Rick Munarriz

This is Sam Eden Rick saying, Fool on!

I think it's the price of admission if you're a tech company.

You have to pay up with stock-based compensation.

That's how you hire the best programmers and everything else you need to make the company run smoothly.

And in this case, I think the report was solid.

And again, yeah, stock-based compensation is a big reason why we're talking about non-GAAP profitability instead of non-non-GAAP, which would be GAAP profitability.

But it is the kind of thing where you are seeing improvements, and margin-wise, they are getting better.

It's SentinelOne, a lot like Snowflake.

Five, six years ago, these companies were seeing doubling the revenue year after year, and now it's slowed dramatically, both in the 20%-plus range now, a little more than 20% for Snowflake.

But it is the kind of thing where

I'm comfortable with where they are now, especially now that they're improving their finances.

They are doing things necessary to continue to grow, possibly stabilizing here at this level.

As a growth investor, I'd love to see that.

But I do think that Gap Profitability is still many, many years away.

And I did cheat, I did look at it up.

Analysts don't see this happening for Sentinel once until 2032.

which is a long time for that to happen.

But I think investors will forgive that because as long as you're making growth and you're generating healthy free cash flow, which they are, I think everything will work out just fine for Sentinel and investors.

I like the growth.

Again, investments in AI have to scare you away about profitability specifically, but these are heavy investments now for payoff long into the future.