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Investing.com -- SailPoint, Inc. reported second-quarter earnings that beat analyst expectations, but shares tumbled 6.2% after the company’s third-quarter revenue guidance came in below consensus estimates.
The identity security provider posted adjusted earnings of $0.07 per share for the second quarter, surpassing the analyst consensus of $0.04. Revenue reached $264 million, exceeding analyst expectations of $243.48 million and representing a 33% increase YoY. Subscription revenue grew 36% YoY to $248 million.
Despite the strong quarterly performance, SailPoint’s third-quarter revenue guidance of $269 million to $271 million falls short of the $277.62 million analyst consensus. The company’s shares declined following the announcement as the market reacted to the lighter-than-expected revenue outlook.
"SailPoint delivered strong second quarter results that exceeded all previously guided metrics, driven by 37% year-over-year SaaS ARR growth and record cash flow from operations," said Mark McClain, SailPoint CEO and Founder. "We are seeing strong continued demand for our comprehensive, intelligent approach to secure humans and machines in the AI era."
The company reported total Annual Recurring Revenue (ARR) of $982 million, up 28% YoY, while SaaS ARR grew 37% YoY to $623 million. Cash flows from operating activities reached $50 million with free cash flow of $46 million.
For the full fiscal year 2026, SailPoint raised its guidance across all metrics. The company now expects total revenue of $1,052 million to $1,058 million, representing 22% to 23% YoY growth, up from its previous guidance of $1,034 million to $1,044 million. Full-year adjusted EPS guidance was raised to $0.20 to $0.22, compared to the previous range of $0.16 to $0.20.
SailPoint’s GAAP operating loss narrowed to $41 million, or 15% of revenue, compared to $66 million, or 33% of revenue, in the same quarter last year. Adjusted income from operations improved to $54 million, or 20% of revenue, up from $21 million, or 11% of revenue, a year ago.