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SailPoint, Inc. (SAIL)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY2026 delivered strong top-line and margin expansion: revenue $264.36M (+33% YoY), subscription revenue $248M (+36% YoY), adjusted operating margin ~20% and adjusted operating income $54M; ARR reached $982M (+28% YoY) with SaaS ARR $623M (+37% YoY) .
  • The quarter exceeded prior guidance and Street estimates: revenue beat consensus by ~$20.9M and adjusted EPS of $0.07 beat by ~$0.026; 18 revenue estimates and 16 EPS estimates informed the consensus* . Values retrieved from S&P Global*.
  • FY2026 outlook increased across ARR, revenue, adjusted operating income, margin, and adjusted EPS; Q3 FY2026 guidance implies continued growth with ARR crossing $1B .
  • Management highlighted record new-logo ARR, strong add-on module attach rates, and a $7M timing shift from federal term renewals that benefited Q2 revenue without pull-forward risk .
  • Stock reaction was positive following the print, with several sources citing sustained momentum post-earnings .

What Went Well and What Went Wrong

What Went Well

  • Record execution in recurring revenue: ARR $982M (+28% YoY) and SaaS ARR $623M (+37% YoY), underpinning durable compounding growth .
  • Margin expansion on operating leverage: adjusted operating income $54M (20% of revenue) vs. $21M (11%) in Q2 FY2025; strong cash generation with CFO $50M and FCF $46M .
  • Management raised FY2026 guidance broadly and emphasized demand for machine identity and AI-driven features; quote: “Identity security is center stage…we are raising our guidance for the full year across all metrics.” — Mark McClain, CEO .

What Went Wrong

  • GAAP operating loss remained negative at $(41)M (−15% margin), despite improvement YoY from $(66)M (−33%) .
  • Adjusted EPS of $0.07 declined YoY vs. prior-year adjusted EPS of $0.08 per press materials, indicating residual dilution and GAAP costs headwinds .
  • Management flagged a $7M timing shift tied to federal term renewals that pulled revenue into Q2 from Q3, adding volatility to reported revenue cadence even if not indicative of underlying demand issues .

Financial Results

MetricQ4 2025Q1 2026Q2 2026
Total Revenue ($USD Millions)$240.0 $230.47 $264.36
Subscription Revenue ($USD Millions)$224.38 $215.0 $248.0
Adjusted Operating Income ($USD Millions)$46.0 $24.0 $54.0
Adjusted Operating Margin %19.0% 10.0% 20.0%
GAAP Operating Income (Loss) ($USD Millions)$(30.0) $(185.0) $(41.0)
Adjusted EPS (Diluted) ($USD)—$0.01 $0.07
Cash from Operations ($USD Millions)—$(97.0) $50.0
Free Cash Flow ($USD Millions)——$46.0
KPIsQ4 2025Q1 2026Q2 2026
ARR ($USD Millions)$877 $925 $982
SaaS ARR ($USD Millions)$540 $574 $623
Net Revenue Retention (%)—115% 114%
Estimates Comparison (S&P Global)Q2 2026
Revenue Consensus Mean ($USD Millions)243.48*
Actual Revenue ($USD Millions)264.36
Primary EPS Consensus Mean ($USD)0.0440*
Actual Adjusted EPS ($USD)0.07
EPS - # of Estimates18*
Revenue - # of Estimates16*

Values retrieved from S&P Global*.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total ARR ($USD Billions)FY2026$1.095–$1.105 $1.105–$1.115 Raised
Total Revenue ($USD Billions)FY2026$1.034–$1.044 $1.052–$1.058 Raised
Adjusted Income from Ops ($USD Millions)FY2026$161–$166 $177–$181 Raised
Adjusted Operating Margin (%)FY202615.4%–16.1% 16.7%–17.2% Raised
Adjusted EPS ($USD)FY2026$0.16–$0.20 $0.20–$0.22 Raised
Total ARR ($USD Billions)Q3 2026n/a$1.027–$1.031 New
Total Revenue ($USD Millions)Q3 2026n/a$269–$271 New
Adjusted Income from Ops ($USD Millions)Q3 2026n/a$42.5–$43.5 New
Adjusted EPS ($USD)Q3 2026n/a$0.05–$0.06 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2025, Q1 2026)Current Period (Q2 2026)Trend
AI/technology initiativesQ4: Unveiled AI-powered agents (Harbor Pilot) and platform innovation focus . Q1: Identity-first, AI/data-driven platform highlighted .Fastest-growing new product: Machine Identity Security; accelerated AI features and data automation; add-on modules ARR >2x YoY .Accelerating
Product performance & attachQ1: Customers >$1M ARR +62% YoY; subscription margins mid-70s .Largest new-logo ARR quarter ever; add-on attach 40% vs 25% prior year; NRR 114% .Improving
Federal/term renewals timingNot highlighted100% renewal rate on federal term contracts; ~$7M revenue shifted into Q2 via upfront recognition .Stable demand; timing volatility
Macro/tariffs/supply chainQ4/Q1: Macro monitored; focus on efficient growth .Management acknowledged non-ideal macro; continued disciplined expense management and strong collections .Mixed
Regional/vertical trendsQ1: Fortune 500/Global 2000 adoption strength .Wins in tech and auto OEM with machine identities outnumbering human identities 20:1, demonstrating enterprise-scale complexity .Expanding enterprise scale
Regulatory/public sectorQ1: FedRAMP milestones in data access security .Federal term renewal dynamics (timing, upfront recognition) .Ongoing

Management Commentary

  • “SailPoint delivered strong second quarter results that exceeded all previously guided metrics, driven by 37% year-over-year SaaS ARR growth and record cash flow from operations… As a result, we are raising our guidance for the full year across all metrics.” — Mark McClain, CEO .
  • “We ended fiscal Q2 with ARR of $982 million… adjusted operating margins expanded to ~20%… cash flow from operating activities of $50 million and free cash flow of $46 million.” — Brian Carolan, CFO .
  • Product momentum: “ARR across… Non-Employee Risk Management, Data Access Security, and Machine Identity Security more than doubled… Machine Identity Security is delivering record-breaking momentum.” — Management remarks .

Q&A Highlights

  • Federal term renewals: 100% renewal rate; ~$7M timing shift recognized upfront into Q2, not a demand pull-forward .
  • New-logo dynamics: largest new-logo ARR quarter; average ARR per new SaaS customer +30%; add-on attach 40% vs 25% prior year .
  • Guidance clarifications: FY2026 ARR raised to $1.11B, revenue to $1.055B, adjusted operating income to $179M (~17% margin), adjusted EPS $0.21 midpoint .

Estimates Context

  • Revenue: Actual $264.36M vs. S&P Global consensus $243.48M*; beat of ~$20.88M . Values retrieved from S&P Global*.
  • Adjusted EPS: Actual $0.07 vs. S&P Global consensus $0.0440*; beat of ~$0.026. EPS estimates count: 18*; Revenue estimates count: 16*. Values retrieved from S&P Global*.
  • Implication: Consensus likely revises FY2026 revenue, margin, and EPS higher, aligning with management’s raised outlook .

Key Takeaways for Investors

  • Q2 FY2026 was a clean beat on revenue and EPS; recurring revenue growth and margin expansion validate operating leverage in the model .
  • Raised FY2026 guidance across ARR, revenue, margin, and EPS provides a near-term positive catalyst and should support estimate revisions .
  • Machine Identity Security and AI-driven automation are emerging as key growth vectors, evidenced by >2x ARR in add-on modules and higher attach rates .
  • Watch revenue cadence: federal term renewal timing can add quarter-to-quarter volatility (e.g., ~$7M shift into Q2) without affecting underlying ARR trends .
  • Cash generation inflecting: CFO $50M and FCF $46M in Q2 signal improved collections and operating discipline; supports de-risked FY second-half FCF targets referenced on the call .
  • Near-term trading: momentum post-earnings has been positive in cited sources; watch for continued sentiment into Q3 as ARR crosses $1B .
  • Medium-term thesis: identity-first security platform breadth (human + machine) and AI capabilities position SailPoint to consolidate share in a complex, multi-cloud enterprise landscape .