(Reuters) - Cybersecurity firm SentinelOne (NYSE:S) on Tuesday forecast fourth-quarter revenue above Wall Street estimates and raised its annual revenue outlook, as cybersecurity spending remains strong.
The California-based company's shares rose nearly 18% in afterhours trading.
Firms have prioritized expenditure on cybersecurity, as sticky inflation and high interest rates forced them to cut back on spending elsewhere.
Worldwide spending on security and risk management is projected to increase 14.3% in 2024, according to research firm Gartner.
"We're seeing strong demand for our cloud security and data (leak) solutions which combined grew triple digits," CEO Tomer Weingarten (NYSE:WRI) said on an earnings call, adding that its mainstay Singularity Platform continued to attract customers.
For the fourth quarter, the company expects revenue of $169 million, which is above analysts' average estimates of $166.5 million according to LSEG data.
SentinelOne also raised its revenue forecast for the full-year to $616 million, up from its previous view of $605 million.
The company has also started selling its generative AI-based program Purple AI that works on threat detection, analysis and response to some customers, CEO Weingarten added.
Purple AI is expected to be "generally available" in the first quarter of 2024, the company said in November.
SentinelOne reported revenue of $164.2 million for the three months ended Oct.31, up 42% from a year ago, which beat estimates of $156.1 million.
Annual recurring revenue for the reported quarter came in at $663.9 million, which is above market estimates as well.
On an adjusted basis, the company posted a loss of 3 cents per share, narrower than the 8 cent loss expected by analysts.
Its total customer count grew to over 11,500 customers for the reported quarter, compared with 11,000 customers in the second quarter.
(This story has been corrected to say fourth quarter, not third quarter, in paragraph 1)