SailPoint Q4 FY2026 Earnings Call - $1.125B ARR, AI-driven non-human identity surge is the next TAM

Operator: Thank you for standing by, and welcome to SailPoint’s fourth quarter fiscal and full year 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. I would now like to hand the call over to Scott Schmitz, VP of Investor Relations. Please go ahead.

Gabriela Borges, Analyst, Goldman Sachs1: Good morning, and thank you for joining us today to discuss SailPoint’s fiscal fourth quarter and full year 2026 financial results. Joining me today are SailPoint’s founder and CEO, Mark McClain, and our Chief Financial Officer, Brian Carolan. For the Q&A portion of today’s call, we will also be joined by our President, Matt Mills. Please note that today’s call will include forward-looking statements, and because these statements are based on the company’s current intent, expectations, and projections, they are not guarantees of future performance, and a variety of factors could cause actual results to differ materially. This call will also include references to non-GAAP results, which exclude certain items that do not reflect our underlying business performance.

Please reference this morning’s press release and our supplemental earnings presentation posted on investors.sailpoint.com for further information regarding our forward-looking statements and non-GAAP financial measures, including reconciliations of such financial measures to the nearest comparable GAAP financial measures. With that, I’d like to turn the call over to Mark.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Thank you, Scott. Good morning, everyone, and thank you for joining us today. We just completed fiscal year 2026 with outstanding results that underscore our ability to deliver growth at scale. This has been a remarkable year for SailPoint as we continue to perform at an exceptionally high level. Our performance puts us at a level that we believe few companies in software and cybersecurity can claim. To back that up, let’s look at the key metrics for fiscal year 2026. We crossed the $1 billion ARR threshold. We delivered 28% overall ARR growth and a consistently strong 38% SaaS ARR growth. These are incredible results. To put this in perspective, our ARR growth of 28% year-over-year, plus our adjusted operating margin of 18% gives us a rule of 46.

This places us in a rare stratum of high-performing companies at greater than $1 billion in scale. Our journey to this point is the result of relentless innovation and unwavering execution. These efforts have enabled us to effectively meet the increasing demand for modern adaptive identity solutions. The combination of visionary product development and operational excellence has positioned SailPoint as a leader in the market, driving our continued success and instilling confidence in our ability to deliver value to our customers well into the future. This past year was also defined by a rapid pace of product advancement. We believe we’ve pushed our industry forward, making identity security more adaptive, more real-time, and more integrated within security operations. At a time when organizations are being pressure tested due to the extraordinary rise of agentic AI, we believe we are delivering the modern security foundation they need.

Our 38% year-over-year SaaS ARR growth is a powerful indicator of both new and existing customers actively choosing to modernize with SailPoint. Our SaaS customer count grew by 16% year-over-year, and our ARR per SaaS customer accelerated to 19% year-over-year growth in fiscal 2026. Our recently introduced flexible pricing model and new AI-fueled innovations are turning customer interest into tangible growth and reinforcing the clear momentum in our SaaS business. The second piece of context for our performance is the topic at the top of everyone’s mind, AI. Now, there is a very active debate happening in the market right now about what AI means for the future of software. I want to address this head on because from our perspective, the answer is clear. The more autonomous and agentic software becomes, the more essential enterprise identity security becomes.

This isn’t just about human users anymore. We are experiencing an era defined by an expansive non-human workforce. Armies of AI agents are being built by business users operating at machine speed and creating an explosion of identities and access points that legacy static security models simply cannot handle. While the scale of this agentic workforce is new, the core challenge of securing non-human identities is not new to us. We have been governing service accounts, bots, and other machine identities for years. For us, securing this new army of AI agents isn’t a reactive pivot, but a natural evolution for a platform architected for this very complexity. In this new world, you cannot secure what you cannot see, and you cannot govern what you cannot define. The fundamental question of who or now what has access to what doesn’t go away. It becomes exponentially more critical and complex.

For SailPoint, this isn’t a disruption to be managed. We believe it is the single greatest market expansion driver we have ever seen, and that solidifies our position as a foundational security control plane for the modern AI-powered enterprise. Because now enterprise security is identity security, and we believe no one is better positioned than SailPoint to help customers navigate into this new world. That is why we believe SailPoint is a significant beneficiary of the AI revolution. Our confidence rests on four deep compounding advantages that we believe are unique to us. First, experience. We have spent two decades exclusively focused on solving the most complex identity challenges for many of the world’s largest organizations. It’s a deeply vertical and horizontal challenge that cannot be solved by general-purpose AI alone. Second, data and context.

Our experience has allowed us to build a strategic moat through our use of data and context to deliver unparalleled precision and intelligence. Third, ecosystem. We are the control plane for its enterprise security, deeply woven into our customers’ operations with thousands of entitlement-level integrations. New AI agents don’t replace this. They must plug into it, making our platform the essential foundation. Finally, all of this culminates in our most valuable asset: trust. Many of the world’s most complex organizations choose us because we are proven and battle-tested. This trust is our currency in a market that cannot afford to risk its enterprise on unproven technology. We believe AI, coupled with our extensive domain knowledge built over decades, will prove itself a true game-changer in the coming years. Today, our solution for solving the AI identity challenge integrates AIS, MIS, and DAS solutions with more capabilities coming.

We’ve packaged these for easier adoption as part of our Digital Identity Flex pricing package. This approach is rooted in our long-standing philosophy of securing every identity, not just counting seats. It aligns our business model directly with the explosion of both human and non-human identities, helping to ensure we grow and benefit as our customers’ agentic workforce expands. Therefore, when you think about our role as an AI beneficiary, it’s critical that you look beyond a single product line. The right mental picture is to see how the vast majority of our portfolio is built with AI to secure the AI movement. From our extensive connectivity framework to our entire AI-enabled platform, we believe that all that we’ve developed has prepared us to be the guardrails for the agentic future. We believe we are built for this new world, and our customers are validating this strategy with their investments.

In total, we closed more than 500 transactions directly tied to our new innovations. In Q4 alone, our AI solutions have seen remarkably fast uptake, with numerous Fortune 1000 companies among the early customers. In fact, non-human identities accounted for approximately 25% of our SaaS identity growth in Q4 and now represent 11% of our SaaS identities under governance. In parallel, our Navigator Select pricing model also continues to gain traction, helping to accelerate adoption of our new offerings. Finally, let me share two examples from the quarter around how our customers are adopting our latest innovations to tackle these emerging identity challenges. First, take the example of a global semiconductor leader. As they undertake a massive modernization initiative to reduce technical debt, they face a critical challenge. Securing their highly automated environments.

They chose SailPoint to govern their explosion of AI agents, service accounts, and machine identities at scale. In addition to modernization as a main driver, their decision hinged on a desire to innovate at full speed, knowing that every identity, human and non-human, is secure and under control. Second, a major technology infrastructure provider chose SailPoint’s agent and machine identity security solutions to meet a mandate centered around preventing over-permissive access between human users and AI agents while enhancing compliance with regulatory requirements such as SOX and GDPR. These proof points support our belief that our strategic advantage is real. Now let’s pivot to how we plan to capitalize on this momentum and convert our unique position into even greater scale. Looking ahead, we expect FY 27 will be the year of AI adoption.

This is a reality being shaped by a market that is rapidly evolving and a platform built for this exact moment. For us, this isn’t a single motion, but a two-pronged engine for durable growth. First, we plan to deepen our footprint within our existing customer base. As customers accelerate their shift to SaaS and confront the explosion of AI identities, we believe we are the right partner to help them navigate this shift. Our adoption of a flex pricing model and our AI-powered platform are designed to help our customers expand their programs and modernize with us. Second, we believe our platform’s power and clarity of vision make us more attractive to new customers than ever before. We are seeing increasing demand from organizations that want to build their security program on the right foundation from day one.

The same advantages that make us essential to many of the world’s largest companies are creating a clear opportunity for SailPoint in the era of AI. Our ability to drive both of these motions is enabled by our platform’s true moat, our governance foundation. In a world of AI agents operating at machine speed, static, periodic governance is no longer sufficient. We are defining the new standard of adaptive identity, a standard that ultimately drives toward real-time governance. For us, that means enabling two critical states, least privilege access, and wherever possible, zero standing privilege. This is made possible by our differentiated ability to link users, machines, agents, applications, and pieces of data in a single correlated data model. The power of that foundation creates what we call identity context. This comes to life in two critical dimensions, visibility and intelligence.

We provide the visibility to extend the governance across the entire universe of identities, confronting application sprawl and securing every entitlement. We’ve recently extended this visibility to help customers explore the depths of AI usage across their enterprise with our just-announced SailPoint Shadow AI Remediation Solution. Visibility is just noise without context. That’s why we also deliver the deep intelligence to understand the meaning behind that access, moving beyond who has access to answer what they can do, when, and at what risk level. This identity context combination of visibility and deep intelligence is our most significant advantage. It’s what enables our customers to move from simply asking who has access to confidently being able to answer whether that access is appropriate, safe, and being used correctly right now. Competitors may offer a fraction of one or the other.

We deliver both with the granularity and depth that have always been the hallmark of SailPoint. This is such an exciting moment for the company. We believe we have the right strategy, the platform, and the team to continue defining the market through our leadership for years to come. Now, to walk you through the financial details of this outstanding year, I’ll hand it over to Brian, our CFO.

Brian Carolan, Chief Financial Officer, SailPoint Technologies Holdings, Inc.: Thanks, Mark. Good morning, everyone, and thank you for joining us today. We finished the year with a great fourth quarter, bringing our annual recurring revenue to $1.125 billion. This represents 28% year-over-year growth, a rate we have consistently maintained for the past three quarters, underscoring the strong and sustained demand for our identity security platform at scale. This growth rate is more than 500 basis points better than our initial FY 2026 ARR guidance. Our SaaS ARR continues to be a powerful growth engine, delivering ARR of $746 million, an increase of 38% year-over-year, and accounting for 90% of our net new ARR for fiscal Q4. This strong performance is a testament to our SaaS-first strategy and growth in our emerging products.

In fact, net new ARR from our emerging products more than doubled quarter-over-quarter, accounting for approximately 17% of our net new ARR in fiscal Q4. What’s even more impressive is that the total ARR from existing customers who adopted our AI identity solutions, which includes AIS, MIS, and DAS, or DAS, expanded by more than 50% year-over-year. We believe this is an excellent leading indicator of our future growth, demonstrating that as customers prioritize a comprehensive identity security strategy, they are turning to SailPoint for innovation. As a result, we’re seeing customers commit to larger deals to secure their environment. This past fiscal year, our average ARR per SaaS customer grew to over $380,000. That’s an increase of 19% from last year and more than double what it was 4 years ago.

We closed the fiscal year with 215 customers exceeding $1 million in ARR. That’s a 34% increase from the previous year and a clear indicator of our success in both landing large new enterprise customers and expanding our relationships with existing ones. Our customers are increasingly choosing to modernize by migrating from our on-premise IdentityIQ solution to our Identity Security Cloud, or ISC. They are making the strategic move to leverage the continuous innovation we are building into our cloud platform. This trend is not only growing but also broadening. Initially, it was primarily our perpetual license customers moving to SaaS. Now we are engaging in more of these strategic conversations with our term license customers as well. This expanded migration trend represents a significant opportunity for growth.

Our existing perpetual and term license customers combined represent approximately $350 million in ARR. With a typical 2-3x uplift upon migration, this translates into an opportunity approaching $1 billion. We view this as a durable growth tailwind and confirmation that the market is moving toward our strategic vision. It reinforces the incredible momentum we see in our SaaS business and a significant interest from customers ready to modernize their identity programs. Importantly, our gross retention has remained strong and steady at 97% this year. We believe this speaks volumes about the value our platform provides and the trust we’ve earned from our customers, in addition to representing an exciting path to ARR expansion. In the fourth quarter, our net revenue retention remained strong at 113%.

Looking at our overall financial performance for the fiscal fourth quarter, we delivered revenue of $295 million, an increase of 23% year-over-year, with SaaS revenue growing 37%. Our adjusted operating margin in Q4 was 20.6%, an expansion of 160 basis points year-over-year. We also continued to generate strong cash flow with $64 million of cash from operating activities and $57 million of free cash flow, which represents a 19.5% free cash flow margin. For our fiscal year 2026, we delivered revenue of $1.071 billion, an increase of 24% year-over-year, with SaaS revenue growing 35%. Our adjusted operating margin for the year was 18.1%, an increase of 270 basis points. Turning now to guidance.

For simplicity, I will refer to the midpoint of our guidance ranges where applicable. Full details can be found in this morning’s press release and supplemental earnings deck, where you can also find additional modeling notes. For the fiscal first quarter of 2027, we expect ARR to be $1.155 billion, up 25% year-over-year. We expect revenue to be $275 million, an increase of 19% year-over-year, with adjusted operating margin of 11.1%. We expect our diluted share count to be approximately 568 million shares and adjusted EPS to be $0.04-$0.05. For our fiscal year 2027, we expect ARR to be $1.361 billion, up 21% year-over-year.

We expect revenue to be approximately $1.265 billion, an increase of 18% year-over-year, with adjusted operating margin of 18.5%. We expect our diluted share count to be approximately 580 million shares and adjusted EPS to be $0.32. We expect to generate approximately $200 million of free cash flow in fiscal year 2027. Our guidance assumes a continued shift towards our cloud platform, with 90%-95% of net new ARR coming from SaaS in FY 2027. If we assumed no change in SaaS mix relative to FY 2026, our guidance for revenue growth would be approximately 300 basis points higher, and our adjusted operating margin would be approximately 200 basis points higher.

We believe making a more conservative assumption with our term forecast is the right approach given the increased interest in our SaaS solutions. In summary, we believe our strong results, consistent growth at scale, and innovative product roadmap position us well for continued success in the AI-powered future. We remain committed to driving durable, profitable growth, and we are optimistic about our ability to deliver long-term value to our shareholders. With that, let’s invite Matt Mills, our President, to join us and open the call for questions. Operator?

Operator: Thank you. As a reminder, to ask a question you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. We ask that you please limit yourself to one question to allow everyone the opportunity to participate. Please stand by while we compile the Q&A roster. Our first question comes from the line of Saket Kalia of Barclays. Saket, your line is open.

Gabriela Borges, Analyst, Goldman Sachs0: Okay. Well, hey, good morning everyone, and thanks for taking my question here. Brian, maybe for you. I’d love to jump right into the ARR guide here for fiscal 2027. You know, I think the moving parts in the revenue guide make a ton of sense just given the strength you’re seeing in SaaS and what that means for rev rec on term. From an ARR perspective, can you just talk about how you’re thinking about the on-prem component next year in terms of churn versus conversion? Zooming out, whether the guided philosophy on ARR is different going into fiscal 2027 versus fiscal 2026.

Brian Carolan, Chief Financial Officer, SailPoint Technologies Holdings, Inc.: Good morning, Saket. Good to hear from you. Thanks for your question. First of all, we feel like this is the appropriate place to start the year for our initial guidance to start the year out. We obviously have strong momentum heading into the year. We’ve demonstrated 28% ARR growth for the past three quarters in a row. We’re doing this at scale, well above $1 billion at this point, with 38% SaaS ARR growth. So I think, you know, we’re demonstrating healthy demand. We have a strong pipeline. We’ve demonstrated strong and steady gross retention at 97%, which is a great place to be. I think, you know, the innovation is really driving customers towards SaaS, both new customers and existing customers.

We do have a very strong migration pipeline. As I mentioned on the script or call, we have a $350 million opportunity that’s broken down between about $210 million of term with the remainder of $140 million coming from perpetual maintenance.

I think we’ve said in the past, we typically see a 2-3x multiplier on that at the time of migration, and then it grows from there, with emerging products and other add-ons and cross-sell opportunities. There’s really no fundamental change in our business. There’s no change in the competition or win rates. We feel like we’re simply taking a prudent approach to start the year. We feel good about this. We feel it’s the right place to start, and, you know, we’ll take it from there.

Brian Essex, Analyst, J.P. Morgan: Very helpful. Thank you.

Operator: Thank you. Our next question comes from the line of Matthew Hedberg of RBC. Please go ahead, Matt.

Matthew Hedberg, Analyst, RBC Capital Markets: Great. Thanks for taking my question, guys. You know, you guys launched Navigators recently, and it really does feel like that’s going to help customers think through even longer-term usage of SailPoint, whether it’s humans or non-human identities. I guess I’m curious kind of, you know, initial reaction to that. You know, when we think about AIS’s impact to fiscal 2027, how have you thought about the impact of that, I guess, Brian, from kind of that initial guide? Thanks, guys.

Brian Carolan, Chief Financial Officer, SailPoint Technologies Holdings, Inc.: Yeah. Go ahead, Matt. You can take the pricing one and on.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Yeah. Hey, Matt. Look, I think like any of these new pricing models, it takes a bit to get them going. It showed up big in our fourth quarter. I think we’ll talk about this later, but the migration, it was a strong migration quarter. Our Flex monetization was pretty significant in driving a lot of that. Just to remind you what that is, it’s kinda taking the economics of having two sets of IP being the SaaS and the perpetual, right? Running it into a single economic stream. It makes it much easier for these customers to get going. Quite frankly, you know, it’s always year one, right?

Year 1, maybe year 1 and a half that they try to get through from an economic perspective. This Flex Premier monetization has been instrumental in helping us really get through that and accelerating our migrations.

Brian Carolan, Chief Financial Officer, SailPoint Technologies Holdings, Inc.: Matt, I’ll take the other one just in terms of the AI identity solutions. I think I mentioned on the call, about 17% of our net new ARR came from what we call emerging products, and a good portion of that, significant portion, comes from the AI identity solutions. That includes AIS, MIS, and also DAS, Data Access Security. We’re actually to start the year, we’re factoring in a little into our initial guide. We expect that to ramp throughout the year as we go along.

Matthew Hedberg, Analyst, RBC Capital Markets: Thanks, guys.

Operator: Thank you. Our next question comes from the line of Rob Owens of Piper Sandler. Your line is open, Rob.

Rob Owens, Analyst, Piper Sandler: Great. Good morning. Thanks for taking my question. Wanted to build on Socket’s question a little bit. Mark, I appreciate your commentary around this being the single greatest market expansion driver you’ve ever seen. If we look at fiscal 2026, we saw moderating ARR beats throughout the year. Then if we look at the initial guide for ARR, it’s not really showing durable growth. Maybe help us understand just how this year played out relative to your expectations. Then as you look forward in the coming fiscal year, just what’s in the guide for AI and agentic and that potential inflection, or have you discounted all of that out of the guide? Thank you.

Brian Carolan, Chief Financial Officer, SailPoint Technologies Holdings, Inc.: Hi, Rob. It’s Brian here. I’ll start, and I think Mark might add some color commentary on this. I think we’ve been able to demonstrate very consistent growth throughout the year. We feel good about doing this in a very balanced manner. It’s a balanced growth in terms of half of that came from new customers and half came from existing. We view that as, you know, durability going out to the future. Certainly, there’s gonna be an inflection point with a lot of the emerging identity types on the non-human identity side. When that inflection point happens, you know, we can’t pinpoint precision with that, but we do know it’s gonna happen. We’re factoring very little into the initial guide, but we do think it’s gonna build over time.

We feel like this is the right place to start the year. I think we’ve been able to demonstrate an outperformance, as the year went along, in FY 2026. Hopefully, we can continue that into FY 2027, but we simply wanna be prudent, with the starting point and then build from there.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Yeah. Rob, thanks again for the question. Good to talk to you. Yeah, look, you’ve known us a long time. We’re not kind of prone to overhyping things. I think when we talk about this being a significant TAM expansion, it’s because of the momentum we see building with these large strategic customers where we spend the great majority of our time. Obviously, as Brian says, we see some ramp coming from the customers as they get into the quote, unquote, "the year of deployment." We’ve talked a lot about how last year was a lot of, I don’t know if I’d call it experimentation, but a lot of trying out various parts of the agentic and AI world in large customers, and now people seem to be ready to move into more production.

They are talking to us very actively about how they need to secure this agentic environment. That’s the kinda demand curve we see building. It’s just prudent in our minds not to kinda build that into an initial commitment to the street here, but we see it coming. We don’t think anybody actually in the market doubts that, honestly, Rob. I think what everybody’s questioning is who’s gonna be the winners. Our contention continues to be to manage this well, you have to have the things that are kind of unique to our traditional value, which is a breadth of understanding all the identities in the landscape and a depth of the detailed entitlements and data those identities can access.

That just gets more complex and much more real-time in this emerging world of agentic. We just feel like we are very well positioned to capture that opportunity. Our customers and prospects, and Matt probably can pick this up later in the conversation maybe, but that’s what we’re hearing from them, and we’re seeing that interest, and they’re talking to lots of vendors, obviously. They seem to be very pleased with what we’re describing as where we’re headed here and what we’re already delivering. We’ve been out in the market for a few months in many cases where people are now just making announcements with future delivery dates. I would kinda highlight that.

Rob Owens, Analyst, Piper Sandler: Great. Thank you.

Operator: Thank you. Our next question comes from the line of Brian Essex of J.P. Morgan. Your line is open, Brian.

Brian Essex, Analyst, J.P. Morgan: Hi, good morning, and thank you for taking the question. Maybe Brian, I know we’re gonna get a lot of questions on this today, so I just wanted to, you know, put a finer point on, you know, the ARR guidance and, you know, maybe from the perspective of what you saw this year versus what you’re contemplating for next year. I think, you know, if I look at what you delivered this year, you know, $248 million of net new ARR growing 27%, which was phenomenal. Gross retention rates are best in class, so we don’t really seem to have to worry about filling a leaky bucket. But the top end of your guide implies maybe $241 million of net new ARR.

Just wanna understand, you know, from what you were able to deliver this year from a sales productivity perspective, how should we think about the levers that you have in place and the assumptions with the guidance next year, just so we can get a sense of the level of conservatism and how much effort from sales productivity and investment in sales and marketing is required to kind of like, you know, exceed that expectation. Thank you.

Brian Carolan, Chief Financial Officer, SailPoint Technologies Holdings, Inc.: Sure. Thanks, Brian. I think we’ve demonstrated that durability in the growth profile, and I think that’s what gives a lot of confidence going into this year. Again, we feel like this is the right starting point. We hope to build from there as the year goes along. We still see a lot of opportunity both in new logo acquisition. We still see a lot of opportunity in what we call our target account list. We’re about 15% penetrated. That’s a 15,000 named account list that we continue to go after. Lots of white space there. We are landing larger deals. We’re up about 20% on average for ARR per customer for the past two years. Once we land them, we keep them.

We have a 97% gross retention rate, and then we expand with them consistently, in that 113%-115% range throughout the year. We still feel like it’s early in terms of the emerging products and cross-sell opportunities that we’re seeing. Not only the explosion of identity growth, especially non-human identities. Again, we started seeing contributions right away from the emerging modules, which contribute 17% of our net new ARR growth. Then let’s not forget about the migration opportunity. We have about a $350 million opportunity. That means only about 15% of our on-prem ARR has been penetrated. We still have $350 million to go.

You start doing a 2-3x multiple on that at the time of migration, and then it grows from there over the next several years. I think we look out into FY 2027 and beyond, and we have a lot of tailwinds in our favor, a lot of opportunity, again, from new logos and also expansion within our existing customer base.

Brian Essex, Analyst, J.P. Morgan: Thank you.

Operator: Thank you. Our next question comes from the line of Meta Marshall of Morgan Stanley. Your line is open, Meta.

Meta Marshall, Analyst, Morgan Stanley: Great. Thanks. Wanted to ask a question. You know, the 50% uplift in ARR from those adding the new modules stat was particularly interesting. I guess I just wanted to get a sense, is that kind of what we would expect as the normal uplift? Or, you know, they might have just adopted one of the three products, and so that’s not kind of a fair, necessarily kind of total uplift potential calculation, if that makes sense. Thanks.

Brian Carolan, Chief Financial Officer, SailPoint Technologies Holdings, Inc.: Hi, Meta, it’s Brian here. I would say it’s still early days. You know, we’re very pleased with the early traction and early success that we’re seeing. Hopefully that’s a leading indicator of what’s to come in FY 2027 and beyond. I think it’s resonating with customers. I mean, you know, these emerging products, many of which were just unveiled over the last six months, are starting to take hold. More importantly, I think they’re showing up in customer conversations and funnel and pipeline opportunities.

Operator: Thank you. Our next question comes from the line of Keith Bachman of BMO. Your line is open, Keith.

Brian Essex, Analyst, J.P. Morgan: Excuse me. Hi, thank you very much, and sorry to go back to the guide for a second, but what is compressing? If I think about the formula, you’ve been growing ARR, as you mentioned, 28%, and you’re getting about 114 net retention rate. If you think about the guide, 21%, and all the attributes that go with it, is it you know, is the assumption that the net retention rate will continue to compress and/or new logos will slow? Because all the characterization that you’ve given about the on-premises migration potential new products, I’m just a little bit surprised about the implied rate of deceleration, even if we assume some conservatism. Is it a slowing of the retention rate or new logos or both?

Any color you could give there would be appreciated. Many thanks.

Brian Carolan, Chief Financial Officer, SailPoint Technologies Holdings, Inc.: Hi, Keith. It’s, Brian, and I’ll take that. Again, we feel this is the right place to start. There is no fundamental change in the business. There’s no change in competition or win rates. We’re simply taking a conservative approach to start the year. We feel good about this. I would say that we are leaning more towards, SaaS and term migrations. We probably would see a little less new term business in FY 27 if we had to call one thing out, because I think customers are going right to SaaS. One example is in Europe.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: You know, they doubled their SaaS business year-over-year in FY 26. They have really leaned into it in terms of the customer base and our selling motion. That’s going to be very strong, and we’re counting on that to be very strong. Again, no fundamental change in the business. We understand that the starting point is, you know, probably a little bit lower, but we feel it’s the right place to start. We feel good about it, and we hope to build from here.

Brian Essex, Analyst, J.P. Morgan: Just to be clear, should we expect the net retention rate, though, to slow a little bit from the 113% level?

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: I would not.

Brian Essex, Analyst, J.P. Morgan: Okay. All right. Many thanks.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: We’ve been very consistent in that range.

Brian Essex, Analyst, J.P. Morgan: Okay. Many thanks.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Thank you. Thank you, Keith.

Operator: Thank you. Our next question comes from the line of Jonathan Ruykhaver of Cantor Fitzgerald. Jonathan, your line is open.

Jonathan Ruykhaver, Analyst, Cantor Fitzgerald: Yeah. Thanks and good morning. I want to ask about some announcements from last week around expanding visibility across privileged access and non-human identities. I think, Mark, you did touch on this to some extent, but I’m curious specifically what the gaps are that these upgrades address. Just looking at the strategy related to, you know, to privilege, can you just elaborate on how you’re thinking of that? Is it a situation where, you know, you see the opportunity to compete directly against the PAM vendors? Is it, you know, a broader opportunity just based on privileged controls, you know, across, you know, human and non-human identities and not necessarily a direct competitive situation against legacy PAM?

How are you thinking of that?

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Yeah. Thanks, Jonathan. You’re right on it there at the end of your comment or question there, I’d say, in that we are, we’re not focused at this point on the traditional PAM market, which is kind of a static privilege assignment. You know, the acronym unpacks to privileged account management, right? Like, an account is sort of permanently privileged in that model. And it’s obviously, as we all know, kind of the history of that was permanently privileged users like database administrators and systems administrators. And what we’re all talking about, and I’d say this is coming from even the folks, you know, like Palo Alto Networks, who bought CyberArk and others in the, in the market, that the world is shifting to a much more universal sense of managing privilege across all identities and a much more dynamic sense of privilege, not static.

When we look at that evolution, and by the way, you know, Jonathan, particularly now applied on that dynamic vector to agents, which will probably be so dynamic as to potentially be almost ephemeral. There might be agents that literally exist for seconds and do a job and go away again. Well, in that environment, obviously, we think it is gonna be that breadth and depth capability that we possess, we think is strong as anyone in the market, if not stronger. That is to see that range of identities, and we’re doing tons of investment in technology to see, to have visibility to all of that range of identities, and then to have the breadth, excuse me, the depth to go deeply into the detailed entitlements or data access rights that allow a particular identity to get to particular data.

Again, we’ve differentiated this since our IPO about a year ago that the other two parts of the traditional identity market, you know, the access part, which is very wide, covers a lot of identities. They’re certainly talking to those vendors about covering the new agentic identity world, but they would struggle, I would argue, to go into the depth that’s required to really control these things at a granular level. On the other side, those coming from the privilege heritage, obviously very deep in their coverage of human identities, and I think they’re gonna certainly claim that they’ll provide that to non-human. Their challenge is breadth.

They just have typically covered, I think the quote from the leader at Palo Alto Networks was that typical CyberArk shop, they’ve covered 3%-5% of the identities in that enterprise, and we’ve covered 100% of those identities in those enterprises. It’s just a very different starting point to go after this market. We do believe that those fundamental characteristics and then the ways in which we’re leaning into this dynamic need is gonna put us in a very good position as these markets unfold and as customers go to volume, right? We do think that’s kind of a unique position we’re starting from, and others are saying a lot of words and not necessarily we’re sure how they’re gonna deliver on those words.

I think this game is gonna be a proof game in our fiscal 2027, this calendar 2026. It’s gonna be a proof of who can deliver what the customers actually need and the technology they need to solve these problems. We do kind of encourage you to keep watching how that unfolds this year. Like Brian said, for a lot of reasons, we think we’re starting from the right place with our financial guidance. We’re making sure you hear us clearly on our confidence in our technical abilities and where we’re going. That’s where I would say that’s true. Hopefully, that’s helpful.

Jonathan Ruykhaver, Analyst, Cantor Fitzgerald: Yep. Yeah, very much so. Thank you.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Thanks.

Operator: Thank you. Our next question comes from the line of Gabriela Borges of Goldman Sachs. Your line is open, Gabriela.

Gabriela Borges, Analyst, Goldman Sachs: Hi. Good morning. Mark, I wanted to get your thoughts on what Anthropic has announced on being able to accelerate COBOL migration through the lens of we know that IGA migrations are sort of painful for your enterprise customers to switch on to SailPoint and then for SailPoint to do the implementation as well. My question for you is, how does AI make those types of migrations easier? The potential opportunity seems to be around your classic market share gains in IGA. The risk would potentially be if the switching cost goes down. Yeah, would love to hear you chat about that a little bit. Thank you.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Yeah. I think if I understood that, Gabriela, I apologize. The line was a little choppy, but I think I got most of that question. I apologize if I didn’t quite. Can you please clarify? No, I think what we’re seeing is, the AI tools being released rapidly and then evolving rapidly in the market certainly help us do a lot of things to be more efficient and effective at moving customers forward. We’re leveraging those tools, right? We always talk about AI for us has three or four characteristics, right? It is potentially enabling bad actors and threat actors to be more effective. We have to protect against that.

It’s enabling us to be far more effective in what we do, and it’s creating this demand curve that we talked about with Rob earlier about our customers are deploying it, and we think we can be there to help them manage it. It’s got a lot of characteristics. In the sense that what does it do to help us do what we do more effectively, which I believe was your question, and how do we therefore maybe potentially fend off kind of newer competitors who are coming, say, from a pure AI agentic world. I think a term we’re all going to be talking about a lot this year, Gabriela, and not just in our space, but in a lot of spaces, is domain knowledge, right?

You can’t enter a space with zero domain knowledge and be that threatening to a partner who’s already in that space and also leveraging AI, right? I think our secret sauce and many vendors’ secret sauce, this is the whole software AI debate, will be as we leverage these amazing technologies and filter them through our very deep and rich understanding of what it takes to be successful in these enterprise environments, we think that puts us in a very good position. Yes, we’re actively looking at ways to use AI to discover agents and technologies, how to quickly leverage policies and put them into our product, how to quickly help customers define security policies. There’s some new guidelines from NIST out recently, very recently, that start to define what’s going to be needed to audit agents.

Something we’ve been telling people, "Get ready, this is coming," right? You’re not going to see this explosion of agents without auditors wanting to ensure you can defend what agent was given what power and why. I think there’s just going to be a ton of aspects of this market that are unfolding, and we’re going to leverage all kinds of AI technology in our products to go after that, but also make sure we are helping customers protect themselves as they deploy AI. It’s really a both/and here, but I hope. Is that, Gabriela, let me make sure. Did I get at the question you were really asking?

Gabriela Borges, Analyst, Goldman Sachs2: Yes. Yeah. Thank you.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Thanks.

Operator: Thank you. Our next question comes from the line of Patrick Colville of Scotiabank. Your line is open, Patrick.

Patrick Colville, Analyst, Scotiabank: Mark and Brian, thank you for having me on. I mean, lots of drivers that you guys have called out, you know, SailPoint’s cloud transition, you know, the SKU upgrade motion, more identities, agentic. I think there have been a lot of questions on the fiscal year 2027 guide. Actually I would want to ask my question about Q4 specifically. Q4 ARR, the beat was a little bit skinnier than we might have hoped. Was there anything unusual in Q4 of like push or pull in ARR into different quarters? And then actually, similarly, when I look at operating margin, the outperformance there versus the guide provided three months ago was perhaps a little bit less than we’ve seen throughout fiscal 2026.

Again, like with cost, was there anything that kind of pushed or pulled in the quarter? Thank you.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Hi, Patrick. I’ll go first. This is Brian here. I think, you know, we look at this and we think the business is very healthy and, you know, we’re pleased with the results. We’re in line to slightly above all of our guided metrics. We grew net new ARR 34% year-over-year. That was the best quarter ever by at least $20 million, and that was driven by SaaS, which that net new ARR was up 41% year-over-year. I think we demonstrated growth at scale. We had a steady gross retention rate and net revenue retention rate. New products are ramping. We’re seeing momentum there. As I mentioned, 17% of our net new ARR came from emerging customers.

Margins improved 270 basis points over the course of the year. We’re doing this with growth in a very responsible manner, and we also demonstrated significant free cash flow movement. You know, as I mentioned, a lot of customers now are starting with SaaS. That’s in accordance with our strategy. This is playing out as we expected with an intentional shift to SaaS, with 90% of our net new ARR in Q4 coming from SaaS. I think I mentioned that, you know, more new customers are starting with SaaS, especially in geographies like Europe. You know, EMEA, SaaS, net new ARR doubled in FY 2026. You know, we possibly saw like a little bit of less on-prem expansion bookings through term business, but we’re not reading into that.

Actually, I think, you know, we’re viewing this as a positive in terms of now customers embracing SaaS, going right to it, and also migration opportunities are going to be a tailwind for us, as I mentioned, moving forward.

Gabriela Borges, Analyst, Goldman Sachs3: Yeah. Patrick, this is Matt. I would just add, I mean, I think, you know, since Navigate, where we announced a ton of new innovations, it’s really kind of accelerated this migration process. I think that was, you know, probably some of the curtailing of or maybe some of the slowdowns you saw in perpetual licenses add-on. I think our business is strong. I’d also call out, you know, new logos. I know that’s always a concern, but it’s, it continues to grow. The largest companies in the world are selecting almost every day SailPoint to help them with this challenging agentic security landscape. Our ASP, our new logo ASP for this last quarter was 22% growth.

We had a really good fourth quarter as it relates to new logos and new logos ASP.

Patrick Colville, Analyst, Scotiabank: Very clear. Thank you.

Gabriela Borges, Analyst, Goldman Sachs3: Thanks, Patrick.

Operator: Thank you. Our next question comes from the line of Joseph Gallo of Jefferies. Please go ahead, Joseph.

Gabriela Borges, Analyst, Goldman Sachs3: Hi, guys. It’s Annick Baumann for Joseph Gallo. Thanks for taking our question. Non-human identities seem to be making deals larger and more complex. Any changes to the sales cycles? And then can you talk about pricing? Previously, I think you talked about a 40% pricing for a non-human identity relative to human. Thank you. Yeah. Hi, this is Matt. I’ll give it a shot, and then the other guys can add in if they want. Look, I do think sales cycles have elongated a little bit over the last six quarters, but I don’t think there’s anything that we’ve seen as of late that’s changed that narrative.

I think when you look at our approach to strategic pricing these agents, you know, we kind of start with the fundamental basis of that, the simple principle that agents need to be deployed securely, and their lifecycle will be intrinsically tied to the human identities, right? I think there’s a lot of companies that are looking at it very similar to us. You cannot secure one without governing the other. Our aim really is to meet our customers and prospects where they are. This is still relatively new to a lot of these folks, and you know, they’re looking for some approaches to be able to get into this that helps them mitigate, in their mind, a potential risk of moving forward with agentic AI.

Our model and our approach to this, it starts with humans, and then we apply some level of a ratio to it. And, you know, if you remember the Jensen Huang theory, right, that his company’s gonna have 2,000 agents to every one employee. Well, that’s a little bit of an extreme example, but it gives you a point of reference on how we’re thinking about that. And then the last part of this thing is, you know, how do you charge for this? And, you know, it’s a bit of a consumption model because we want these customers to be able to deploy it without limits over the period of time, the contract.

The contracts we’ve done like this basically all start with a price point, and then it’s what does the renewal look like? This gives us a pretty solid foundation to be able to say, "Here’s the cost point, here’s the ability to access and to deploy over the period, and then here’s how the follow-up of the renewal would come." Those are the long poles in the tent. The last piece I’ll add, because it’s very important, is a fair use policy. All these proposals have a fair use policy versus sustainability to make sure that if a customer is using it outside of our expectations, right? The way you should think of it is anything over 95% of the broader customer base, right?

There’s some components in there that actually protect us from runaway costs. That’s—I don’t know if that’s helpful or not. I hope it is. But it gives you a little bit of a view in terms of how we’re looking at pricing this non-human world.

Operator: Thank you. Our next question comes from the line of Peter Levine of Evercore. Your line is open, Peter.

Gabriela Borges, Analyst, Goldman Sachs4: Great. Thank you, gentlemen, and good morning. Yeah, maybe to you know, Matt, the last question maybe to a final point, and maybe for you as well, Brian, is how should we think about you know, monetization, you know, in a more consumption flex-driven model, right? Or the directional metrics you can share with us if it’s revenue per identity or per AI workflow, just to kind of help frame the opportunity or for you know, for us to kind of just see what the revenue build looks like. Again, it’s just I guess it’s more so just quantify for us as you’re securing more AI agents, just how that translates into revenue, higher attach rates, increased consumption, or again, just metrics like revenue per identity. How should we best think about that? Thank you.

Gabriela Borges, Analyst, Goldman Sachs3: Yeah. This is all about flexibility and adoption for us. We wanna get customers going on, you know, whatever their non-human identity footprint is, being able to secure that right away. Those Flex models that we’ve introduced, and yes, we do view this as more akin to consumption-based, but that’s not how we’re gonna recognize it. We’re gonna actually just have a fixed fee for a period of time, let them deploy as they need to, and then monitor them and then come back to them with any kind of over usage. Yeah. Yeah. I would say it’s not a metered model. Yeah. Peter.

Gabriela Borges, Analyst, Goldman Sachs4: Great.

Gabriela Borges, Analyst, Goldman Sachs3: We recognize it financially just like we would any other kind of deal. Certainly, this is gonna be incremental. I mean, it’s hard to put an exact, you know, ten-point precision on that. But we know that the ratio of non-human to human is going to be significant. This will play itself out over time in terms of price and volume, but we do know it’s gonna be incremental. Yeah. And look, our point of view on this is we’re trying to make this really, really easy for companies to do business with us and mitigate the risk, as I mentioned before. This is all about adoption.

The customers that we’ve seen thus far, once they get in, they start to understand what they can do, what they can’t do. It becomes far easier for these to make greater investments in the move. These kind of flexible pricing models that we’re talking about kind of take that away and says, "You know, let’s get on with the business of agentic AI.

Gabriela Borges, Analyst, Goldman Sachs4: Thank you.

Operator: Thank you. Our next question comes from the line of Gray Powell of BTIG. Please go ahead, Gray.

Gabriela Borges, Analyst, Goldman Sachs5: Okay, great. Thank you very much. Appreciate the questions. So yeah, just what are you seeing in terms of the appetite for customers to replace legacy IGA solutions this year from folks like, you know, Oracle and IBM? And are you seeing AI playing a bigger role in those conversations? Is it potentially driving any acceleration of, you know, legacy product migration?

Gabriela Borges, Analyst, Goldman Sachs3: Hey, Gray, this is Matt. I’ll give you a perspective. I mean, we’ve really seen, I’ll just use our own migrations as a point of reference, right? Once we announced all the innovations here at Navigate last year.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Significant difference in these customers that are large customers that have probably made a lot of customizations, even with our own tools, feeling this overwhelming urge that they gotta move. I think these agents and agent AI. I think they’ve all realized this is not gonna be a we wanna move or not. It is coming at you 100 miles an hour. I think it’s caused not only the legacy ones that you’re talking about, the Oracle and maybe the CA of the world, but anybody who’s not on a platform that can actually handle this accelerated agent AI that’s coming at ’em. It’s out the window.

Gabriela Borges, Analyst, Goldman Sachs3: That’s really helpful. Thank you.

Operator: Thank you. Our next question comes from the line of Shrenik Kothari of Baird. Please go ahead, Shrenik.

Gabriela Borges, Analyst, Goldman Sachs2: Yeah. Thanks for taking my question. You closed 400+ deals tied to new innovations and emerging products contributing 17% net new ARR, which is clearly a very strong start and encouraging early signal. Just given your own commentary, many of these are still in early innings. On the go-to-market side, right, how do you view the current transition from selling a more core governance sales motion towards this more complex multi-product expansion playbook? Do you feel from training, enablement, field structure, how are you viewing you are already in place to sell this broader platform from day one? Thanks.

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Yeah. I’ll take a shot at that, Matt may jump on too. I think couple things, right? We just had, as you all know, our Navigate conference in the fall, and then we just had our sales kickoff just literally a few weeks ago. Big focus on a couple of different things. One is making sure people feel confident that as any customer wants to move forward with, we’ll call it traditional IGA, they’re very confident in what we’re doing vis-a-vis our kinda current competitors and the legacy players we’ve seen. I think particularly on that kinda continuing to add fuel to the fire of that 17%, you know, of our ARR coming from these emerging products, a large portion of the enablement at our sales kickoff this year was around making sure people are ready and equipped to go have those conversations.

I’ll point to one particular thing Matt and the team have done, and maybe Matt will give a little more color here. For the first time, we’ve put kind of a focused, targeted sales team around the agentic topic area. We’ve been bringing in new reps and SEs who come from that kind of a heritage, and that’s really opening up a different sales motion to the chief AI officer or whatever the company calls their lead AI person, right? We’re still obviously engaged with CISOs and identity leaders about that, but we’re finding that some of the pull, the demand we’ve been talking about is actually coming from that AI part of the organization.

Shockingly, maybe not shockingly, sometimes they aren’t as connected to the identity team as they probably should be, and sometimes we’re the ones helping that bridge get built. Matt and Gary, who leads our whole field team, have kind of put a focused effort on that. Matt, maybe you can expand a little bit on what we’re doing there and what we hope to accomplish there.

Gabriela Borges, Analyst, Goldman Sachs3: Yeah. Think of them as product-oriented sellers, right? They walk in the door with a set of skills to be able to talk about agentic and not only you know the value prop but also the challenges these companies have in deploying it. I think the other thing that’s really important is that as Mark said it feels to us that a lot of the budget now is locked up in this head of AI or chief AI officer whatever they call it and that through going through that route we’re unlocking a lot more budget and a lot more opportunity than maybe just simply going up the traditional stovepipe of you know identity up to the CISO. That’s become very interesting.

Gabriela Borges, Analyst, Goldman Sachs2: Great. Appreciate your answer. Thanks.

Operator: Thank you. I would now like to turn the conference back over to Mark McClain for closing remarks. Sir?

Mark McClain, Founder and Chief Executive Officer, SailPoint Technologies Holdings, Inc.: Well, thanks everyone again for the time. We really appreciate it. Again, we’ll kinda end where we started. We feel very good about the results for all of last year. We feel very good about the starting position for this year and the tailwinds we see coming from these technological shifts in our customers and our position to win. We invite you to kinda go on the journey with us this year. We feel very good about where we’re at and where we’re headed, and look forward to continuing to engage with a lot of you individually. Thanks for the time this morning.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

Gabriela Borges, Analyst, Goldman Sachs6: Goodbye