SailPoint Technologies Holdings’ Progress Accelerates — The Motley Idiot

SailPoint Technologies Holdings’ Progress Accelerates — The Motley Idiot

SailPoint Technologies Holdings (NYSE:SAIL), a software program enterprise focused on identification governance — which allows businesses control who has entry to what in the electronic environment — documented its 3rd-quarter final results on Wednesday. Earnings advancement accelerated sequentially to fifty two% thanks to advancement in its licensing organization that was a great deal greater than predicted. The powerful major-line functionality allowed the enterprise to crank out a surprise earnings and generate robust functioning money move. But management also predicted that the torrid price of advancement was about to slow down drastically. 

SailPoint Q3 final results: The uncooked quantities


Q3 2018

Q3 2017

Year-Around-Year Transform


$66.four million 

$forty three.six million

fifty two%

GAAP functioning earnings

$four.5 million

$.four million


GAAP net revenue (reduction)

$three.three million

($six.four million)


GAAP earnings (reduction) for each share




Data supply: SailPoint.

What transpired with SailPoint this quarter?

  • License revenue grew 66% to $ million. The acquire was driven by greater-than-predicted uptake amongst its clients in the federal govt.
  • Subscription revenue grew 54% to $28.5 million. Solutions and other revenue increased 22% to $nine.8 million.
  • Total revenue of $66.four million was extra than $ten million earlier mentioned the major close of management’s assistance selection.
  • Worldwide product sales have been 31% of whole revenue. This represents a sequential decline that is typically attributable to the powerful advancement in its domestic license organization. Management mentioned that it expects this number to bounce around from quarter to quarter.
  • Consolidated gross margin expanded by five hundred basis factors to eighty two%. Improved scale and powerful contribution from the licensing organization (which features a gross margin of 99%) aided generate the enhance.
  • On a non-GAAP (altered) basis, functioning margin came in at eighteen%. Non-GAAP net revenue and earnings for each share (EPS) have been $eleven.two million and $.twelve, respectively. These quantities significantly exceeded assistance.
A person holds a smartphone that contains a login screen.

Picture supply: Getty Visuals.

What management had to say

On the contact with investors, CEO Mark McClain expounded on why his enterprise continues to win in the marketplace: “We consider our final results are thanks to a continual need for identification governance. Our marketplace management and our determination to providing ground breaking greatest-in-course answers to aid shoppers secure electronic identities for all buyers, all applications, and all details.”

McClain also talked up new products that he suggests aid the enterprise serve its clients greater. “With new releases to the two IdentityIQ and IdentityNow, our about one,100 shoppers are greater organized to govern electronic identities for their buyers, whether or not human or nonhuman software program bots their applications, from legacy mainframe to cloud applications and their details, no matter of in which the information are saved,” he claimed.

Hunting ahead

While SailPoint just documented blowout quarterly final results, the assistance that CFO Cam McMartin shared with investors indicates that the company’s hypergrowth is about to slow drastically:

Metric This fall 2018 Steerage Selection
This fall 2017 Real
Total revenue $70 million to $seventy one.5 million $67.8 million
Non-GAAP functioning revenue $8.5 million to $ten million $16.7 million
Non-GAAP EPS $.08 to $.09 $.seventeen

Data supply: SailPoint.

But the upbeat 3rd-quarter final results did enable management to drastically enhance its assistance for the total calendar year 2018:

Metric New Steerage Selection
Previous Steerage Selection
Total revenue $240.7 million to $242.two million $233 million to $236 million
Non-GAAP functioning revenue $27.8 million to $29.three million $seventeen million to $19 million
Non-GAAP EPS $.25 to $.126 $.twelve to $.14

Data supply: SailPoint.

McMartin claimed he was quite pleased with the company’s functionality and reaffirmed his perception that SailPoint is perfectly positioned for monetary prosperity. “We continue to consider we have an chance to generate powerful major-line advancement for several many years, though continuing to produce non-GAAP functioning revenue and constructive free money move,” he claimed.

Brian Feroldi has no position in any of the shares described. The Motley Idiot recommends SailPoint Technologies. The Motley Idiot has a disclosure plan.


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