SailPoint (NASDAQ:SAIL) traded lower on Tuesday even after the identity security company posted stronger-than-expected third-quarter results and raised its guidance for the full fiscal year.
As of 07:28 ET, the stock was down 4.8% in premarket trading.
For the quarter, SailPoint delivered adjusted EPS of $0.08, while revenue climbed 20% year over year to $282 million—comfortably ahead of the $270.3 million consensus estimate. Subscription revenue remained the primary growth driver, rising 22% to $266 million.
Free cash flow jumped to $49 million, reflecting improved operational efficiency. Meanwhile, total annual recurring revenue (ARR) reached $1.04 billion, up 28% and matching expectations, with SaaS ARR increasing 38% to $669 million. The company also celebrated its first quarter surpassing the $1 billion ARR threshold.
Adjusted operating income came in at $56 million, holding a margin near 20%. GAAP operating loss, however, widened to $42 million due to higher equity compensation and amortization charges.
CEO Mark McClain highlighted the company’s momentum, noting,
“Our fiscal third quarter marked a significant milestone for SailPoint as we surpassed $1 billion of ARR. Our performance underscores the strength of SailPoint’s strategy and the durability of our business.”
He added,
“Our platform brings together identity, data, and security in real-time — and that advantage becomes even more critical as AI agents enter the enterprise.”
SailPoint raised its outlook across key metrics. Adjusted EPS for the full year is now expected to be $0.22–$0.23, up from the prior $0.20–$0.22 range and ahead of the $0.21 analyst consensus. Revenue is projected between $1.067 billion and $1.071 billion, compared with the earlier view of $1.052–$1.058 billion.
Looking ahead to fiscal 2026, the company now anticipates ARR of $1.120–$1.124 billion, lifting its previous projection of $1.105–$1.115 billion. Analysts had expected around $1.11 billion. Adjusted operating income guidance also improved, rising to $191.9–$192.9 million from the earlier $177–$181 million range.