to cut 8% of its workforce.
The stock had been on a strong run heading into earnings — up 27% in May alone and 20% year-to-date. That momentum reversed fast.
The restructuring plan involves cutting full-time headcount by approximately 8%. The company said savings will be redirected toward artificial intelligence, data, and cloud infrastructure.
$S (SentinelOne) #earnings are out: pic.twitter.com/NsT19Ni3ZR
— The Earnings Correspondent (@earnings_guy) May 28, 2026
SentinelOne expects to take a one-time charge of around $25 million as a result. That includes $12–14 million in severance payments and $10–12 million in stock-based compensation. Most of the restructuring is expected to wrap up in Q2.
CEO Tomer Weingarten framed it as a strategic shift. “Enterprises recognize that securing the AI era requires machine speed defense which only truly modern infrastructure can deliver,” he said in the earnings release.
Q1 Numbers Beat, But Q2 Guidance Falls Short
On the headline numbers, Q1 was a beat. Adjusted EPS of 4 cents topped the 2-cent consensus. Revenue of $277 million was up 21% year-over-year and largely in line with estimates of $277.3 million.
Annualized recurring revenue (ARR) came in at $1.163 billion, up 23% and just ahead of the $1.16 billion estimate.
But investors focused on the forward outlook. Q2 revenue guidance of $290 million (midpoint) missed the $292 million consensus — a small gap, but enough to raise questions about the back half of the year.
JPMorgan analyst Brian Essex flagged a “revenue and ARR growth disconnect,” attributing it partly to a large managed service provider deal where revenue recognition will be delayed due to the deal’s ramp structure.
TD Cowen analyst Shaul Eyal put it more plainly: “A tepid Q2 growth outlook signals possible deceleration into the back half of the year, with the fiscal 2027 outlook now appearing riskier.”
Full-Year Outlook Maintained
Despite the Q2 miss, SentinelOne kept its full-year fiscal 2027 guidance intact. Revenue is still expected between $1.195 billion and $1.205 billion. Adjusted EPS guidance stays at 32–38 cents per share.
Wall Street is currently modeling full-year EPS of 34 cents and revenue of $1.2 billion — right in line with management’s range.
The company also raised its fiscal 2027 margin outlook. JPMorgan’s Essex acknowledged that as a positive but noted growth is what the market cares about most for a stock like this.
SentinelOne competes directly with CrowdStrike, Microsoft, and Palo Alto Networks.
Heading into earnings, the stock had formed a cup base with a technical entry point of 21.40. That level is now well above where the stock is trading.
SentinelOne carries an IBD Composite Rating of 88 out of 99, with an Accumulation/Distribution Rating of A-minus as of Thursday’s close.
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