SailPoint (NASDAQ:SAIL) stock slid on Tuesday after it reported fiscal second-quarter results.
The identity security firm reported revenue of $264.36 million, up 33% year-on-year and ahead of analyst expectations of $240.58 million.
Subscription revenue climbed 36% to $248 million. Adjusted EPS came in at a 2-cent loss, better than the anticipated 10-cent deficit.
Annual Recurring Revenue (ARR) reached $982 million, up 28%, with SaaS ARR growing 37% to $623 million.
SailPoint also improved operational efficiency, reporting an adjusted operating margin of 20.4%, nearly doubling the 10.7% margin recorded a year earlier.
The company generated $49.95 million in operating cash, reversing a $52.8 million outflow from the same quarter last year, while cash and equivalents stood at $271.05 million as of July 31.
SailPoint CEO and Founder Mark McClain noted that demand for its intelligent identity security platform remains strong as enterprises seek to secure both humans and machines in the AI era.
McClain emphasized that identity security has become central to enterprise protection and said the company's strategy is proving effective, prompting SailPoint to raise its full-year guidance across all metrics.
Outlook
Looking ahead, the company projects third-quarter ARR between $1.027 billion and $1.031 billion, reflecting 26%-27% growth.
Revenue is expected at $269 million-$271 million, slightly below the $275.01 million analyst consensus.
Adjusted EPS is forecasted at 5-6 cents, roughly in line with the 6-cent consensus.
For fiscal 2026, SailPoint raised its ARR guidance to $1.105 billion-$1.115 billion, up from $1.095 billion-$1.105 billion, representing 26%-27% growth.
Revenue expectations were lifted to $1.052 billion-$1.058 billion, surpassing the $1.031 billion consensus estimate.
The company now anticipates adjusted EPS of 20-22 cents, up from a prior range of 16-20 cents and above the 19-cent analyst forecast.
Price Action: SAIL stock is trading lower by 10.94% to $19.94 premarket at last check Tuesday.
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