SentinelOne Inc.
01/14/2026 | Press release | Distributed by Public on 01/14/2026 15:32
Material Event (Form 8-K)
Item 8.01 Other Events.
On January 8, 2026, SentinelOne, Inc. (the "Company") entered into an Assessment Agreement (the "Agreement") with the Israeli Tax Authority (the "ITA") covering various transfer pricing matters for intercompany transactions between the Company and its Israeli subsidiary, Sentinel Labs Israel Ltd., including the valuation and taxation of the intergroup utilization of the Company's Israeli subsidiary's intellectual property. The Agreement covers the Company's fiscal years ended January 31, 2021 through January 31, 2025 and fully and finally resolves all related disputed tax matters between the Company and its affiliates and the ITA.
This settlement with the ITA includes certain principles established in the bilateral Advanced Pricing Agreement ("APA") process between the Company, the Internal Revenue Service and the ITA, through which the Company has been negotiating since fiscal year 2022, and provides a final tax determination on this matter.
As previously disclosed in the Company's Form 10-Q dated May 28, 2025 for the first quarter of fiscal year 2026, the Company incurred a tax expense of $136.0 million and recorded a long-term tax contingency in that amount. In connection with the final resolution of this matter and all issues relating to the valuation of the Company's Israeli subsidiary's intellectual property, the Company expects to record an additional $14.0 million tax expense in the current fiscal year ending January 31, 2026.
In regard to the Company's acquisition in September 2025 of Prompt Security, Inc. ("Prompt") and its wholly owned Israeli subsidiary, the Company expects to record an additional $30.0 million tax expense for the fiscal year ending January 31, 2026. The Agreement also provides for the tax impact of the alignment of Prompt's intellectual property into the Company's structure and fully resolves any and all issues relating to the valuation of Prompt's intellectual property.
The Agreement provides for installment payments through 2030 with unpaid balances accruing interest at 7.0% per annum. The Company has the option to extend the payment schedule for up to two additional years. In the event of a change in control, all unpaid amounts would accelerate in accordance with the terms of the Agreement. The initial installment payments through fiscal year 2028 are in local currency in the following approximate USD amounts: $30 million in the first quarter of fiscal year 2027, $10 million in the fourth quarter of fiscal year 2027, and $15 million in the fourth quarter of fiscal year 2028.
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