What happened

After the company reported second-quarter results and slightly raised guidance, shares of SailPoint Technologies Holdings (NYSE:SAIL), a cybersecurity company focused on identity governance solutions, rose 15% as of 1:05 p.m. EST on Wednesday.

So what

The headline numbers from the quarter were solid:

  • Revenue jumped 18% to $63.1 million. This figure exceeded the high end of guidance and was slightly ahead of the $63 million that Wall Street was expecting.
  • Subscription sales continue to be the star of the show, growing 40% to $33.7 million.
  • Non-GAAP (adjusted) net loss was $1.3 million, or $0.01 per share. That was much better than the $0.05 net loss that traders were expecting.

On the call with investors, COO Cam McMartin said that the company made progress during the quarter to improve the quality and quantity of its sales pipeline, which is an issue that plagued the business in the first quarter.

Woman holding a cell phone with a lock symbol on it

Image source: Getty Images.

In response to that positive change, management shared the following guidance with investors for the upcoming quarter: 

Metric Q3 2019 Guidance
Q3 2018 Actual
Total revenue $69.5 million to $71 million $66.4 million
Non-GAAP operating income (loss) $3 million to $3.5 million $11.6 million
Non-GAAP EPS $0.05 $0.12

Data source: SailPoint.

For context, Wall Street was looking for $70.7 million in revenue and $0.04 in non-GAAP EPS, so this guidance looks quite decent.

Management also favorably tweaked its full-year 2019 guidance range:

Metric Updated Guidance 
Old Guidance 
Total revenue $278.5 million to $281.5 million $277 million to $281.5 million
Non-GAAP operating income $18 million to $19 million $17.1 million to $18.6 million
Non-GAAP EPS $0.12 to $0.13 $0.14 to $0.16

Data source: SailPoint.

Traders applauded the upbeat quarterly results and slight guidance boost. 

Now what

It's great to hear that the company has already made progress with its sales pipeline issues that were brought up in the first quarter. But it's also worth remembering that the updated full-year guidance is still well below what management had initially planned for the full year, so there's still plenty of work to do.

Regardless, the better-than-expected second-quarter results, guidance increase, and favorably commentary from management should give investors confidence that the company is on the upswing, so it's no surprise to see shares rise today.