The cyber company is actually growing: Sentinel One’s share rose yesterday and brought the cyber company back to an issue value of about $ 9 billion, after publishing good financial reports for the year 2021; it presented an encouraging forecast for the coming year and announced a large $ 600 million purchase New.
Read more in Calcalist:
Sentinel will pay 58% of the purchase amount in cash and the rest in its shares for Atibo from California, which will put it into corporate identity management activities. This field has become one of the hottest in the cyber world, as most intrusions into organizations are made through the exploitation of vulnerabilities in managing permissions and internal identities. Hybrid work, which has become accepted since the outbreak of the corona plague, has further increased the importance of managing permissions in connecting to enterprise systems. Ativo, which has raised only $ 60 million to date, is already selling to 300 customers, and it will allow Sentinel One to go deeper into the organization and increase the market it is targeting by another $ 4 billion. Atibo employs about 200 people in its offices in Fremont, and also has development activities in India.
2 View the gallery
Sentinel One on the day of the IPO on Wall Street
(Photo: Courtesy of SentinelOne)
Even before the inclusion of Ativo’s operations, whose acquisition will be completed during the second quarter, Sentinel One, which specializes in identifying and preventing cyber-attacks, provided a positive forecast for the coming year. The company expects revenue of $ 370-366 million, a figure that reflects a certain slowdown in the growth rate, but it is still a high double-digit growth rate. In 2021 Sentinel grew by 120% and its revenues totaled $ 205 million, and in the fourth quarter it also surpassed forecasts with revenues of $ 65.6 million.
However, Sentinel One is still far from profitable, and the investments the company makes in research and development and sales are higher than its total sales. Thus, the R&D item amounted to $ 136 million and the marketing and sales item to $ 160 million. In view of these huge expenses, Sentinel recorded an operating loss of $ 267 million in the annual summary. At the quarterly level, these numbers are quite similar: revenues of $ 65.6 million The company lost $ 71 million, both operationally and bottom line.
This is a loss of 27 cents per share, higher than forecast, but investors concentrated more on the revenue line, which topped the forecasts and showed that unlike many technology companies issued last year, Sentinel manages to maintain its rapid growth rate. As of the end of Sentinel’s fiscal year, which ends in late January, and prior to the signing of the Atibo acquisition, it had $ 1.7 billion in cash balances so it could take advantage of market weakness to make further acquisitions at relatively low multiples in the near future.
Sentinel’s management correctly read the new sentiment in the markets. Along with emphasizing growth, the company noted that it will operate under “discipline” when it comes to its spending structure in order to move towards profitability targets in the coming year as well. Even if profitability is still very far on the horizon, the cyber company managed to improve its gross profit margin to 63% of revenues in the fourth quarter of the year, compared to 60% at the annual level and only 54% in the corresponding quarter in 2020. The negative cash flow from operations decreased to $ 6 million in the last quarter of 2021 compared to $ 23 million at the same time.
Sentinel One was founded and managed by Tomer Weingarten and currently employs about a thousand people. The company, which competes head-to-head with the American CrowdStreak, was issued last June at a value of $ 9 billion, making it the largest cyber offering in the history of Wall Street. At the height of the tide in this market, in November 2021, Sentinel reached a value of $ 20 billion and was the largest Israeli company in terms of market capitalization for a few moments.