September 22, 2025 04:01 AM GMT Software | North America Going to Need a Bigger Boat: AI and Security We see a $45bn+ opportunity for AI security in coming years, as organizations grapple with how to secure a larger surface area against more intelligent threat vectors. As threat environment grows, see AI for Security seeing adoption before Security for AI. PANW, CRWD, MSFT, SAIL best exposed. Key Takeaways This note explores the second mega theme in our assumption series of security software coverage. Pleas ...

Zscaler (NASDAQ:ZS), Varonis (NASDAQ:VRNS) and SailPoint (NASDAQ:SAIL) are among the top cybersecurity stocks to own into the end of the year, investment firm J.P. Morgan said. “Within Network Security, demand remains elevated for SASE and Next Gen SIEM,” J.P. Morgan analyst Brian Essex ...

AUSTIN, Texas--(BUSINESS WIRE)--SailPoint, Inc. (Nasdaq: SAIL), a leader in enterprise identity security, is gearing up for Navigate 2025, its premier global conference series kicking off September 29-October 2 in Austin, Texas. The event will showcase headline speakers, immersive sessions, and interactive labs for security leaders worldwide. Navigate is where industry leaders, practitioners, and innovators come together to uncover what's next in security. Attendees can gain actionable insights. ...

TRENDING: This Industry Is Flashing Gargantuan Market-Size Estimates IPO Stock Of The Week SailPoint (SAIL) regained a key level in recent weeks and is now approaching a new buy point as the stock market rallies to record highs. SailPoint stock is featured on Investor's Business Daily's IPO Leaders screen. SailPoint sells identity-focused cybersecurity software that manages access to corporate or government networks. The company says security demands for enterprises… Related news Stocks Generating Improved ...

Core Viewpoint - SailPoint, Inc. (SAIL) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements [4][6]. - For the fiscal year ending January 2026, SailPoint is expected to earn $0.21 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 14.2% over the past three months [8]. Institutional Investor Influence - Institutional investors utilize earnings estimates to determine the fair value of stocks, and changes in these estimates can lead to significant buying or selling actions, impacting stock prices [4]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. - The upgrade of SailPoint to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for near-term price increases [10].

Core Insights - Total annual recurring revenue reached $982 million, climbing 28%, with SaaS ARR surging to $623 million, marking a 37% increase, reflecting strong demand for identity security platforms [1] - The company posted a quarterly adjusted EPS of $0.07, beating estimates of $0.04, delivering a 75% surprise, with revenue landing at $264 million, up 33% year-over-year, driven by a subscription revenue jump to $248 million, which is a 36% growth [2] - The market value stands at $11.6 billion, with a forward price/earnings multiple of 103.3x, price/sales at 12.80x, and price/book at 1.70x, all significantly above sector medians [3] Financial Performance - The GAAP operating loss registered at $41 million, narrowing from a $66 million loss a year earlier, while adjusted operating income hit $54 million, or 20% of revenue [8] - The company generated $50 million in positive operating cash flow and $46 million in free cash flow, indicating strong cash generation from core business operations [9] Strategic Developments - SailPoint announced a partnership with HCLTech to deliver identity security solutions, combining SailPoint's AI-driven Atlas platform with HCLTech's expertise [10] - The company expanded Identity University to address the talent shortage in the industry, offering new training and certifications for identity security professionals [11] - SailPoint launched its first SaaS instance in the Middle East and expanded to South America, meeting the rising demand for identity security [12] Product Innovations - The new SailPoint Accelerated Application Management solution helps organizations govern and secure applications at scale, addressing gaps in identity management [13] Future Outlook - Earnings forecasts indicate a turnaround with consensus estimates at $0.06 for Q3 2025 and $0.22 for fiscal year 2026, signaling a forecasted growth rate of +101.70% [14] - Management expects Q3 revenue between $269 and $271 million, with full-year revenue hitting $1,052 to $1,058 million, translating to 14–15% quarterly growth and 22–23% annual expansion [15] - Analyst sentiment remains positive with a consensus "Moderate Buy" rating and an average price target of $25.87, implying a potential upside of 20% from current levels [16] Conclusion - SailPoint demonstrates steady growth, renewed guidance, and positive analyst sentiment, indicating a potential 20% upside from current levels, supported by strong recurring revenue and expanding margins [17]

Group 1 - SailPoint Inc. is recognized as one of the best IPO tech stocks to buy, particularly following its partnership with HCLTech to enhance identity security solutions for AI-enabled enterprise environments [1][2] - The collaboration aims to accelerate identity transformation, providing continuous risk-aware governance and improving resilience in the context of AI [2][3] - HCLTech has achieved the status of SailPoint Global Delivery Admiral, indicating its high level of commitment to customer satisfaction and expertise in deployment [3] Group 2 - SailPoint delivers identity security solutions across various regions, including the Americas, Europe, the Middle East, Africa, and the Asia-Pacific [4]

Core Insights - The company reported a 28% year-over-year growth in Annual Recurring Revenue (ARR) [2] - Strong financial performance was highlighted by a 33% revenue growth and 20% profit margins [2] - The quarter marked a record in free cash flow and the best new SaaS logo ARR quarter in the company's history [2] - The net revenue retention rate stood at 114%, indicating effective customer expansion alongside new customer acquisition [2] - There was a 30% year-over-year increase in the size of net new SaaS ARR [3]

Core Competency and Strategic Thinking - SailPoint's core competency is centered around identity innovation, which is crucial in the current high-paced environment of technological advancement [2] - The company is strategically focused on identifying areas where it can leverage its strengths to maintain a competitive edge in identity solutions [2]

[PART I - Financial Information](index=2&type=section&id=PART%20I) Presents SailPoint's unaudited condensed consolidated financial statements, including balance sheets, operations, equity, cash flows, and detailed notes [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents SailPoint's unaudited condensed consolidated financial statements, covering corporate conversion, IPO, and key financial items [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details the company's financial position as of July 31, 2025, and January 31, 2025, reflecting asset, liability, and equity changes | Metric | July 31, 2025 (in thousands) | January 31, 2025 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Cash and cash equivalents | $271,052 | $121,293 | | Total current assets | $626,600 | $512,382 | | Total assets | $7,445,941 | $7,411,916 | | Total current liabilities | $504,465 | $574,693 | | Long-term debt, net | — | $1,024,467 | | Total liabilities | $629,795 | $1,804,215 | | Total stockholders' equity / partners' deficit | $6,816,146 | $(5,588,440) | - Total assets increased slightly from **$7,411,916 thousand** to **$7,445,941 thousand**, while total liabilities significantly decreased from **$1,804,215 thousand** to **$629,795 thousand**, primarily due to the repayment of long-term debt[12](index=12&type=chunk) - Stockholders' equity shifted from a partners' deficit of **$(5,588,440) thousand** to a positive equity of **$6,816,146 thousand**, reflecting the Corporate Conversion and IPO[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of operations show improved financial performance for the three and six months ended July 31, 2025, driven by revenue growth and reduced net loss | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $264,359 | $198,575 | $494,827 | $386,231 | | Gross profit | $177,806 | $123,313 | $305,461 | $238,803 | | Loss from operations | $(40,798) | $(65,830) | $(225,763) | $(134,023) | | Interest expense | $(1,693) | $(47,317) | $(24,082) | $(93,556) | | Net loss | $(10,552) | $(87,130) | $(197,864) | $(176,306) | | Net loss per share (basic & diluted) | $(0.02) | $(2.97) | $(0.42) | $(5.89) | - Total revenue increased by **33%** for the three months ended July 31, 2025, and by **28%** for the six months ended July 31, 2025, primarily driven by subscription revenue growth[14](index=14&type=chunk) - Net loss significantly decreased from **$(87,130) thousand** to **$(10,552) thousand** for the three months ended July 31, 2025, and from **$(176,306) thousand** to **$(197,864) thousand** for the six months ended July 31, 2025, largely due to a substantial reduction in interest expense[14](index=14&type=chunk) [Condensed Consolidated Statements of Redeemable Convertible Units, Stockholders' Equity and Partner's Deficit](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Redeemable%20Convertible%20Units,%20Stockholders'%20Equity%20and%20Partner's%20Deficit) Details changes in equity and partners' deficit, reflecting Corporate Conversion and IPO impact on capital structure - As of July 31, 2025, there are no redeemable convertible units outstanding, a change from **495,161 units** with a net carrying value of **$11,196,141 thousand** as of January 31, 2025, due to the Corporate Conversion[18](index=18&type=chunk)[88](index=88&type=chunk) - Total stockholders' equity increased from a partners' deficit of **$(5,588,440) thousand** as of January 31, 2025, to **$6,816,146 thousand** as of July 31, 2025, primarily driven by the effect of the Corporate Conversion and the IPO proceeds[18](index=18&type=chunk) - Additional paid-in capital increased to **$6,994,699 thousand** as of July 31, 2025, from zero as of January 31, 2025, reflecting the IPO and equity-based compensation[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements show a shift from cash used in 2024 to cash provided by financing in 2025, driven by IPO proceeds and debt repayment | Cash Flow Activity (in thousands) | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(46,862) | $(108,183) | | Net cash used in investing activities | $(7,884) | $(11,503) | | Net cash provided by (used in) financing activities | $207,672 | $(2,225) | | Net change in cash, cash equivalents and restricted cash | $152,926 | $(121,911) | | Cash, cash equivalents and restricted cash, end of period | $277,316 | $96,557 | - Net cash used in operating activities decreased from **$(108,183) thousand** in 2024 to **$(46,862) thousand** in 2025, indicating improved operational cash management[22](index=22&type=chunk) - Financing activities shifted from using **$(2,225) thousand** in 2024 to providing **$207,672 thousand** in 2025, primarily driven by **$1,259,681 thousand** in IPO proceeds, partially offset by **$1,040,000 thousand** in Term Loan repayments[22](index=22&type=chunk)[44](index=44&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed explanations and disclosures for the condensed consolidated financial statements, covering corporate conversion, IPO, and key financial items [1. Description of Business and Summary of Significant Accounting Policies](index=9&type=section&id=1.%20Description%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the company's Corporate Conversion, IPO, capital structure changes, accounting policies, and recent pronouncements - On February 12, 2025, SailPoint Parent, LP converted to SailPoint, Inc. (Corporate Conversion) in connection with its IPO[26](index=26&type=chunk) - All outstanding partnership units were converted into **499,060,464 shares** of common stock[27](index=27&type=chunk) - The IPO closed on February 14, 2025, with **57.5 million shares** sold by the Company at **$23.00** per share, generating net proceeds of approximately **$1,248.2 million**[31](index=31&type=chunk) [2. Revenue Recognition](index=12&type=section&id=2.%20Revenue%20Recognition) Disaggregates revenue by subscription categories and recognition timing, showing increased SaaS and term subscription revenue | Revenue Category (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | SaaS | $144,758 | $105,716 | $276,573 | $202,783 | | Term subscriptions | $58,120 | $32,630 | $98,160 | $63,315 | | Total Subscription | $247,937 | $181,811 | $463,260 | $351,903 | | Total revenue | $264,359 | $198,575 | $494,827 | $386,231 | - SaaS revenue increased by **37%** for the three months ended July 31, 2025, and by **36%** for the six months ended July 31, 2025, reflecting a strong shift towards cloud solutions[46](index=46&type=chunk) - Remaining performance obligations as of July 31, 2025, were **$1,485.7 million**, with **$732.0 million** expected to be recognized as revenue over the next 12 months[48](index=48&type=chunk) [3. Allowance for Expected Credit Losses](index=13&type=section&id=3.%20Allowance%20for%20Expected%20Credit%20Losses) Details the allowance for expected credit losses for accounts receivable and contract assets, showing increased provision for credit losses | Metric (in thousands) | July 31, 2025 | January 31, 2025 | | :-------------------- | :------------ | :--------------- | | Allowance for credit losses - accounts receivable | $1,065 | $192 | | Allowance for credit losses - contract assets | $201 | $168 | - The provision for credit losses increased significantly from **$0.3 million** to **$0.8 million** for the three months ended July 31, 2025, and from **$0.7 million** to **$4.3 million** for the six months ended July 31, 2025[50](index=50&type=chunk) [4. Fair Value Measurements](index=13&type=section&id=4.%20Fair%20Value%20Measurements) Describes financial assets and liabilities measured at fair value, categorized by input levels, highlighting cash equivalents and contingent consideration | Asset/Liability (in thousands) | July 31, 2025 (Level 1) | January 31, 2025 (Level 1) | | :----------------------------- | :---------------------- | :------------------------- | | Money market funds | $233,283 | $81,972 | | Liability (in thousands) | July 31, 2025 (Level 3) | January 31, 2025 (Level 3) | | :----------------------- | :---------------------- | :------------------------- | | Contingent consideration | $7,309 | $5,700 | - The fair value of contingent consideration related to the Imprivata acquisition increased by **$1.6 million** during the three months ended July 31, 2025, and was fully settled in August 2025[55](index=55&type=chunk) [5. Business Combinations](index=14&type=section&id=5.%20Business%20Combinations) Details the company's 2025 acquisitions of Imprivata's IGA business and Double Zero Security, outlining purchase price allocation - Acquired Imprivata's Identity Governance and Administration business on December 13, 2024, for **$10.7 million** cash plus up to **$7.4 million** in contingent consideration[57](index=57&type=chunk) **Imprivata Acquisition Preliminary Purchase Price Allocation (in thousands):** | Item | Amount | | :--- | :----- | | Accounts receivable | $1,572 | | Goodwill | $9,247 | | Intangible assets | $9,800 | | Deferred revenue | $(4,236) | | Total fair value of assets acquired and liabilities assumed | $16,383 | - Acquired Double Zero Security, Inc. on April 9, 2024, for **$5.4 million**, net of cash acquired, plus **$0.8 million** in Holdback Consideration[61](index=61&type=chunk) [6. Commitments and Contingencies](index=16&type=section&id=6.%20Commitments%20and%20Contingencies) Addresses contractual purchase commitments, indemnification arrangements, and litigation claims, noting no material changes or adverse impacts - No material changes to non-cancelable contractual commitments outside the ordinary course of business for the six months ended July 31, 2025[66](index=66&type=chunk) - The company has not incurred any material costs from indemnification arrangements to date and does not expect current litigation to have a material adverse impact on financial statements[68](index=68&type=chunk)[69](index=69&type=chunk) [7. Credit Agreement and Debt](index=16&type=section&id=7.%20Credit%20Agreement%20and%20Debt) Details the company's debt structure, including the new 2025 Credit Agreement and Term Loan repayment post-IPO - Entered into a new 2025 Credit Agreement on June 25, 2025, for a five-year **$250.0 million** secured revolving credit facility, maturing June 25, 2030[70](index=70&type=chunk) - The company fully repaid its **$1.04 billion** Term Loans from the 2022 Credit Agreement using IPO proceeds, resulting in a **$15.3 million** loss from extinguishment of debt[76](index=76&type=chunk)[78](index=78&type=chunk) - Total interest expense related to Term Loans decreased from **$47.2 million** (Q3 2024) and **$93.3 million** (6M 2024) to **$0** (Q3 2025) and **$22.3 million** (6M 2025), respectively, due to repayment[78](index=78&type=chunk)[79](index=79&type=chunk) [8. Related Party Transactions](index=17&type=section&id=8.%20Related%20Party%20Transactions) Discloses transactions with Thoma Bravo, including sales, advisory fees, and debt repayment post-IPO - Sales transactions with Thoma Bravo affiliates were **$0.1 million** for the three months ended July 31, 2025, and **$0.8 million** for the six months ended July 31, 2025[80](index=80&type=chunk) - The advisory services agreement with Thoma Bravo was terminated upon the IPO closing, with **$9.3 million** in outstanding fees settled[82](index=82&type=chunk) - Interest payments to a Thoma Bravo affiliate on Term Loans were **$1.2 million** for the six months ended July 31, 2025, with the principal balance fully repaid[83](index=83&type=chunk) [9. Stockholders' / Partners' Equity](index=18&type=section&id=9.%20Stockholders'%20/%20Partners'%20Equity) Details the transformation of the company's equity structure post-Corporate Conversion and IPO, from units to common stock - As a result of the Corporate Conversion, all outstanding partnership units were converted into shares of common stock[87](index=87&type=chunk) - The company's authorized capital stock now includes **1,750,000,000 shares** of common stock and **50,000,000 shares** of undesignated preferred stock[84](index=84&type=chunk) - There are no redeemable convertible units outstanding as of July 31, 2025, compared to **495,161 units** with a net carrying value of **$11,196,141 thousand** as of January 31, 2025[88](index=88&type=chunk) [10. Equity-Based Compensation](index=19&type=section&id=10.%20Equity-Based%20Compensation) Explains the IPO's significant impact on employee incentive plans, including accelerated vesting, award replacement, and compensation expense - The IPO triggered accelerated vesting of incentive units, EARs, and cash-settled awards, leading to **$113.8 million** in equity-based compensation expense during the three months ended April 30, 2025[92](index=92&type=chunk) - Unvested incentive units and EARs were replaced with **1,253,536 RSAs** and **232,168 RSUs** under the new SailPoint, Inc. Omnibus Incentive Plan[94](index=94&type=chunk) | Equity-Based Compensation Expense (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total equity-based compensation expense | $48,984 | $24,390 | $209,689 | $50,247 | [11. Balance Sheet Related Items](index=20&type=section&id=11.%20Balance%20Sheet%20Related%20Items) Provides detailed breakdowns of property, equipment, assets, and liabilities, highlighting changes due to IPO activities | Property and Equipment, Net (in thousands) | July 31, 2025 | January 31, 2025 | | :--------------------------------------- | :------------ | :--------------- | | Computer equipment | $14,731 | $12,845 | | Capitalized software development costs | $13,762 | $8,219 | | Total property and equipment, net | $27,147 | $22,879 | | Accrued Expenses and Other Liabilities (in thousands) | July 31, 2025 | January 31, 2025 | | :---------------------------------------------------- | :------------ | :--------------- | | Commissions | $17,111 | $31,365 | | Bonus | $17,090 | $31,647 | | Interest payable | $44 | $29,829 | | Thoma Bravo advisory fees | — | $8,750 | | Total accrued expenses and other liabilities | $83,769 | $158,135 | - Accrued expenses and other liabilities decreased significantly from **$158,135 thousand** to **$83,769 thousand**, primarily due to the settlement of bonuses, commissions, interest payments, and Thoma Bravo advisory fees[107](index=107&type=chunk) [12. Income Taxes](index=22&type=section&id=12.%20Income%20Taxes) Details the company's income tax provision and effective tax rates, highlighting a significant net discrete tax benefit in 2025 | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective tax rate | 74.8% | 23.0% | 19.6% | 22.3% | - A net discrete tax benefit of **$21.2 million** was recognized for the three and six months ended July 31, 2025, due to a change in valuation allowance for interest expense and Texas R&D credits carryforwards resulting from changes in tax law[110](index=110&type=chunk) [13. Segments and Geographic Information](index=23&type=section&id=13.%20Segments%20and%20Geographic%20Information) Confirms the company operates in one reportable segment, with revenue breakdown by geographic area, showing the US as the largest market - The company operates in one reportable segment, with net loss as the key performance metric for the CODM[111](index=111&type=chunk) | Geographic Area (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $170,356 | $133,926 | $321,533 | $261,324 | | EMEA | $58,618 | $37,419 | $106,575 | $73,450 | | Rest of the World | $35,385 | $27,230 | $66,719 | $51,457 | | Total revenue | $264,359 | $198,575 | $494,827 | $386,231 | - The United States accounted for **64%** and **65%** of total revenue for the three and six months ended July 31, 2025, respectively[112](index=112&type=chunk) [14. Employee Benefit Plans](index=23&type=section&id=14.%20Employee%20Benefit%20Plans) Describes the company's 401(k) Plan, including employee deferrals and matching contributions, and reports associated expenses - The company recorded **$2.0 million** and **$1.6 million** in expense for 401(k) matching contributions for the three months ended July 31, 2025 and 2024, respectively[114](index=114&type=chunk) - For the six months ended July 31, 2025 and 2024, matching contributions expense was **$4.3 million** and **$3.3 million**, respectively[114](index=114&type=chunk) [15. Subsequent Events](index=23&type=section&id=15.%20Subsequent%20Events) Discloses a significant subsequent event: the definitive agreement to acquire Security Savvy, Ltd. assets, expected to close in 2025 - On August 21, 2025, the company entered into a definitive agreement to acquire certain assets of Security Savvy, Ltd., an identity visibility and intelligence company[115](index=115&type=chunk) - The transaction is expected to close later in 2025, subject to customary closing conditions[115](index=115&type=chunk) [Special Note About Forward-Looking Statements](index=24&type=section&id=Special%20Note%20About%20Forward-Looking%20Statements) Provides a cautionary statement regarding forward-looking statements, emphasizing substantial risks and uncertainties that could cause actual results to differ - Forward-looking statements are subject to substantial risks and uncertainties, and readers should not rely on them as predictions of future events[119](index=119&type=chunk) - Key factors that could cause actual results to differ include the ability to sustain growth, attract and retain customers, compete successfully, adapt to changing technology, and manage security risks[119](index=119&type=chunk)[122](index=122&type=chunk) - The company undertakes no obligation to update forward-looking statements, except as required by law[120](index=120&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion of financial condition and results, covering business overview, recent developments, key metrics, and liquidity [Overview](index=25&type=section&id=Overview) SailPoint provides comprehensive identity security solutions, unifying identity data across various types using SaaS and AI-powered offerings - SailPoint delivers comprehensive identity security solutions, unifying identity data across employee, non-employee, and machine identities[124](index=124&type=chunk) - Solutions leverage intelligent analytics and AI to provide visibility into access, define security policies, and ensure regulatory compliance[124](index=124&type=chunk)[125](index=125&type=chunk) - Offerings include Identity Security Cloud (SaaS) and IdentityIQ (customer-hosted), built on the Atlas platform[125](index=125&type=chunk) [Recent Developments](index=25&type=section&id=Recent%20Developments) Recent developments include a unit split, accelerated equity vesting, Corporate Conversion, IPO, debt repayment, and a net discrete tax benefit - On February 12, 2025, SailPoint Parent, LP converted to SailPoint, Inc. (Corporate Conversion) and closed its IPO on February 14, 2025, raising approximately **$1,248.2 million** net proceeds[129](index=129&type=chunk)[130](index=130&type=chunk) - The company fully repaid its **$1,040.0 million** Term Loans using IPO proceeds, incurring a **$15.3 million** loss from extinguishment of debt[132](index=132&type=chunk) - A **$21.2 million** net discrete tax benefit was recorded due to changes in tax law affecting interest expense and Texas R&D credit carryforwards[134](index=134&type=chunk) [Our Business Model](index=26&type=section&id=Our%20Business%20Model) SailPoint serves large organizations with tiered pricing for SaaS and customer-hosted solutions, reporting customer numbers by ARR tiers | Customer Segment | July 31, 2025 | July 31, 2024 | | :---------------- | :------------ | :------------ | | Total Customers | 3,105 | N/A | | < $250k ARR | 2,015 | N/A | | > $250k ARR | 1,090 | N/A | | > $1M ARR | 185 | N/A | - Customers with **$250,000** or more of ARR increased by **27%** year-over-year, and those with over **$1,000,000** of ARR increased by **48%** year-over-year as of July 31, 2025[135](index=135&type=chunk) - Pricing for Identity Security Cloud is tiered by suite with a-la-carte options, while IdentityIQ term subscriptions are based on factors like the number of digital identities governed[137](index=137&type=chunk) [Key Factors Affecting Our Performance](index=26&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) Future performance hinges on acquiring new customers, expanding sales, increasing SaaS revenue, international penetration, and technology leadership - Focus on adding new customers by enhancing marketing, increasing sales capacity, and leveraging channel partners, targeting over **60%** of organizations with fragmented or manual identity processes[139](index=139&type=chunk) - Strategy to generate additional sales to existing customers through suite upgrades, additional products, and migrating customer-hosted solutions to SaaS, which typically increases ARR[140](index=140&type=chunk) - Continued investment in AI to enhance solution capabilities and extend identity security portfolio into new use cases, such as non-employee risk management and cloud infrastructure entitlement management[144](index=144&type=chunk) [Impact of Current Economic Conditions](index=27&type=section&id=Impact%20of%20Current%20Economic%20Conditions) Global economic and political uncertainties, including market fluctuations and inflation, could adversely affect business and financial results - Worldwide economic and political uncertainties, such as financial market fluctuations, rising interest rates, and inflation, could adversely affect business operations or financial results[145](index=145&type=chunk) - The broader implications of these macroeconomic events on the company's business, results of operations, and financial position remain uncertain[145](index=145&type=chunk) [Key Business Metrics](index=27&type=section&id=Key%20Business%20Metrics) Monitors ARR, SaaS ARR, and Dollar-Based Net Retention Rate as key performance indicators, showing ARR growth and consistent retention | Metric (in millions) | July 31, 2025 | July 31, 2024 | | :------------------- | :------------ | :------------ | | ARR | $982.0 | N/A | | SaaS ARR | $622.7 | N/A | - SaaS ARR increased its share of total ARR to **63%** as of July 31, 2025, up from **59%** as of July 31, 2024, reflecting the company's SaaS-first subscription model transition[151](index=151&type=chunk) | Metric | July 31, 2025 | July 31, 2024 | | :----- | :------------ | :------------ | | Dollar-based net retention rate | 114% | 114% | [Factors Affecting the Comparability of Our Results of Operations](index=29&type=section&id=Factors%20Affecting%20the%20Comparability%20of%20Our%20Results%20of%20Operations) Financial results comparability is impacted by increased public company operating costs and a substantial rise in equity-based compensation - Operating as a public company incurs additional costs for legal, regulatory, financial, and insurance compliance, which were inapplicable as a private company[157](index=157&type=chunk) - A significant increase in equity-based compensation expense resulted from the conversion and vesting of equity awards prior to the IPO and the issuance of new awards under the Omnibus Plan[158](index=158&type=chunk) - Thoma Bravo monitoring fees are no longer incurred after the IPO, impacting general and administrative expenses[157](index=157&type=chunk) [Components of Results of Operations](index=29&type=section&id=Components%20of%20Results%20of%20Operations) Details revenue and cost components, operating expenses, other income/expense, income tax, and seasonality for financial performance context - Subscription revenue, including SaaS, term subscriptions, and maintenance, is recognized ratably over the agreement term, with a strategic focus on increasing SaaS revenue[159](index=159&type=chunk)[161](index=161&type=chunk) - Perpetual license revenue is recognized upfront but is expected to decrease as a percentage of total revenue due to the shift towards subscriptions[162](index=162&type=chunk) - Cost of subscription revenue is expected to increase due to higher third-party cloud-based hosting costs as SaaS subscriptions grow[165](index=165&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Compares financial results for the three and six months ended July 31, 2025, versus 2024, highlighting revenue growth, improved margins, and reduced net loss | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $264,359 | $198,575 | $494,827 | $386,231 | | Gross profit | $177,806 | $123,313 | $305,461 | $238,803 | | Loss from operations | $(40,798) | $(65,830) | $(225,763) | $(134,023) | | Net loss | $(10,552) | $(87,130) | $(197,864) | $(176,306) | - Subscription revenue increased by **36%** for the three months and **32%** for the six months ended July 31, 2025, driven by SaaS and term subscriptions[184](index=184&type=chunk)[202](index=202&type=chunk) - Interest expense decreased significantly by **$45.6 million** (3 months) and **$69.5 million** (6 months) due to the full repayment of Term Loans[198](index=198&type=chunk)[215](index=215&type=chunk) [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) Presents non-GAAP financial measures like adjusted gross profit and free cash flow, providing a clearer view of core operating performance | Non-GAAP Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted gross profit | $206,740 | $152,418 | $382,681 | $297,064 | | Adjusted gross profit margin | 78% | 77% | 77% | 77% | | Non-GAAP Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted income (loss) from operations | $53,999 | $21,194 | $77,622 | $40,386 | | Adjusted operating margin | 20% | 11% | 16% | 10% | | Non-GAAP Metric (in thousands) | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------------- | :----------------------------- | :----------------------------- | | Free cash flow | $(54,746) | $(115,034) | [Liquidity, Capital Resources and Cash Requirements](index=43&type=section&id=Liquidity,%20Capital%20Resources%20and%20Cash%20Requirements) Liquidity significantly improved due to IPO proceeds and Term Loan repayment, relying on cash and a new revolving credit facility - Primary liquidity sources are cash flows from operations, IPO proceeds (**$1,248.2 million** net), and debt financing[232](index=232&type=chunk)[233](index=233&type=chunk) -