Shares in SentinelOne Inc. rose in after-hours trading after the cybersecurity company reported a solid earnings beat in the previous quarter but missed on its outlook for the current one.

For its fourth quarter that ended Jan. 31, SentinelOne reported a loss before costs such as stock compensation of 13 cents per share, down from a loss of 17 cents per share in the same quarter of last year. Revenue shot up 92%, $126.1 million. Analysts had expected an adjusted loss of 16 cents on revenue of $124.7 million.

Annual recurring revenue rose 88%, $548.7 million, above an expected $545.7 million. The company had more than 10,000 customers as of Jan. 31, up about 50% year-over-year, with customers with an ARR of $100,000 growing 74%, to 905. Its dollar-based net retention rate in the quarter remained above 130%, an indication it’s getting existing customers to spend more, and it had $1.2 billion in cash, cash equivalents and investments on hand as of the end of the quarter. For its full fiscal 2023, it reported revenue more than doubled from 2022, to $422.2 million.

Highlights in the quarter included SentinelOne partnering with cybersecurity intelligence firm LogRhythm Inc. in December to help companies streamline their security operations and cut through the noise to gain more precise insights into their threats. Under the partnership, customers of both companies gain expanded visibility across their networks and systems, automated mitigation of threats and reduced complexity.

“We continued to deliver leading growth and margin improvement, a result of stronger execution and our competitive position,” Chief Executive Tomer Weingarten said in a company’s earnings release. “Our ARR crossed half a billion dollars, and our global customer base exceeded 10,000 — two major milestones. Our sights are set much higher.”

For its first quarter of fiscal 2024, SentinelOne said it expects revenue of $137 million, roughly in line with expectations. For the full fiscal year, the company expects revenue of $631 million to $640 million, below the consensus estimate of $650 million.

In a letter to shareholders, SentinelOne was surprisingly upbeat. Companies talking themselves up are not historically rare, but in 2023 amid layoffs, 40-year high inflation and bank failures, the trend in earnings reports is to address the broader macroeconomic situation. On the third page of its letter to shareholders, SentinelOne eventually refers to “helping customers in a dynamic demand environment” and mentions “cost-consciousness and prudence around IT budgets.”

Investors liked SentinelOne’s numbers, sending the company’s shares up almost 5% after-hours.

Photo: SentinelOne