SailPoint Technologies Holdings, Inc. (NYSE: SAIL) reported Q2 EPS of $0.03, $0.05 better than the analyst estimate of ($0.02). Revenue for the quarter came in at $54.6 million versus the consensus estimate of $49.98 million.

“We are pleased to announce our financial results for Q2 2018, which showed strong momentum across the business with revenue increasing 39% year-over-year and profitability on a non-GAAP basis,” said Mark McClain, SailPoint’s CEO and Co-founder. “At 1,031 customers, we are excited to have crossed the 1,000 customer milestone. Our customers represent everything from the world’s largest companies to cloud-first mid-market enterprises.”

“Organizations are struggling to keep pace with the constantly evolving security and compliance landscape amid their digital transformation, which is why identity governance is so critical,” added McClain. “Regardless of where an enterprise is in their digital transformation, they need the ability to securely govern digital identities for all users, which includes both humans and non-human bots, all applications and all data, whether on premises or in the cloud. SailPoint is at the forefront of developing innovative ways of providing comprehensive identity governance to ensure companies can securely and confidently enable their workforce.”

Financial Highlights for Second Quarter 2018:

• Revenue: Total revenue was $54.6 million, a 39% increase over Q2 2017. License revenue was $19.1 million, a 43% increase over Q2 2017. Subscription revenue was $25.0 million, a 53% increase over Q2 2017. Services and other revenue was $10.4 million, an 8% increase over Q2 2017.
• Operating (Loss) Income: Loss from operations was $(1.8) million, compared to loss from operations of $(1.2) million in Q2 2017. Non-GAAP income from operations was $4.6 million, compared to $1.2 million in Q2 2017.
• Net (Loss) Income: Net loss was $(5.6) million, compared to $(4.3) million in Q2 2017. Net loss available to common shareholders per basic and diluted share was $(0.07), compared to $(0.22) in Q2 2017. Non-GAAP net income was $2.5 million, compared tonon-GAAP net loss of $(1.7) million in Q2 2017. Non-GAAP net income per diluted share was $0.03, compared to non-GAAP net loss per basic and diluted share of $(0.02) in Q2 2017.
• Adjusted EBITDA: Adjusted EBITDA was $4.4 million, compared to $1.9 million in Q2 2017.
• Balance Sheet and Cash Flow: As of June 30, 2018, cash and cash equivalents were $81.8 million. During the second quarter of 2018, the Company repaid $60.0 million of borrowings outstanding under its term loan facility to reduce the aggregate outstanding principal amount thereof to $10.0 million. During the three months ended June 30, 2018, the Company generated $11.3 million in cash from operations compared with $(0.9) million of cash used in operations from the prior year period. For the six months ended June 30, 2018, the Company generated $26.6 million in cash from operations, compared to $6.0 million of cash from operations in the prior year period.

GUIDANCE:

SailPoint Technologies Holdings, Inc. sees FY2018 EPS of $0.12-$0.14, versus the consensus of $0.08. SailPoint Technologies Holdings, Inc. sees FY2018 revenue of $233-236 million, versus the consensus of $227.55 million.

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