SailPoint ARR Growth Slows to 25% After Two Faster Quarters
The identity-security vendor posted $1.231 billion of annual recurring revenue and $309 million of quarterly sales as remaining performance obligation reached $1.9 billion.
SailPoint, Inc. (SAIL), an enterprise identity-security software company, reported annual recurring revenue of $1.231 billion for the fiscal second quarter ended July 31, 2026, up 25% from a year earlier. That year-over-year rate slowed from 26% in the fiscal first quarter and 28% in the fiscal fourth quarter of 2026, the second consecutive step-down in the company’s ARR growth.
SaaS ARR was $847 million, up 36% year over year, matching the first-quarter rate after 38% in the prior quarter. Net new SaaS ARR rose 34% year over year and accounted for 97% of net new ARR. SaaS customer count grew 16% year over year, and ARR per SaaS customer rose 17% to more than $400,000.
Total revenue was $309 million, up 17% from a year earlier, after 22% growth in the first quarter and 23% in the fourth quarter of fiscal 2026. Subscription revenue was $295 million, up 19%.
GAAP operating loss narrowed to $59 million, or 19% of revenue, from $80 million, or 28% of revenue, in the first quarter. Adjusted income from operations was $63 million, or 20% of revenue, compared with $38 million, or 14% of revenue, in the first quarter. Cash flow from operating activities was $45 million, and free cash flow was $37 million.
AI-driven ARR exceeded $70 million. AI-driven solutions accounted for more than 30% of net new ARR in the quarter, and existing customers who adopted an AI-driven solution increased annual spend by more than 60%. More than two-thirds of migrations completed in the quarter included an AI-driven solution.
Remaining performance obligation growth accelerated to 30% year over year to $1.9 billion. Current RPO grew 27% year over year to $931 million.
The company completed the acquisition of Entro Security and unveiled SailPoint Identity Security, combining Agentic Fabric and Human Fabric, along with a Cursor Enterprise connector, Agentic Acceleration, Unified Platform Access, and a Claude Compliance API integration. KuppingerCole ranked SailPoint first in product, innovation, and market leadership in identity and access governance as of August 13, 2026.
Chief Executive Mark McClain said the quarter demonstrated “the powerful compounding effect of our identity security platform and AI-driven innovations” and that the company remained on track for fiscal 2029 targets of at least $2.1 billion of ARR.
For the third quarter of fiscal 2027, SailPoint expects total ARR of $1,288 million to $1,292 million, or 24% year-over-year growth, and total revenue of $326 million to $330 million, or 16% to 17% growth. Adjusted income from operations is expected at $57.5 million to $58.5 million, a 17.4% to 17.9% margin, and adjusted earnings of $0.07 to $0.08 a share.
For the full fiscal year 2027, the company expects total ARR of $1,375 million to $1,385 million, or 22% to 23% growth, and total revenue of $1,265 million to $1,275 million, or 18% to 19% growth. Adjusted income from operations is expected at $239 million to $244 million, an 18.7% to 19.3% margin, and adjusted earnings of $0.30 to $0.34 a share. The company reiterated fiscal 2029 targets of at least $2.1 billion of ARR, at least $800 million of AI-driven ARR, at least 22% adjusted operating margin, and at least $400 million of free cash flow.