What happened

Shares of Sailpoint Technologies Holdings (NYSE:SAIL), a cybersecurity company focused on identity governance solutions, are up 15% as of 10:41 a.m. EDT. The stock's move comes in response to the company's release of strong second-quarter results.

So what

Here's a review of the headline numbers from SailPoint's second quarter:

  • Revenue jumped 39% to $54.6 million. Wall Street was only expecting $50 million in revenue.
  • Non-GAAP net income was $2.5 million, or $0.03 per share. Market watchers were expecting a loss of $0.02 per share, so this was also a better-than-expected result.
Businessman touching screen with chart coming off of it

Image source: Getty Images.

Turning to guidance, here's what management expects to happen in the upcoming quarter:

  • Revenue should land between $54.5 million and $55.5 million. This range is above the $53.2 million in total revenue that Wall Street was expecting. 
  • Non-GAAP loss per share should be $0.02 or $0.01. That's right in line with expectations. 

Management also increased its outlook for the full 2018 year:

  • Revenue is expected to be in the range of $233 million to $236 million. This is well ahead of its prior call for revenue to land between $225 million and $229 million. It's also much better than the $227.5 million in revenue that analysts were modeling.  
  • Non-GAAP income from operations is expected to come in between $17 million and $19 million. This is also a boost from its prior range of $14 million to $16 million.
  • Non-GAAP EPS is now expected to land between $0.12 and $0.14. This represents a $0.05 increase and is comfortably ahead of Wall Street's estimate of $0.08. 

Given the better-than-expected quarterly results and guidance boost, it isn't hard to figure out why SailPoint stock is soaring today. 

Now what

SailPoint is off to a great start on the public markets. The company has smashed expectations in all three of its quarterly reports and the share price has nearly doubled. You can't ask for much more than that.

Overall, this software-as-a-service business is growing fast and appears to have a long runway ahead. While SailPoint's stock certainly can't be called cheap, this looks to be a high-quality business that deserves its premium valuation.