SentinelOne, Inc. 8-K

What Happened

• On January 8, 2026, SentinelOne, Inc. entered an Assessment Agreement with the Israeli Tax Authority (ITA) resolving transfer‑pricing disputes involving its Israeli unit, Sentinel Labs Israel Ltd., for fiscal years ended January 31, 2021 through January 31, 2025.
• The Agreement incorporates principles from a bilateral Advanced Pricing Agreement (APA) process with the IRS and ITA and provides a final tax determination on the covered matters.
• SentinelOne previously recorded a $136.0 million long‑term tax contingency (Form 10‑Q, May 28, 2025). In connection with this settlement the company expects to record an additional $14.0 million tax expense in the fiscal year ending January 31, 2026, and an additional $30.0 million tax expense related to its September 2025 acquisition of Prompt Security, Inc. (Prompt), for a combined additional impact of $44.0 million.

Key Details

• Covered fiscal years: Jan 31, 2021 through Jan 31, 2025.
• Additional tax expense expected: $14.0M (Israeli subsidiary IP valuation) + $30.0M (Prompt IP alignment) = $44.0M for fiscal year ending Jan 31, 2026.
• Previously recorded tax contingency: $136.0M (recorded in Q1 FY2026 filing).
• Payment terms: installment payments through 2030, unpaid balances accrue interest at 7.0% per annum; company may extend payments up to two years; change‑of‑control accelerates unpaid amounts.
• Initial approximate USD installments: ~$30M (Q1 FY2027), ~$10M (Q4 FY2027), ~$15M (Q4 FY2028).

Why It Matters

• The Agreement removes a multi‑year tax dispute and provides finality on transfer‑pricing and IP valuation issues, reducing legal and tax uncertainty for the covered years.
• It increases reported tax expense for the current fiscal year by $44M and creates a multi‑year cash payment obligation (with 7% interest), which can affect near‑term cash flow planning.
• The change‑of‑control acceleration provision could be relevant to any future M&A activity.