I should probably explain this. I expect a lot from companies like this (or Monday or Gitlab etc) where the revenue base isn’t even close to that of a Datadog or Crowdstrike or Zscaler or even Cloudflare. The latter are all at run rates of $1b+ and in some cases close to or more than $2b. A company like SentinelOne with just $362m in TTM revenue, not to mention deep FCF losses, just needs to grow super fast. If it slows from well over 100% this year to 60% or 70% next year, what is it gonna do the year after?
Another thought on this: SentinelOne added $49m of net new ARR this quarter and plans to add at least 20% more than that next quarter, we’ll call that $59m. But neither of these numbers is impressive based on the trajectory of net new ARR in the last 8 quarters:
Q421: $28m
Q122: $30m
Q222: $37m
Q322: $39m
Q422: $55m
Q123: $47m
Q223: $65m (organic…$100m total)
Q323: $49m
and then 59m in Q4?
Even with a decent beat on that 59m, it won’t be huge growth vs 55m in Q4 last year. Seems like they’ve kind of stagnated the last 4 or 5 quarters.
Meanwhile Crowdstrike is adding roughly $200m each quarter.
I don’t know. There’s just lot of uncertainty with SentinelOne, in my opinion. They have a lot left to prove, and I just don’t know how it’s gonna go.
If the FED gives us a bump this afternoon, I might sell the rest.
Bear