Bear, I am still puzzled and amazed that you look down your nose at Sentinel the way you do. We simply don’t have ANY other company that is growing like Sentinel in these macro conditions.
Revenue up 92%
ARR up 88%
Tomer Weingarten, CEO . - We continued to deliver leading growth and margin improvement. Our ARR crossed half a billion dollars, and our global customer-base exceeded 10,000 - two major milestones. Our sights are set much higher. We continue to strengthen our technology leadership. Once again, we are a leader in Gartner’s Magic Quadrant for Endpoint Protection Platform and achieved the top ranking across all three Gartner’s Critical Capabilities for Endpoint Protection Platforms.
Dave Bernhardt, CFO - Our fourth quarter results exceeded expectations across all key metrics, indicating strength of our competitive position and unit economics. Evident in our fiscal year 2024 outlook, we expect to deliver compelling top line growth with consistent margin improvement.”
Fourth Quarter
· Total revenue up 92% to $126 million, compared to $66 million
· International revenue was 35% of total revenue and grew 125%!
· Annualized recurring revenue (ARR) up 88% to $549 million
· Total customer count grew 50% to over 10,000 customers.
· $100k customers grew 74% to 905. ["Keep in mind that this is dramatically understated as we don’t count the customers serviced by our MSSP partners ".]
· NRR remained above 130%.
· Adj gross margin: was 75%, up from 66%.
· Adj operating margin: was (35)%, improved from (66)%.
· Cash was $1.2 billion
Full Year
· Total revenue up 106% to $422 million, up from $205 million.
· Adj gross margin was 72%, up 9 points from 63%.
· Adj op margin was -49%, up 36 points from -85%
Shareholder Letter and Conference Call
We are winning in a significant majority of competitive situations—our win rates increased in the fourth quarter, including against large next-gen competitors. Customers most commonly select us for our performance and breadth, ease of use, and superior platform value. Our momentum with large enterprises and expanding platform adoption continues to drive increasing ARR per customer. We secured many prominent large wins ranging from U.S. federal agencies to global financial institutions and technology pioneers, spanning both endpoint and cloud footprints.
Global economic conditions remained similar to last quarter. We continue to see customer cost-consciousness and prudence around IT budgets, which has led to longer sales cycles and deal right-sizing. We expect these dynamics to persist. Customers are evaluating deals to ensure they are getting the best product and value at a rational price. Fundamentally, the enterprise need for cybersecurity remains mission critical.
Our AI-based security and platform approach allows us to be flexible in meeting diverse budgetary needs and deliver our customers a favorable cost of ownership, especially important in today’s environment. Our platform solutions including endpoint, cloud, identity, and security data are among the top IT spending priorities. Entering FY24, our pipeline nearly doubled year-over-year and continued to build at a record pace thus far. Our competitive position is stronger, and we are proud to protect over 10,000 enterprises around the world. Our top priority is securing tomorrow, with a relentless focus on technology leadership, trust, and transparency.
Cloud - We are excited to announce the expansion of our cloud security portfolio. As a technology leader in cloud workload protection (CWP), we are partnering with Wiz, the leader in cloud security posture management (CSPM). This is more than just a collaboration, it is an exclusive strategic and go-to-market partnership giving enterprises access to best-of-breed cloud security solutions.
Our Singularity platform has the first and only unified security data lake with EDR hunting and querying capabilities. Our platform ingests petabytes of data across hundreds of trillions of events, serving millions of queries in just sec- onds. Disparate solutions and vendors for EDR and security data lakes saddle enterprises with high costs and com- plexity. Every SentinelOne customer gets access to our unified Singularity data lake. There is no separate solution.
Singularity Cloud once again remained our fastest-growing solution in Q4, followed by strong contributions from other emerging solutions like Data Retention, Vigilance MDR, and Identity Security. We have just begun to scratch the surface of a significant cloud security opportunity. We’re winning sizable deals, including several multi-million dollar wins that can easily match or exceed the size of the endpoint deployment for these customers. Early deployments for many customers are just a fraction of their total cloud footprints. We’re excited to expand our cloud security portfolio by partnering with Wiz. Given our expanding customer base and growth opportunities, we believe we are still in the early innings of a large expansion opportunity.
Partner ecosystem - For years, we’ve taken a partner friendly go-to-market approach, where we enable their business instead of compet- ing against them. This is especially important for strategic partnerships like MSSPs. We’ve architecturally designed capabilities that enhance these relationships, like multi-tenancy, automation, and role-based access control. Many of the leading MSSP providers have built successful practices on top of our Singularity platform. Our extensive and diverse network of channel partners that’s very hard to replicate. It’s not just a package design - but a true competitive technology moat. These product-driven differentiators fuel ease of deployment, scaled management, and robust integration capabilities. We believe this makes us the partner of choice for MSSPs across the globe.
Op cash flow was $(22) million, worsening from $(6) million a year ago.
Free cash flow was $(25) million, worsening from $(7) million a year ago.
Guidance - For the first quarter, we expect revenue of about $137 million, up 75% year-over-year. [That means above 80%, well above anyone else].
For fiscal year 2024, we expect revenue of $631-640 million, reflecting growth of 51% at the midpoint [with 4 chances to raise it].
Cyber security remains a top IT priority, driven by a fervent and evolving threat landscape. At the same time, we are mindful of the near-term challenges impacting IT budgets. We expect the macro-related uncertainties to persist for the full year, which is factored into our guidance.
Our Glassdoor ratings are near perfect at 4.9 and easily the highest among peers. I’m proud of Sentinel being named as the best workplace in technology in Fortune’s U.S. ranking for 2022.
My take : This is now **one of my highest conviction companies, short term at least (maybe tied with Monday)…