SailPoint, Inc. Q4 FY2025 earnings call

• Industry leadership: Over 20 years of expertise in enterprise identity security, with Atlas platform providing broad and deep governance of access and identity, and significant leadership in governance and administration.
• Innovation: SaaS-based Atlas platform drives time to value, security, and efficiency. Introduced new innovations like privileged task automation and machine identity security, and announced Harbor Pilot and agent identity security. Appointed Chandra Gnanasambandam as Executive VP of Product and CTO to lead innovation.
• Efficient growth: Solid new logo acquisition supported by growing pipeline, strong customer expansion through cross-sell, up-sell, and SaaS migrations (dollar-based net retention rate steady at 114%), and increasing demand for new products like Non-Employee Risk Management and Machine Identity Security.

SailPoint ended fiscal 2025 with $877 million in annual recurring revenue (ARR), a 29% year-over-year increase, with SaaS ARR growing 39%. In Q4, total revenue was $240 million, up 18% year-over-year, and subscription revenue was $224 million, up 22% year-over-year. For the full year 2025, total revenue was $862 million, up 23% year-over-year, and subscription revenue was $794 million, up 27% year-over-year. SaaS ARR now represents over 60% of total ARR. Additionally, there was an almost 80% year-over-year increase in customers with ARR greater than $1 million.

• Fiscal Q1 2026: Expect ARR to be $898 million (+27% y/y), revenue $225 million (+20% y/y), adjusted operating margin 6.4%, diluted share count ~564 million shares, and adjusted EPS loss of $0.01.
• Fiscal Year 2026: Expect ARR to be $1.08 billion (+23% y/y), revenue ~$1.03 billion (+20% y/y), adjusted operating margin 14.9%, diluted share count ~570 million shares, and adjusted EPS $0.16.

• Macro environment impact: Uncertainty in macro environment could affect demand, though initial signals show demand remains high.
• Federal business: Geopolitical uncertainty and changes in the new administration could impact US federal business, but no immediate negative impact seen yet.
• Term mix impact: Term and SaaS mix can impact revenue and operating margins, with Q1 2026 expecting an 80-20 mix on term and SaaS recognition.

Q: How has the macro environment impacted demand in the quarter and trends through February and March?

A: Mark McClain said identity security is still top priority in most CIO and CISO environments, and while there are headwinds, demand remains high with no significant impact seen yet.

Q: Can you talk about the US federal business, its size, and how it's thought about next year?

A: Brian Carolan said public sector business represents about 12%-14% of revenue, US Fed is less than half of that, with average tenure >5 years and FedRAMP certified, watching closely but no immediate impact seen.

Q: How is machine and non-human identities being priced?

A: Brian Carolan said Machine Identity Security was launched in Oct 2024, with strong demand, closing Q4 double-digits in customers and low millions in ARR contributions, priced at about a third of a human identity initially.

Q: How does the identity consolidation opportunity play out, especially with CyberArk's acquisition?

A: Mark McClain said SailPoint focuses on mid to large enterprises with complex IT environments, and sees consolidation more in SMB space, with no competitive pressure in mid-large customers for consolidated solutions as they focus on solving complex identity security problems.

Q: What about mix of upfront vs ratable recognition and migrations?

A: Brian Carolan said guiding for FY '26, SaaS to be ~90% of net new product ARR, 60-40 mix in upfront vs ratable recognition; about 10% of maintenance ARR migrated, with 2x-3x uplift on migrated ARR contributing 3%-4% to net revenue retention.