Shares in SailPoint Inc. fell more than 11% today after the identity security company beat analyst expectations on revenue and adjusted earnings and raised its outlook, in a selloff that pointed to investor expectations the results did not clear.

For its fiscal 2027 first quarter ended April 30, the company reported adjusted earnings of five cents per share, up from one cent a year earlier, on revenue of $280 million, up 22% year-over-year. Analysts had been expecting adjusted earnings of four cents per share on revenue of $276 million.

SailPoint posted a net loss of $75 million, or 13 cents per share, narrowing from a loss of $187 million, or 42 cents per share, a year earlier. The operating loss shrank to $80 million from $185 million.

Annual recurring revenue rose 26% year-over-year, to $1.16 billion. Software-as-a-service annual recurring revenue, the faster-growing slice, climbed 36%, to $781 million. Subscription revenue, which made up $266 million of the $280 million total, rose 23%.

The company also generated cash. SailPoint reported $38 million in cash flow from operations and $33 million in free cash flow, a sharp reversal from the cash burn it recorded a year earlier when initial public offering payouts weighed on results.

SailPoint raised its full-year outlook alongside the results. For fiscal 2027, the company now expects revenue of $1.27 billion to $1.28 billion and annual recurring revenue of $1.36 billion to $1.37 billion, growth of 21% to 22%. It guided to adjusted earnings of 30 to 34 cents per share. For the current quarter, the company forecast revenue of $308 million to $312 million and adjusted earnings of seven to eight cents per share, broadly in line with what analysts had been expecting.

Founder and Chief Executive Mark McClain tied the quarter to demand for securing the growing population of machine and artificial intelligence identities inside large enterprises. “Securing identity is a prerequisite for modern innovation,” McClain said in the earnings release. “As regulatory frameworks intensify the mandate for strict controls over nonhuman identities, our unified, real-time approach empowers many of the world’s largest enterprises to harness the potential of artificial intelligence with confidence.”

SailPoint was taken private by Thoma Bravo in a 2022 buyout before returning to the Nasdaq in February 2025. Despite the double beat and the raised forecast, its second-quarter and full-year guidance landed roughly in line with analyst estimates rather than above them and the outlook implied ARR growth slowing from the 26% posted in the quarter. For a stock that had climbed since its return to public trading, that proved enough to send shares lower.

Photo: SailPoint