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SailPoint Technologies Beats Its Own Guidance (Again)

By Brian Feroldi – Updated Apr 11, 2019 at 3:06PM

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The identity-governance leader reports strong revenue and profit growth to cap off 2018.

SailPoint Technologies Holdings (SAIL), a cybersecurity software company that helps organizations manage who has access to sensitive data, reported its fourth-quarter and full-year 2018 results on Tuesday.

Revenue growth came in at 19% during the fourth quarter and easily surpassed the high end of management's guidance range. It was a similar story for the company's adjusted profits.

Management predicts that it will be able to sustain double-digit revenue growth in 2019. However, the company also plans to increase spending to set the stage for continued growth. Those investments are expected to take their toll on profitability.

SailPoint Q4 results: The raw numbers


Q4 2018

Q4 2017

Year-Over-Year Gain (Decline)


$80.6 million 

$67.8 million


GAAP operating profit

$11.2 million

$10.5 million


GAAP net income 

$5.1 million

$5.4 million


GAAP earnings per share




Data source: SailPoint.

What happened with SailPoint this quarter?

  • License revenue increased by 11% to $40.6 million. Subscription revenue grew 39% to $29.5 million. Services and other revenue increased 7% to $10.5 million.
  • Total revenue of $80.6 million greatly exceeded management's guidance range of $70 million to $71.5 million.
  • Consolidated gross margin held steady at 84%.
  • International sales expanded 50% during the quarter. 
  • Non-GAAP net income grew 29% to $16.9 million, or $0.19 per share. This figure also greatly surpassed management's guidance range of $0.08 to $0.09.

Check out the latest earnings call transcript for SailPoint Technologies Holdings.

A blue fingerprint on a keyboard key

Image source: Getty Images.

Here's a review of the company's results for 2018:

  • Revenue jumped 34% to $248.9 million. 
  • Non-GAAP operating income grew 71% to $38.9 million.
  • Non-GAAP net income more than tripled to $33.6 million, or $0.37 per share.
  • Cash balance at year-end was $71 million. The company is now debt-free after making a $70 million payment during 2018.

What management had to say

CEO Mark McClain stated that SailPoint ended the year with strong momentum across the board: "Our 2018 revenues increased 34% year over year, and we were profitable on a GAAP and non-GAAP basis. Our customer base grew 26% year over year to 1,173 enterprises who chose our comprehensive, open identity governance platform to address their security, compliance, and business efficiency challenges."

Looking forward

CFO Cam McMartin stated that subscription revenue is expected to grow by more than 30% during 2019. License revenue is expected to grow about 10%, and services revenue growth is expected to be in the "low to mid-teens."

Expense growth is expected to outpace revenue growth during much of 2019 as the company looks to invest in its sales, marketing, and research and development teams. Management also expects to open new offices around the world and build a new corporate headquarters in Texas.

When taken together, here's the guidance for the first quarter of 2019:

Metric Q1 2019 Guidance Range
Q1 2018 Actual
Total revenue $59.5 million to $61 million $49.7 million
Non-GAAP operating income (loss) ($500,000) to $1 million $3.1 million
Non-GAAP EPS ($0.02) to $0.00 $0.02

Data source: SailPoint.

It is a similar story for the full 2019:

Metric 2019 Guidance Range
2018 Actual
Total revenue $293 million to $299 million $248.9 million
Non-GAAP operating income $28 million to $31 million $38.9 million
Non-GAAP EPS $0.25 to $0.29 $0.37

Data source: SailPoint.

Commenting on the year ahead, McClain said: "For 2019, we plan to continue building on the strong momentum we demonstrated in 2018. At the same time, we're equally focused on extending our leadership and driving innovation across our Identity platforms, to ensure global enterprises of all sizes can successfully address the security, compliance, and efficiency challenges stemming from their digital transformation."

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool recommends SailPoint Technologies. The Motley Fool has a disclosure policy.

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