SentinelOne, Inc. (NYSE:S) announced it has entered into an Assessment Agreement with the Israeli Tax Authority to resolve transfer pricing matters related to its Israeli subsidiary, Sentinel Labs Israel Ltd. The agreement, signed January 8, covers fiscal years ended January 31, 2021 through January 31, 2025, and addresses the valuation and taxation of the Israeli subsidiary's intellectual property. According to a press release statement, this settlement fully resolves all related disputed tax matters between SentinelOne and the Israeli Tax Authority.
The company stated that the settlement incorporates principles from the bilateral Advanced Pricing Agreement process involving both the Internal Revenue Service and the Israeli Tax Authority, a process that began in fiscal year 2022. The agreement provides a final tax determination on these matters.
As previously disclosed in SentinelOne's Form 10-Q dated May 28, 2025, the company incurred a tax expense of $136 million and recorded a long-term tax contingency for that amount. In connection with the resolution of this matter, SentinelOne expects to record an additional $14 million tax expense in the current fiscal year ending January 31, 2026.
Following its September 2025 acquisition of Prompt Security, Inc. and its Israeli subsidiary, SentinelOne also expects to record an additional $30 million tax expense for the fiscal year ending January 31, 2026. The agreement covers the tax impact of aligning Prompt's intellectual property within SentinelOne's structure and resolves all related valuation issues.
The agreement provides for installment payments through 2030, with unpaid balances accruing interest at 7% per year. SentinelOne has the option to extend the payment schedule by up to two additional years. In the event of a change in control, all unpaid amounts would become due immediately. Initial installment payments are scheduled as follows: approximately $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, all in local currency equivalents.
This information is based on a press release statement included in a recent SEC filing.
In other recent news, SentinelOne announced that its Singularity Platform has received GovRAMP Authorization at the High Impact level, enhancing its position in the public sector security market. This authorization allows state and local government organizations to use the AI-powered security platform for protecting critical data and infrastructure. In terms of analyst ratings, Stephens reiterated its Overweight rating on SentinelOne, citing an attractive growth outlook and compelling valuation with a price target of $20. Meanwhile, Piper Sandler downgraded the stock to Neutral due to a lack of catalysts and recent management changes, adjusting its price target to $17. Citizens maintained its Market Outperform rating with a $23 price target, despite noting challenges such as a lack of scale relative to peers. Additionally, Citron Research highlighted SentinelOne's role in uncovering a significant Chinese hacking operation, setting a price target of $32 and emphasizing the company's evolution into a full AI-native security platform. These developments reflect the varied perspectives of analysts on SentinelOne's current and future positioning in the cybersecurity market.