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SailPoint's Quarterly Outlook Indicates Sequential Revenue Slowdown; Shares Slump

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SailPoint's Quarterly Outlook Indicates Sequential Revenue Slowdown; Shares Slump

SailPoint (SAIL) on Tuesday issued a fiscal second-quarter revenue outlook indicating a sequential growth slowdown, while the cybersecurity company left its full-year profit guidance unchanged.

SailPoint expects second-quarter revenue of $308 million to $312 million, indicating year-over-year growth of 17% to 18%. That reflects a slower pace than a 22% rise in the first quarter to $280.1 million, which surpassed the consensus of $275.8 million on FactSet.

Annual recurring revenue is projected at $1.218 billion to $1.222 billion, representing a rise of 24% annually. The metric increased 26% to $1.16 billion in the first quarter that ended in April, largely in line with the Street's views.

The stock declined 10% intraday, and has slid nearly 21% since the start of the year.

SailPoint pegged second-quarter adjusted per-share earnings at $0.07 to $0.08 after its bottom-line rose to $0.05 in the first quarter from $0.01 a year earlier, topping the $0.04 market estimate.

Analysts in a FactSet survey are looking for second-quarter total sales of $309.7 million, ARR of $1.213 billion, and non-GAAP EPS of $0.08.

For fiscal 2027, the company maintained its adjusted EPS guidance at $0.30 to $0.34, while raising its revenue outlook to between $1.265 billion and $1.275 billion from its prior range of $1.26 billion to $1.27 billion. Analysts expect non-GAAP EPS of $0.32 on sales of $1.27 billion.

SailPoint is now looking at full-year ARR of $1.364 billion to $1.374 billion, compared with its prior guidance of $1.356 billion to $1.366 billion. The Street is looking for $1.363 billion.

"Consistent with last quarter, our fiscal (second-quarter) and full-year 2027 guidance assumes 90% to 95% of net new ARR will come from (software as a service) as customers leverage the continuous innovation we are building into our cloud platform," Chief Financial Officer Brian Carolan said at an earnings conference call, according to a FactSet transcript. "As our SaaS mix increases, it may cause short-term fluctuations in our (profit and loss statement)."

Still, "the shift towards SaaS is a long-term value driver for the business," Carolan said.

Price: $15.68, Change: $-2.01, Percent Change: -11.36%

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