Analysis: SentinelOne’s CEO Wants To Clear Up A Few Things
From the reports about a buyout exploration process, to the Wiz deal termination, to a dispute over generative AI demos, SentinelOne CEO Tomer Weingarten had a lot to go through Thursday.
After nearly two weeks of being in the news for things other than its AI-driven cybersecurity technology, SentinelOne’s leadership was clearly hoping that strong quarterly results might be enough to change the conversation.
And it worked, sort of. As of this writing, SentinelOne’s stock price is up about 9 percent from its regular-trading close on Thursday, to $18.15 a share.
Still, the first two questions during SentinelOne’s quarterly call with analysts Thursday were, in fact, about those “other” topics. And SentinelOne CEO Tomer Weingarten actually invited more drama, slamming comments made by rival vendor CrowdStrike on its quarterly call the day before.
That prompted a response from a CrowdStrike spokesperson, which reads in part: “It must be a stressful and emotional time for Tomer.”
Maybe so. The past two weeks of not-so-welcome news coverage was kicked off by a Reuters report saying SentinelOne has been mulling the possibility of a take-private deal, following the loss of nearly half its market valuation since its blockbuster 2021 IPO. SentinelOne has been considering a sale to buyers including private equity firms and has hired an investment bank, Qatalyst Partners, to assist in the process, the Aug. 21 report indicated.
A few days later, more reporting emerged around the possibility of a buyout. And from a news perspective, that’s where things started to get interesting: Reports from Bloomberg and then Reuters last Friday suggested that one of SentinelOne’s chummiest vendor partners might be open to exploring an acquisition deal.
The interesting part? The vendor partner in question was Wiz, a three-year-old company that’s a fraction of the size of SentinelOne — but also happens to currently enjoy a $10 billion valuation from its venture investors, making it more than twice as valuable as SentinelOne at the moment.
In terms of what happened next, the accounts would seem to differ. A pair of Israel-based media outlets suggested Wednesday that SentinelOne’s leadership was less than thrilled about Wiz’s comments, causing SentinelOne to sever a major reselling agreement that the two companies had inked in March.
On the call Thursday, however, Weingarten seemed to imply that the termination of the reselling agreement with Wiz was unrelated to the company’s comments (which he called a “head scratcher”).
“In terms of the reselling agreement, we didn’t see any contribution from that,” he said. “We didn’t feel like that’s something that’s [been] fulfilled on their end. So we decided to terminate that.”
As for the report about SentinelOne exploring a sale to begin with, Weingarten attempted to shut that down, as well.
In an interview with CNBC published Thursday, he suggested that SentinelOne is not actually up for sale right now. “There is an unbelievable amount of rumors and speculation in the market,” Weingarten reportedly told the outlet.
The SentinelOne CEO made similar comments during the quarterly call Thursday. With SentinelOne “laser-focused on delivering the best innovation we can, the best protection we can for our customers, maximizing our business potential,” the company believes it “can do that [as] best as possible as a public, independent, transparent company,” Weingarten said.
“I think that that is as clear as I can be,” he said.
But Weingarten didn’t stop there.
While responding to an analyst question about the competitive environment with major rivals including CrowdStrike, the SentinelOne CEO at one point decided to throw this out there: “Let’s also talk about the blatant misrepresentations they had on their earnings call.”
“I think it’s unbelievable that you see them calling out, or implying, that we are a point product company — when it’s plain to see that we’re the broadest platform out there,” Weingarten said.
And there was more: “When they say they’re the only generative AI company to demo generative AI at conference shows, that’s also a blatant lie,” Weingarten said, alluding to a comment by CrowdStrike CEO George Kurtz on Wednesday that the company was the only vendor at Black Hat 2023 to do a live demo of generative AI technology. (“We showcased Charlotte AI earlier this month at Black Hat where we were the only vendor of consequence to showcase a live, not PowerPoint, demo of generative AI in action,” Kurtz said during the company’s quarterly call.)
Weingarten pointed to the fact that SentinelOne had debuted its own generative AI security tool, Purple AI, back in April at the RSA Conference.
“I mean, obviously, we’ve been the first to demo that,” he said during the quarterly call. “There are other vendors that have demo’ed that. Everybody’s giving live demos. We actually gave hands-on live demos. So if we talk about the competition, I think it’s important to separate facts from all these rumors and speculations and misrepresentations.”
In response to Weingarten’s comments, CrowdStrike said in a statement to outlets including CRN that “at CrowdStrike, we remain totally focused on customer outcomes. From day one, the Falcon platform brought AI to cybersecurity. We’ll let our customers and results do the talking.”
Ultimately, what probably mattered most for SentinelOne to clear up was that the company is actually doing very well.
The company’s previous quarter had been shaky, but the results shared Thursday show that SentinelOne is “bouncing back,” wrote Shaul Eyal, managing director at TD Cowen, in a note to investors Friday. On both revenue and net income, SentinelOne’s fiscal Q2 surpassed Wall Street expectations, even in spite of the sketchy economic environment.
Maybe the most important story really is that SentinelOne is proving it deserves to remain a public company on its own merits — or, to borrow a phrase from its competitor, letting its results do the talking.