SailPoint (NasdaqGS:SAIL) Q2 2026 Earnings Call September 09, 2025 08:30 AM ET Company ParticipantsScott Schmitz - SVP - IRMark McClain - CEO, Founder & DirectorBrian Carolan - CFOBrian Essex - Executive DirectorMeta Marshall - MD & VPTodd Weller - Managing DirectorJonathan Ruykhaver - Managing DirectorMatt Mills - President - Worldwide Field OperationsGabriela Borges - MD - Software ResearchSaket Kalia - Managing DirectorShaul Eyal - Managing Director - Equity ResearchGray Powell - Managing DirectorConfere ...

Financial Data and Key Metrics Changes - The company closed the quarter with $982 million in annual recurring revenue (ARR), a 28% year-over-year increase, with SaaS ARR growing 37% year-over-year [4][21] - Total Q2 revenue increased 33% year-over-year, with subscription revenue growing 36% year-over-year [21][23] - Adjusted operating margins expanded 980 basis points to 20.4%, with a record cash flow from operating activities of $50 million [21][24] Business Line Data and Key Metrics Changes - The company saw a 48% year-over-year increase in customers with ARR greater than $1 million, indicating strong demand for identity security solutions [4] - New SaaS customers had a 40% attach rate of add-on modules, up from 25% in the same quarter last year, contributing to the growth of emerging add-on modules [22][24] - ARR from emerging add-on modules more than doubled year-over-year, contributing to a net revenue retention (NRR) of 114% [22][24] Market Data and Key Metrics Changes - The company is experiencing strong demand across various industry verticals, with a notable increase in average ARR per new SaaS customer by 30% [22] - The company is positioned to lead in the evolving market of identity security, particularly with the rise of AI and machine identities [5][10] Company Strategy and Development Direction - The company aims to build a foundation for the next generation of enterprise security, focusing on real-time protection and governance of all identities, including human and machine [14][15] - The company is enhancing its platform with innovations like SailPoint Accelerated Application Management and SailPoint Machine Identity Security to address emerging challenges [16][17] - The company emphasizes the importance of integrating identity, data, and security to provide a comprehensive solution for enterprises [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position heading into the second half of the year, citing strong performance and record free cash flow [31] - The company anticipates ARR to cross the billion-dollar mark in Q3 2026, with an expected growth rate of 26.5% year-over-year [25] - Management acknowledged the challenges posed by the current macroeconomic environment but remains optimistic about continued growth and modernization efforts among customers [60][61] Other Important Information - The company is one of the only independent, enterprise-scale identity security platforms, which allows it to offer flexibility and extensibility to large complex enterprises [12][19] - The company is actively pursuing partnerships to expand its market reach, including a new partnership with HCL Technologies [19] Q&A Session Summary Question: Can you provide more details on the guidance and the impact of federal term renewals? - Management confirmed a 100% renewal rate for term-based federal renewals in Q2, which resulted in a $7 million timing shift in revenue recognition from Q3 to Q2, with no impact on ARR [30][31] Question: What are the dynamics between Q3 and Q4 regarding net new ARR? - Management noted that Q2's net new ARR was consistent with last year, and they feel confident heading into Q3, expecting to maintain or increase the rate of movement to SaaS [37][38] Question: Can you elaborate on the opportunities in machine identity? - Management highlighted the importance of discovering and assigning ownership of machine identities, noting that customers are increasingly recognizing these as part of the attack vector [42][43] Question: How does the company view the integration of AI-driven connector integration? - Management acknowledged the need for a tight alignment between identity and data access, emphasizing the importance of understanding the characteristics of agents and their access to data [48][49] Question: What is the current state of legacy systems among customers? - Management indicated an acceleration in migrations from legacy systems, with a sense of urgency among customers to modernize their identity solutions [54][55] Question: How does the company view the competitive landscape? - Management noted that while there is increased competition in the governance space, their win rates against traditional competitors remain strong, particularly in the mid-to-large enterprise market [78][79]

Financial Data and Key Metrics Changes - The company reported an annual recurring revenue (ARR) of $982 million, representing a 28% year-over-year increase, with SaaS ARR growing 37% year-over-year [4][20] - Total revenue for Q2 was $264 million, an increase of 33% year-over-year, with subscription revenue growing 36% year-over-year [20][22] - Adjusted operating margins expanded by 980 basis points to 20.4%, with cash flow from operating activities reaching a record $50 million [20][23] Business Line Data and Key Metrics Changes - The company saw a 48% year-over-year increase in customers with ARR greater than $1 million, indicating strong demand for its identity security solutions [4] - New SaaS customers had a 40% attach rate of add-on modules, up from 25% in the same quarter last year, contributing to the overall growth [21][22] - ARR from emerging add-on modules more than doubled year-over-year, contributing to a net revenue retention (NRR) of 114% [21][22] Market Data and Key Metrics Changes - The company is experiencing robust demand across various industry verticals, with a notable increase in average ARR per new SaaS customer by 30% year-over-year [21][22] - The company is positioned to capitalize on the growing trend of enterprises recognizing the need for real-time identity security controls [6][11] Company Strategy and Development Direction - The company aims to lead in the evolving identity security market by integrating identity, security, and data context into a unified platform [6][11] - The introduction of new products like SailPoint Agent Identity Security is designed to address the governance of AI agents and machine identities [8][15] - The company is focused on modernizing its offerings to meet the challenges posed by the rise of AI and machine identities, emphasizing real-time controls and governance [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position heading into the second half of the year, citing strong performance metrics and a robust pipeline [30] - The company anticipates ARR to cross the billion-dollar mark in Q3 2026, with a year-over-year growth expectation of 26.5% [24] - Management highlighted the importance of adapting to the evolving landscape of identity security, particularly with the rise of AI agents [8][11] Other Important Information - The company is increasing its fiscal year 2026 ARR outlook by $10 million to $1.11 billion, reflecting a 26.6% year-over-year growth [24][25] - The acquisition of key assets from Savvy is expected to enhance the company's capabilities in SaaS application visibility and identity risk detection [14] Q&A Session Summary Question: Can you provide more details on the guidance and the impact of federal term renewals? - Management confirmed a 100% renewal rate for term-based federal renewals in Q2, with a $7 million timing shift in revenue recognition from Q3 to Q2 [30][31] Question: What are the dynamics for net new ARR in Q3 and Q4? - Management noted a consistent performance in Q2 and expressed optimism for Q3, expecting to maintain or increase the rate of movement to SaaS [36][60] Question: Can you elaborate on the machine identity market and opportunities? - Management highlighted the need for governance of non-human identities and the unique approach SailPoint is taking to address this challenge [40][41] Question: How does the company view the competitive landscape and governance space? - Management indicated that while there is increased competition, the core competitive landscape remains stable, with strong win rates against traditional competitors [77][78] Question: What are the implications of the shift towards integrated identity solutions? - Management acknowledged the trend towards tighter integration of identity with security ecosystems but emphasized the need for flexibility in customer solutions [88][89]

SailPoint (NasdaqGS:SAIL) Q2 2026 Earnings Call September 09, 2025 08:30 AM ET Company ParticipantsMark McClain - Founder and CEOMatt Mills - PresidentBrian Carolan - CFOScott Schmitz - SVP of Investor RelationsOperatorGood day, and thank you for standing by. Welcome to the SailPoint Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you wi ...

The cybersecurity company's third-quarter guidance disappoints investors. ...

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Financial Highlights - The company's Annual Recurring Revenue (ARR) reached $982 million, a 28% year-over-year growth[12] - SaaS ARR grew by 37% year-over-year, reaching $623 million[12] - Q2'26 total revenue was $264 million[12] - Adjusted subscription gross profit margin was 83% for Q2'26[12] - Adjusted operating margin was 20.4% for Q2'26[12] Customer Metrics - The company has approximately 3,105 customers[12] - The dollar-based net retention rate is 114%[12] - Customers with over $250K ARR increased by 27% year-over-year[56] - Customers with over $1 million ARR increased by 48% year-over-year[57] Future Outlook - Q3'26 ARR is projected to be between $1,027 million and $1,031 million, representing a 26% to 27% year-over-year growth[63] - Fiscal Year 2026 ARR is projected to be between $1,105 million and $1,115 million, representing a 26% to 27% year-over-year growth[63]

[Fiscal Second Quarter 2026 Results Overview](index=1&type=section&id=Fiscal%20Second%20Quarter%202026%20Results%20Overview) SailPoint's strong fiscal Q2 2026 results, driven by SaaS ARR growth and record cash flow, led to raised full-year guidance [Executive Summary](index=1&type=section&id=Executive%20Summary) SailPoint reported strong fiscal second quarter 2026 results, surpassing all previous guidance metrics - SailPoint delivered strong Q2 results, exceeding all previously guided metrics[3](index=3&type=chunk) - The strong performance was driven by **37% year-over-year SaaS ARR growth** and record cash flow from operations[3](index=3&type=chunk) - The company is raising its guidance for the full year across all metrics due to strong demand for its identity security solutions in the AI era[3](index=3&type=chunk) [Fiscal 2026 Second Quarter Financial Highlights](index=1&type=section&id=Fiscal%202026%20Second%20Quarter%20Financial%20Highlights) For fiscal Q2 2026, SailPoint achieved a 28% year-over-year increase in total ARR to $982 million, with SaaS ARR growing 37% to $623 million, and total revenue rising 33% to $264 million Fiscal 2026 Second Quarter Financial Highlights | Metric | Q2 2026 Value | YoY Growth % | | :-------------------------------- | :-------------- | :----------- | | Total ARR | $982 million | 28% | | SaaS ARR | $623 million | 37% | | Total Revenue | $264 million | 33% | | Subscription Revenue | $248 million | 36% | | GAAP Operating Loss | $(41) million | N/A (vs $(66)M) | | Adjusted Income from Operations | $54 million | N/A (vs $21M) | | Cash Flows from Operating Activities | $50 million | N/A | | Free Cash Flow | $46 million | N/A | [Financial Outlook](index=1&type=section&id=Financial%20Outlook) SailPoint has raised its financial guidance for both the third quarter and the full fiscal year 2026, reflecting increased expectations across key metrics Q3 and FY 2026 Financial Guidance (in millions, except per share amounts and percentages) | Metric | Q3'26 Guidance | FY'26 Guidance | Prior FY'26 Guidance | | :-------------------------------- | :--------------- | :--------------- | :------------------- | | Total ARR | $1,027 to $1,031 | $1,105 to $1,115 | $1,095 to $1,105 | | Total ARR YoY growth % | 26% to 27% | 26% to 27% | 25% to 26% | | Total Revenue | $269 to $271 | $1,052 to $1,058 | $1,034 to $1,044 | | Total Revenue YoY growth % | 14% to 15% | 22% to 23% | 20% to 21% | | Adjusted Income from Operations | $42.5 to $43.5 | $177 to $181 | $161 to $166 | | Adjusted Operating Margin % | 15.7% to 16.2% | 16.7% to 17.2% | 15.4% to 16.1% | | Adjusted Earnings Per Share (Adjusted EPS) | $0.05 to $0.06 | $0.20 to $0.22 | $0.16 to $0.20 | [Company Information](index=2&type=section&id=Company%20Information) This section details SailPoint's enterprise identity security focus, non-GAAP financial measures, key business metrics, and corporate conversion information [About SailPoint](index=2&type=section&id=About%20SailPoint) SailPoint is a leader in enterprise identity security, providing a unified platform to manage and secure access for human and digital identities - SailPoint is a leader in enterprise identity security, focusing on securing human and digital identities[10](index=10&type=chunk) - The company offers a unified, intelligent, and extensible platform for identity-first security, helping enterprises manage access and defend against threats[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) SailPoint uses non-GAAP financial measures to provide a clearer understanding of its core operating performance by excluding specific non-recurring or non-cash items - SailPoint uses non-GAAP measures (**Adjusted income from operations**, **Adjusted operating margin**, **Adjusted EPS**, **Free cash flow**, **Free cash flow margin**) to clarify and enhance understanding of past performance[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) - These non-GAAP measures exclude items such as equity-based compensation, payroll taxes related to IPO-accelerated awards and RSUs, amortization of acquired intangible assets, and acquisition-related expenses[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The company believes these adjustments enable comparison of underlying business performance, evaluate cost trends, and enhance comparability with other technology companies[17](index=17&type=chunk) [Definitions and Rationale](index=2&type=section&id=Definitions%20and%20Rationale) This section defines key non-GAAP financial measures and explains the rationale behind their use, detailing specific exclusions for a clearer view of core operations - Adjusted income from operations excludes equity-based compensation, payroll taxes, amortization of acquired intangibles, acquisition-related expenses, and other specific non-recurring items[11](index=11&type=chunk) - Adjusted operating margin is defined as adjusted income from operations divided by total revenue[12](index=12&type=chunk) - Adjusted EPS is calculated based on adjusted net income divided by diluted weighted average shares outstanding, with a fixed projected tax rate of **24.5% for fiscal year 2026**[13](index=13&type=chunk)[14](index=14&type=chunk) - Free cash flow is defined as net cash provided by (used in) operating activities, less cash used for purchases of property and equipment and capitalized software development costs, used as a measure of financial progress[15](index=15&type=chunk) [Specific Adjustments](index=3&type=section&id=Specific%20Adjustments) This section details the specific adjustments made to GAAP figures for non-GAAP reporting, including exclusions for equity-based compensation, payroll taxes, and acquisition-related costs - Equity-based compensation expense is excluded due to its variability and irrelevance to core operating performance[18](index=18&type=chunk) - Payroll taxes related to IPO-accelerated awards and RSUs are excluded as they are one-time or highly variable and unrelated to core operating performance[19](index=19&type=chunk)[20](index=20&type=chunk) - Amortization of acquired intangible assets and impairment of intangible assets are excluded to provide a more meaningful comparison of operating results over time[21](index=21&type=chunk) - Acquisition-related costs are excluded as they are not indicative of ongoing operating performance[22](index=22&type=chunk) - Benefit from amortization related to acquired contract acquisition costs is adjusted to reflect the full amount of commission expense, providing a consistent basis for comparison[23](index=23&type=chunk) [Limitations of Non-GAAP Measures](index=4&type=section&id=Limitations%20of%20Non-GAAP%20Measures) Non-GAAP financial measures may not be comparable across companies and should not be considered in isolation from GAAP measures due to excluded material expenses - Non-GAAP financial measures may not be directly comparable to those of other companies due to differing calculation methodologies[24](index=24&type=chunk) - These measures are not prepared in accordance with GAAP and exclude expenses that may materially impact reported financial results, thus should not be considered in isolation or as a substitute for GAAP measures[24](index=24&type=chunk) [Definitions of Certain Key Business and Other Metrics](index=4&type=section&id=Definitions%20of%20Certain%20Key%20Business%20and%20Other%20Metrics) SailPoint defines key operating metrics such as Annual Recurring Revenue (ARR) and SaaS ARR as annualized values of subscription contracts, with subscription revenue recognized ratably - Annual Recurring Revenue (ARR) is defined as the annualized value of SaaS, maintenance, term subscription, and other subscription contracts as of the measurement date[25](index=25&type=chunk) - SaaS Annual Recurring Revenue (SaaS ARR) is specifically the annualized value of SaaS contracts[26](index=26&type=chunk) - Subscription revenue includes fees for SaaS offerings, term subscriptions, maintenance and support of perpetual license solutions, and other subscription services, recognized ratably over the agreement term[28](index=28&type=chunk)[29](index=29&type=chunk) [Explanatory Note Regarding Our Corporate Conversion](index=5&type=section&id=Explanatory%20Note%20Regarding%20Our%20Corporate%20Conversion) SailPoint Parent, LP converted to SailPoint, Inc. on February 12, 2025, in connection with its IPO, affecting how company references are interpreted - SailPoint Parent, LP converted into SailPoint, Inc. on **February 12, 2025**, in connection with its IPO[30](index=30&type=chunk) - References to 'SailPoint' refer to the limited partnership before the conversion and the corporation after[30](index=30&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section disclaims forward-looking statements, which are subject to uncertainties and risks that could cause actual results to differ materially from expectations - The report contains forward-looking statements subject to uncertainties, risks, and changes in circumstances that could cause actual results to differ materially[31](index=31&type=chunk) - Key risk factors include the ability to sustain growth, attract and retain customers, deepen existing customer relationships, grow the identity security market, maintain partner relationships, and compete successfully[32](index=32&type=chunk) - Other risks involve operational complexity, brand reputation, industry conditions, market opportunity accuracy, personnel management, corporate culture, AI integration, security breaches, service disruptions, and compliance with regulations[32](index=32&type=chunk) [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents SailPoint's condensed consolidated statements of operations, balance sheets, and cash flows for the reported periods [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2026, SailPoint reported total revenue of $264.36 million, significantly reducing its GAAP operating loss to $(40.80) million and net loss to $(10.55) million Condensed Consolidated Statements of Operations (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------------- | :------- | :------- | | Total Revenue | $264,359 | $198,575 | | Gross Profit | $177,806 | $123,313 | | Loss from Operations | $(40,798) | $(65,830) | | Net Loss | $(10,552) | $(87,130) | | Net Loss per Share, Basic and Diluted | $(0.02) | $(2.97) | | Weighted Average Shares Outstanding, Basic and Diluted | 555,757 | 82,703 | Condensed Consolidated Statements of Operations (Six Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------------- | :------- | :------- | | Total Revenue | $494,827 | $386,231 | | Gross Profit | $305,461 | $238,803 | | Loss from Operations | $(225,763) | $(134,023) | | Net Loss | $(197,864) | $(176,306) | | Net Loss per Share, Basic and Diluted | $(0.42) | $(5.89) | | Weighted Average Shares Outstanding, Basic and Diluted | 528,355 | 82,564 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of July 31, 2025, total assets increased to $7.45 billion, cash and equivalents rose to $271.05 million, and total liabilities decreased to $629.80 million due to debt repayment Condensed Consolidated Balance Sheets (in thousands) | Metric | July 31, 2025 | January 31, 2025 | | :----------------------------------- | :-------------- | :--------------- | | Cash and Cash Equivalents | $271,052 | $121,293 | | Total Current Assets | $626,600 | $512,382 | | Goodwill | $5,151,668 | $5,151,668 | | Intangible Assets, net | $1,460,597 | $1,560,723 | | 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) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q2 2026, SailPoint generated $49.95 million in net cash from operating activities, a significant improvement, resulting in a $42.98 million increase in cash and equivalents Condensed Consolidated Statements of Cash Flows (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------------- | :------- | :------- | | Net Cash Provided by (Used in) Operating Activities | $49,945 | $(52,797) | | Net Cash Used in Investing Activities | $(3,987) | $(3,819) | | Net Cash Provided by (Used in) Financing Activities | $(2,977) | $(415) | | Net Change in Cash, Cash Equivalents and Restricted Cash | $42,981 | $(57,031) | | Cash, Cash Equivalents and Restricted Cash, End of Period | $277,316 | $96,557 | Condensed Consolidated Statements of Cash Flows (Six Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------------- | :-------- | :-------- | | Net Cash Provided by (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 | [Supplemental Financial Information](index=10&type=section&id=Supplemental%20Financial%20Information) This section provides detailed revenue breakdowns and comprehensive reconciliations of GAAP to non-GAAP financial measures [Supplemental Schedules: Revenue Breakdown](index=10&type=section&id=Supplemental%20Schedules%3A%20Revenue%20Breakdown) SailPoint's Q2 2026 revenue breakdown shows strong growth in SaaS and Term subscriptions, with total subscription revenue increasing 36% year-over-year Revenue Breakdown (Three Months Ended July 31, in thousands) | Revenue Type | 2025 | 2024 | % Change | | :---------------------- | :------- | :------- | :------- | | SaaS | $144,758 | $105,716 | 37 % | | Maintenance and support | $38,471 | $38,909 | (1) % | | Term subscriptions | $58,120 | $32,630 | 78 % | | Other subscription services | $6,588 | $4,556 | 45 % | | **Total subscription** | **$247,937** | **$181,811** | **36 %** | | Perpetual licenses | $430 | $22 | ** | | Services and other | $15,992 | $16,742 | (4) % | | **Total revenue** | **$264,359** | **$198,575** | **33 %** | Revenue Breakdown (Six Months Ended July 31, in thousands) | Revenue Type | 2025 | 2024 | % Change | | :---------------------- | :------- | :------- | :------- | | SaaS | $276,573 | $202,783 | 36 % | | Maintenance and support | $75,860 | $77,178 | (2) % | | Term subscriptions | $98,160 | $63,315 | 55 % | | Other subscription services | $12,667 | $8,627 | 47 % | | **Total subscription** | **$463,260** | **$351,903** | **32 %** | | Perpetual licenses | $435 | $91 | ** | | Services and other | $31,132 | $34,237 | (9) % | | **Total revenue** | **$494,827** | **$386,231** | **28 %** | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) SailPoint's GAAP to non-GAAP reconciliations reveal improved adjusted profitability, with Q2 2026 adjusted operating margin at 20.4% and Adjusted EPS at $0.07 GAAP to Adjusted Gross Profit Reconciliation (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | GAAP Gross Profit | $177,806 | $123,313 | | GAAP Gross Profit Margin | 67.3 % | 62.1 % | | Equity-based compensation expense | 2,612 | 3,215 | | Amortization of acquired intangible assets | 26,322 | 25,890 | | **Adjusted Gross Profit** | **$206,740** | **$152,418** | | **Adjusted Gross Profit Margin** | **78.2 %** | **76.8 %** | GAAP to Adjusted Income from Operations Reconciliation (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | GAAP Income (Loss) from Operations | $(40,798) | $(65,830) | | GAAP Income (Loss) from Operations Margin | (15.4) % | (33.2) % | | Equity-based compensation expense | 48,418 | 24,390 | | Amortization of acquired intangible assets | 50,214 | 64,479 | | Amortization of acquired contract acquisition costs | (5,444) | (6,559) | | Acquisition-related expenses and Thoma Bravo monitoring fees | 1,609 | 4,714 | | **Adjusted Income (Loss) from Operations** | **$53,999** | **$21,194** | | **Adjusted Operating Margin** | **20.4 %** | **10.7 %** | GAAP to Adjusted Net Income and EPS Reconciliation (Three Months Ended July 31, in thousands, except per share amounts) | Metric | 2025 | 2024 | | :------------------------------------------------- | :------- | :------- | | GAAP Net Loss | $(10,552) | $(87,130) | | Equity-based compensation expense | 48,418 | N/A | | Amortization of acquired intangible assets | 50,214 | N/A | | Amortization of acquired contract acquisition costs | (5,444) | N/A | | Acquisition-related expenses and Thoma Bravo monitoring fees | 1,609 | N/A | | Tax effect of adjustments | (44,281) | N/A | | **Adjusted Net Income** | **$39,964** | N/A | | **Adjusted EPS, diluted** | **$0.07** | N/A | | Shares used in computing adjusted EPS, diluted | 557,878 | N/A | [Gross Profit Reconciliation](index=11&type=section&id=Gross%20Profit%20Reconciliation) This section reconciles GAAP to adjusted gross profit, detailing adjustments for equity-based compensation and amortization of acquired intangible assets GAAP to Adjusted Gross Profit Reconciliation (Six Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | GAAP Gross Profit | $305,461 | $238,803 | | GAAP Gross Profit Margin | 61.7 % | 61.8 % | | Equity-based compensation expense | 24,204 | 6,553 | | Amortization of acquired intangible assets | 52,382 | 51,708 | | **Adjusted Gross Profit** | **$382,681** | **$297,064** | | **Adjusted Gross Profit Margin** | **77.3 %** | **76.9 %** | [Subscription Gross Profit Reconciliation](index=11&type=section&id=Subscription%20Gross%20Profit%20Reconciliation) This section reconciles GAAP to adjusted subscription gross profit, highlighting adjustments for equity-based compensation and amortization of acquired intangible assets GAAP to Adjusted Subscription Gross Profit Reconciliation (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | GAAP Subscription Gross Profit | $177,494 | $123,323 | | GAAP Subscription Gross Profit Margin | 71.6 % | 67.8 % | | Equity-based compensation expense | 1,931 | 1,626 | | Amortization of acquired intangible assets | 26,322 | 25,844 | | **Adjusted Subscription Gross Profit** | **$205,747** | **$150,793** | | **Adjusted Subscription Gross Profit Margin** | **83.0 %** | **82.9 %** | [Operating Income Reconciliation](index=11&type=section&id=Operating%20Income%20Reconciliation) This section reconciles GAAP to adjusted income from operations, detailing adjustments for equity-based compensation, amortization, and acquisition-related expenses GAAP to Adjusted Income from Operations Reconciliation (Six Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :-------- | :-------- | | GAAP Income (Loss) from Operations | $(225,763) | $(134,023) | | GAAP Income (Loss) from Operations Margin | (45.6) % | (34.7) % | | Equity-based compensation expense | 208,877 | 50,247 | | Amortization of acquired intangible assets | 100,125 | 128,886 | | Amortization of acquired contract acquisition costs | (11,208) | (13,304) | | Acquisition-related expenses and Thoma Bravo monitoring fees | 2,192 | 8,580 | | **Adjusted Income (Loss) from Operations** | **$77,622** | **$40,386** | | **Adjusted Operating Margin** | **15.7 %** | **10.5 %** | [Operating Expense Reconciliations](index=12&type=section&id=Operating%20Expense%20Reconciliations) This section provides detailed reconciliations of GAAP to adjusted operating expenses, including sales and marketing, research and development, and general and administrative GAAP to Adjusted Sales and Marketing Expense Reconciliation (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | GAAP Sales and Marketing Expense | $131,289 | $119,565 | | Equity-based compensation expense | (18,203) | (8,934) | | Amortization of acquired intangible assets | (23,797) | (38,494) | | Amortization related to acquired contract acquisition costs | 5,444 | 6,559 | | Acquisition-related expenses | (1,609) | — | | **Adjusted Sales and Marketing Expense** | **$93,124** | **$78,696** | GAAP to Adjusted Research and Development Expense Reconciliation (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | GAAP Research and Development Expense | $48,111 | $43,108 | | Equity-based compensation expense | (7,512) | (6,030) | | Amortization of acquired intangible assets | (95) | (95) | | **Adjusted Research and Development Expense** | **$40,504** | **$36,983** | GAAP to Adjusted General and Administrative Expense Reconciliation (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | GAAP General and Administrative Expense | $39,204 | $26,470 | | Equity-based compensation expense | (20,091) | (6,211) | | Acquisition-related expenses and Thoma Bravo monitoring fees | — | (4,714) | | **Adjusted General and Administrative Expense** | **$19,113** | **$15,545** | [Free Cash Flow Reconciliation](index=12&type=section&id=Free%20Cash%20Flow%20Reconciliation) This section reconciles GAAP net cash from operating activities to free cash flow, detailing deductions for property, equipment, and capitalized software development costs GAAP to Free Cash Flow Reconciliation (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------------- | :------- | :-------- | | GAAP Net Cash Provided by (Used in) Operating Activities | $49,945 | $(52,797) | | Less: Purchase of property and equipment | (962) | (889) | | Less: Capitalized software development costs | (3,025) | (2,831) | | **Free Cash Flow** | **$45,958** | **$(56,517)** | | GAAP Net Cash Provided by (Used in) Operating Activities Margin | 18.9 % | (26.6) % | | **Free Cash Flow Margin** | **17.4 %** | **(28.5) %** | GAAP to Free Cash Flow Reconciliation (Six Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------------- | :-------- | :-------- | | GAAP Net Cash Provided by (Used in) Operating Activities | $(46,862) | $(108,183) | | Less: Purchase of property and equipment | (3,153) | (1,476) | | Less: Capitalized software development costs | (4,731) | (5,345) | | **Free Cash Flow** | **$(54,746)** | **$(115,004)** | | GAAP Net Cash Provided by (Used in) Operating Activities Margin | (9.5) % | (28.0) % | | **Free Cash Flow Margin** | **(11.1) %** | **(29.8) %** | [Adjusted Net Income and EPS Reconciliation](index=13&type=section&id=Adjusted%20Net%20Income%20and%20EPS%20Reconciliation) This section reconciles GAAP net loss to adjusted net income and EPS, detailing various adjustments including equity-based compensation and tax effects GAAP to Adjusted Net Income and EPS Reconciliation (Six Months Ended July 31, in thousands, except per share amounts) | Metric | 2025 | 2024 | | :------------------------------------------------- | :------- | :------- | | GAAP Net Loss | $(197,864) | $(176,306) | | Equity-based compensation expense | 208,877 | N/A | | Payroll taxes for IPO-accelerated awards and RSUs | 3,399 | N/A | | Amortization of acquired intangible assets | 100,125 | N/A | | Amortization of acquired contract acquisition costs | (11,208) | N/A | | Acquisition-related expenses and Thoma Bravo monitoring fees | 2,192 | N/A | | Tax effect of adjustments | (62,334) | N/A | | **Adjusted Net Income** | **$43,187** | N/A | | **Adjusted EPS, diluted** | **$0.08** | N/A | | Shares used in computing adjusted EPS, diluted | 556,712 | N/A |

Grew ARR 28% year-over-year to $982 millionIncreased SaaS ARR 37% year-over-year to $623 millionDelivered cash flows from operating activities of $50 million, and free cash flow of $46 million AUSTIN, Texas, Sept. 09, 2025 (GLOBE NEWSWIRE) -- SailPoint, Inc. (Nasdaq: SAIL), a leader in enterprise identity security, today announced financial results for its fiscal second quarter ended July 31, 2025. "SailPoint delivered strong second quarter results that exceeded all previously guided metrics, driven by 37% ...