SailPoint, Inc.

Greetings and welcome to the SailPoint Technologies Holdings second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to our host, Josh Harding, Senior Vice President of Finance and Operations. Thank you. You may begin.

Good afternoon, and thank you for joining us today to discuss SailPoint's second quarter 2021 financial results. Joining me today are SailPoint CEO and co-founder, Mark McClain, and our Chief Financial Officer, Jason Rehm. 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. Since this call will include references to non-GAAP results, which excludes special items, please reference this afternoon's press release in the Investor section of SailPoint.com for further information regarding forward-looking statements and reconciliations of GAAP to non-GAAP results. And now, I'd like to turn the call over to Mark McClain.

Thanks, Josh, and thanks to each of you for joining the call today. I'm very pleased to share our strong second quarter fiscal year 2021 results with you. For the second quarter, we exceeded the high end of both our revenue and our ARR guidance, driven by strong growth from our SaaS and subscription-based offerings. We reported subscription revenue of $64 million, up 40% year over year, and ended the quarter with ARR of over $291 million, 43% year-over-year. The outperformance in revenue and ARR was driven by our sales team's continued focus on demonstrating the value of our subscription-based identity security offerings and a relentless focus on customer satisfaction that continues to support our strong renewal rates. Taken together, our results this quarter point to solid execution across geographies and strong interest from global enterprises in the critical value we provide to their business. Our well-executed Q2 helped us to close the first half of 2021 in a position of strength. As we noted last quarter, enterprises are increasingly aware of the foundational role identity plays in securing their business, and that continues to bode well for us in the market. This has proven to be particularly true at the upper end of the market, as more and more large enterprises are embracing the next generation of identity and adopting our SaaS identity platform to address their complex identity security needs at scale. On that point, I'd like to share a couple of highlights from Fortune 500 companies that selected our SaaS platform this quarter. First, a large financial services company selected our SaaS identity platform paired with our AI-enabled services to replace a legacy solution that had been in place for years and required significant maintenance, ongoing customization, and a large team to keep the program up and running. As a result, the company constantly struggled to maintain IT controls required to secure access to critical business applications and to satisfy complex regulatory demands. With their move to SailPoint, they're moving from a cumbersome and static identity stack to a flexible and agile approach to identity that can scale with their business. Second, a global pharmaceutical company opted for our SaaS identity platform, given their desire for a solution that would be simple to deploy and yet sophisticated enough to meet their evolving multinational business needs. This customer has implemented a SaaS-first strategy and required an identity platform that delivered flexibility, agility, and quick return on investment. SailPoint's platform checks all of these boxes, giving the company a strong foundation for securing and enabling their workforce while matching both the pace and scale of the business over time. In addition to the growing adoption of our SaaS identity security platform at the upper end of the market, we are seeing a greater number of existing SailPoint customers expand their investment in SailPoint. In the first half of the year, We saw an accelerating interest in our AI-enabled services from our existing customer base as they looked to embrace the future of identity. These services help companies simplify the administration of their identity programs while infusing a high level of intelligence, automation, and extensibility. We simplify and automate key identity decisions critical to maintaining a compliant and secure environment without sacrificing the intelligence, sophisticated, and scalable approach that large enterprises require. In Q2, we saw good momentum among customers deepening their investment with us to help them evolve their program towards this autonomous state of identity. For example, in Q2, a longtime SailPoint customer in the property and casualty insurance space added our AI-enabled SaaS services to help them further streamline and modernize their approach to identity. With SailPoint, They will automate and simplify access requests and certifications, freeing up their teams to focus on the most critical identity decisions. This will add tangible value to their business by reducing the chances of human error and enforcing consistent application of access policies across the business. Now, the company can take the strong identity security foundation already in place at SailPoint and evolve their program towards their desired state of autonomous identity. As we continue to position SailPoint to capitalize on the opportunity in front of us, we made some important appointments both at the leadership and board level this quarter. We recently hired a new CMO, Wendy Wu, who brings a deep understanding of SaaS, having led teams at Box and Microsoft through their enterprise expansion journeys. And we expanded our board of directors with the addition of Sudhakar Ramakrishna, who was named CEO of SolarWinds earlier this year, and Ron Green, Executive Vice President and Chief Security Officer for MasterCard. Both bring deep SaaS and cybersecurity expertise to our board. These additions serve us well as we look to grow, scale, and evolve the business over time. As we think about the second half of the year, we are focused on two key areas to continue building upon our momentum. First, we will continue to deliver against our mission to help enterprises discover, secure, and manage all their identities. We believe companies today have a stronger inclination than ever to adopt an enterprise security program that is grounded in identity security. To capitalize on this momentum, our product organization plans to deliver new functionality that further embeds and extends identity security into the workflow of the business. This will make identity security more accessible and approachable to the everyday user while infusing a high level of intelligence and automation needed to fuel and speed identity decisions across the business. Our entire company is united around delivering a best-in-class identity security experience so that our customers can ensure all parts of their business are properly enabled, resilient, and protected. Second, will continue to focus on consistent execution across the organization, driving broad global adoption of the SailPoint identity platform. We win in the market by delivering tangible value to our customers and by building solutions that achieve the right balance of speed and security across their businesses. In closing, we believe we are well positioned for the second half of 2021 and beyond. We continue to see strong demand, We have the right teams in place to continue our shift to a SaaS and a subscription-based revenue model. And we enjoy a strong and committed partner ecosystem to support our customers' success over time. And, most importantly, we have an advanced product offering that sits at the center of a modern enterprise security architecture. Before I turn it over to Jason to review our financial results, I'd like to address the news we released earlier today that Jason will be departing SailPoint to pursue other opportunities. Jason has been an integral part of our management team for over two years and played an important role in our transition to a SaaS company. Jason will remain as CFO through August 31st and will serve as an advisor for a period of time after that to ensure a seamless transition. I've truly enjoyed working with Jason, and I'd like to thank him for his many contributions to SailPoint. On behalf of the board and everybody at CellPoint, I wish him all the best in his future endeavors. We will begin the search process for a new CFO immediately, which will focus on finding an executive that will complement our ongoing move to SaaS. As part of the transition process, Cam McMartin has agreed to serve as interim CFO starting September 1st. Many of you know Cam from the many years he served as CellPoint's COO and CFO, prior to transitioning to our board of directors in 2019. We're incredibly fortunate to have somebody of CAM's experience able to serve as interim CFO and support our strong internal team through this transition period. With that, I'd like to hand it off to Jason, who will share more details on the financial results from the quarter.