SailPoint Technologies Holdings (SAIL +0.00%), a software company that is focused on protecting sensitive data, reported its second-quarter results on Wednesday.
SailPoint got off to a rough start in 2019. Last quarter, management was forced to cut its full-year guidance because its pipeline wasn't maturing as fast as it initially expected. Thankfully, things are going better in the second quarter. Revenue came in ahead of management's forecast and the company was able to raise full-year guidance, although not by enough to offset the cuts that were made earlier in the year.
SailPoint's second-quarter results: The raw numbers
|
Metric |
Q2 2019 |
Q2 2018 |
Change |
|---|---|---|---|
|
Revenue |
$63.1 million |
$53.7 million |
18% |
|
GAAP operating profit (loss) |
($10.1 million) |
($1.4 million) |
N/A |
|
GAAP net income |
($9.2 million) |
($1.0 million) |
N/A |
|
GAAP earnings per share |
($0.10) |
($0.01) |
N/A |
Data source: SailPoint. GAAP = generally accepted accounting principles.
What happened with SailPoint this quarter?
- Subscription revenue grew 40% to $33.7 million. License revenue and services revenue held steady at $19.3 million and $10 million, respectively.
- Operating expenses rose 37%, mostly as a result of headcount additions in sales, marketing, and research and development.
- Adjusted EBITDA was negative $0.7 million.
- Non-GAAP net loss was $1.3 million, or $0.01 per share.
Image source: Getty Images.
What management had to say
CEO Mark McClain was pleased with the quarter's results: "[W]e added 59 net new customers during the quarter. We improved our focus and execution and saw ongoing strength across our partner ecosystem, with solid contribution from both tech partners and global system integrators."
On the conference call with analysts, McClain talked up the company's newest product offering, SailPoint.
We took important steps forward in reshaping identity governance from reactive to proactive, with the unveiling of our vision for the future of identity governance, SailPoint's Predictive Identity. This new approach to identity leverages artificial intelligence and machine learning technologies to infuse identity programs with the critical intelligence enterprises need to govern smarter.
Looking forward
COO Cam McMartin stated that SailPoint made several operational changes in the second quarter to increase the quality and quantity of its sales pipeline. Those changes enhanced the company's closing efficiency and allowed management to offer the following guidance 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.
The increased sales efficiency also allowed management to slightly raise its full-year 2019 guidance:
| 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.
Investors applauded the second-quarter results by bidding up the stock about 16% in the trading session following the release.
McClain did his best to assure investors that the company is in a great position to deliver against its long-term business objectives: "We remain confident that we are on a path that sets us up well for the future."
