SAIL: +53% subscription revenue

Is SailPoint Technologies (SAIL) the kind of growth company you’re look for?

How is SAIL different from OKTA?

Okta provides secure identity tools to safely authorize access, delivering capabilities for access management, user authentication, single sign-on, MFA, and password reset. SailPoint provides governance and compliance tools, so you can manage and document enterprise behavior. You get tools for access requests, access certifications, separation of duties, entitlement provisioning, and password management. (source:

Their competitors include Oracle, CA Technologies, IBM, and Dell. They formed a partnership with Okta this year.

Today, they reported Q2 revenue of $54.6 million, a 39% YoY increase, and $25.05 million in subscription revenue, a 53% YoY increase. SAIL has reported three quarterly earnings since going public in November 2017, with quarterly YoY subscription revenue growth of 51%, 54%, and 53%.

Here’s where the guesswork comes in for their future subscription revenue growth. The mid-range of their Q2 overall revenue guidance was $50M, and they beat it by 9.2%. They’re guiding for $55M in Q3. If they hit it on the mark, their Q3 YoY subscription revenue growth will slow to 36.5% (assuming that subscriptions are 46% of total revenue, which it’s been the past two quarters). If they beat by 9.2% again, then subscription growth will be 49%, which puts them just shy of the growth rate in the past three quarters. Of course, subscriptions could take a larger piece of the total revenue pie. The precedent is there since it was 42% of total revenue in a year ago. Again, lots of guesswork here.

Based on their after-hours price and their raised 2018 revenue guidance, they have a 10.9 P/S ratio. Their loss this quarter narrowed from $10.7M last year to $5.6M this year.

What are your impressions of SAIL’s performance so far? What questions does this initial info bring to mind? I will continue my analysis and post as many answers as I am able. I still need to learn how to paste tables on this board so that they’re formatted correctly. If I figure that out, I’ll post those, too. I’m still learning what information to provide for those of you who are seeking new investments.

To sum up my confidence in SAIL, their impressive subscription growth, path to profitability, and partnership with Okta are all major factors. Add to that the fact that their audience has built-in need/urgency due to government regulations. I bought my initial position in December, and purchased more during after-hours trading today. They are 14% of my portfolio, my second largest position.