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Why Is SailPoint, Inc. (SAIL) Up 13.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for SailPoint, Inc. (SAIL - Free Report) . Shares have added about 13.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is SailPoint, Inc. due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for SailPoint, Inc. before we dive into how investors and analysts have reacted as of late.
SAIL Q2 Earnings Beat Estimates on Strong SaaS Growth
SailPoint reported fiscal second-quarter 2027 adjusted earnings of 9 cents per share, up 28.6% year over year and 12.5% above the Zacks Consensus Estimate of 8 cents. The quarter benefited from strong SaaS adoption and AI-driven solution demand.
Revenues rose 16.8% year over year to $309 million but missed the consensus mark by 0.51%. Dollar-based net retention was 113%, highlighting steady customer retention and expansion.
SAIL’s Q2 ARR Growth Stays Robust
Annual recurring revenue, or ARR, increased 25% year over year to $1.231 billion. SaaS ARR climbed 36% to $847 million, while net new SaaS ARR rose 34% to $66 million and represented 97% of total net new ARR.
AI-driven ARR exceeded $70 million. AI-driven solutions accounted for more than 30% of net new ARR, while more than two-thirds of migrations completed in the quarter included an AI-driven solution.
The AI-driven pipeline more than doubled since the June 2026 Investor Day to more than $200 million. Management also noted a record number of proofs of concept as enterprises evaluate identity governance solutions for human and non-human identities.
SailPoint's SaaS Revenue Leads Subscription Mix
SaaS revenues jumped 34% year over year to $193.9 million. Maintenance and support revenues fell 8% to $35.5 million, while term subscription revenues declined 3% to $56.2 million. Other subscription services revenues increased 47% to $9.7 million.
Total subscription revenues advanced 19% to $295.2 million. Services and other revenues decreased 17% to $13.6 million, showing that subscription offerings remained the primary source of top-line growth.
The higher SaaS mix created an approximately $5 million revenue timing headwind in the quarter. SaaS revenues are recognized ratably, while a portion of term-license revenues is recognized upfront.
SailPoint Expands Customer and Contract Base
SaaS customer count increased 16% year over year, while ARR per SaaS customer rose 17% to more than $400,000. SailPoint ended the quarter with approximately 3,310 customers and had 235 customers generating more than $1 million in ARR, up 27% year over year.
Remaining performance obligations increased 30% to $1.9 billion. Current remaining performance obligations, representing amounts expected to be recognized as revenues over the next 12 months, advanced 27% to $931 million.
SAIL's Margins Hold Near Year-Ago Levels
Adjusted gross margin was 77.4%, down from 78.2% a year ago. Adjusted subscription gross margin was 82.3% compared with 83% in the prior-year quarter.
Adjusted research and development expenses rose 11.1% to $45 million. Adjusted sales and marketing expenses increased 19.5% to $111.3 million, while adjusted general and administrative expenses grew 4.5% to $20 million.
Adjusted income from operations increased 16.3% to $62.8 million, while adjusted operating margin was 20.3% versus 20.4% a year earlier.
SAIL's Cash Flow Moderates in Q2
Cash and cash equivalents were $309.9 million as of July 31, 2026, compared with $358.1 million as of Jan. 31, 2026. Cash flows from operating activities were $45 million, down from $49.9 million in the year-ago quarter.
Free cash flow declined 18.6% to $37.4 million from $46 million, with free cash flow margin contracting to 12.1% from 17.4%. Investing outflows included $118.2 million for business acquisitions during the reported quarter.
SailPoint Raises ARR Outlook for Fiscal 2027
For the fiscal third quarter, SailPoint expects ARR of $1.288-$1.292 billion, implying 24% year-over-year growth. Revenues are projected between $326 million and $330 million, with adjusted income from operations of $57.5-$58.5 million and adjusted earnings of 7-8 cents per share.
For fiscal 2027, the company raised its ARR outlook to $1.375-$1.385 billion from $1.364-$1.374 billion. Revenues remain forecast at $1.265-$1.275 billion, adjusted income from operations at $239-$244 million and adjusted earnings at 30-34 cents per share.
SailPoint continues to expect roughly $200 million in free cash flow.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, SailPoint, Inc. has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock has a grade of F on the value side, putting it in the bottom 20% quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, SailPoint, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
SailPoint, Inc. belongs to the Zacks Internet - Software industry. Another stock from the same industry, Samsara Inc. (IOT - Free Report) , has gained 7.2% over the past month. More than a month has passed since the company reported results for the quarter ended July 2026.
Samsara Inc. reported revenues of $508.44 million in the last reported quarter, representing a year-over-year change of +29.9%. EPS of $0.20 for the same period compares with $0.12 a year ago.
Samsara Inc. is expected to post earnings of $0.19 per share for the current quarter, representing a year-over-year change of +26.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Samsara Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
View the Zacks #1 Rank List
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Why Is SailPoint, Inc. (SAIL) Up 13.5% Since Last Earnings Report?
A month has gone by since the last earnings report for SailPoint, Inc. (SAIL - Free Report) . Shares have added about 13.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is SailPoint, Inc. due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for SailPoint, Inc. before we dive into how investors and analysts have reacted as of late.
SAIL Q2 Earnings Beat Estimates on Strong SaaS Growth
SailPoint reported fiscal second-quarter 2027 adjusted earnings of 9 cents per share, up 28.6% year over year and 12.5% above the Zacks Consensus Estimate of 8 cents. The quarter benefited from strong SaaS adoption and AI-driven solution demand.
Revenues rose 16.8% year over year to $309 million but missed the consensus mark by 0.51%. Dollar-based net retention was 113%, highlighting steady customer retention and expansion.
SAIL’s Q2 ARR Growth Stays Robust
Annual recurring revenue, or ARR, increased 25% year over year to $1.231 billion. SaaS ARR climbed 36% to $847 million, while net new SaaS ARR rose 34% to $66 million and represented 97% of total net new ARR.
AI-driven ARR exceeded $70 million. AI-driven solutions accounted for more than 30% of net new ARR, while more than two-thirds of migrations completed in the quarter included an AI-driven solution.
The AI-driven pipeline more than doubled since the June 2026 Investor Day to more than $200 million. Management also noted a record number of proofs of concept as enterprises evaluate identity governance solutions for human and non-human identities.
SailPoint's SaaS Revenue Leads Subscription Mix
SaaS revenues jumped 34% year over year to $193.9 million. Maintenance and support revenues fell 8% to $35.5 million, while term subscription revenues declined 3% to $56.2 million. Other subscription services revenues increased 47% to $9.7 million.
Total subscription revenues advanced 19% to $295.2 million. Services and other revenues decreased 17% to $13.6 million, showing that subscription offerings remained the primary source of top-line growth.
The higher SaaS mix created an approximately $5 million revenue timing headwind in the quarter. SaaS revenues are recognized ratably, while a portion of term-license revenues is recognized upfront.
SailPoint Expands Customer and Contract Base
SaaS customer count increased 16% year over year, while ARR per SaaS customer rose 17% to more than $400,000. SailPoint ended the quarter with approximately 3,310 customers and had 235 customers generating more than $1 million in ARR, up 27% year over year.
Remaining performance obligations increased 30% to $1.9 billion. Current remaining performance obligations, representing amounts expected to be recognized as revenues over the next 12 months, advanced 27% to $931 million.
SAIL's Margins Hold Near Year-Ago Levels
Adjusted gross margin was 77.4%, down from 78.2% a year ago. Adjusted subscription gross margin was 82.3% compared with 83% in the prior-year quarter.
Adjusted research and development expenses rose 11.1% to $45 million. Adjusted sales and marketing expenses increased 19.5% to $111.3 million, while adjusted general and administrative expenses grew 4.5% to $20 million.
Adjusted income from operations increased 16.3% to $62.8 million, while adjusted operating margin was 20.3% versus 20.4% a year earlier.
SAIL's Cash Flow Moderates in Q2
Cash and cash equivalents were $309.9 million as of July 31, 2026, compared with $358.1 million as of Jan. 31, 2026. Cash flows from operating activities were $45 million, down from $49.9 million in the year-ago quarter.
Free cash flow declined 18.6% to $37.4 million from $46 million, with free cash flow margin contracting to 12.1% from 17.4%. Investing outflows included $118.2 million for business acquisitions during the reported quarter.
SailPoint Raises ARR Outlook for Fiscal 2027
For the fiscal third quarter, SailPoint expects ARR of $1.288-$1.292 billion, implying 24% year-over-year growth. Revenues are projected between $326 million and $330 million, with adjusted income from operations of $57.5-$58.5 million and adjusted earnings of 7-8 cents per share.
For fiscal 2027, the company raised its ARR outlook to $1.375-$1.385 billion from $1.364-$1.374 billion. Revenues remain forecast at $1.265-$1.275 billion, adjusted income from operations at $239-$244 million and adjusted earnings at 30-34 cents per share.
SailPoint continues to expect roughly $200 million in free cash flow.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, SailPoint, Inc. has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock has a grade of F on the value side, putting it in the bottom 20% quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, SailPoint, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
SailPoint, Inc. belongs to the Zacks Internet - Software industry. Another stock from the same industry, Samsara Inc. (IOT - Free Report) , has gained 7.2% over the past month. More than a month has passed since the company reported results for the quarter ended July 2026.
Samsara Inc. reported revenues of $508.44 million in the last reported quarter, representing a year-over-year change of +29.9%. EPS of $0.20 for the same period compares with $0.12 a year ago.
Samsara Inc. is expected to post earnings of $0.19 per share for the current quarter, representing a year-over-year change of +26.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Samsara Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.