SAIL Results

SAIL announced results yesterday. I’m fairly new to the board so I’m giving this a try to make sure I have my numbers right with the new accounting standards and also for any feedback you may have. SAIL has been discussed quite a few times since its IPO last year and I recently took a small starter position.

Recent Discussion:
Elon’s initial post “Why I Bought SAIL” https://discussion.fool.com/why-i-bought-sailpoint-technologies-…
Update on SAIL 6/18 - https://discussion.fool.com/update-on-sailpoint-technologies-sai…
OKTA vs Sail 2/19 - https://discussion.fool.com/okta-or-sail-34125979.aspx?sort=whol…
Dreamer’s detailed post from a 2/19 - https://discussion.fool.com/sail-50-yy-sub-rev-growth-34139373.a…

Hopefully this table formats properly…

		                   **Q1	Q2	Q3	Q4	2018       Q1     Q2	 Q3	Q4	2017**
**SUBSCRIPTION REVENUE 605**	        23	25	28.1	30	106.5      15	  16.3	 18.5	21.2	71
**SUBSCRIPTION REVENUE 606**		22.5	24.1	27.9	29.5	104
**GROWTH RATE (YoY%)**		        53%	53%	52%	42%	50%
**GROWTH RATE (QoQ%)**		        9%	9%	12%	7%	

		                     **Q1	Q2	Q3	Q4	2018	   Q1	  Q2 	 Q3	Q4	2017** 
**LICENSE REVENUE 605**		        17	19.1	28.1	37.4	101.7      12.2	  13.3	 17	36.7	79.2
**LICENSE REVENUE 606**		        16.8	19.6	28	40.5	105						
**GROWTH RATE (YoY%)**		        42%	44%	65%	2%	28%						

		                    **Q1	Q2	Q3	Q4	2018	   Q1	  Q2	 Q3	Q4	2017**
**TOTAL REVENUE 605**		        49.7	54.6	66.4	77.8	248.5	   35.5	 39.3	 43.6	67.8	186.1
**TOTAL REVENUE 606**		        48.9	53.7	65.7	80.6	248.9						
**GROWTH RATE (YoY%)**	                40%	39%	52%	15%	34%		

Notes from the call:
Revenue has been a bit “chunky” for the last few Qs with 4M from License revs closing early in Q3 instead of Q4. Also most of their federal government business went to Q3 as well.
License Gross Margins at 99%, Subscription Margins at 82%
International Revenue up 50% YoY
Customer Base up 26% YoY to 1173 total customers (7% QoQ)
95% renewal rate
Hire of Chief Customer Officer to help scale the business

Thoughts:
I like the business and there seems to be considerable potential for growth even if I don’t yet have a complete understanding of all the differences between Identity Governance and Access Management. At least OKTA and SAIL are offering complementary products.

I was initially getting stuck on the seasonality / chunkiness / lumpiness / whatever else you want to call it, with the growth this quarter. So I went back and found this in the Q3 call: it is important to remember that we recognized approximately $4 million of license revenue and $1 million of nonrecurring subscription revenue in the fourth quarter of 2017 that came from contracts signed prior to that period. Removing those amounts from Q4 17, I get Q4 18 Subscription revenue growth of 49% and Total Revenue Growth of 24%. I’m not sure if this is the right way to look at it, but that subscription revenue growth looks more in line to me with their recent performance. The total revs and license revs, I’m not so sure. Is it just going to be their nature for the percentages to bounce around so much quarter to quarter? Let me know if anyone has any thoughts…

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