Shares of SailPoint (NASDAQ:SAIL) dropped sharply in premarket trading after the identity security company reported fourth-quarter results that largely matched expectations but issued a weaker-than-anticipated forecast for the current quarter.
The stock fell around 11% ahead of the opening bell.
SailPoint reported fourth-quarter revenue of $295 million, representing a 23% increase year over year and slightly above the analyst consensus estimate of $292.5 million. Subscription revenue grew 25%, while annual recurring revenue (ARR) rose 28% to $1.125 billion. SaaS ARR climbed 38% to $746 million.
Adjusted earnings for the quarter came in at $0.08 per share, in line with analyst forecasts.
For the full fiscal year, revenue increased 24% to $1.07 billion, supported by a 27% rise in subscription revenue to $1.01 billion.
On an adjusted basis, operating income for the fourth quarter improved to $61 million, representing a margin of 21%, compared with $46 million a year earlier. The company also generated $64 million in operating cash flow and $57 million in free cash flow during the quarter.
Chief Executive Officer Mark McClain said demand for the company’s solutions remains linked to rising enterprise security needs tied to artificial intelligence. “the more automated and agentic the enterprise becomes, the more essential a foundational identity control plane becomes.”
Looking ahead, SailPoint expects first-quarter revenue between $273 million and $277 million, below analysts’ expectations of $284.03 million. The company forecasts ARR of $1.153 billion to $1.157 billion.
Adjusted earnings per share for the first quarter are projected to range from $0.04 to $0.05, also below the analyst estimate of $0.06.
For fiscal 2027, SailPoint forecasts revenue of $1.26 billion to $1.27 billion, implying growth of roughly 21% and about 18%–19%, compared with the consensus estimate of $1.28 billion. ARR is expected to reach between $1.356 billion and $1.366 billion.
The company projects adjusted earnings per share for the year in the range of $0.30 to $0.34, versus the analyst consensus estimate of $0.32. Adjusted operating income is expected to total between $231.5 million and $236.5 million, representing operating margins of 18.2% to 18.8%.