SailPoint, Inc. Q4 FY2020 earnings call

• Strong Q4 and FY20 results driven by solid execution and high demand for identity platform. - 2020 showed significant demand for identity security as working from anywhere highlighted access risk. - SaaS mix increasing, with SaaS gross margins reaching record levels. - Integration of Intello expected to extend platform, focusing on SaaS app management. - Disciplined expense management leading to non-GAAP operating income of $13 million, well above expectations.

For the full year 2020, total revenue was approximately $365 million, representing 27% year-on-year growth. Fourth quarter total revenue was approximately $103 million, a 16% year-over-year growth and the largest quarter in history. Subscription revenue in Q4 was $56 million, a 38% year-over-year growth. SaaS revenue for 2020 was $67 million, an increase of 58% from 2019. ARR closed at $251 million, representing 40% year-over-year growth. SaaS gross margins improved to record levels, benefiting from scale and DevOps/engineering focus. SaaS represented the highest percentage of new bookings in Q4, with subscription arrangements (SaaS or term license) making up over two thirds of new bookings.

• Guiding SaaS mix for full year 2021 to be about 24% of total revenue. - Expect IdentityIQ to decline as growth comes from IdentityNow. - Pipeline includes both SaaS and on-prem software, but current expectation is based on guided mix. - ARR closed at $251M with 40% YOY growth, indicating continued growth trajectory.

• Market shift towards SaaS could impact on-prem sales over time. - Competitive landscape could affect market share. - Dependence on key partners and sales reps for SaaS adoption.

Q: Congrats on the strong close to the year. Curious on incentivizing reps to lean into SaaS.

A: Yes, provided slight incentives last year which worked, currently dialing back but aligned to SaaS as future direction.

Q: On integration of Intello.

A: Intello's technology helps with SaaS app management, seen as extension of platform with focus on integrating into SailPoint's offerings.

Q: Impact of SolarWinds on demand.

A: Not a fundamental shift in demand, customers already aware of risks, just keeps spotlight on importance of knowing who has access.

Q: Reduced friction in selling SaaS to large enterprises.

A: Market pull from customers, strength of product, and comfort of sales force leading to increased SaaS sales.

Q: License revenue decline.

A: License revenue expected to decline over time as IdentityNow serves more market segments, IdentityIQ remaining for specific customer needs.

Q: Competitive displacements relative to prior quarters.

A: Steady drumbeat, technology capabilities in SaaS product including AI driving interest but no notable uptick in rate.

Q: Impact of remote work on IGA solution need.

A: Pandemic and remote work exposed lack of visibility/control over access, causing urgency to address, but not a dramatic shift.