Prospectus Summary
PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before investing in our common stock. For a more complete understanding of us and this offering, you should read and carefully consider the entire prospectus, including the more detailed information set forth under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus. Some of the statements in this prospectus are forward-looking statements. See “Forward-Looking Statements.”Our Vision
Our vision is to manage and secure dynamic access to critical applications and data for every enterprise identity with an intelligent and unified platform.
Overview
SailPoint delivers solutions to enable comprehensive identity security for the enterprise. We do this by unifying identity data across systems and identity types, including employee identities, non-employee identities (which include contractors, consultants, and partners), machine identities (autonomous non-human users such as application level accounts, infrastructure accounts, Internet of Things (“IoT”) devices, application programming interface (“API”) accounts, and bots), and artificial intelligence (“AI”) agents. Our software as a service (“SaaS”) and customer-hosted offerings leverage intelligent analytics to provide organizations with critical visibility into which identities currently have access to which resources, which identities should have access to those resources and how that access is being used. Our solutions enable organizations to establish, control, and automate policies that help them define and maintain a robust security posture and achieve regulatory compliance. Powered by AI, our solutions enable organizations to overcome the scale and complexity of managing identities in real-time across dynamic, complex information technology (“IT”) environments.
The evolving threat landscape requires a more comprehensive identity security approach than ever before. The number of cyber attacks continues to increase at an accelerating rate, fueled in part by the adoption of AI by threat actors. In 2023, 90% of organizations surveyed experienced an identity-related incident according to the Identity Defined Security Alliance (“IDSA”). In June 2024, a significant volume of data was stolen via compromised login credentials from customers of a data warehouse, including data from a large ticketing company and a major bank. Hacking groups extensively use compromised identities in their operations, conducting spear-phishing campaigns to access email accounts, harvesting multifactor authentication (“MFA”) codes and leveraging compromised service accounts to infiltrate victims. Once compromised, insufficiently governed identities enable attacks to access sensitive applications and data, presenting a significant risk to organizations.
Identity security is complicated by an evolving and increasingly complex IT environment. Increasingly distributed and remote workforces, the proliferation of infrastructure as a service (“IaaS”) and SaaS applications and an explosion of data have significantly contributed to this new IT paradigm. Non-employee and machine identities, AI-enabled or otherwise, are driving a significant expansion in the number and scope of identities that organizations must manage.
Organizations lack both the people and expertise needed to manage complex ecosystems, and the personnel and skills gap is widening as identity sprawl continues to proliferate. These factors are further exacerbated by regulatory trends toward greater data privacy requirements, leading organizations to demand more effective solutions for managing identity and data security risk.
We believe identity is core to enterprise security. We pioneered the market for enterprise identity governance almost two decades ago, and our leadership in the sector has been recognized by independent research firms, including Gartner, Forrester, and KuppingerCole. From this foundation, we have evolved our offerings to address the most challenging dimensions of identity security today.
Since SailPoint was last a public company, we continued to execute on our ambitious strategy to remain at the forefront of innovation in enterprise security by transforming our product offerings into the SailPoint Identity Security Cloud built on our unified Atlas platform. We accelerated the transition of our product offerings to be consumed as a cloud-native SaaS offering to meet our customers where they are in their digital transformation journey. We expanded the breadth of our Identity Security Cloud from our foundational strength in enterprise identity governance for human identities, to now cover all types of identities and a broad range of identity security use cases. Our strategic transformation has increased our long-term relevance with customers while meaningfully expanding our total addressable market.
Today, we offer a range of solutions to meet the varied needs of our customers across multiple deployment options, including Identity Security Cloud, our SaaS-based cloud solution built on our unified platform, Atlas, and IdentityIQ, our customer-hosted identity security solution. These solutions are designed to enable our customers to make more effective decisions regarding access, improve security processes, and provide them with a deeper understanding of identity and access.
Our solutions are underpinned by several key differentiators:
Our customers include many of the world’s largest and most complex organizations, including large enterprises across all major verticals and governments. Our go-to-market approach consists primarily of tailored customer engagement strategies by market segment, which we believe is critical to ensuring successful implementation and ongoing customer success. Most new customers purchase one of our SaaS suites. We focus on expanding our customer relationships over time with significant up-selling and cross-selling opportunities, including suite upgrades and additional products.
In recent years, we have transitioned our business to a subscription model. This transition is substantially complete with subscription revenue, which consists primarily of SaaS, maintenance, and term subscriptions, comprising 89% and 92% of our total revenue for the year ended January 31, 2024 and the nine months ended October 31, 2024, respectively. As of October 31, 2024, our annual recurring revenue (“ARR”) was $813.2 million, reflecting an increase of 30% compared to October 31, 2023. Of the 30% increase in ARR, approximately 16% was attributable to new customers and approximately 3% was attributable to migrations from our customer-hosted solutions (primarily maintenance on previously sold perpetual licenses as well as term subscriptions) to our SaaS solution. Today, our go-to-market motion is focused primarily on our SaaS solution and the growth in our ARR is primarily driven by an increase in SaaS ARR. As of October 31, 2024, our SaaS ARR was $485.7 million, reflecting an increase of 40% as compared to $346.0 million as of October 31, 2023. Of the 40% increase in SaaS ARR, approximately 24% was attributable to new customers and approximately 8% was attributable to migrations from our customer-hosted solutions (primarily maintenance on previously sold perpetual licenses as well as term subscriptions) to our SaaS solution.
Our transformation has led to rapid growth while increasing the visibility and predictability of our financial model. As of January 31, 2022, 2023, and 2024, our ARR was $374.6 million, $520.1 million, and $681.8 million, respectively, representing year-over-year growth of 44%, 39%, and 31%, respectively. As of January 31, 2022, 2023, and 2024, our SaaS ARR was $166.9 million, $266.6 million, and $388.3 million, respectively, representing year-over-year growth of 83%, 60%, and 46%, respectively.
For the fiscal year ended January 31, 2022 (Predecessor), period from February 1, 2022 to August 15, 2022 (Predecessor), period from August 16, 2022 to January 31, 2023 (Successor), fiscal year ended January 31, 2024 (Successor), and nine months ended October 31, 2024 (Successor):
Adjusted gross profit margin, adjusted subscription gross profit margin, and adjusted operating margin are non-GAAP financial measures. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for our definitions of these non-GAAP financial measures, information about how and why we use these non-GAAP financial measures, a discussion of the limitations of these non-GAAP financial measures, and a reconciliation of each of these non-GAAP financial measures to its most directly comparable financial measure calculated in accordance with U.S. generally accepted accounting principles (“GAAP”).
Industry Background
Several factors are causing organizations to transform their approach to identity security and adopt a comprehensive identity security strategy, including:
2024 is nearly $5 million, and according to IDSA’s 2024 Trends in Identity Security report, 73% of companies surveyed cite identity security as a top three security priority. However, many organizations do not have a comprehensive identity strategy. A survey done by KuppingerCole in August 2024 found that only 40% of companies have a comprehensive identity security posture.
Limitations of Existing Solutions
Legacy and homegrown identity solutions face numerous inherent limitations in meeting the requirements of the evolving identity landscape and today’s complex IT environment, which include:
Our Solutions
We believe identity is core to enterprise security. During our nearly 20-year history, we have continuously evolved our offerings to address the most pressing challenges in identity security.
We offer multiple identity solutions to meet the diverse needs of our customers across a full range of deployment options:
Our solutions address nearly all types of systems and identities, including data and applications, employee identities, non-employee identities and machine identities, and enable smarter access decisions, improve business processes, and provide deeper understanding of identity and access.
Key Benefits of Our Solutions
The key benefits of our solutions for our customers include:
security posture through a single pane of glass, eliminating the need for organizations to purchase discrete solutions from a legacy vendor or create a patchwork of point solutions from several vendors.
Our Competitive Strengths
Our competitive strengths include:
Our Market Opportunity
The increasing prevalence of identity-related breaches and continued advances in cyber-attack techniques is prompting organizations to transform their approach to identity security. At the same time, the growing complexity of the enterprise IT environment coupled with the shift to cloud and hybrid environments has made identity security more challenging. Our solutions are designed to address the challenges of all enterprises and mid-market organizations in adopting a comprehensive identity security strategy.
We estimate our market opportunity is approximately $55 billion in 2024. We calculate this figure using the total number of global companies with 100 or more employees, which we determined by referencing independent industry data from the S&P Capital IQ database. We then segment these companies into three cohorts based on the number of employees: companies that have between 100 and 999 employees, companies that have between 1,000 and 4,999 employees, and companies with 5,000 or more employees. We then multiply the number of companies in each cohort by the average ARR per customer in the corresponding employee count cohort. Average ARR per customer for each employee count cohort is calculated as the ARR attributable to customers in each cohort who subscribe to our Standard, Business, and Business Plus SaaS suites as of July 31, 2024, divided by the number of customers in that cohort who subscribe to a SaaS suite as of July 31, 2024. Our market opportunity estimate assumes that all companies within each cohort would subscribe to our solutions at the same level as our existing customers in such cohort; however, our actual market opportunity will vary depending on the adoption of our solutions by companies and the purchase levels of such companies once they have subscribed to our solutions.
We believe that we are currently underpenetrated in our existing customer base. We expect our estimated market opportunity will continue to grow as customers expand their usage of our solutions by adopting additional products.
For information regarding assumptions and limitations relating to our market opportunity, see “Risk Factors—Risks Related to Our Business and Industry—Our estimated market opportunity and forecasts of our market and market growth may prove to be inaccurate. Moreover, even if our estimate of the market size is accurate, there can be no assurance that we will serve a significant portion of the market, and even if our estimated market opportunity achieves the forecasted growth, there can be no assurance that our business will grow at similar rates or at all.”
Growth Strategies
The following are key elements of our growth strategy:
Recent Developments
Presented below are certain preliminary estimates of selected key business metrics as of the year ended January 31, 2025. The following information reflects our preliminary estimates with respect to such data based on currently available information. These estimated metrics should not be viewed as a substitute for our financial statements prepared in accordance with GAAP included in this prospectus. In particular, ARR and SaaS ARR should be viewed independently of revenue and subscription revenue, respectively, as operating metrics that are not intended to be combined with or to replace revenue or subscription revenue, respectively, or as a forecast of future revenues. Further, our preliminary estimates below are not necessarily indicative of the metrics to be expected for any future period as a result of various factors, including, but not limited to, those discussed in “Risk Factors” and “Forward-Looking Statements.” This information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus.
As of the year ended January 31, 2025, we expect:
During the fourth quarter of the fiscal year ended January 31, 2025, we continued to experience . This impact was offset by . Management considers ARR and SaaS ARR as key metrics for gauging the health and growth of our subscription business.
Risk Factor Summary
There are a number of risks related to our business, this offering, and our common stock that you should consider before you decide to participate in this offering. Some of the principal risks related to an investment in our company include the following:
we will serve a significant portion of the market, and even if our estimated market opportunity achieves the forecasted growth, there can be no assurance that our business will grow at similar rates or at all.
These and other risks are more fully described in the section titled “Risk Factors” in this prospectus. If any of these risks actually occurs, our business, financial condition, results of operations, cash flows, and prospects could be materially and adversely affected. As a result, you could lose all or part of your investment in our common stock.
Our Principal Stockholder
Thoma Bravo is one of the largest software-focused investors in the world, with approximately $160 billion in assets under management as of June 30, 2024. Through its private equity, growth equity, and credit strategies, the firm invests in growth-oriented, innovative companies operating in the software and technology sectors. Leveraging Thoma Bravo’s deep sector knowledge and strategic and operational expertise, the firm collaborates with its portfolio companies to implement operating best practices and drive growth initiatives. Over the past 20+ years, the firm has acquired or invested in more than 490 companies representing approximately $265 billion in enterprise value (including control and non-control investments). The firm has offices in Chicago, London, Miami, New York, and San Francisco.
In connection with this offering, we will enter into a director nomination agreement (the “Director Nomination Agreement”) with Thoma Bravo that provides Thoma Bravo the right to designate nominees to our board of directors (our “Board”), subject to certain conditions. The Director Nomination Agreement will provide Thoma Bravo the right to designate: (i) all of the nominees for election to our Board for so long as Thoma Bravo beneficially owns 40% or more of the total number of shares of our common stock beneficially owned by Thoma Bravo upon completion of this offering, as adjusted for any reorganization, recapitalization, stock dividend, stock split, reverse stock split, or similar changes in our capitalization (such number of shares as may be adjusted, the “Original Amount”); (ii) a number of directors (rounded up to the nearest whole number) equal to 40% of the total directors for so long as Thoma Bravo beneficially owns at least 30% and less than 40% of the Original Amount; (iii) a number of directors (rounded up to the nearest whole number) equal to 30% of the total directors for so long as Thoma Bravo beneficially owns at least 20% and less than 30% of the Original Amount; (iv) a number of directors (rounded up to the nearest whole number) equal to 20% of the total directors for so long as Thoma Bravo beneficially owns at least 10% and less than 20% of the Original Amount; and (v) one director for so long as Thoma Bravo beneficially owns at least 5% of the Original Amount. See “Certain Relationships and Related Party Transactions—Related Party Transactions—Director Nomination Agreement” for more details with respect to the Director Nomination Agreement.
Upon completion of this offering, Thoma Bravo will beneficially own approximately % of our common stock (or % of our common stock if the underwriters exercise their option to purchase additional shares in full) and will therefore be able to control all matters that require approval by our stockholders, including changes to our organizational documents and approval of acquisition offers and other significant corporate transactions. Thoma Bravo’s interests may not coincide with the interests of our other stockholders. Additionally, Thoma Bravo engages in a broad spectrum of activities, including investments in our industry generally. In the ordinary course of its business activities, Thoma Bravo may engage in activities where its interests conflict with our interests or those of our other stockholders, such as investing in or advising businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours. See “Risk Factors—Risks Related to This Offering and Ownership of Our Common Stock—Thoma Bravo controls us, and its interests may conflict with ours or yours in the future.”
In connection with our entry into the Credit Facilities (as defined below) on August 16, 2022, Thoma Bravo acquired $50.0 million of our Term Loan (as defined below), and as of , Thoma Bravo owned $ million of our Term Loan. We expect to use a portion of the net proceeds from this offering to repay a portion of our Term Loan. As a result, Thoma Bravo will receive a portion of the net proceeds from this offering. Based upon our estimated receipt of net proceeds from this offering of approximately $ million (or $ million if the underwriters exercise their option to purchase additional shares in full), we expect that Thoma Bravo will receive $ million (or $ million if the underwriters exercise their option to purchase additional shares in full) of such net proceeds in connection with such repayment. See “Use of Proceeds” for additional information.
Status as a Controlled Company
Upon completion of this offering, Thoma Bravo will own approximately % of our common stock (or % of our common stock if the underwriters exercise their option to purchase additional shares in full), and we will be a “controlled company” within the meaning of the rules of Nasdaq. As a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements, and you will not have the same protections as those afforded to stockholders of companies that are subject to such governance requirements. See “Management—Corporate Governance—Controlled Company Status.”
Corporate Conversion
We currently operate as a Delaware limited partnership under the name SailPoint Parent, LP, which directly and indirectly holds all of the equity interests in our operating subsidiaries. Prior to the effectiveness of the registration statement of which this prospectus forms a part, SailPoint Parent, LP will convert into a Delaware corporation pursuant to a statutory conversion and will change its name to SailPoint, Inc. In this prospectus, we refer to all of the transactions related to our conversion into a corporation as the Corporate Conversion. Following the Corporate Conversion, we will remain a holding company and will continue to conduct our business through our operating subsidiaries. For more information, see the section titled “Corporate Conversion.”
Following the completion of the Corporate Conversion and prior to the closing of this offering, Thoma Bravo will own approximately % of SailPoint, Inc.’s common stock. SailPoint, Inc. will have several wholly owned direct and indirect subsidiaries that are legacies from the corporate structure that existed prior to this offering. See the section titled “Corporate Conversion.”
General Corporate Information
Our principal executive offices are located at 11120 Four Points Drive, Suite 100, Austin, Texas 78726. Our telephone number at that address is (512) 346-2000. Our website address is www.sailpoint.com. The information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.
The SailPoint design logo and our other registered or common law trademarks, service marks or trade names appearing in this prospectus are the property of SailPoint Technologies, Inc., our wholly-owned subsidiary. Other trademarks and trade names referred to in this prospectus are the property of their respective owners.