SentinelOne (S, Financials) shares fell more than 4% on Thursday after the cybersecurity firm reported a 29% increase in fourth-quarter revenue to $225.5 million, driven by continued demand for its artificial intelligence-powered security platform.

Reflecting ongoing client growth and platform adoption, annualized recurring revenue climbed 27% to $920.1 million.Comparatively to a negative 9% margin in the same time a year ago, the firm reported its first quarter of positive non-GAAP operating margin of 1%. Adding that SentinelOne is focusing on developing autonomous AI-driven security processes to improve its platform, CEO Tomer Weingarten said the firm is on pace to reach $1 billion in annualized recurring revenue and total revenue this year.Revenue rose 32% to $821.5 million from $621.2 million for the whole fiscal year. Customer count with annually recurring income of at least $100,000 increased 25% to 1,411. Gross margins also grew; non-GAAP margin jumped to 79% in the fourth quarter from 78% a year before.SentinelOne said that while GAAP net loss margin improved to 31% in the fourth quarter from 41% in the previous year, its losses were shrinking. Reversing a 4% loss in the same time previous year, non- GAAP net income margin hit 5%.Operating cash flow margin of negative 2% compared to negative 4% a year earlier indicated improvement in cash flow patterns. From negative 6%, free cash flow margin moved to negative 4%. Reflecting a good liquidity, the business closed the fiscal year with $1.1 billion in cash, cash equivalents, and investments.Forecasting income between $1.007 billion and $1.012 billion for the whole year, SentinelOne released recommendations for the first quarter and whole fiscal year 2026. Reflecting ongoing attempts to balance expansion with profitability, the business estimates a non-GAAP operating margin between 3% and 4%.Apart from ongoing research and development, the company's growth plan calls for further developments in AI-driven security capabilities. CFO Barbara Larson said the business is still mostly focused on increasing margins in fiscal year 2026 and beyond and fostering sustainable development.Operating in a very competitive cybersecurity industry, SentinelOne faces competitors such as CrowdStrike (CRWD, Financials) and Palo Alto Networks (PANW, Financials) also fighting for business security contracts. The company's emphasis on automated security response driven by artificial intelligence-powered threat identification has helped it to become a major participant in the expanding cybersecurity sector.As businesses search for sophisticated defense against changing digital threats, the cybersecurity industry has witnessed growing demand. One of SentinelOne's main differences is how it uses artificial intelligence and machine learning to automate threat identification and response. To further its market position, the firm has also been extending its alliances and integrations with cloud service providers.Driven by worries about ransomware, data breaches, and state-sponsored assaults, industry experts predict cybersecurity expenditure to keep increasing. The capacity of SentinelOne to expand its AI-driven security solutions while enhancing its financial performance will be crucial for its future development path.SentinelOne is setting itself for long-term growth in the cybersecurity sector while striving for consistent profitability with a strong near to fiscal 2025 and an ambitious plan forward.