SailPoint (SAIL) Q2 2027 earnings summary

Executive summary

• Annual recurring revenue (ARR) grew 25% year-over-year to $1.231 billion, with SaaS ARR up 36% to $847 million and net new SaaS ARR up 34%, representing 97% of net new ARR.

• Total revenue increased 17% year-over-year to $309 million, driven by 19% growth in subscription revenue, with SaaS revenue up 34%.

• AI-driven solutions accounted for over 30% of net new ARR, with AI-driven ARR surpassing $70 million; customers adopting AI solutions increased annual spend by over 60%.

• SaaS customer count increased 16% year-over-year, with ARR per SaaS customer up 17% to over $400,000; 3,310 customers, including 235 with ARR over $1 million.

• Acquisition of Entro Security expanded non-human identity discovery and integration into the product suite.

Financial highlights

• Adjusted operating margin was 20.3% for the quarter; adjusted income from operations was $62.8 million; adjusted EPS was $0.09.

• Free cash flow was $37 million for the quarter, with a margin of 12.1%; cash and cash equivalents at quarter-end were $309.9 million.

• Adjusted gross profit margin was 77.4%, and adjusted subscription gross profit margin was 82.3%.

• Dollar-based net revenue retention was 113%; gross retention in the high 90s.

• Net loss attributable to common stockholders was $(50.4) million, or $(0.09) per share, compared to $(10.6) million, or $(0.02) per share, year-over-year.

Outlook and guidance

• Q3'27 guidance: ARR of $1.288–$1.292 billion (24% YoY growth), revenue of $326–$330 million (16–17% YoY growth), adjusted operating margin of 17.4–17.9%, and adjusted EPS of $0.07–$0.08.

• FY'27 guidance: ARR of $1.375–$1.385 billion (22–23% YoY growth), revenue of $1.265–$1.275 billion (18–19% YoY growth), adjusted operating margin of 18.7–19.3%, adjusted EPS of $0.30–$0.34, and free cash flow of ~$200 million.

• FY'29 targets reaffirmed: at least $2.1 billion ARR, $800 million AI-driven ARR, 22%+ adjusted operating margin, and $400 million+ free cash flow.

• SaaS expected to comprise 90–95% of net new ARR for FY'27.

• Diluted share count expected at 575–577 million for FY'27.