What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-03-27 compared with 2023-03-29 · 374 added, 409 removed, 713 unchanged (52% of the section changed)

18 unchanged sentences

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

6 unchanged sentences

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquisitions – Acquisition of Attivo — Refer to Notes 2 and 15 to the financial statements

Critical Audit Matter Description

On May 3, 2022, the Company completed the acquisition of Attivo Networks, Inc.

for consideration of $534.8 million.

The Company accounted for the acquisition as a business combination.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including $77.6 million of customer relationships and $63.2 million of developed technology.

We identified forecasted revenue used in the valuation of customer relationships and developed technology as a critical audit matter because it requires management to make significant estimates and assumptions.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasted revenue.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasted revenue included the following, among others:

• Assessed the reasonableness of forecasted revenue, by performing a retrospective review of the forecasted revenue and comparing it to (1) historical revenue results of the acquired business, (2) historical and forecasted revenue of peer companies in industry, and (3) communications with the Board of Directors.

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition — Refer to Notes 2 and 3 to the financial statements

1 unchanged sentence

The Company generates substantially all its revenue from subscriptions to its Singularity Platform.

This includes subscription, premium support and maintenance and other Singularity Modules, which are distinct performance obligations and are recognized ratably over the subscription term as the performance obligations are satisfied.

This includes subscription, premium support and maintenance and other Singularity Modules, which are distinct performance obligations and are recognized (i) ratably over the subscription term as the performance obligations are satisfied, (ii) based on transaction volume or (iii) based on certain usage-based measures.

To determine the amount and pattern of revenue recognition, management identifies and evaluates the relevant contractual terms in its customer contracts based on its accounting policy (collectively “contract terms and conditions”).

3 unchanged sentences

• We assessed management’s significant accounting policies related to revenue recognition for compliance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers.

• We selected a sample of recorded revenue transactions and contracts entered into during the period and performed the following procedures:

• We selected a sample of recorded revenue transactions and contracts entered during the year and performed the following procedures:

◦ Obtained and read customer source documents and the contract, including master agreements and related amendments, to evaluate if relevant contract terms and conditions have been appropriately identified by management.

4 unchanged sentences

We have served as the Company’s auditor since 2018.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of SentinelOne, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of SentinelOne, Inc.

and subsidiaries (the “Company”) as of January 31, 2023 and 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended January 31, 2023, of the Company and our report dated March 29, 2023, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Attivo Networks, which was acquired in May 2022, and whose financial statements constitute approximately 0.5% of total assets as of January 31, 2023 and approximately 7% of total revenue during the year ended January 31, 2023.

Accordingly, our audit did not include the internal control over financial reporting at Attivo Networks.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

San Jose, California

March 29, 2023

SENTINELONE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(in thousands, except share data)

Current assets:

1 unchanged sentence

Short-term investments

669,305 485,584

Accounts receivable, net

45 unchanged sentences

Additional paid-in capital 2,934,607 2,663,394

Accumulated other comprehensive income (loss) ( 6,367 ) 454

Accumulated other comprehensive loss

( 1,550 ) ( 6,367 )

Accumulated deficit ( 1,339,044 ) ( 1,000,351 )

17 unchanged sentences

198,247 162,722 93,504

Restructuring (Note 11)

Total operating expenses

3 unchanged sentences

Interest expense ( 1,216 ) ( 1,830 ) ( 787 )

Other expense, net ( 1,293 ) ( 2,280 ) ( 424 )

Other income (expense), net

918 ( 1,293 ) ( 2,280 )

Loss before income taxes ( 332,834 ) ( 384,291 ) ( 270,097 )

Provision (benefit) for income taxes ( 5,613 ) 1,004 460

Provision for (benefit from) income taxes

5,859 ( 5,613 ) 1,004

Net loss $ ( 338,693 ) $ ( 378,678 ) $ ( 271,101 )

10 unchanged sentences

Other comprehensive income (loss):

Changes in unrealized losses on investments ( 6,821 ) — —

Changes in unrealized gains (losses) on investments

4,817 ( 6,821 ) —

Foreign currency translation adjustments — — 289

8 unchanged sentences

Balances as of January 31, 2021 167,058,113 $ 621,139 39,242,316 $ 2 $ 29,869 $ 165 $ ( 350,572 ) $ ( 320,536 )

Issuance of Series E Preferred Stock, net of issuance costs of $ 0.1 million

31,405,183 152,539 — — — — — —

Issuance of Series F Preferred Stock, net of issuance costs of $ 0.1 million

22,128,982 266,774 — — — — — —

Issuance of common stock upon exercise of options — — 5,358,692 1 4,607 — — 4,608

Issuance of common stock upon exercise of warrants — — 321,802 — 200 — — 200

Issuance of common stock for services provided — — 11,013 — 47 — — 47

Vesting of early exercised options — — — — 71 — — 71

Stock based compensation expense — — — — 15,958 — — 15,958

Foreign currency translation adjustments — — — — — 366 — 366

Net loss — — — — — — ( 117,573 ) ( 117,573 )

Balances as of January 31, 2021 167,058,113 $ 621,139 39,242,316 $ 2 $ 29,869 $ 165 $ ( 350,572 ) $ ( 320,536 )

Conversion of redeemable convertible preferred stock to common stock upon initial public offering ( 167,058,113 ) ( 621,139 ) 169,787,200 10 621,129 — — 621,139

12 unchanged sentences

Balances as of January 31, 2022 — $ — 270,451,615 $ 27 $ 2,271,980 $ 454 $ ( 621,673 ) $ 1,650,788

SENTINELONE, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

(in thousands, except share data)

Issuance of common stock upon exercise of options — — 7,650,525 1 17,334 — — 17,335

8 unchanged sentences

Balance as of January 31, 2023 — $ — 286,763,857 $ 29 $ 2,663,394 $ ( 6,367 ) $ ( 1,000,351 ) $ 1,656,705

Issuance of common stock upon exercise of options — — 10,298,114 1 28,317 — — 28,318

SENTINELONE, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

(in thousands, except share data)

Vesting of restricted stock units — — 6,021,877 — — — — —

Issuance of common stock under employee stock purchase plan — — 1,607,874 — 19,147 — — 19,147

Vesting of early exercised options — — — — 186 — — 186

Stock-based compensation — — — — 223,563 — — 223,563

Other comprehensive income

— — — — — 4,817 — 4,817

Net loss — — — — — — ( 338,693 ) ( 338,693 )

Balance as of January 31, 2024 — $ — 304,691,722 $ 30 $ 2,934,607 $ ( 1,550 ) $ ( 1,339,044 ) $ 1,594,043

The accompanying notes are an integral part of these consolidated financial statements.

15 unchanged sentences

216,870 164,466 87,889

Loss on investments, accretion of discounts, and amortization of premiums on investments, net ( 12,217 ) — —

Accretion of discounts, and amortization of premiums on investments, net

( 19,943 ) ( 12,217 ) —

Changes in operating assets and liabilities, net of effects of acquisition

Net gain on strategic investments

( 2,703 ) — —

4,637 ( 1,187 ) ( 456 )

Changes in operating assets and liabilities, net of effects of acquisitions

Accounts receivable ( 61,949 ) ( 44,442 ) ( 59,082 )

20 unchanged sentences

Purchases of investments ( 466,253 ) ( 1,938,007 ) ( 6,000 )

Maturities of investments 925,185 — —

Cash paid for acquisition, net of cash acquired

Sales and maturities of investments

639,193 925,185 —

Net cash used in investing activities

Cash paid for acquisitions, net of cash and restricted cash acquired

( 13,585 ) ( 281,032 ) ( 3,449 )

Net cash provided by (used in) investing activities

140,590 ( 1,312,666 ) ( 19,743 )

CASH FLOW FROM FINANCING ACTIVITIES:

Proceeds from issuance of Series E redeemable convertible preferred stock, net of issuance costs — — 152,539

Proceeds from issuance of Series F redeemable convertible preferred stock, net of issuance costs — — 266,774

Payments of deferred offering costs — ( 186 ) ( 7,416 )

Proceeds from revolving line of credit — — 19,857

Repayment of debt — — ( 20,000 )

1 unchanged sentence

28,317 17,335 14,622

Proceeds from exercise of warrants — — 200

Proceeds from issuance of common stock under the employee stock purchase plan 19,147 19,159 11,356

12 unchanged sentences

Interest paid

Income taxes paid, net $ 500 $ 583 298

$ 7 $ 17 $ 409

Income taxes paid, net of refunds

$ 5,111 $ 500 $ 583

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

1 unchanged sentence

Property and equipment purchased but not yet paid $ 98 $ 203 $ 913

Vesting of early exercised stock options $ 186 $ 103 $ 575

Deferred offering costs accrued but not yet paid $ — $ — $ 186

SENTINELONE, INC.

1 unchanged sentence

(in thousands)

Vesting of early exercised stock options $ 103 $ 575 71

Deferred offering costs accrued but not yet paid $ — $ 186 —

Issuance of common stock and assumed equity awards in connection with acquisition $ 186,332 $ 120,319 —

Issuance of common stock and assumed equity awards in connection with acquisitions

$ — $ 186,332 $ 120,319

Conversion of redeemable convertible preferred stock to common stock upon initial public offering $ — $ — $ 621,139

4 unchanged sentences

SentinelOne, Inc.

(SentinelOne, we, our, or us) was incorporated in January 2013 in the State of Delaware.

On March 29, 2021, we amended our certificate of incorporation to change our name from Sentinel Labs, Inc.

to SentinelOne, Inc.

(SentinelOne, the Company, we, our, or us) was incorporated in January 2013 in the State of Delaware.

We are a cybersecurity provider that delivers an artificial intelligence-powered platform to enable autonomous cybersecurity defense.

2 unchanged sentences

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States (US).

The consolidated financial statements include the accounts of SentinelOne and our wholly-owned subsidiaries.

6 unchanged sentences

Actual results could differ from those estimates.

As the impact of the COVID-19 pandemic continues to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment.

These estimates and assumptions may change in future periods and will be recognized in the consolidated financial statements as new events occur and additional information becomes known.

To the extent our actual results differ materially from those estimates and assumptions, our future financial statements could be affected.

Segment and Geographic Information

2 unchanged sentences

The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and assessing financial performance.

For information regarding our revenue and long-lived assets by geography, see Notes 3 and 12, respectively.

For information regarding our revenue and long-lived assets by geography, see Note 3, Revenue and Contract Balances , and Note 14, Geographic Information , respectively.

Foreign Currency

During fiscal 2022, we changed the functional currency of certain subsidiaries from their respective local currency to the U.S.

The change in functional currency is due to increased exposure to the U.S.

dollar as a result of a change in facts and circumstances in the primary economic environment in which these subsidiaries operate.

During fiscal 2022, we changed the functional currency of certain subsidiaries from their respective local currency to the US dollar.

The change in functional currency is due to increased exposure to the US dollar as a result of a change in facts and circumstances in the primary economic environment in which these subsidiaries operate.

The effects of the change in functional currency were not significant to our consolidated financial statements.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Subsequent to the change, our reporting currency and the functional currency of our foreign subsidiaries is the U.S.

Subsequent to the change, our reporting currency and the functional currency of our foreign subsidiaries is the US dollar.

Foreign currency transaction gains and losses are recorded in other income (expense), net in the consolidated statements of operations and were not material for any periods presented.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers.

We recognize revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers .

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue is recognized when a customer obtains control of promised services.

16 unchanged sentences

(iv) Allocation of the Transaction Price to the Performance Obligations in the Contract —If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.

Contracts that contain multiple performance obligations require an allocation

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of the transaction price to each performance obligation based on relative SSP.

Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on relative standalone selling price (SSP).

Certain arrangements include variable consideration that is typically a function of transaction volume or another usage-based measure.

1 unchanged sentence

direct allocation).

(v) Recognition of Revenue when, or as, Performance Obligations are Satisfied —Revenue is recognized when control of the related performance obligation is transferred to the customer in an amount that reflects the consideration expected to be received in exchange for the subscriptions or services.

(v) Recognition of Revenue when, or as, Performance Obligations are Satisfied —Revenue is recognized when control of the related performance obligation is transferred to the customer in an

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

amount that reflects the consideration expected to be received in exchange for the subscriptions or services.

We generate substantially all of our revenue from subscriptions to our Singularity Platform.

6 unchanged sentences

Certain arrangements include variable consideration related either to transaction volume or another usage-based measure.

Depending upon the structure of a particular arrangement, we (1) recognize revenue as each distinct service period is performed, (2) recognize the estimate of variable consideration ratably over the period to which it relates, or (3) apply the ‘right to invoice’ practical expedient and recognize revenue based on the amount invoiced to the customer during the period.

Depending upon the structure of a particular arrangement, we i) recognize revenue as each distinct service period is performed, ii) recognize the estimate of variable consideration ratably over the period to which it relates, or iii) apply the ‘right to invoice’ practical expedient and recognize revenue based on the amount invoiced to the customer during the period.

We generally invoice our customers upfront upon signing for the entire term of the contract, periodically, or in arrears.

12 unchanged sentences

Research and development costs are expensed as incurred, unless they qualify for recognition as capitalized internal-use software.

Research and development expenses consist primarily of personnel-related costs, including

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

salaries, benefits, bonuses, and stock-based compensation, consulting fees, software and subscription services, third-party cloud infrastructure expenses incurred in developing our platform and modules, and allocated overhead costs.

Research and development expenses consist primarily of personnel-related costs, including salaries, benefits, bonuses, and stock-based compensation, consulting fees, software and subscription services, third-party cloud infrastructure expenses incurred in developing our platform and modules, and allocated overhead costs.

Advertising Expenses

1 unchanged sentence

Advertising expenses were $ 18.5 million, $ 12.3 million, and $ 8.4 million for fiscal 2024, 2023 and 2022, respectively.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation

3 unchanged sentences

Forfeitures are accounted for in the period in which they occur.

We granted certain awards that have both service-based vesting conditions and performance-based milestones.

We recognize stock-based compensation expense on a graded basis over the total requisite service period for each separately vesting portion of the performance tranches related to these performance milestone options.

We also granted stock option awards with a service-based, performance-based, and market-based vesting conditions to our Chief Executive Officer and Chief Financial Officer.

These stock options will vest upon the occurrence of our IPO (the performance-based vesting condition) and the achievement of certain milestone events and our share price targets (the market-based vesting conditions), subject to the executive’s continued service to us from the grant date through the milestone events.

For these options, we used a Monte Carlo simulation to determine the fair value at the grant date and the implied service period.

We granted certain awards that have both service-based vesting conditions and performance-based vesting conditions.

For these awards, we recognize stock-based compensation expense on a graded basis over the total requisite service period for each separately vesting portion of performance tranches where it is probable that the performance-based vesting conditions will be achieved.

We also granted stock option awards with service-based, performance-based, and market-based vesting conditions to our Chief Executive Officer and Chief Financial Officer.

For these awards, stock-based compensation expense is recognized using the accelerated attribution method over the requisite implied service period when it is probable the performance-based vesting condition will be achieved.

We are subject to income taxes in the United States and other foreign jurisdictions.

We are subject to income taxes in the US and other foreign jurisdictions.

We utilize the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, as well as from net operating loss carryforwards, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

6 unchanged sentences

We consider our redeemable convertible preferred stock, restricted common stock, and shares issued upon the early exercise of stock options subject to repurchase to be participating securities.

Under the two-class method, net loss is not allocated to redeemable convertible preferred stock, restricted

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

common stock, and early exercised stock options as the holders do not have a contractual obligation to share in our losses.

Under the two-class method, net loss is not allocated to redeemable convertible preferred stock, restricted common stock, and early exercised stock options as the holders do not have a contractual obligation to share in our losses.

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents.

Cash equivalents consist of amounts invested in money market funds.

Restricted cash consists of the Attivo indemnity escrow fund and collateralized letters of credit established in connection with lease agreements for our office facilities.

Cash equivalents may consist of amounts invested in money market funds and certificates of deposit.

Restricted cash consists of indemnity escrow funds related to acquisitions and collateralized letters of credit established in connection with lease agreements for our office facilities.

Restricted cash, current and non-current, are included within prepaid expenses and other current assets and other assets, respectively, on our consolidated balance sheets.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a reconciliation of cash, cash equivalents, and restricted cash to the total of these amounts shown in the consolidated statements of cash flows (in thousands):

7 unchanged sentences

Investments with maturities greater than one year from the consolidated balance sheet date are classified as long-term investments.

We classify our investments as available-for-sale securities and present them within assets.

We classify our investments as available-for-sale securities.

Our investments are recorded at fair value with unrealized gains and losses, if any, reported in accumulated other comprehensive income (loss).

5 unchanged sentences

Realized gains and losses on the sale of investments are determined on a specific identification method and are recorded in other income (expense), net in the consolidated statements of operations.

There were no realized gains or losses on the sale of investments during fiscal 2023, 2022 and 2021.

Realized gains and losses on the sale of investments during fiscal 2024, 2023 and 2022 were not significant.

Strategic Investments

1 unchanged sentence

We elect to apply the measurement alternative and record non-marketable equity investments at cost, less any impairment, plus or minus observable price changes in orderly transactions for identical or similar investments of the same issuer.

Non-marketable debt securities are classified as available-for-sale and are recorded at their estimated fair value with changes in fair value recorded through accumulated other comprehensive income (loss).

Strategic investments are included within long-term investments on our consolidated balance sheets and adjustments to their carrying amounts are recorded in other income (expense), net in the consolidated statements of

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-marketable debt securities are recorded at cost, less any impairment, plus or minus observable price changes in orderly transactions for identical or similar investments of the same issuer.

During fiscal 2024, the Company recognized impairment charges of $ 0.8 million and realized gains of $ 3.5 million on its non-marketable strategic investments.

Impairment charges and realized gains on strategic investments were recognized in other income (expense), net in the consolidated statements of operations.

There were no material events or circumstances impacting the carrying amount of our strategic investments during fiscal 2023 and 2022.

2 unchanged sentences

The carrying amounts reported on the consolidated balance sheets for accounts receivable, accounts payable, accrued liabilities, and accrued payroll and benefits approximate their respective fair values due to their short-term nature.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, investments, and accounts receivable.

We maintain our cash, cash equivalents, restricted cash, and investments with high-credit-quality financial institutions mainly in the U.S.

We maintain our cash, cash equivalents, restricted cash, and investments with high-credit-quality financial institutions mainly in the US and Israel.

We have not experienced any credit losses relating to our cash, cash equivalents, restricted cash, and investments.

1 unchanged sentence

We perform periodic credit evaluations of our customers and generally do not require collateral.

The only channel partner that represented 10% or more of accounts receivable, net for the periods presented was as follows:

Channel partners that represented 10% or more of accounts receivable, net for the periods presented were as follows:

As of January 31,

Channel partner A 26 % 20 %

Channel partner B

Channel partner C

* Less than 10%

There were no end customers that represented 10% or more of accounts receivable as of January 31, 2024 or 2023.

Channel partners that represented 10% or more of our total revenue for the periods presented were as follows:

The only channel partner that represented 10% or more of our total revenue for the periods presented was as follows:

Year Ended January 31,

1 unchanged sentence

Channel partner A 19 % 18 % 18 %

Channel partner B * * 13 %

*Less than 10%

There were no end customers that represented 10% or more of total revenue for fiscal 2024, 2023 and 2022.

5 unchanged sentences

Deferred Contract Acquisition Costs

We capitalize sales commissions and associated payroll taxes that are incremental to obtaining a customer contract, which are recorded as deferred contract acquisition costs on the consolidated balance sheets.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

commissions for the renewal of a contract are not considered commensurate with commissions paid for the initial contracts, given the substantive difference in commission rates in proportion to their respective contract values.

Commissions paid on a new contract are amortized on a straight-line basis over an estimated period of benefit of four years , while commissions paid on renewal contracts are amortized over the average contractual term of the renewal.

We capitalize sales commissions and associated payroll taxes, and certain incentives (such as referral fees) paid to partners, that are incremental to obtaining a customer contract, which are recorded as deferred contract acquisition costs on the consolidated balance sheets.

Sales commissions for the renewal of a contract are not considered commensurate with commissions paid for the initial contracts, given the substantive difference in commission rates in proportion to their respective contract values.

Commissions paid, including certain incentives paid to partners, on a new contract are amortized on a straight-line basis over an estimated period of benefit of four years , while commissions paid on renewal contracts are amortized over the average contractual term of the renewal.

We determine the estimated period of benefit based on both quantitative and qualitative factors, including the duration of our relationships with customers and the estimated useful life of our technology.

Amortization of deferred contract acquisition costs is included in sales and marketing expenses in the consolidated statements of operations.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We periodically review these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit.

20 unchanged sentences

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the asset group.

In fiscal 2024, we recorded a $ 2.4 million impairment loss related to our excess facilities.

No impairment loss was recorded during fiscal 2023 and 2022.

15 unchanged sentences

Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statements of operations.

See Note 15 for additional information regarding our acquisitions.

In accordance with ASC 842, we determine if an arrangement is or contains a lease at inception by evaluating various factors, including if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration and other facts and circumstances.

See Note 4, Acquisitions , for additional information regarding our acquisitions.

In accordance with ASC Topic 842, Leases , we determine if an arrangement is or contains a lease at inception by evaluating various factors, including if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration and other facts and circumstances.

Operating lease right-of-use (ROU) assets and operating lease liabilities are recognized on the consolidated balance sheets at the lease commencement date based on the present value of lease payments over the lease term, which is the non-cancelable period stated in the contract adjusted for any options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Lease payments consist of the fixed payments under the arrangement, less any lease incentives, such as tenant improvement allowances.

Variable costs, such as maintenance and utilities based on actual usage, are not included in the measurement of operating lease ROU assets and operating lease liabilities and are expensed when the event determining the amount of variable consideration to be paid occurs.

When the implicit rate of the leases is not determinable, we use an IBR based on the information available at the lease commencement date in determining the present value of lease payments.

Variable costs, comprised of maintenance and utilities based on actual usage, are not included in the measurement of operating lease ROU assets and operating lease liabilities and are expensed when the event determining the amount of variable consideration to be paid occurs.

When the implicit rate of the leases is not determinable, we use an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

Lease cost for lease payments is recognized on a straight-line basis over the lease term.

4 unchanged sentences

We did not have any material finance leases during fiscal 2024, 2023 and 2022.

Recently Adopted Accounting Pronouncement s

In October 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

The new guidance requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized in accordance with Accounting Standards Codification Topic 606 as if the acquirer had originated the contracts.

Previously, contract assets and contract liabilities were measured at fair value.

The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and early adoption is permitted.

We early adopted this guidance on February 1, 2022, which did not have a material impact at the time of adoption on our consolidated financial statements.

Recently Issued Accounting Pronouncement s Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2023-07, Improvements to Reportable Segment Disclosures (Topic 280).

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the CODM and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is also permitted.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

will likely result in us including the additional required disclosures when adopted.

We are currently evaluating the provisions of this ASU.

In December 2023, the FASB issued ASU No.

2023-09, Improvements to Income Tax Disclosures (Topic 740).

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024.

Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.

This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.

REVENUE AND CONTRACT BALANCES

4 unchanged sentences

Amount % of Revenue Amount % of Revenue Amount % of Revenue

United States $ 276,443 65 % $ 140,034 68 % $ 65,497 70 %

US $ 397,885 64 % $ 276,443 65 % $ 140,034 68 %

International 223,269 36 145,736 35 64,765 32

Total $ 621,154 100 % $ 422,179 100 % $ 204,799 100 %

No single country other than the United States represented 10% or more of our revenue during fiscal 2023, 2022 and 2021.

The following table summarizes revenue from contracts by type of customer for the periods presented (in thousands, except percentages):

Year Ended January 31,

2023 2022 2021

Amount % of Revenue Amount % of Revenue Amount % of Revenue

Channel partners $ 380,857 90 % $ 187,541 92 % $ 88,954 96 %

Direct customers 41,322 10 17,258 8 4,102 4

Total $ 422,179 100 % $ 204,799 100 % $ 93,056 100 %

No single country other than the US represented 10% or more of our revenue during fiscal 2024, 2023 and 2022.

Substantially all of our sales are fulfilled through channel partners, including distributors, resellers, managed security service providers, and others.

Contract Balances

Contract assets consist of unbilled accounts receivable, which arise when a right to consideration for our performance under the customer contract occurs before invoicing the customer.

The amount of unbilled accounts receivable included within accounts receivable, net on the consolidated balance sheets was $ 1.5 million as of both January 31, 2023 and 2022.

The amount of unbilled accounts receivable included within accounts receivable, net on the consolidated balance sheets was $ 3.8 million and $ 1.5 million as of January 31, 2024 and 2023, respectively.

Contract liabilities consist of deferred revenue, which represents invoices billed in advance of performance under a contract.

5 unchanged sentences

Revenue allocated to remaining performance obligations represents non-cancelable contract revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced in future periods.

For consumption and usage-based agreements with non-cancelable commitments, remaining performance obligations are determined based on the ratable recognition of the remaining commitment over the remaining contract term.

The amount and timing of revenue recognition are generally dependent on customers’ future consumption, which is inherently variable at the customers’ discretion.

As of January 31, 2024, our remaining performance obligations were $ 896.2 million, of which we expect to recognize 87 % as revenue over the next 24 months, with the remainder to be recognized thereafter.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Capitalized contract costs were $ 125.8 million and $ 93.4 million as of January 31, 2024 and 2023, respectively.

2 unchanged sentences

We did not recognize any impairment of deferred contract acquisition costs during fiscal 2024, 2023 and 2022.

On November 8, 2023, we completed our acquisition of Krebs Stamos Group LLC (KSG), a Washington D.C.-based privately held strategic advisory group.

The purchase price of $ 13.9 million for all of the outstanding membership interests of KSG consisted of all cash and has been accounted for as a business combination in accordance with ASC Topic 805, Business Combinations .

We recorded $ 4.8 million of net identifiable assets in our consolidated balance sheet as of the KSG acquisition date, of which $ 3.2 million was related to intangible assets.

The excess of the purchase price over the fair value of net identifiable assets acquired has been assigned to goodwill in the amount of $ 9.1 million.

The goodwill in this transaction is primarily attributable to expected operational synergies and the assembled workforce.

The goodwill is expected to be deductible for tax purposes.

Intangible assets consist of customer relationships, which will be amortized to sales and marketing expense on a straight-line basis over the estimated useful life of four years .

The results of operations of KSG have been included in the consolidated financial statements from the date of acquisition, and would not have had a material impact on our combined results of operation if the acquisition had occurred on February 1, 2022.

The estimates and assumptions regarding the fair value of certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, income taxes, and goodwill are subject to change as we obtain additional information during the measurement period, which usually lasts for up to one year from the acquisition date.

In connection with the acquisition, we also granted PSUs under our 2021 Equity Incentive Plan.

For further details, refer to Note 10, Stock-Based Compensation .

As the shares are subject to post-acquisition employment, we are accounting for them as post-acquisition compensation expense.

On May 3, 2022, we acquired 100 % of the issued and outstanding equity securities of Attivo Networks, Inc.

(Attivo), an identity security and lateral movement protection company (the Attivo acquisition).

Attivo expands our coverage of critical attack surfaces.

Identity is an adjacent security solution that complements our core endpoint solution.

The Attivo acquisition closed on May 3, 2022 and has been accounted for as a business combination in accordance with ASC Topic 805, Business Combinations .

We had post-combination expense with a fair value of $ 32.9 million that was not included in the total purchase consideration, which is comprised of 307,396 shares of restricted common stock with an aggregate fair value of $ 10.0 million, and 378,828 assumed options with an aggregate fair value of $ 11.5 million.

Restricted common stock and assumed options will be recognized as stock-based compensation expense.

In addition, in connection with the acquisition, certain employees who were promised compensation related to their previous employment agreements will be paid $ 11.4 million in cash based on continued employment which will be recognized on a straight-line basis as acquisition-related compensation costs.

All post-combination expense is expected to be recognized through May 2026.

Post-combination compensation expense is subject to adjustment based on continuing service obligations to us of certain stockholders of Attivo.

In connection with the Attivo acquisition, we also granted RSUs and PSUs under our 2021 Equity Incentive Plan.

For further details, refer to Note 10, Stock-Based Compensation .

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the allocation of purchase consideration recorded on our consolidated balance sheet as of the acquisition date (in thousands):

Consideration:

Cash $ 348,917

Common Stock ( 6,032,231 shares) (1)

Fair value of total consideration transferred $ 534,802

Cash and cash equivalents $ 8,836

Accounts receivable 4,867

Prepaid expense and other current assets 3,880

Operating lease right-of-use assets 260

Intangible assets 151,900

Accrued liabilities ( 4,270 )

Accrued payroll and benefits ( 1,113 )

Operating lease liabilities ( 259 )

Deferred revenue ( 51,746 )

Other liabilities ( 2,357 )

Deferred tax liability ( 7,310 )

Total identifiable net assets 102,688

Goodwill 432,114

Total purchase consideration $ 534,802

(1) Consideration calculated using the fair value of our common stock

The valuation of intangible assets acquired are included in Note 7, Intangible Assets .

The excess of the purchase price over the fair value of net tangible and intangible assets acquired has been assigned to goodwill.

Goodwill represents the future benefits resulting from the Attivo acquisition that will enhance the value of our product for both new and existing customers and strengthen our competitive position.

Goodwill is not deductible for tax purposes.

We incurred $ 5.5 million of transaction expenses in connection with the Attivo acquisition during fiscal 2023.

$ 3.2 million of these costs were recorded as general and administrative expenses in our consolidated statements of operations, with the remainder allocated to purchase price consideration.

No transaction expenses in connection with the acquisition were recorded during fiscal 2024.

The following unaudited supplemental pro forma financial information is provided for informational purposes only and summarizes our combined results of operations as if the acquisition occurred on February 1, 2021 (in thousands):

Year Ended January 31,

Revenue $ 429,683 $ 235,321

Net loss $ ( 393,773 ) $ ( 326,829 )

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The unaudited supplemental pro forma results reflect certain adjustments for the amortization of acquired intangible assets, recognition of stock-based compensation, acquisition-related transaction expenses, and acquisition-related compensation costs.

Such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the date indicated, nor is it indicative of our future operating results.

On February 6, 2021, we executed a merger agreement to acquire 100 % of the issued and outstanding equity securities of Scalyr, Inc.

(Scalyr), a leading cloud-native, cloud-scale data analytics platform.

This Scalyr acquisition allows us to advance our data ingestion, search, and retention capabilities.

The Scalyr acquisition closed on February 9, 2021.

The aggregate consideration transferred was $ 125.3 million, of which $ 5.0 million was paid in cash, $ 106.2 million was comprised of 7,277,214 shares of common stock, and $ 14.1 million was comprised of assumed options to purchase 2,138,347 shares of common stock.

As part of the merger agreement, we entered into non-compete agreements with the founder and the co-founder of Scalyr with a term of three years and a fair value of $ 0.7 million.

The fair value of the non-compete agreements was excluded from the purchase consideration and the net assets acquired, resulting in purchase consideration of $ 124.6 million.

The assets acquired and liabilities assumed in connection with the acquisition were recorded at their fair value on the date of acquisition as follows (in thousands):

Cash and cash equivalents $ 699

Accounts receivable 3,665

Restricted cash 444

Prepaid expense 277

Intangible assets 17,150

Goodwill 108,193

Accounts payable ( 412 )

Deferred revenue ( 5,041 )

Other liabilities ( 347 )

Total purchase consideration $ 124,628

The valuation of intangible assets acquired are included in Note 7, Intangible Assets .

The excess of the purchase price over the fair value of net tangible and intangible assets acquired has been assigned to goodwill.

Goodwill represents the future benefits as a result of the acquisition that will enhance our product available to both new and existing customers and increase our competitive position.

Goodwill is not deductible for tax purposes.

As part of the consideration transferred, we withheld 1,317,079 shares of our common stock with a fair value of $ 14.59 per share at the time of grant (Holdback Shares) and $ 0.4 million of cash related to certain obligations, including indemnification for potential breach of general representations and warranties of the sellers.

The Holdback Shares and cash are expected to be released 18 months from the acquisition closing date, subject to claims for any obligations.

In connection with the acquisition, we granted 1,315,099 shares of restricted common stock that vest over a period of two years contingent on continued employment, for which stock-based compensation expense was recognized ratably over the vesting period.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There was no other contingent consideration or cash consideration expected to be paid out subsequent to the acquisition.

The results of operations of Scalyr have been included in our consolidated financial statements from the date of acquisition.

We incurred $ 1.4 million of transaction costs in connection with the acquisition during fiscal 2022.

These costs were recorded as general and administrative expenses in the consolidated statements of operations.

The following unaudited pro forma financial information summarizes the results of operations of SentinelOne and Scalyr as if the acquisition occurred on February 1, 2020 (in thousands):

Year Ended January 31,

Revenue $ 204,874

Net loss $ ( 262,145 )

The pro forma results reflect certain adjustments for the amortization of acquired intangible assets, adjustments to revenue resulting from the fair value adjustment to deferred revenue, recognition of stock-based compensation, and acquisition-related costs.

FAIR VALUE MEASUREMENTS

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes information about our cash, cash equivalents, and investments by investment category (in thousands):

The following table summarizes information about our cash, cash equivalents, and investments by investment category for the periods presented (in thousands):

As of January 31, 2024

3 unchanged sentences

Money market funds Level 1 204,481 — — 204,481

Certificates of deposit

Level 2 8,245 — — 8,245

Total cash and cash equivalents $ 256,651 $ — $ — $ 256,651

Short-term investments:

Treasury securities Level 1 $ 144,392 $ 1 $ ( 501 ) $ 143,892

Commercial paper Level 2 230,305 30 ( 667 ) 229,668

US Treasury securities Level 1 $ 234,776 $ — $ ( 1,053 ) $ 233,723

Corporate notes and bonds Level 2 279,248 12 ( 1,068 ) 278,192

agency securities Level 2 74,060 3 ( 349 ) 73,714

US agency securities Level 2 157,873 18 ( 501 ) 157,390

Total short-term investments $ 671,897 $ 30 $ ( 2,622 ) $ 669,305

Long-term investments:

Treasury securities Level 1 $ 192,337 $ — $ ( 2,460 ) $ 189,877

US Treasury securities Level 1 $ 27,175 $ 121 $ — $ 27,296

Corporate notes and bonds Level 2 69,970 279 ( 67 ) 70,182

agency securities Level 2 101,844 27 ( 921 ) 100,950

US agency securities Level 2 90,924 303 ( 48 ) 91,179

Total long-term investments $ 188,069 $ 703 $ ( 115 ) $ 188,657

Total assets measured at fair value $ 1,116,617 $ 733 $ ( 2,737 ) $ 1,114,613

The table above does not include the Company’s strategic investments in non-marketable debt and equity securities, which are classified as level 3 investments and were $ 12.5 million as of January 31, 2023.

The following table summarizes the respective fair value and the classification by level within the fair value hierarchy (in thousands):

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of January 31, 2023

Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 1,641,642 $ — $ — $ 1,641,642

Fair Value Level Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

Cash and cash equivalents:

Cash $ 35,055 $ — $ — $ 35,055

Money market funds Level 1 102,886 — — 102,886

Total cash and cash equivalents $ 137,941 $ — $ — $ 137,941

Short-term investments:

Certificates of deposit — 374 — 374

Total assets measured and recorded at fair value $ 1,641,642 $ 374 $ — $ 1,642,016

We invest in highly rated securities with a weighted average maturity of 18 months or less.

As of January 31, 2023, all of our investments will mature within 2 years.

US Treasury securities Level 1 $ 144,392 $ 1 $ ( 501 ) $ 143,892

Commercial paper Level 2 230,305 30 ( 667 ) 229,668

Corporate notes and bonds Level 2 38,443 15 ( 148 ) 38,310

US agency securities Level 2 74,060 3 ( 349 ) 73,714

Total short-term investments $ 487,200 $ 49 $ ( 1,665 ) $ 485,584

Long-term investments:

US Treasury securities Level 1 $ 192,337 $ — $ ( 2,460 ) $ 189,877

Corporate notes and bonds Level 2 233,946 178 ( 2,029 ) 232,095

US agency securities Level 2 101,844 27 ( 921 ) 100,950

Total long-term investments $ 528,127 $ 205 $ ( 5,410 ) $ 522,922

Total assets measured at fair value $ 1,153,268 $ 254 $ ( 7,075 ) $ 1,146,447

There were no transfers between the levels of the fair value hierarchy during fiscal 2024, 2023 and 2022.

As of January 31, 2024, all of our investments will mature within two years.

As of January 31, 2024, we determined that the declines in the market value of our investment portfolio were not driven by credit related factors.

During the years ended January 31, 2023 and 2022, we did not recognize any

During the years ended January 31, 2024 and 2023, we did not recognize any losses on our investments due to credit related factors.

As of January 31, 2024, we had $ 2.1 million in continuous unrealized loss positions for more than twelve months on securities with a total fair value of $ 437.2 million.

The tables above do not include the Company’s strategic investments in non-marketable debt and equity securities, which are recorded at cost, less any impairment, plus or minus observable price changes in orderly transactions for identical or similar investments of the same issuer (measurement alternative) and were $ 16.1 million and $ 12.5 million as of January 31, 2024 and 2023, respectively.

During the year ended January 31, 2024, the Company recognized impairment charges on its non-marketable strategic investments of $ 0.8 million.

During the year ended January 31, 2024, the Company recognized realized gains of $ 3.5 million on its non-marketable strategic investments.

Impairment charges and realized gains on strategic investments were recognized in other income (expense), net.

The fair value was estimated on a non-recurring basis based on Level 3 inputs.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

losses on our investments due to credit related factors.

As of January 31, 2023, no unrealized losses were in a continuous unrealized loss position for more than twelve months.

PROPERTY AND EQUIPMENT, NET

12 unchanged sentences

INTANGIBLE ASSETS

Intangible assets, net as of January 31, 2023 consisted of the following (in thousands):

Intangible assets, net as of January 31, 2024 and 2023 consisted of the following (in thousands):

As of January 31,

Developed technology $ 78,700 $ 78,700

Customer relationship 79,100 1,500

Customer relationships

82,300 79,100

Backlog 11,100 11,100

7 unchanged sentences

Total intangible assets, net $ 122,903 $ 145,093

Amortization expense of intangible assets was $ 23.0 million and $ 3.3 million for fiscal 2023 and 2022, respectively.

Amortization expense of intangible assets was not material for fiscal 2021.

Amortization expense of intangible assets was $ 28.9 million, $ 23.0 million, and $ 3.3 million for fiscal 2024, 2023, and 2022, respectively.

SENTINELONE, INC.

2 unchanged sentences

Fiscal Year Ending January 31,

2025 $ 25,412

Thereafter 26,698

Total $ 122,648

We have entered into non-cancelable real estate operating lease agreements with various expiration dates through fiscal 2029.

We have entered into real estate operating lease agreements with various expiration dates through 2029, some of which include options to extend the leases for up to seven years, and some of which include options to terminate the leases.

Our lease terms include options to extend the lease if they are reasonably certain of being exercised.

Our operating lease arrangements do not contain any restrictive covenants or residual value guarantees.

15 unchanged sentences

Variable lease costs 1,323 1,886 1,124

Sublease income

( 941 ) ( 700 ) ( 563 )

Total lease costs $ 5,256 $ 6,862 $ 6,836

Sublease income was $ 0.7 million, $ 0.6 million and $ 0.9 million for fiscal 2023, 2022 and 2021, respectively, and was recorded as a reduction of lease costs.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The maturities of our non-cancelable operating lease liabilities as of January 31, 2023 were as follows (in thousands):

The maturities of our operating lease liabilities as of January 31, 2024 were as follows (in thousands):

Fiscal Year Ending January 31, Amount

5 unchanged sentences

Class A common stock and Class B common stock.

In connection with the IPO, we amended and restated our certificate of incorporation and authorized 1,500,000,000 shares of Class A common stock and 300,000,000 shares of Class B common stock.

In connection with our IPO, we amended and restated our certificate of incorporation and authorized 1,500,000,000 shares of Class A common stock and 300,000,000 shares of Class B common stock.

The shares of Class A common stock and Class B common stock are identical, except with respect to voting rights.

5 unchanged sentences

Shares of Class B common stock automatically convert to Class A common stock at the earlier of:

(i) the date specified by a vote of the holders of 66 2/3% of the then outstanding shares of Class B common stock, (ii) seven years from the date of our Final Prospectus, or June 29, 2028, (iii) the first date following the completion of our IPO on which the number of shares of outstanding Class B common stock (such calculations shall include shares of Class B common stock subject to outstanding stock options) held by Tomer Weingarten, including certain permitted entities that Mr.

(i) the date specified by a vote of the holders of 66 2/3% of the then outstanding shares of Class B common stock, (ii) seven years from the date of our prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act (Final Prospectus), or June 29, 2028, (iii) the first date following the completion of our IPO on which the number of shares of outstanding Class B common stock (such calculations shall include shares of Class B common stock subject to outstanding stock options) held by Tomer Weingarten, including certain permitted entities that Mr.

Weingarten controls, is less than 25 % of the number of shares of outstanding Class B common stock (such calculation shall include shares of Class B common stock subject to outstanding stock options) that Mr.

2 unchanged sentences

Weingarten is terminated for cause, as defined in our restated certificate of incorporation, and (vi) the date that is 12 months after the death or disability, as defined in our restated certificate of incorporation, of Mr.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our common stock reserved for future issuance on an as-converted basis as of January 31, 2024 and 2023 were as follows:

5 unchanged sentences

Total shares of common stock reserved 94,320,028 95,075,431

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCK-BASED COMPENSATION

Stock-Based Compensation Expense

The components of stock-based compensation expense recognized in the consolidated statements of operations consisted of the following (in thousands):

Year Ended January 31,

Cost of revenue $ 17,187 $ 10,093

Research and development 61,055 51,771

Sales and marketing 55,798 40,115

General and administrative 83,890 62,487

Restructuring

Total $ 216,870 $ 164,466

2021 Equity Incentive Plan

In May 2021, our board of directors and in June 2021, our stockholders approved our 2021 Equity Incentive Plan (2021 Plan) as a successor to our 2013 Equity Incentive Plan (2013 Plan) and 2011 Stock Incentive Plan (2011 Plan) with the purpose of granting stock-based awards to employees, directors, officers and consultants, including stock options, restricted stock awards, restricted stock units (RSUs), and performance-based restricted stock units (PSUs).

A total of 35,281,596 shares of Class A common stock were initially available for issuance under the 2021 Plan.

5 unchanged sentences

Any shares underlying stock options that are expired, canceled, forfeited or repurchased under the Prior Plans will be automatically transferred to the 2021 Plan and be available for issuance as Class A common stock.

Restricted Stock Units

A summary of our RSU activity is as follows:

Restricted Stock Units and Performance Stock Units

A summary of our RSU and PSU activity is as follows:

Number of Shares Weighted-Average Grant Date Fair Value

7 unchanged sentences

As of January 31, 2024, we had unrecognized stock-based compensation expense related to unvested RSUs of $ 482.6 million that is expected to be recognized on a straight-line basis over a weighted-average period of 2.95 years.

As of January 31, 2024, we had unrecognized stock-based compensation expense related to unvested PSUs of $ 3.8 million that is expected to be recognized on a straight-line basis over a weighted-average period of 2.13 years.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During fiscal 2024, we granted PSUs covering 1,133,455 shares of Class A common stock at target to certain executives subject to service-based and performance-based vesting conditions.

As of January 31, 2024, the financial performance metrics have not been achieved.

As such, we have not recorded any stock-based compensation expense and have no unrecognized stock-based compensation expense related to these PSUs.

In November 2023, we granted 312,686 PSUs with a grant date fair value of $ 5.4 million subject to service-based and performance-based vesting conditions to retain the services of certain former KSG employees.

These PSUs will vest 100 % upon the achievement of certain financial performance and integration milestone events, subject to the employees’ continued service to us from the grant date through the milestone events or target dates.

For further details, refer to Note 4, Acquisitions .

Stock Option Information

5 unchanged sentences

Forfeited ( 988,850 ) 5.60

Assumed options from Attivo acquisition

Outstanding as of January 31, 2024

4 unchanged sentences

15,633,560 $ 4.51 5.96 $ 348,522

The weighted-average grant-date fair value of options granted during fiscal 2022 and 2021 were $ 13.14 and $ 1.63 per share, respectively.

There were no options granted during fiscal 2023.

The aggregate grant-date fair value of options vested during fiscal 2023, 2022 and 2021 was $ 61.4 million, $ 32.0 million and $ 5.1 million, respectively.

There were no options granted during fiscal 2024 and 2023.

The weighted-average grant-date fair value of options granted during fiscal 2022 was $ 13.14 per share.

The aggregate intrinsic value is the difference between the exercise price and the estimated fair value of the underlying common stock.

3 unchanged sentences

In March 2021, we granted 1,404,605 options to purchase shares of common stock subject to service-based, performance-based, and market-based vesting conditions to our Chief Executive Officer and Chief Financial Officer under the 2013 Plan.

These stock options will vest 100 % upon the occurrence of our IPO (the performance-based vesting condition), which was completed in June 2021, and the achievement of certain share price targets (the market-based vesting conditions), subject to the executive’s continued service to us from the grant date through the milestone events.

As of January 31, 2023, the share price targets have not yet been achieved, and therefore, these milestone options remain unvested.

These stock options will vest 100 % upon the occurrence of i) our IPO (the performance-based vesting condition), which was completed in June 2021, and ii) the achievement of a certain market capitalization target (the market-based vesting condition), subject to the executive’s continued service to us from the grant date through the milestone event.

As of January 31, 2024, the market capitalization target has not yet been achieved, and therefore, these milestone options remain unvested.

For these options, we used a Monte Carlo simulation to determine the fair value at the grant date and the implied service period.

We recorded stock-based compensation expense related to these milestone options of $ 3.6 million and $ 3.1 million during fiscal 2023 and 2022, respectively.

We recorded stock-based compensation expense related to these milestone options of $ 3.6 million, $ 3.6 million, and $ 3.1 million during fiscal 2024, 2023, and 2022, respectively.

As of January 31, 2024, we had unrecognized stock-based compensation expense related to unvested milestone options of $ 9.1 million, that is expected to be recognized over the remaining implied service period of 2.6 years.

Performance Share Units

In connection with the acquisition of Attivo, we granted 71,003 shares of performance share units subject to service-based and performance-based vesting conditions.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We recorded stock-based compensation expense related to these PSUs of $ 0.5 million during fiscal 2023.

As of January 31, 2023, we had unrecognized stock-based compensation expense related to these PSUs of $ 0.5 million that is expected to be recognized over the remaining vesting period of 2.3 years.

Restricted Common Stock

In connection with the Attivo acquisition, restricted common stock was issued to Attivo employees.

See Note 15, Acquisitions, for more information regarding these restricted common stock.

We recorded stock-based compensation expense related to restricted common stock in connection with our acquisition of Attivo of $ 1.0 million during fiscal 2023.

In connection with the Attivo acquisition, we issued restricted Class A common stock to Attivo’s employees.

We recorded stock-based compensation expense related to these restricted shares in connection with the Attivo acquisition of $ 0.7 million and $ 1.0 million during fiscal 2024 and 2023, respectively.

As of January 31, 2024, we had unrecognized stock-based compensation expense related to this unvested restricted common stock of $ 0.3 million.

In connection with the Scalyr acquisition, we granted 1,315,099 shares of restricted common stock with a fair value of $ 14.59 per share at the time of grant, that vest over a period of two years .

We recorded stock-based compensation expense related to restricted common stock in connection with our acquisition of Scalyr of $ 8.5 million and $ 10.9 million during fiscal 2023 and 2022, respectively.

As of January 31, 2023, we had unrecognized stock-based compensation expense related to this unvested restricted common stock of $ 0.2 million that is expected to be recognized by the end of February 2023.

In connection with the Scalyr acquisition, we granted 1,315,099 shares of restricted common stock.

We recorded stock-based compensation expense related to restricted common stock in connection with the Scalyr acquisition of $ 0.2 million, $ 8.5 million, and $ 10.9 million during fiscal 2024, 2023, and 2022, respectively.

As of January 31, 2024, this restricted common stock has fully vested.

Employee Stock Purchase Plan (ESPP)

2 unchanged sentences

The number of shares reserved for issuance and sale under the ESPP will automatically increase on the first day of each fiscal year, starting on February 1, 2022 for the first ten calendar years after the first offering date, in an amount equal to (i) 1 % of the aggregate number of outstanding shares of all class our common stock on the last day of the immediately preceding fiscal year, or (ii) such other amount as the administrator of the ESPP may determine.

The ESPP generally provides for six-month offering periods beginning January 6 and July 6 of each year, with each offering period consisting of single six-month purchase periods, except for the initial offering period which began on July 1, 2021, and will end on July 5, 2023 and the second offering period will begin on January 6, 2022.

On each purchase date, eligible employees will purchase the shares at a price per share equal to 85 % of the lesser of (1) the fair market value of our common stock as of the beginning of the offering period or (2) the fair market value of our common stock on the purchase date, as defined in the ESPP except for the initial offering period that has a 24-months look back to the IPO price of $ 35 .

The following table summarizes assumptions used in estimating the fair value of employee stock purchase rights for the initial and subsequent offering periods under the 2021 ESPP using the Black-Scholes option pricing model:

On each purchase date, eligible employees will purchase the shares at a price per share equal to 85 % of the lesser of i) the fair market value of our common stock as of the beginning of the offering period or ii) the fair market value of our common stock on the purchase date, as defined in the ESPP, except for the initial offering period that had a 24-month look back to the IPO price of $ 35 .

The following table summarizes the assumptions used in estimating the fair value of employee stock purchase rights using the Black-Scholes option pricing model for the periods presented:

Year Ended January 31,

1 unchanged sentence

Expected volatility 55 % - 85 %

52.3 % - 70.5 %

Risk-free interest rate 5.2 % - 5.5 %

1 unchanged sentence

Dividend yield — % — %

We recognized stock-based compensation expense related to ESPP of $ 12.7 million and $ 5.5 million during fiscal 2023 and 2022, respectively.

As of January 31, 2023, $ 1.5 million amount has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions.

1,335,183 and 381,716 shares were issued under the ESPP for $ 19.2 million and $ 11.4 million during fiscal 2023 and 2022, respectively.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During fiscal 2023, we recorded $ 0.4 million in expense related to modifications of our ESPP as a result of the decrease in our stock price in July 2022 and January 2023 which triggered resets of the ESPP offering periods in accordance with our plan.

We expect to record the remaining $ 0.4 million in expense related to these modifications through the second quarter of 2024.

Attivo Acquisition

In connection with the Acquisition, we granted 539,795 shares of restricted stock units (RSUs) under our 2021 Equity Incentive Plan that will vest over a period of 3 years contingent on continued employment of certain Attivo employees, for which stock-based compensation expense will be recognized ratably over the vesting period.

Attivo Equity Incentive Plan

In connection with the Acquisition, we assumed unvested stock options that were granted under the Attivo 2011 Equity Incentive Plan (“Attivo Plan”).

We do not intend to grant any additional shares under the Attivo Plan and the Attivo Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.

Any shares underlying stock options that are expired, canceled, forfeited or repurchased under the Attivo Plan will be automatically become available for issuance as Class A common stock pursuant to our 2021 Equity Incentive Plan.

During the third quarter of fiscal 2023, certain members of our management team converted to non-employee consultants.

The transition has been accounted for as a modification, under which, the exercise period of certain vested awards has been extended and a certain number of unvested awards will vest through the end of the consulting agreements.

During fiscal 2023, we recognized an incremental charge of $ 4.5 million related to the transition of these employees to non-employee consultants and expect to recognize an aggregate of an additional $ 6.2 million in expense over the requisite service period through the fourth quarter of 2024.

Stock-Based Compensation Expense

We estimate the fair value of stock options granted using the Black-Scholes option pricing model based on the following assumptions:

Expected term – We determine expected term based on the average period the options are expected to remain outstanding using the simplified method, calculated as the midpoint of the options’ vesting term and contractual expiration period, until sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior becomes available.

Expected volatility – Since there is little trading history of our common stock, expected volatility is estimated based on the historical volatilities of a group of comparable publicly traded companies.

Risk-free interest rate – The risk-free interest rate is based on U.S.

Treasury yields for a period that corresponds with the expected term of the award.

Dividend yield – As we do not currently issue dividends and do not expect to issue dividends on our common stock in the foreseeable future, the expected dividend yield is zero .

Fair value of underlying common stock – Prior to the completion of our IPO, the fair value of our common stock was determined by the board of directors by considering a number of objective and subjective factors including input from management and contemporaneous third-party valuations.

After the completion of our IPO, the fair value of our Class A common stock is determined by the closing price of our Class A common stock, which is traded on the New York Stock Exchange.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes assumptions used in estimating the fair value of stock options granted under the Black-Scholes pricing model in fiscal 2022 (no stock options were granted in fiscal 2023):

Year Ended January 31,

Expected term (in years) 6.0

Expected volatility 62.3 % - 66.0 %

Risk-free interest rate 0.8 % - 1.1 %

Dividend yield — %

The components of stock-based compensation expense recognized in the consolidated statements of operations consisted of the following (in thousands):

Year Ended January 31,

Cost of revenue $ 10,093 $ 3,618

Research and development 51,771 35,358

Sales and marketing 40,115 15,460

General and administrative 62,487 33,453

Total $ 164,466 $ 87,889

We recognized stock-based compensation expense related to ESPP of $ 11.7 million, $ 12.7 million, and $ 5.5 million during fiscal 2024, 2023, and 2022, respectively.

Modifications

During fiscal 2024 and 2023, certain members of our management team converted to non-employee consultants or to positions that no longer provide substantive service to the Company (Management Transitions).

The Management Transitions have been accounted for as modifications, under which, the exercise period of certain vested awards has been extended and a certain number of unvested awards will vest through the end of the agreements entered into in connection with the Management Transitions.

During fiscal 2024 and 2023, we recognized an incremental charge of $ 6.2 million and $ 4.5 million, respectively, related to the Management Transitions.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RESTRUCTURING

In June 2023, we announced a restructuring plan (the Plan) as a result of a review of current strategic priorities, resource allocation, and cost reduction intended to reduce operating costs, improve operating margins and continue advancing our ongoing commitment to profitable growth.

The Plan includes a reduction of our workforce by approximately 5 %, or approximately 100 full-time employees.

We incurred approximately $ 7.4 million in charges in connection with the Plan in fiscal 2024, which consists of $ 5.4 million in charges related to severance payments and employee benefits, $ 2.4 million of impairment charges related to excess facilities, $ 0.7 million related to inventory write-offs, offset partially by $ 1.1 million in savings related to the reversal of certain stock-based compensation expense.

Note that the charges related to inventory write-offs are recognized as cost of sales and not restructuring operating expenses in our consolidated financial statements of operations.

These costs were paid as of January 31, 2024.

The actions associated with the Plan are expected to be fully complete by the end of fiscal 2025, subject to finalizing the disposition of certain office space.

Our loss before provision for income taxes for fiscal 2024, 2023 and 2022 consisted of the following (in thousands) :

15 unchanged sentences

Total provision for income taxes $ 5,859 $ ( 5,613 ) $ 1,004

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the expected provision for (benefit from) income taxes at the statutory federal income tax rate to our recorded provision for income taxes consisted of the following (in thousands):

1 unchanged sentence

2024 2023 2022

Benefit from income taxes at U.S.

federal statutory rate $ ( 80,701 ) $ ( 56,720 ) $ ( 24,594 )

Benefit from income taxes at US federal statutory rate $ ( 69,895 ) $ ( 80,701 ) $ ( 56,720 )

State taxes, net of federal benefit 150 53 82

2 unchanged sentences

Non-deductible expenses 1,390 1,780 322

Research and development credits ( 2,251 ) ( 688 ) ( 20 )

Change in valuation allowance 40,525 60,145 81,739

1 unchanged sentence

Total provision for (benefit from) income taxes $ 5,859 $ ( 5,613 ) $ 1,004

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant components of our net deferred tax assets and liabilities as of January 31, 2024 and 2023 consisted of the following (in thousands):

18 unchanged sentences

Net deferred tax assets (liabilities) $ ( 795 ) $ ( 251 )

Based upon available objective evidence, we believe it is more likely than not that the net U.S.

and Israel deferred tax assets will not be fully realizable.

Accordingly, we have established a valuation allowance for the U.S.

and Israel gross deferred tax assets.

Based upon available objective evidence, we believe it is more likely than not that the US and Israel net deferred tax assets will not be fully realizable.

Accordingly, we have established a valuation allowance for the US and Israel gross deferred tax assets.

As of January 31, 2024 and 2023, we had a valuation allowance of $ 341.0 million and $ 291.8 million, respectively, against our deferred tax assets.

During fiscal 2024 and 2023, total valuation allowance increased by $ 49.2 million and $ 72.8 million, respectively, primarily due to additional net operating losses.

As of January 31, 2023 , we had federal net o perating loss carryforwards of $ 651.1 million, which will begin to expire in 2031, and state net operating loss carryforwards of $ 338.3 million, which will begin to expire in 2024.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of January 31, 2024, we had federal net operating loss carryforwards of $ 721.2 million, which will begin to expire in 2031, and state net operating loss carryforwards of $ 390.6 million, which will begin to expire in 2025.

We also had foreign net operating loss carryforwards of $ 202.8 million, which do not expire.

6 unchanged sentences

Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.

We file income tax returns in the U.S.

federal jurisdiction and various state and foreign jurisdictions.

We file income tax returns in the US federal jurisdiction and various state and foreign jurisdictions.

Our tax years generally remain open and subject to examination by federal, state, or foreign tax authorities.

We are currently

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

under examination by the Israel Tax Authorities for the 2017 through 2021 tax years.

We are currently under examination by the Israel Tax Authorities for the 2017 through 2021 tax years.

We are not currently under audit in any other tax jurisdictions.

4 unchanged sentences

Gross increases for tax positions of current year 1,027 447 32

Gross increases for tax positions of prior year 157 — —

Balance at end of year $ 2,197 $ 1,013 $ 566

We recognize interests and penalties related to income tax matters as a component of income tax expense.

No accrued interest of penalties have been recorded as of January 31, 2023, 2022, and 2021.

We do not anticipate that its total unrecognized tax benefits will significantly change during the next 12 months.

3 unchanged sentences

Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive.

For purposes of this calculation, redeemable convertible preferred stock, stock options, restricted common stocks, RSUs, PSUs, ESPP, early exercised stock options, and common stock warrants are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented.

For purposes of this calculation, stock options, restricted common stock, RSUs, PSUs, shares purchased pursuant to our ESPP, and early exercised stock options are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented.

The rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock are identical, except with respect to voting, conversion, and transfer rights.

As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net loss per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both individual and combined basis.

As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis to each class of common stock and the

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

resulting basic and diluted net loss per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis.

Basic and diluted net loss per share attributable to common stockholders was as follows (in thousands, except share and per share data):

4 unchanged sentences

Net loss per share attributable to Class A and Class B common stockholders, basic and diluted $ ( 1.15 ) $ ( 1.36 ) $ ( 1.56 )

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders because their inclusion would have been anti-dilutive:

1 unchanged sentence

2024 2023 2022

Redeemable convertible preferred stock — — 168,951,059

Stock options 21,159,850 32,446,814 42,422,473

Common stock warrants — — 954,884

Shares subject to repurchase 178,308 20,091 37,500

RSUs and PSUs 27,406,457 14,409,166 1,770,304

ESPP 107,924 134,469 52,381

Shares subject to repurchase 16,543 178,308 20,091

Restricted common stock 10,621 451,444 1,142,496

4 unchanged sentences

As of January 31,

United States $ 27,990 $ 21,176

US $ 40,067 $ 27,990

Israel 21,806 27,625

5 unchanged sentences

From time to time, we may be a party to various legal proceedings and subject to claims in the ordinary course of business.

BlackBerry Litigation

Starting in October 2019, BlackBerry Corp.

and its subsidiary Cylance, Inc.

(BlackBerry) filed a total of nine proceedings ( seven lawsuits and two arbitrations) against us and certain former BlackBerry employees who joined our company.

In these proceedings, BlackBerry alleges that it has viable legal claims as a result of its former employees joining us.

Many of these proceedings have now been dismissed.

The status of each of the currently pending proceedings is discussed below.

We have defended against these claims vigorously and expect to continue to do so.

BlackBerry Corp., et al.

Coulter, et al.

On October 17, 2019, BlackBerry commenced an action captioned BlackBerry Corp., et al.

Chris Coulter, in the Vermont Superior Court—Chittenden Unit, Case No.

953-10-19 Cncv, against Chris Coulter, a now-former employee who worked in our Vigilance services team (the “Vermont Action”).

On October 23, 2019, BlackBerry filed an amended complaint that added the company as a defendant.

The amended complaint asserts claims against us for conspiracy, tortious interference with contract, aiding and abetting breach of fiduciary duties, and misappropriation of trade secrets.

On April 17, 2020, the court in the Vermont Action issued a preliminary injunction that enjoined Mr.

Coulter from working at our company until after February 2021.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As a result of the court’s order, Mr.

Coulter chose to seek other employment and is no longer employed by us.

On January 15, 2021, the court entered an order narrowing the scope of the case and limiting the claims against us to avoid conflict with a similar action that was previously filed in California and was dismissed.

The Vermont Action is currently pending.

The matter is set to be ready for trial by July 1, 2023;

no trial date has been set.

On October 25, 2019, BlackBerry commenced a separate action captioned BlackBerry Corp., et al v.

Coulter, et al., No.

2019-0854-JTL (Del.

Ch.) (the “Delaware Action”) against Mr.

Coulter and the company in Delaware Chancery Court.

The court stayed this case pending resolution of the Vermont Action.

On February 7, 2020, BlackBerry voluntarily dismissed without prejudice all claims against Mr.

Coulter and us in the Delaware Action.

On December 3, 2019, BlackBerry initiated a largely duplicative arbitration solely against Mr.

Coulter administered by JAMS, an alternative dispute resolution provider.

That arbitration, however, was dismissed on or about March 30, 2021, with JAMS informing us that they had closed their files on this matter on April 30, 2021.

BlackBerry Corp.

Sentinel Labs, Inc., et al.

On January 16, 2020, BlackBerry commenced an action captioned BlackBerry Corp., et al.

Sentinel Labs, Inc., et al., No.

20CV361950 in the California Superior Court of Santa Clara County, California against us and unnamed “Doe” defendants (who counsel understands are all former BlackBerry employees that we later employed), asserting claims for trade secret misappropriation and unfair business practices (the “California Action”).

We filed counterclaims that, in part, seek to invalidate unlawful provisions under California law in BlackBerry’s agreements it entered into with its employees.

Between December 2020 and August 2021, there were several rounds of motion practice, court hearings, and court orders relating to the sufficiency of BlackBerry’s identification of its alleged trade secrets in connection with its misappropriation of trade secrets claim, resulting in a narrowed scope of this claim.

We are mid-discovery, and there have been court hearings and orders in connection with various discovery disputes.

We continue to vigorously litigate this lawsuit, including our counterclaims against BlackBerry.

Fact discovery is currently set to close by August 2023, and a trial has now been set for March 28, 2024.

BlackBerry Corp., et al.

Quinn, et al.

On February 17, 2020, BlackBerry commenced an action captioned BlackBerry Corp., et al.

Quinn, et al., Case No.

D-1-GN-20-00096, in 459th Judicial District of Travis County, Texas, against Sean Quinn, our now-former employee, and the company.

On August 8, 2020, we and Mr.

Quinn moved to stay or dismiss this case in light of the overlapping issues between this lawsuit and the California Action.

On September 21, 2020, the court stayed this case pending resolution of the California Action.

This lawsuit remains stayed and is pending in abeyance before the Texas court.

BlackBerry Corp., et al.

Kaylan Brown Coulter.

On April 7, 2022, BlackBerry commenced an action captioned BlackBerry Corp., et al.

Kaylan Brown Coulter, Case No.

22-cv-01249, in the Superior Court - Chittenden Unit, Vermont, against Kaylan Brown-Coulter, the wife of Chris Coulter (referenced above), alleging breach of non-disclosure and non-solicitation agreements, breach of covenant of good faith and fair dealing, breach of fiduciary duties, and civil conspiracy.

While this is part of the same series of lawsuits by BlackBerry, we were not named in this action.

On May 6, 2022, Ms.

Brown-Coulter removed the case to the United States District Court for the District of Vermont (Case No.

Shortly thereafter, on May 13, 2022, Ms.

Brown-Coulter filed a motion to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6).

This motion is currently pending before the court, and the matter is currently set to be trial ready for April 2023 unless dispositive motions are filed.

We have not recorded any accruals for loss contingencies associated with these legal proceedings, determined that an unfavorable outcome is probable, or determined that the amount or range of any possible loss is reasonably estimable.

Securities Litigation

On June 6, 2023, a securities class action was filed against the Company, its Chief Executive Officer and its Chief Financial Officer, in the Northern District of California, captioned Johansson v.

SentinelOne, Inc., Case No.

4:23-cv-02786 .

The suit is brought on behalf of an alleged class of stockholders who purchased or acquired shares of the Company’s Class A common stock between June 1, 2022 and June 1, 2023.

The complaint alleges that defendants made false or misleading statements about the Company's business, operations and prospects, including its annual recurring revenues and internal controls, and purports to assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended.

A substantially similar suit was filed on June 16, 2023 in the same court against the same defendants asserting the same claims, captioned Nyren v.

SentinelOne, Inc., Case No.

4:23-cv-02982 .

On October 4, 2023, the court issued an order consolidating both cases under the caption In re SentinelOne, Inc.

Securities Litigation Case No.

4:23-cv-02786 and appointing a lead plaintiff.

Lead plaintiff filed an amended complaint on December 18, 2023.

Defendants moved to dismiss the amended complaint on February 16, 2024.

We believe the case is without merit and intend to defend the suit vigorously.

Fortis Litigation

In September 2023, Fortis Advisors LLC (Fortis), in its capacity as the representative for the stockholders of Attivo, filed an action against the Company in Delaware Chancery Court asserting claims arising out of the Attivo Acquisition.

The case is captioned Fortis Advisors LLC v.

SentinelOne, Inc., Case No.

2023-0946-VLM .

In June 2023, the Company sent a letter to Fortis seeking indemnification for certain claims, including for breaches by Attivo of its representations and warranties in the merger agreement.

Fortis is now seeking a declaratory judgment that the Company is not entitled to indemnification for the claims it has asserted, and that Fortis should recover the funds held in escrow.

Fortis also alleges that the Company breached its representations and warranties in the merger agreement because its SEC filings allegedly contained materially false or misleading statements about the Company’s annual recurring revenues.

The Company believes Fortis’ claims are without merit and intends to defend the suit vigorously.

On November 3, 2023, the Company filed its answer to Fortis’ complaint.

On the same day, the Company filed counterclaims against Fortis, in its capacity as the representative of the stockholders of Attivo, based on Attivo’s breach of several of its representations, warranties and covenants in the merger agreement.

The Company’s counterclaims seek an order directing Fortis to comply with its contractual obligations to release funds set aside to indemnify the Company for its losses and any additional damages in excess of the indemnity fund.

Derivative Litigation

On January 10, 2024, a shareholder derivative complaint was filed, naming the Company’s Board of Directors, its Chief Executive Officer and its Chief Financial Officer as defendants, and the Company as nominal defendant.

The action was filed in the United States District Court, District of Delaware, and is captioned Stochevski v.

Weingarten, et al., Case No.

4:24-cv-00024.

The complaint alleges that the director and officer defendants breached their fiduciary duties by making or failing to correct false or misleading statements about the Company’s business, operations and prospects, including its annual recurring revenues and internal controls.

We believe that there are no other pending or threatened legal proceedings that are likely to have a material adverse effect on our consolidated financial statements.

2 unchanged sentences

Our contracts generally include certain provisions for indemnifying customers against liabilities if our products or services infringe a third party’s intellectual property rights.

We also offer a limited warranty to certain customers, subject to certain conditions, to cover certain costs incurred by the customer in case of a cybersecurity breach.

We have a cybersecurity liability policy that may cover

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We also offer a limited warranty to certain customers, subject to certain conditions, to cover certain costs incurred by the customer in case of a cybersecurity breach.

We have entered into an insurance policy to cover our potential liability arising from this limited warranty arrangement.

We have not incurred any material costs related to such obligations and have not accrued any liabilities related to such obligations in the consolidated financial statements as of January 31, 2023 and 2022.

our customers’ actual damages.

We have not incurred any material costs related to such obligations and have not accrued any liabilities related to such obligations in the consolidated balance sheets as of January 31, 2024 and 2023.

In addition, we also indemnify certain of our directors and executive officers against certain liabilities that may arise while they are serving in good faith in their company capacities.

1 unchanged sentence

EMPLOYEE BENEFIT PLAN

employees participate in a 401(k) defined contribution plan sponsored by us.

Our US employees participate in a 401(k) defined contribution plan sponsored by us.

Contributions to the plan are discretionary.

There was $ 2.8 million matching contributions by us for fiscal 2023.

There were no matching contributions by us for fiscal 2022 and 2021.

We made $ 2.6 million and $ 2.8 million in matching contributions for fiscal 2024 and 2023, respectively.

There were no matching contributions for fiscal 2022.

Israeli Severance Pay

4 unchanged sentences

For fiscal 2024, 2023, and 2022, we recorded $ 3.5 million, $ 3.9 million, and $ 3.7 million, respectively, in severance expenses related to these employees.

On May 3, 2022, we acquired 100 % of the issued and outstanding equity securities (the Acquisition) of Attivo Networks, Inc.

(Attivo), an identity security and lateral movement protection company.

Attivo expands our coverage of critical attack surfaces.

Identity is an adjacent security solution that complements our core endpoint solution.

The Acquisition closed on May 3, 2022 and has been accounted for as a business combination in accordance with ASC Topic 805, Business Combinations.

We had post-combination expense with a fair value of $ 32.9 million that was not included in the total purchase consideration, which is comprised of 307,396 of restricted common stock with an aggregate fair value of $ 10.0 million, and 378,828 assumed options with an aggregate fair value of $ 11.5 million.

Restricted common stock and assumed options will be recognized as stock-based compensation expense.

All post-combination expense is expected to be recognized through May 2026.

Post-combination compensation expense is subject to adjustment based on continuing service obligations to the Company of certain stockholders of Attivo.

In connection with the Acquisition, we also granted restricted stock units (RSUs) and performance share units (PSUs) under our 2021 Equity Incentive Plan.

For further details refer to Note 9, Stock-Based Compensation .

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the preliminary allocation of purchase consideration recorded on our consolidated balance sheet as of the acquisition date (in thousands):

Consideration:

Cash $ 348,917

Common Stock ( 6,032,231 shares) (1)

Fair value of total consideration transferred $ 534,802

Cash and cash equivalents $ 8,836

Accounts receivable 4,867

Prepaid expense and other current assets 3,880

Operating lease right-of-use assets 260

Intangible assets 151,900

Accrued liabilities ( 4,270 )

Accrued payroll and benefits ( 1,113 )

Operating lease liabilities ( 259 )

Deferred revenue ( 51,746 )

Other liabilities ( 2,357 )

Deferred tax liability ( 7,310 )

Total identifiable net assets 102,688

Goodwill 432,114

Total purchase consideration $ 534,802

(1) Consideration calculated using the fair value of our common stock

The excess of the purchase price over the fair value of net tangible and intangible assets acquired has been assigned to goodwill.

Goodwill represents the future benefits resulting from the acquisition that will enhance the value of our product for both new and existing customers and strengthen our competitive position.

Goodwill is not deductible for tax purposes.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth the preliminary amounts allocated to the intangible assets identified and their estimated useful lives as of the date of acquisition:

Fair Value Useful Life

(in thousands) (in years)

Customer relationships $ 77,600 10

Developed technology 63,200 5

Backlog 11,100 2

Total intangible assets acquired $ 151,900

The preliminary fair value assigned to customer relationships was determined using the multi-period excess earnings method of the income approach.

The fair value assigned to developed technology was determined using the relief from royalty method under the income approach.

The fair value assigned to backlog was determined using the multi-period excess earnings method of the income approach.

The intangible assets acquired are expected to be amortized over their useful lives on a straight-line basis.

Aside from $ 61.0 million, net, within restricted cash on the consolidated balance sheet, held in an indemnity escrow expected to be paid out within 15 months of the Acquisition, there are no other contingent consideration or cash consideration expected to be paid out subsequent to the Acquisition.

The indemnity escrow was measured at fair value within other liabilities in our consolidated balance sheet at Acquisition and will be accreted to face value until paid out.

The results of operations of Attivo have been included in our consolidated financial statements from the date of the Acquisition.

We have incurred $ 5.5 million of transaction expenses in connection with the Acquisition during the year ended January 31, 2023.

$ 3.2 million of these costs were recorded as general and administrative expenses in our consolidated statements of operations during the year ended January 31, 2023, with the remainder allocated to purchase price consideration.

Our consolidated statements of operations from the date of the Acquisition to the period ended January 31, 2023 includes revenue and net loss of Attivo of $ 30.2 million and $ 36.4 million, respectively.

The following unaudited supplemental pro forma financial information is provided for informational purposes only and summarizes our combined results of operations as if the Acquisition occurred on February 1, 2021 (in thousands):

Year Ended January 31,

Revenue $ 429,683 $ 235,321

Net loss $ ( 393,773 ) $ ( 326,829 )

Such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the Acquisition been completed on the date indicated, nor is it indicative of our future operating results.

RECLASSIFICATION OF PRIOR YEAR PRESENTATION

Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

An adjustment has been made to the consolidated balance sheets for fiscal year ended January 31, 2022, to reclassify $ 6.0 million in other assets to long-term investments.

SENTINELONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUBSEQUENT EVENTS

In February 2023, the Company entered into a non-cancellable agreement with a cloud infrastructure vendor, under which the Company committed to spend an aggregate of at least $ 860.0 million between March 2023 and February 2029.

On February 1, 2024, we completed the acquisition of PingSafe Pte.

(PingSafe) to provide customers better automation across their entire cloud footprint.

We acquired 100 % of the shares of PingSafe for total consideration of approximately $ 57.5 million in cash and 2,354,607 shares of our Class A common stock, subject to customary adjustments set forth in the purchase agreement.

On February 1, 2024, we acquired 100 % of the issued and outstanding equity securities of Stride Security Ltd.

(Stride), a security automation company.

The aggregate consideration for the Stride acquisition is approximately $ 7.5 million in cash, subject to customary adjustments.

In addition, approximately $ 7.5 million will be earned over three years , subject to continued employment.

The PingSafe and Stride acquisitions will be accounted for as business combinations in accordance with ASC Topic 805, Business Combinations and, accordingly, the total purchase price will be allocated to the tangible and intangible assets acquired and the liabilities assumed based on their respective fair values on the date of acquisition.

We are currently working on the preliminary purchase price allocations and expect them to be completed in the first quarter of fiscal 2025.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data