SailPoint (NASDAQ:SAIL) reported fiscal first-quarter 2027 results that missed Wall Street profit forecasts, triggering a sharp sell-off in the company’s shares, which fell more than 15% in premarket trading on Tuesday.
The cybersecurity specialist posted a loss of $0.13 per share, significantly below analyst expectations for earnings of $0.04 per share. Despite the earnings miss, revenue rose 22% year-over-year to $280 million, surpassing the consensus forecast of $276 million. Subscription revenue increased 23% to $266 million during the quarter.
For the period ended April 30, annual recurring revenue (ARR) climbed 26% from a year earlier to $1.16 billion. SaaS annual recurring revenue grew even faster, advancing 36% to $781 million.
Adjusted operating income improved to $38 million, representing a 14% operating margin, compared with $24 million and a 10% margin in the same quarter last year. On a GAAP basis, SailPoint substantially reduced its operating loss to $80 million from $185 million a year earlier.
The company also delivered a significant improvement in cash generation, reporting free cash flow of $33 million compared with negative $101 million in the prior-year period.
“Our strong start to fiscal 2027, marked by robust top- and bottom-line growth, underscores the critical market demand for comprehensive identity security,” said SailPoint CEO Mark McClain.
Looking ahead to the second quarter, SailPoint forecast earnings per share of $0.07 to $0.08, compared with analyst expectations of $0.08. The company expects total ARR to reach between $1.218 billion and $1.222 billion, representing approximately 24% year-over-year growth, while revenue is projected to range from $308 million to $312 million, broadly in line with the consensus estimate of $309.7 million.
For the full 2027 fiscal year, SailPoint reaffirmed expectations for ARR of between $1.364 billion and $1.374 billion. Revenue is forecast to range from $1.265 billion to $1.275 billion, broadly matching analyst expectations of approximately $1.27 billion.
The company also projected a full-year adjusted operating margin of between 18.7% and 19.3%.