Could Prompt Security be SentinelOne’s lifeline as shares slide 35% this year?
CEO Tomer Weingarten calls Prompt Security a key part of the company’s AI strategy as SentinelOne navigates slowing revenue growth and market turbulence.
Israeli-founded cybersecurity firm SentinelOne forecast fourth-quarter revenue slightly below analysts’ expectations on Thursday, sending its shares down almost 15% on Friday. The company’s shares are now down over 35% this year. The announcement also came with news that Chief Financial Officer Barbara Larson will step down in mid-January, a move that adds to the uncertainty facing the Mountain View, California-based company.
The company projected fourth-quarter revenue of $271 million, compared to analysts’ consensus of $273.1 million, while third-quarter revenue came in at $258.9 million, slightly above expectations. While SentinelOne highlighted continued strong demand for its AI-native Singularity platform, the muted outlook underscores the competitive pressure in the cybersecurity sector.
SentinelOne operates in a crowded space alongside heavyweights such as CrowdStrike, up roughly 50% this year, and Palo Alto Networks, whose market capitalization now approaches $140 billion, compared with SentinelOne’s $4.9 billion.
Adding to the turbulence, CFO Larson’s departure leaves the company with an interim successor, Chief Growth Officer Barry Padgett, as SentinelOne searches for a permanent replacement.
Despite these headwinds, SentinelOne is placing significant strategic bets on the next frontier of enterprise technology: generative and agentic AI. Five months ago, the company announced a definitive agreement to acquire Israeli startup Prompt Security, which specializes in securing AI in runtime and preventing data leakage from generative AI tools. While financial terms were undisclosed, estimates place the deal around $250 million, structured as a combination of cash and stock.
For CEO Tomer Weingarten, Prompt Security represents a key element in SentinelOne’s broader AI security strategy. “Well, I mean, obviously, to us, AI security is now centered around Prompt Security,” he said during the company's quarterly call. “The response from customers and partners has just been incredible. It addresses an urgent ongoing need. Every organization adopting AI tools, and every CISO we engage with, is focused on doing it safely.”
The startup’s technology is designed to be seamless to deploy and frictionless to scale, aligning naturally with SentinelOne’s existing go-to-market strategy. It offers both cross-sell opportunities to existing customers and an entry point for new organizations seeking to secure AI workloads.
“Together with our AI for security offerings, we are well-positioned to secure the full lifecycle of AI adoption,” Weingarten added. “We’re helping enterprises embrace AI safely and confidently, proving that innovation and security can move forward together.
“The market for AI-enabled cybersecurity is accelerating, and the companies that can deliver visibility, governance, and control quickly will define the next wave of enterprise security.”
