Earnings release
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SailPoint Announces Fiscal Second Quarter 2027 Results • Grew ARR 25% year-over-year to $1.231 billion • Increased SaaS ARR 36% year-over-year to $847 million, with net new SaaS ARR up 34% year-over-year, accounting for 97% of net new ARR • Delivered cash flows from operating activities of $45 million, and free cash flow of $37 million AUSTIN, Texas--September 9, 2026—SailPoint, Inc. (Nasdaq: SAIL), a leader in enterprise identity security, today announced financial results for its fiscal second quarter ended July 31, 2026. "Our strong Q2 results demonstrate the powerful compounding effect of our identity security platform and AI-driven innovations,” said Mark McClain, SailPoint CEO and Founder. “This momentum reinforces our confidence in our long-term trajectory, keeping us firmly on track to achieve our FY’29 targets, including at least $2.1 billion of ARR. By unifying human and agentic identity under one control plane, SailPoint is redefining security for the AI era.” Fiscal Second Quarter 2027 Financial Highlights • Annual Recurring Revenue (ARR): Total ARR was $1.231 billion, an increase of 25% year-over-year. SaaS ARR was $847 million, an increase of 36% year-over-year. • Revenue: Total revenue was $309 million, an increase of 17% year-over-year. Subscription revenue was $295 million, an increase of 19% year-over-year. • Operating Income (Loss): GAAP operating loss was $(59) million, or (19)% of revenue, in fiscal Q2 2027, compared to $(41) million, or (15)% of revenue, in fiscal Q2 2026. Adjusted income from operations was $63 million, or 20% of revenue, in fiscal Q2 2027, compared to $54 million, or 20% of revenue, in fiscal Q2 2026. Recent Business Highlights ▪ AI-driven ARR exceeded $70 million. ▪ AI-driven solutions accounted for more than 30% of net new ARR in the quarter. ▪ Existing customers who adopted an AI-driven solution increased their annual spend by more than 60% in the quarter. ▪ More than two-thirds of migrations completed in the quarter included an AI-driven solution. ▪ SaaS customer count grew 16% year-over-year, with ARR per SaaS customer growing 17% year-over-year to more than $400,000. ▪ Remaining performance obligation (RPO) growth accelerated to 30% year-over-year to reach $1.9 billion, and current RPO (cRPO) grew 27% year-over-year to $931 million. ▪ Unveiled the SailPoint Identity Security solution – the powerful combination of SailPoint Agentic Fabric and SailPoint Human Fabric to deliver a continuous, real-time loop to discover, govern, and protect today’s complex digital environments. ▪ Announced the release of the SailPoint Cursor Enterprise connector, enabling organizations to securely govern both human software engineers and autonomous AI background agents from a single, unified control plane. ▪ Announced SailPoint Agentic Acceleration, an AI-powered methodology to help enterprises move to our cloud solutions by automating the majority of the modernization process. ▪ Completed the acquisition of Entro Security, which enhances SailPoint’s holistic identity security solution that bridges broad human accountability with the deep, granular security required for machine and agentic identities. ▪ Launched Unified Platform Access, providing technology partners with frictionless, direct access to the SailPoint platform.
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▪ Introduced a new integration with the Claude Compliance API to provide enterprise-grade identity security for AI platforms. ▪ KuppingerCole ranked SailPoint first in Product, Innovation, and Market Leadership in identity and access governance as of August 13, 2026. Financial Outlook For the third quarter and full year of fiscal 2027, SailPoint expects (in millions, except per share amounts and percentages): Q3’27 Guidance FY’27 Guidance Total ARR $1,288 to $1,292 $1,375 to $1,385 Total ARR YoY growth % 24% 22% to 23% Total revenue $326 to $330 $1,265 to $1,275 Total revenue YoY growth % 16% to 17% 18% to 19% Adjusted income from operations $57.5 to $58.5 $239 to $244 Adjusted operating margin % 17.4% to 17.9% 18.7% to 19.3% Adjusted earnings per share (Adjusted EPS) $0.07 to $0.08 $0.30 to $0.34 SailPoint also reiterates the following fiscal 2029 targets, which were discussed at SailPoint’s June 2026 Investor Day: • At least $2.1 billion of ARR • At least $800 million of AI-driven ARR • At least 22% adjusted operating margin • At least $400 million of free cash flow These statements regarding SailPoint’s expectations of its financial outlook are forward-looking, and actual results may differ materially. Refer to “Forward-Looking Statements” below for information on the factors that could cause SailPoint’s actual results to differ materially from these forward-looking statements. SailPoint has not reconciled its expectations as to adjusted income (loss) from operations, adjusted operating margin, adjusted EPS and free cash flow to their most directly comparable GAAP measures due to the high variability and difficulty in making accurate forecasts and projections of certain items that impact such GAAP measures. In particular, adjusted income (loss) from operations, adjusted operating margin, and adjusted EPS exclude stock-based compensation expense, which is affected by future hiring, turnover, and retention needs, as well as the future fair market value of our common stock, all of which are difficult to predict and subject to change. The actual amount of the excluded stock-based compensation expense will have a significant impact on SailPoint’s GAAP income (loss) from operations and GAAP net income (loss) per basic and diluted common share. SailPoint’s forward-looking adjusted income (loss) from operations, adjusted operating margin and adjusted EPS also exclude payroll taxes related to restricted stock units (RSUs), amortization of acquired intangibles as well as acquisition-related costs and severance of certain key executives, if applicable, all of which are also difficult to predict accurately. Similarly, SailPoint’s forward-looking cash flow from operating activities is difficult to accurately predict. Accordingly, reconciliations of our forward-looking adjusted income (loss) from operations, adjusted operating margin, adjusted EPS and free cash flow to their most directly comparable GAAP measures are not available without unreasonable effort. Investor Conference Call and Webcast
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SailPoint will host a conference call today at 8:30 a.m. Eastern Time to discuss the results and outlook. A live webcast of the conference call and a presentation regarding SailPoint’s fiscal second quarter 2027 financial results and outlook will be available on SailPoint’s website at https://investors.sailpoint.com. An audio replay of the conference call will be available on the investor relations website for one year. About SailPoint At SailPoint, we believe enterprise security must start with identity at the foundation. Today’s enterprise runs on a diverse workforce of not just human but also digital identities—and securing them all is critical. Through the lens of identity, SailPoint empowers organizations to seamlessly manage and secure access to applications and data at speed and scale. Our unified, intelligent, and extensible platform delivers identity-first security, helping enterprises defend against dynamic threats while driving productivity and transformation. Trusted by many of the world’s most complex organizations, SailPoint secures the modern enterprise. Non-GAAP Financial Measures In addition to our financial information presented in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding of past performance, including the following: Adjusted income from operations, which we define as income (loss) from operations excluding equity-based compensation expense, payroll taxes related to awards that were accelerated upon the closing of our initial public offering (the IPO) and payroll taxes related to RSUs, amortization of acquired intangible assets which includes impairment charges, impairment of intangible assets, acquisition-related expenses (including fair value adjustments to acquisition-contingent consideration), benefit from amortization related to acquired contract acquisition costs, Thoma Bravo monitoring fees (which were annual service fees for consultation and advice related to corporate strategy, budgeting of future corporate investments, acquisition and divestiture strategies, and debt and equity financings pursuant to an advisory services agreement that was terminated upon the closing of the IPO), and restructuring expenses. Adjusted operating margin, which we define as adjusted income from operations divided by total revenue. Adjusted EPS (or non-GAAP net income (loss) available to common stockholders per diluted share), which we define as adjusted net income (loss) divided by the diluted weighted average shares outstanding, except that solely for the fiscal year ended January 31, 2026 (and all periods therein), we calculated adjusted EPS based on the number of diluted shares outstanding as of the end of such period rather than the diluted weighted average shares outstanding for such period. We believe that using such a denominator provides a more meaningful comparison with subsequent periods due to the IPO closing after the beginning of fiscal year 2026. We calculate adjusted net income (loss) as net income (loss) on a GAAP basis excluding equity-based compensation expense, payroll taxes related to awards that were accelerated upon the closing of the IPO (IPO-accelerated awards) and payroll taxes related to RSUs, amortization of acquired intangible assets which includes impairment charges, impairment of intangible assets, acquisition-related expenses (including fair value adjustments to acquisition-contingent consideration), Thoma Bravo monitoring fees, benefit from amortization related to acquired contract acquisition costs, and restructuring expenses, and adjusted for the income tax effects related to those adjustments. We currently apply a fixed projected tax rate of 24.5% when calculating or estimating adjusted net income for the fiscal year ending January 31, 2027 and all periods therein for consistency across interim reporting periods within such fiscal year. This rate may be adjusted during the year if significant events that have a material impact on the rate occur, such as significant changes in our geographic mix of revenue and expenses, tax law changes, and acquisitions. Adjusted gross profit, which we define as gross profit excluding equity-based compensation expense, payroll taxes related to IPO-accelerated awards and payroll taxes related to RSUs, amortization of acquired intangible assets which includes impairment charges, impairment of intangible assets, acquisition-related expenses and restructuring expenses.
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Adjusted gross profit margin, which we define as adjusted gross profit divided by total revenue. Adjusted subscription gross profit, which we define as subscription gross profit excluding equity-based compensation expense, payroll taxes related to IPO-accelerated awards and payroll taxes related to RSUs, amortization of acquired intangible assets which includes impairment charges, impairment of intangible assets, acquisition-related expenses and restructuring expenses. Adjusted subscription gross profit margin, which we define as adjusted subscription gross profit divided by subscription revenue. Free cash flow, which we define as net cash provided by (used in) operating activities, less cash used for purchases of property and equipment, and capitalized software development costs. We use free cash flow as a measure of financial progress in our business, as it balances operating results, cash management, and capital efficiency. We believe information regarding free cash flow provides investors and others with an important perspective on the cash available to make strategic acquisitions and investments, to fund ongoing operations, and to fund other capital expenditures. Free cash flow can be volatile and is sensitive to many factors, including changes in working capital and timing of capital expenditures. Working capital at any specific point in time is subject to many variables including the discretionary timing of expense payments and fluctuations in foreign exchange rates. Free cash flow margin, which we define as free cash flow divided by total revenue. Our non-GAAP financial measures exclude items that do not reflect our ongoing, core operating or business performance, such as equity-based compensation, payroll taxes related to IPO-accelerated awards and payroll taxes related to RSUs, amortization of acquired intangible assets, and acquisition-related expenses (including fair value adjustments to acquisition-contingent consideration). We believe these adjustments enable management and investors to compare our underlying business performance from period to period and provide investors with additional means to evaluate cost and expense trends. We also believe these adjustments enhance comparability of our financial performance against those of other technology companies. Accordingly, our management believes the presentation of our non-GAAP financial measures provides useful information to investors regarding our financial condition and results of operations. In addition, SailPoint’s management uses adjusted income (loss) from operations for budgeting and planning purposes, including with respect to its corporate bonus plan. Our non-GAAP financial measures are adjusted for the following factors, among others: Equity-based compensation expense. We believe that the exclusion of equity-based compensation expense is appropriate because it eliminates the impact of equity-based compensation costs that are based upon valuation methodologies and assumptions that vary over time, and the amount of the expense can vary significantly due to factors that are unrelated to our core operating performance and that can be outside of our control. Although we exclude equity-based compensation expense from our non-GAAP measures, equity-based compensation has been, and will continue to be, an important part of our compensation strategy and a significant component of our expenses and may increase in future periods. Payroll taxes related to IPO-accelerated awards and payroll taxes related to RSUs. We believe that the exclusion of payroll taxes related to IPO-accelerated awards is appropriate as the acceleration was a one-time, non-recurring event. We believe that the exclusion of payroll taxes related to RSUs is appropriate as they are dependent on SailPoint’s stock price and the vesting of such awards and therefore can vary significantly due to factors that are unrelated to our core operating performance and that can be outside of our control. Because the amount of such payroll taxes is highly variable due to factors outside of our control and is unrelated to our core operating performance, our management does not consider them when evaluating the performance of our business or making operating plans (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution than the accounting charges associated with such grants). As with equity-based compensation expense, although we exclude payroll taxes related to RSUs from our non-GAAP measures, such payroll taxes are, and will continue to be, a component of our expenses and may increase in future periods. We note that, unlike equity-based compensation expense, payroll taxes are a cash expense.
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Amortization of acquired intangible assets and impairment of intangible assets. We exclude amortization charges for our acquisition-related intangible assets and impairment of intangible assets for purposes of calculating certain non-GAAP measures to eliminate the impact of these non-cash charges and provide for a more meaningful comparison between operating results from period to period as intangible assets are valued at the time of acquisition and are amortized over the useful life, which can be several years after the acquisition. Acquisition-related costs. We believe that the exclusion of acquisition-related expenses is appropriate as they represent items that management believes are not indicative of our ongoing operating performance. These expenses are primarily composed of legal, accounting, and professional fees incurred that are not capitalizable and that are included within general and administrative expenses. Acquisition-related expenses also include fair value adjustments to acquisition-contingent consideration, which are currently included within sales and marketing expenses. Restructuring expenses. We believe that the exclusion of restructuring expenses, which typically consist of employee severance costs and other exit costs, is appropriate as these costs represent charges that are not indicative of our ongoing operating performance. In addition, our management does not consider these charges when evaluating the performance of our business or when making ongoing operating plans. Amortization related to acquired contract acquisition costs. On August 16, 2022, our predecessor was acquired in an all-cash take-private transaction by Thoma Bravo (the Take-Private Transaction). In accordance with GAAP reporting requirements, we wrote off our contract acquisition costs at the time of the Take-Private Transaction. Therefore, GAAP commissions expenses related to contract acquisition costs after the Take-Private Transaction do not reflect the commissions expense that would have been reported if the contract acquisition costs had not been written off. Accordingly, we believe that presenting the approximate amount of acquisition-related commission expenses (so that the full amount of commission expenses is included) provides a more appropriate representation of commission expenses in a given period and, therefore, provides readers of our financial statements with a more consistent basis for comparison across accounting periods. SailPoint’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry because they may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP and exclude expenses that may have a material impact on our reported financial results. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. SailPoint urges you to review the reconciliations of our non-GAAP financial measures to the comparable GAAP financial measures included below and not to rely on any single financial measure to evaluate our business. Definitions of Certain Key Business and Other Metrics Annual recurring revenue (ARR). We define ARR as the annualized value of SaaS, maintenance, term subscription, and other subscription contracts as of the measurement date. To the extent that we are actively negotiating a renewal or new agreement with a customer after the expiration of a contract, we continue to include that contract’s annualized value in ARR until the customer notifies us that it is not renewing its contract. We calculate ARR by dividing the active contract value by the number of days of the contract and then multiplying by 365. ARR should be viewed independently of revenue as ARR is an operating metric and is not intended to be combined with or to replace revenue. ARR is not a forecast of future revenue, which can be impacted by ASC 606 allocations, and ARR does not consider other sources of revenue that are not recurring in nature. ARR does not have a standardized meaning and is not necessarily comparable to similarly titled measures presented by other companies. SaaS annual recurring revenue (SaaS ARR). We define SaaS ARR as the annualized value of SaaS contracts as of the measurement date. To the extent that we are actively negotiating a renewal or new agreement with a customer after the expiration of a contract, we continue to include that contract’s annualized value in SaaS ARR until the customer notifies us that it is not renewing its contract. We calculate SaaS ARR by dividing the active SaaS contract value by the number of days of the contract and then multiplying by 365. SaaS ARR should be viewed independently of subscription revenue as SaaS ARR is an operating metric and is not intended to be combined with or to replace subscription revenue. SaaS ARR is not a forecast of future subscription revenue, which can be
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impacted by ASC 606 allocations and renewal rates, and does not consider other sources of revenue that are not recurring in nature. SaaS ARR does not have a standardized meaning and is not necessarily comparable to similarly titled measures presented by other companies. AI-driven annual recurring revenue (AI-driven ARR). We define AI-driven ARR (which was previously referred to as AI ARR at our June 2026 Investor Day) as total ARR from our AI solutions, including Agentic Suites, SailPoint Agentic Fabric (SAF), and Agentic add-on modules, as of the measurement date. To the extent that we are actively negotiating a renewal or new agreement with a customer after the expiration of a contract, we continue to include that contract’s annualized value in AI-driven ARR until the customer notifies us that it is not renewing its contract. We calculate AI-driven ARR by dividing the active AI solutions contract value by the number of days of the contract and then multiplying by 365. AI-driven ARR is an operating metric and is not intended to be combined with or to replace any revenue metrics. AI-driven ARR is not a forecast of future revenue from our AI solutions, which can be impacted by ASC 606 allocations and renewal rates, and does not consider other sources of revenue that are not recurring in nature. AI-driven ARR does not have a standardized meaning and is not necessarily comparable to similarly titled measures presented by other companies. Net new annual recurring revenue (net new ARR). We define net new ARR as the change in ARR from the end of the prior quarter for purposes of assessing quarterly achievement, and the change in ARR from the prior year for purposes of assessing annual achievement. Net new SaaS annual recurring revenue (net new SaaS ARR). We define net new SaaS ARR as the change in SaaS ARR from the end of the prior quarter for purposes of assessing quarterly achievement, and the change in SaaS ARR from the prior year for purposes of assessing annual achievement. Subscription revenue. The majority of our revenue relates to subscription revenue which consists of (i) fees for access to, and related support for, the SaaS offerings, (ii) fees for term subscriptions, (iii) fees for ongoing maintenance and support of perpetual license solutions, and (iv) other subscription services such as cloud managed services, and certain professional services. Term subscriptions include the term licenses and ongoing maintenance and support. Maintenance and support agreements consist of fees for providing software updates on a when and if available basis and for providing technical support for software products for a specified term. Subscription revenue, including support for term licenses, is recognized ratably over the term of the applicable agreement. Revenue related to term subscription performance obligations, excluding support for term subscriptions, is recognized upfront at the point in time when the customer has taken control of the software license. Remaining performance obligation (RPO). Our contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. These remaining performance obligations represent contract value that has not yet been recognized as revenue. RPO includes both invoices that have been issued to customers but have not been recognized as revenue and amounts that will be invoiced and recognized as revenue in future periods. Current remaining performance obligation (cRPO). Represents RPO that the Company expects to recognize as revenue over the next 12 months. Explanatory Note Regarding Our Corporate Conversion Prior to February 12, 2025, we were a Delaware limited partnership named SailPoint Parent, LP. On February 12, 2025, in connection with our IPO, SailPoint Parent, LP converted into a Delaware corporation pursuant to a statutory conversion (the Corporate Conversion) and changed its name to SailPoint, Inc. References to “SailPoint,” “we,” and “our” (i) for periods prior to the Corporate Conversion are to SailPoint Parent, LP and, where appropriate, its consolidated subsidiaries and (ii) for periods after the Corporate Conversion are to SailPoint, Inc. and, where appropriate, its consolidated subsidiaries. Forward-Looking Statements This press release and statements made during the above referenced conference call may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements
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regarding our strategy, future operations, financial position, prospects, plans and objectives of management, growth rate and our expectations regarding future revenue, operating income or loss, or earnings or loss per share. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “will be,” “will likely result,” “should,” “expects,” “plans,” “anticipates,” “could,” “would,” “foresees,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “outlook,” or “continue” or the negative of these words or other similar terms or expressions. These forward-looking statements are not guarantees of future performance, but are based on management’s current expectations, assumptions, and beliefs concerning future developments and their potential effect on us, which are inherently subject to uncertainties, risks, and changes in circumstances that are difficult to predict. Our expectations expressed or implied in these forward-looking statements may not turn out to be correct. Our results could be materially different from our expectations because of various risks. Important factors, some of which are beyond our control, that could cause actual results to differ materially from our historical results or those expressed or implied by these forward-looking statements include the following: our ability to sustain historical growth rates; our ability to attract and retain customers; our ability to deepen our relationships with existing customers; the growth in the market for identity security solutions; our ability to maintain successful relationships with each of our partners; the length and unpredictable nature of our sales cycle; our ability to compete successfully against current and future competitors; our ability to successfully integrate acquired businesses and technologies and achieve the expected benefits of such acquisitions; the increasing complexity of our operations; our ability to maintain and enhance our brand or reputation as an industry leader and innovator; unfavorable conditions in our industry or the global economy; our estimated market opportunity and forecasts of our market and market growth may prove to be inaccurate; our ability to hire, train, and motivate our personnel; our ability to maintain our corporate culture; our ability to successfully introduce, use, and integrate artificial intelligence (AI) with our solutions; breaches in our security, cyber attacks, or other cyber risks; interruptions, outages, or other disruptions affecting the delivery of our SaaS solution or any of the third-party cloud-based systems that we use in our operations; our ability to adapt and respond to rapidly changing technology, industry standards, regulations, or customer needs, requirements, or preferences; real or perceived errors, failures, or disruptions in our platform or solutions; the ability of our platform and solutions to effectively interoperate with our customers’ existing or future IT infrastructures; and our ability to comply with our privacy policy or related legal or regulatory requirements. More information on these risks and other potential factors that could affect our financial results is included in our filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our Annual Report on Form 10-K for the year ended January 31, 2026 and subsequent Quarterly Reports on Form 10-Q and other filings. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release or made during the above referenced conference call. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. Any forward-looking statement made in this press release or during the above referenced conference call speaks only as of the date as of which such statement is made, and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise. Investor Relations Contact Scott Schmitz, SVP IR ir@sailpoint.com Media Relations Contact Shannon Paulk, Sr. Manager, Corporate Communications shannon.paulk@sailpoint.com
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SAILPOINT, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Revenue Subscription $ 295,205 $ 247,937 $ 561,026 $ 463,260 Services and other 13,608 16,422 27,929 31,567 Total revenue 308,813 264,359 588,955 494,827 Cost of revenue Subscription 84,103 70,443 164,323 145,934 Services and other 19,325 16,110 38,135 43,432 Total cost of revenue 103,428 86,553 202,458 189,366 Gross profit 205,385 177,806 386,497 305,461 Operating expenses Research and development 62,185 48,111 123,871 115,381 Sales and marketing 155,881 131,289 310,157 295,819 General and administrative 46,277 39,204 91,253 120,024 Total operating expenses 264,343 218,604 525,281 531,224 Loss from operations (58,958) (40,798) (138,784) (225,763) Other income (expense), net Interest income 3,390 2,336 6,439 5,562 Interest expense (264) (1,693) (529) (24,082) Other income (expense), net (1,301) (1,710) (4,307) (1,901) Total other income (expense), net 1,825 (1,067) 1,603 (20,421) Loss before income taxes (57,133) (41,865) (137,181) (246,184) Income tax benefit 6,773 31,313 12,147 48,320 Net loss $ (50,360) $ (10,552) $ (125,034) $ (197,864) Class A yield — — — (23,786) Net loss attributable to common stockholders (50,360) (10,552) (125,034) (221,650) Net loss per share attributable to common stockholders, basic and diluted (1) $ (0.09) $ (0.02) $ (0.22) $ (0.42) Weighted average common shares outstanding, basic and diluted (1) 568,113 555,757 566,360 528,355 ________ (1) Amounts for the period during February 2025 prior to the Corporate Conversion have been retrospectively adjusted to give effect to the Corporate Conversion. These amounts do not consider the shares of common stock sold in the Company's IPO or the Class A Units considered preferred shares that were converted into common stock due to the Corporate Conversion.
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SAILPOINT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) July 31, 2026 January 31, 2026 Assets Current assets Cash and cash equivalents $ 309,850 $ 358,144 Accounts receivable, net of allowance 275,764 335,001 Contract acquisition costs 62,683 47,697 Contract assets, net of allowance 73,802 70,565 Prepayments and other current assets 54,595 39,288 Total current assets 776,694 850,695 Property and equipment, net 46,789 35,178 Contract acquisition costs, non-current 140,393 117,833 Contract assets, non-current, net of allowance 45,707 41,249 Other non-current assets 27,182 23,621 Goodwill 5,250,334 5,151,668 Intangible assets, net 1,296,723 1,377,317 Total assets $ 7,583,822 $ 7,597,561 Liabilities and stockholders' equity Current liabilities Accounts payable $ 13,415 $ 5,824 Accrued expenses and other liabilities 103,876 121,464 Deferred revenue 515,319 516,007 Total current liabilities 632,610 643,295 Deferred tax liabilities, non-current 34,503 56,112 Other long-term liabilities 25,485 12,732 Deferred revenue, non-current 29,615 39,191 Total liabilities 722,213 751,330 Commitments and contingencies Stockholders' equity Preferred stock — — Common stock 57 56 Additional paid in capital 7,237,385 7,096,974 Accumulated deficit (375,833) (250,799) Total stockholders' equity 6,861,609 6,846,231 Total liabilities and stockholders' equity $ 7,583,822 $ 7,597,561
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SAILPOINT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Cash flows from operating activities Net loss $ (50,360) $ (10,552) $ (125,034) $ (197,864) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 53,631 52,466 106,736 104,531 Amortization and write-off of debt issuance costs 136 1,479 272 17,120 Amortization of contract acquisition costs 15,997 9,317 28,598 17,484 Adjustments to contingent consideration — 1,609 — 1,609 Provision for credit losses 1,374 784 2,421 4,346 Equity-based compensation expense, net of amounts capitalized 68,321 48,349 137,426 154,061 Deferred taxes (12,682) (33,583) (22,448) (58,908) Other — — 57 — Net changes in operating assets and liabilities, net of acquisitions Accounts receivable (20,949) (13,761) 57,467 46,275 Contract acquisition costs (47,627) (17,157) (66,144) (26,623) Contract assets (4,277) (9,862) (7,942) (13,679) Prepayments and other current assets (2,345) (6,251) (15,310) (21,241) Other non-current assets (446) 386 (382) 468 Operating leases, net (36) 59 (67) 314 Accounts payable (129) (340) 7,591 (7) Accrued expenses and other liabilities 36,308 15,715 (8,192) (74,911) Deferred revenue 8,047 11,287 (11,845) 163 Net cash provided by (used in) operating activities 44,963 49,945 83,204 (46,862) Cash flows from investing activities Purchase of property and equipment (1,934) (962) (2,903) (3,153) Capitalized software development costs (5,620) (3,025) (10,372) (4,731) Business acquisitions, net of cash acquired (118,225) — (118,225) — Net cash used in investing activities (125,779) (3,987) (131,500) (7,884) Cash flows from financing activities Proceeds from IPO, net of underwriting discounts and commissions — — — 1,259,681 Repayment of Term Loans — — — (1,040,000) Payment of debt issuance costs — (2,716) — (2,716) Payments of deferred offering costs, net — (261) — (8,618) Payments related to holdback and contingent consideration — — — (675) Net cash provided by financing activities — (2,977) — 207,672 Net change in cash, cash equivalents and restricted cash (80,816) 42,981 (48,296) 152,926 Cash, cash equivalents and restricted cash, beginning of period 393,906 234,335 361,386 124,390 Cash, cash equivalents and restricted cash, end of period $ 313,090 $ 277,316 $ 313,090 $ 277,316 Reconciliation of cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to the condensed consolidated statements of cash flows: Cash and cash equivalents $ 309,850 $ 271,052 $ 309,850 $ 271,052 Restricted cash within prepayments and other current assets 3,240 6,264 3,240 6,264 Total cash, cash equivalents, and restricted cash in the consolidated statements of cash flows $ 313,090 $ 277,316 $ 313,090 $ 277,316
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SAILPOINT, INC. SUPPLEMENTAL SCHEDULES (Amounts in thousands, except percentages) (Unaudited) Three Months Ended July 31, 2026 2025 % Change Revenue Subscription SaaS $ 193,872 $ 144,758 34 % Maintenance and support 35,468 38,471 (8) % Term subscriptions 56,196 58,120 (3) % Other subscription services 9,669 6,588 47 % Total subscription 295,205 247,937 19 % Services and other 13,608 16,422 (17) % Total revenue $ 308,813 $ 264,359 17 % Six Months Ended July 31, 2026 2025 % Change Revenue Subscription SaaS $ 372,351 $ 276,573 35 % Maintenance and support 70,031 75,860 (8) % Term subscriptions 100,112 98,160 2 % Other subscription services 18,532 12,667 46 % Total subscription 561,026 463,260 21 % Services and other 27,929 31,567 (12) % Total revenue $ 588,955 $ 494,827 19 %
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SAILPOINT, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Amounts in thousands, except percentages and per share amounts) (Unaudited) Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 GAAP gross profit $ 205,385 $ 177,806 $ 386,497 $ 305,461 GAAP gross profit margin 66.5 % 67.3 % 65.6 % 61.7 % Equity-based compensation expense 5,703 2,612 12,232 24,204 Payroll taxes for IPO-accelerated awards and RSUs 231 — 475 634 Amortization of acquired intangible assets 27,013 26,322 53,845 52,382 Restructuring expense 758 — 758 — Adjusted gross profit $ 239,090 $ 206,740 $ 453,807 $ 382,681 Adjusted gross profit margin 77.4 % 78.2 % 77.1 % 77.3 % Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 GAAP subscription gross profit $ 211,102 $ 177,494 $ 396,703 $ 317,326 GAAP subscription gross profit margin 71.5 % 71.6 % 70.7 % 68.5 % Equity-based compensation expense 4,115 1,931 8,726 13,195 Payroll taxes for IPO-accelerated awards and RSUs 146 — 282 332 Amortization of acquired intangible assets 27,013 26,322 53,845 52,380 Restructuring expense 520 — 520 — Adjusted subscription gross profit $ 242,896 $ 205,747 $ 460,076 $ 383,233 Adjusted subscription gross profit margin 82.3 % 83.0 % 82.0 % 82.7 %
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Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 GAAP loss from operations $ (58,958) $ (40,798) $ (138,784) $ (225,763) GAAP loss from operations margin (19.1) % (15.4) % (23.6) % (45.6) % Equity-based compensation expense 68,321 48,418 137,442 208,877 Payroll taxes for IPO-accelerated awards and RSUs 1,634 — 3,331 3,399 Amortization of acquired intangible assets 51,028 50,214 101,794 100,125 Restructuring expense 2,516 — 2,516 — Amortization of acquired contract acquisition costs (3,461) (5,444) (7,375) (11,208) Acquisition-related expenses and Thoma Bravo monitoring fees 1,707 1,609 1,707 2,192 Adjusted income from operations $ 62,787 $ 53,999 $ 100,631 $ 77,622 Adjusted operating margin 20.3 % 20.4 % 17.1 % 15.7 % Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 GAAP research and development expense $ 62,185 $ 48,111 $ 123,871 $ 115,381 Equity-based compensation expense (15,822) (7,512) (31,297) (35,351) Payroll taxes for IPO-accelerated awards and RSUs (451) — (958) (686) Amortization of acquired intangible assets (137) (95) (274) (190) Restructuring expense (768) — (768) — Adjusted research and development expense $ 45,007 $ 40,504 $ 90,574 $ 79,154 Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 GAAP sales and marketing expense $ 155,881 $ 131,289 $ 310,157 $ 295,819 Equity-based compensation expense (22,944) (18,203) (45,413) (71,706) Payroll taxes for IPO-accelerated awards and RSUs (609) — (1,237) (1,684) Amortization of acquired intangible assets (23,878) (23,797) (47,675) (47,553) Restructuring expense (597) — (597) — Amortization of acquired contract acquisition costs 3,461 5,444 7,375 11,208 Acquisition-related expenses — (1,609) — (1,609) Adjusted sales and marketing expense $ 111,314 $ 93,124 $ 222,610 $ 184,475
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Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 GAAP general and administrative expense $ 46,277 $ 39,204 $ 91,253 $ 120,024 Equity-based compensation expense (23,852) (20,091) (48,500) (77,616) Payroll taxes for IPO-accelerated awards and RSUs (343) — (661) (394) Restructuring expense (393) — (393) — Acquisition-related expenses and Thoma Bravo monitoring fees (1,707) — (1,707) (583) Adjusted general and administrative expense $ 19,982 $ 19,113 $ 39,992 $ 41,431 Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025(1) GAAP net cash provided by (used in) operating activities $ 44,963 $ 49,945 $ 83,204 $ (46,862) Less: Purchase of property and equipment (1,934) (962) (2,903) (3,153) Less: Capitalized software development costs (5,620) (3,025) (10,372) (4,731) Free cash flow $ 37,409 $ 45,958 $ 69,929 $ (54,746) GAAP net cash provided by (used in) operating activities margin 14.6 % 18.9 % 14.1 % (9.5) % Free cash flow margin 12.1 % 17.4 % 11.9 % (11.1) % _________ (1) Free cash flow for the six months ended July 31, 2025 includes $78 million of cash paid to settle equity-related awards, cash awards and their associated payroll taxes upon the closing of our IPO, $37 million in cash paid for interest expense, and $9 million of cash paid for fees under our advisory services agreement with Thoma Bravo, which was terminated upon the closing of our IPO.
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Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 GAAP net loss $ (50,360) $ (10,552) $ (125,034) $ (197,864) Equity-based compensation expense 68,321 48,418 137,442 208,877 Payroll taxes for IPO-accelerated awards and RSUs 1,634 — 3,331 3,399 Amortization of acquired intangible assets 51,028 50,214 101,794 100,125 Restructuring expense 2,516 — 2,516 — Amortization of acquired contract acquisition costs (3,461) (5,444) (7,375) (11,208) Acquisition-related expenses and Thoma Bravo monitoring fees 1,707 1,609 1,707 2,192 Tax effect of adjustments (22,603) (44,281) (37,194) (62,334) Adjusted net income $ 48,782 $ 39,964 $ 77,187 $ 43,187 GAAP net loss per share, basic and diluted (1) $ (0.09) $ (0.02) $ (0.22) $ (0.42) Adjusted EPS, diluted $ 0.09 $ 0.07 $ 0.14 $ 0.08 Weighted average shares used in computing GAAP net loss per share, basic and diluted 568,113 555,757 566,360 528,355 Shares used in computing adjusted EPS, diluted 569,247 557,878 567,014 556,712 _________ (1) Includes the impact of the Class A yield for the six months ended July 31, 2025.