You need to learn the next dialogue and evaluation of our monetary situation
and outcomes of operations together with our unaudited condensed
consolidated monetary statements and notes thereto in Half I, Merchandise 1 of this
Quarterly Report on Type 10-Q (this “Quarterly Report”) and our Annual Report on
Type 10-Okay for the 12 months ended December 31, 2020, which was filed with the U.S.
Securities and Trade Fee (the “SEC”) on February 25, 2021 (the “Annual
Report”), together with the consolidated monetary statements and associated notes
included therein.
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report incorporates forward-looking statements throughout the that means of
the federal securities legal guidelines, which statements contain substantial dangers and
uncertainties. Ahead-looking statements usually relate to future occasions or
our future monetary or working efficiency. All statements included on this
Quarterly Report, apart from statements of historic truth, are forward-looking
statements. This contains statements concerning our technique, future operations,
monetary place, estimated revenues and losses, projected prices, prospects,
plans and aims of administration. In some instances, you’ll be able to establish
forward-looking statements as a result of they comprise phrases corresponding to “might,” “will,”
“ought to,” “expects,” “plans,” “anticipates,” “may,” “intends,” “goal,”
“tasks,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or
“proceed” or the destructive of those phrases or different comparable phrases or expressions.
You shouldn’t depend upon forward-looking statements as predictions of future
occasions or place undue reliance thereon. Now we have primarily based the forward-looking
statements contained on this Quarterly Report totally on our present
expectations and projections, in mild of at the moment out there info, about
future occasions and developments that we imagine might have an effect on our enterprise, monetary
situation, outcomes of operations and prospects. The end result of the occasions
described in these forward-looking statements is topic to dangers, uncertainties
and different components. Necessary components, a few of that are past our management, that
may trigger precise outcomes to vary materially from our historic outcomes or
these expressed or implied by these forward-looking statements embrace the
following: the scope, period and severity of the COVID-19 pandemic, together with
any recurrence, in addition to the timing of the financial restoration following the
pandemic and its impact on the worldwide financial system and on our enterprise; our means
to realize and maintain profitability; our means to maintain historic development
charges; our means to draw and retain clients and to deepen our
relationships with current clients; an elevated focus in our enterprise from
promoting licenses to promoting subscriptions; breaches in our safety,
cyber-attacks or different cyber-risks; interruptions with the supply of our
software program as a service (“SaaS”) options or third-party cloud-based programs that
we use in our operations; our means to compete efficiently towards present
and future rivals; the size and unpredictable nature of our gross sales cycle;
delayed results on our working outcomes from ratably recognizing a few of our
income; fluctuations in our quarterly outcomes; our means to take care of
profitable relationships with our channel companions; the growing complexity of
our operations; actual or perceived errors, failures or disruptions in our
platform or options; our means to adapt and reply to quickly altering
expertise, business requirements, rules or buyer wants, necessities or
preferences; our means to adjust to our privateness coverage or associated authorized or
regulatory necessities; the influence of varied tax legal guidelines and rules,
together with our failure to conform therewith; our means to efficiently establish,
purchase and combine firms and belongings; our means to take care of and improve
our model or repute as an business chief; and the power of our platform
and options to successfully interoperate with our clients’ current or future
IT infrastructures. Extra info on these dangers and different potential components
that would have an effect on our monetary outcomes is included in our different filings with
the SEC, together with within the “Threat Elements” and “Administration’s Dialogue and
Evaluation of Monetary Situation and Outcomes of Operations” sections of the
Annual Report and “Threat Elements” in Half II, Merchandise 1A in subsequent quarterly
reviews. Furthermore, we function in a really aggressive and quickly altering
atmosphere. New dangers and uncertainties emerge once in a while and it isn’t
potential for us to foretell all dangers and uncertainties that would have an effect
on the forward-looking statements contained on this Quarterly Report. We can’t
guarantee you that the outcomes, occasions and circumstances mirrored within the
forward-looking statements will probably be achieved or happen, and precise outcomes, occasions
or circumstances may differ materially from these described within the
forward-looking statements.
The forward-looking statements made on this Quarterly Report relate solely to
occasions as of the date hereof. We undertake no obligation to replace any
forward-looking statements made on this Quarterly Report back to replicate occasions or
circumstances after the date of this Quarterly Report or to replicate new
info or the prevalence of unanticipated occasions, besides as required by
regulation. Our forward-looking statements don’t replicate the potential influence of any
future acquisitions, mergers, inclinations, joint ventures or investments we might
make.
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Enterprise Overview
SailPoint Applied sciences Holdings, Inc. (“we,” “our,” the “Firm” or
“SailPoint”) is the main supplier of enterprise identification safety options.
Our identification safety options present organizations with essential visibility
into who at the moment has entry to which assets, who ought to have entry to
these assets and the way that entry is getting used.
We provide each SaaS and on-premise software program options, which offer
organizations with the intelligence required to empower customers and govern their
entry to programs, functions and information throughout hybrid info expertise
(“IT”) environments, spanning on-premises, cloud and cell functions and
file storage platforms. We assist clients allow their companies with extra
agile and revolutionary IT, streamline supply of entry to their companies,
improve their safety posture and higher meet compliance and regulatory
necessities. Our clients embrace most of the world’s largest and most complicated
organizations, together with business enterprises, monetary establishments and
governments.
Our set of identification safety options consists of:
•IdentityNow: our cloud-based, multi-tenant identification safety platform, which
supplies clients with a set of totally built-in companies for compliance,
provisioning and password administration for functions and information hosted
on-premises or within the cloud;
•IdentityIQ: our on-premises identification safety resolution, which might be hosted in
the general public cloud or deployed in a buyer’s information middle, supplies giant,
complicated enterprise clients a unified and extremely configurable identification safety
resolution; and
•SailPoint Identification Companies: delivered as multi-tenant SaaS subscription
companies that may be utilized together with IdentityNow and IdentityIQ and
at the moment consisting of:
•Entry Insights: collects a wealth of identification info and turns that
info into actionable insights and supplies business-oriented dashboards
and reviews to trace the effectiveness of consumers’ identification packages;
•Entry Modeling: makes use of synthetic intelligence (“AI”) and machine studying
(“ML”) to recommend roles primarily based on comparable entry between customers and provides
clients insights to verify the proper entry for every position;
•Entry Threat Administration: our cloudÂprimarily based entry controls resolution that allows
our clients to handle their danger by automating entry controls for enterprise
functions with complicated safety necessities;
•Cloud Entry Administration: makes use of AI and ML to mechanically study, monitor and
safe entry to cloud infrastructure;
•Advice Engine: makes use of AI, ML, peer group evaluation, identification attributes
and entry exercise to assist clients resolve whether or not entry ought to be granted or
eliminated; and
•SaaS Administration: our cloudÂprimarily based resolution that helps clients uncover,
handle, and safe their SaaS functions.
Our options tackle the complicated wants of world enterprises and mid-market
organizations. Our success is principally depending on our means to ship
compelling options to draw new clients and retain current clients.
Rising safety threats and evolving rules and compliance requirements for
cyber safety, information safety, privateness and inside IT controls create new
alternatives for our business and require us to adapt our options to be
profitable. Sustaining our historic development price can also be difficult as a result of
our development technique relies upon partly on our means to drive new buyer development
inside current geographic markets, additional penetrate our current buyer
base, proceed to spend money on our platform, leverage and develop our community of
companions, develop market and product funding throughout current vertical markets,
and proceed to develop our international presence, whereas competing towards a lot bigger
firms with extra recognizable manufacturers and monetary assets. Though we
search to develop quickly, we additionally give attention to working leverage and effectivity whereas
persevering with to spend money on our platform to ship revolutionary options to our
clients.
We imagine enterprises are more and more embracing the cloud to deal with their
essential safety infrastructure. In consequence, a rising variety of enterprises
are altering their strategy to identification safety and now choose to make use of a SaaS
resolution somewhat than buy software program outright and set up it in their very own
infrastructure. This business shift aligns nicely with our present product
technique. Our product technique is to (1) speed up innovation inside our core
identification safety SaaS choices, (2) ship
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continued innovation as we execute towards our imaginative and prescient for SailPoint identification
safety, and (3) be certain that as we ship these new improvements, they work in
live performance with our SaaS choices along with our on-premises choices.
Whereas an acceleration towards subscription-based choices leads to a
short-term income headwind, we imagine that continued development of SaaS,
term-based license and upkeep and assist income will result in a extra
predictable income mannequin and enhance our visibility to future interval whole
revenues. However, our income and our gross margins differ relying on the
kind of resolution we promote, and we anticipate that as we proceed our acceleration
towards subscription-based choices, our subscription retention charges could possibly be
barely decrease than the retention price for assist and upkeep for our
perpetual clients. In consequence, a shift within the gross sales mixture of our options
may have an effect on our efficiency relative to historic outcomes. Our transition to a
subscription mannequin has accelerated extra quickly than initially anticipated, and
as income from perpetual licenses has continued to symbolize an more and more
smaller portion of our whole income, we now view our transition as largely
full. Whereas we anticipate to sometimes see perpetual license transitions with
new clients and ongoing expansions offers for present clients, our principal
focus is on promoting subscription primarily based preparations consisting of SaaS and time period
licenses.
IdentityNow and our SailPoint Identification Companies are offered in change for a
subscription price and supply clients entry to those options and
infrastructure assist all through their subscription settlement. Our
commonplace subscription settlement for our SaaS choices has a period of three
years. For our IdentityIQ options, our clients both buy a perpetual
software program license, which incorporates one 12 months of upkeep and assist, or a time period
license, offered as bundled preparations that embrace the rights to a time period license
and upkeep and assist usually for a three-year time period. Accordingly, we
allocate the transaction value to every efficiency obligation. Our upkeep
supplies software program upkeep in addition to entry to our technical assist
companies through the upkeep time period. After the preliminary upkeep interval,
clients with perpetual licenses might renew their upkeep and assist
settlement for an extra price.
Pricing for every of our options depends on the variety of digital
identities of workers, contractors, enterprise companions, software program bots and different
human and non-human customers that the client is entitled to control with the
resolution. We additionally bundle and value our IdentityNow and IdentityIQ options
into modules. Every module has distinctive functionalities, and our clients are in a position
to buy a number of modules, relying on their wants. We additionally supply
superior integration modules for key functions and programs which might be
bought along with our base resolution modules. They’re additionally priced primarily based
on the full variety of identities, as are our SailPoint Identification Companies. Thus,
our income from any buyer is mostly decided by the variety of
identities that the client is entitled to control in addition to the variety of
modules bought by the client for our IdentityIQ and IdentityNow options
and which, if any, of the SailPoint Identification Companies that the client
purchases.
Our income combine is altering as demand for our services and products is shifting
from gross sales of perpetual licenses to gross sales of time period licenses and subscriptions,
and we anticipate this shift in demand to proceed, significantly as we proceed our
technique to shift the gross sales mixture of our options in direction of our SaaS choices. For
clients that also want to buy and function non-SaaS software program, we’re
more and more promoting our software program via subscription-based time period licenses,
somewhat than via perpetual licenses. Over time, we anticipate that gross sales to new
clients will probably be completely comprised of time period licenses and subscriptions. Our
transition to a subscription mannequin has impacted, and can proceed to influence,
the timing of our recognition of income as an growing proportion of our
gross sales turn out to be acknowledged ratably, in addition to our working margins as
subscription income turns into a bigger proportion of our gross sales. Our shift to a
subscription mannequin has fluctuated between intervals, and our means to foretell
our income and margins in any specific interval has been, and will proceed to
be, restricted.
Along with our options, we provide skilled companies to our clients
and companions to configure and optimize the usage of our options in addition to
coaching companies associated to the configuration and operation of our platform.
Most of our skilled companies exercise is in assist of our companions, who
carry out a major majority of all preliminary and follow-on implementation work
for our clients. Most of our consulting companies are priced on a
time-and-materials foundation, and our coaching companies are offered via
a number of pricing fashions, together with on a per-person foundation for teacher led
programs and a flat-rate foundation for our e-learning programs.
As a part of our development technique, within the first quarter of 2021 we acquired Intello
Inc. (“Intello”), an early-stage SaaS administration firm that helps
organizations to find, handle, and safe SaaS functions, and ERP
Maestro, Inc., (“ERP Maestro”), an early-stage SaaS governance, danger and
compliance resolution that gives separation-of-duty controls monitoring,
enabling clients to handle their danger by automating entry controls for
enterprise functions with complicated safety ideas. See Word 4 “Enterprise
Mixtures” in our notes to our unaudited condensed consolidated monetary
statements included on this Quarterly Report for extra info.
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See “Key Elements Affecting Our Efficiency” inside “Administration’s Dialogue and
Evaluation of Monetary Situation and Outcomes of Operations” in Half II, Merchandise 7 of
the Annual Report for info concerning the important thing components affecting our
efficiency.
Impression of COVID-19
In mild of the continued unfold of COVID-19 in america and overseas,
together with the emergence of latest variants of the coronavirus, authorities and
public well being authorities proceed to advocate social distancing and impose
varied quarantine and isolation measures on parts of the inhabitants,
together with measures directed at companies. Whereas meant to guard human life,
these restrictions have had and are anticipated to proceed to have critical adversarial
impacts on home and overseas economies of unsure period. Now we have made
sure changes to our operations as we proceed to offer our choices to
new and current clients in response to those measures. For instance, as a
results of the COVID-19 pandemic, we shifted all buyer occasions to virtual-only
experiences starting in early 2020 and anticipate this pattern to proceed for the
foreseeable future, and now we have transitioned to primarily offering consulting
companies just about as nicely.
Whereas we imagine that the pandemic has not had a right away materials adversarial
influence on our monetary efficiency, our enterprise might but be negatively impacted
by the COVID-19 pandemic because the period of the pandemic and the long-term scope
of its results in the end stay unknown. For instance, the situations brought on by
the COVID-19 pandemic might materially adversely have an effect on the speed of IT spending by
our present and potential clients, together with our clients’ means or
willingness to buy our choices, delay potential clients’ buying
choices, delay the provisioning of our choices, or trigger clients to fail
to make well timed funds. Now we have seen an immaterial variety of buyer requests,
and will proceed to see comparable requests, to elongate cost phrases or cut back
the worth or period of subscription contracts, however this has not resulted in a
materials adversarial influence on our renewal charges. As well as, throughout 2020 and the
first a part of 2021, we usually weren’t capable of present on-site consulting
companies to our clients resulting from native and regional restrictions associated to the
pandemic, and such restrictions stay in place for a few of our clients.
Nevertheless, this has not resulted in any significant adversarial influence on our means
to ship such companies as a result of a good portion of our consulting
companies have traditionally been offered remotely and most on-site tasks
transitioned to a distant supply mannequin. We proceed to watch the worldwide
influence of the pandemic on our clients and our enterprise, particularly because the
variety of instances involving new strains and variants of the coronavirus continues
to extend and as sure elements of the world expertise surges in COVID-19
instances and significantly devastating results from the pandemic.
However the potential and precise adversarial impacts described above, because the
pandemic has brought on extra of our clients to shift to a digital workforce, we
imagine the worth and scalability of our identification platform has turn out to be much more
evident. We imagine that the pandemic has not had a fabric adversarial influence on
our monetary efficiency, and certainly, our income grew in 2020 and through the
first 9 months of 2021 as in comparison with the prior 12 months intervals. We anticipate to
proceed to see wholesome demand for our options; nonetheless, we acknowledge
that the uncertainty associated to COVID-19 might end in elevated volatility in
the monetary projections we use as the idea for estimates and assumptions used
in our monetary statements.
The challenges posed by COVID-19 on our enterprise and our clients’ companies
might evolve quickly, and the pace, trajectory and power of a restoration in
basic financial situations stays extremely unsure and could possibly be slowed or
reversed by numerous components, together with the current emergence of latest strains
of the coronavirus and the effectiveness of vaccines for the illness as they
proceed to be developed and distributed. Consequently, we are going to proceed to
consider our monetary place and outcomes of operations in mild of future
developments, significantly these regarding COVID-19. See “Threat Elements” in
Half I, Merchandise 1A within the Annual Report for extra info concerning the potential
results of COVID-19 on our enterprise.
Key Enterprise Metric
Along with our monetary info ready in accordance with U.S.
usually accepted accounting ideas (“GAAP”), we monitor the next key
metric to assist us measure and consider the effectiveness of our operations:
As of
September 30, 2021 September
30, 2020
(In 1000’s)
Complete annual recurring income $ 323,770 $ 224,657
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We use whole annual recurring income (“Complete ARR”) to watch the expansion of our
recurring enterprise as we proceed to shift to a subscription mannequin. Complete ARR
represents the annualized worth of the energetic portion of SaaS, term-based
license, upkeep and assist contracts and different subscription companies at
the tip of the reporting interval. We calculate Complete ARR by dividing the energetic
contract worth by the variety of days within the energetic portion of the general
contract time period after which multiplying by 365. Complete ARR ought to be seen
independently of income and deferred income as Complete ARR is an working
metric and isn’t meant to be mixed with or exchange this stuff. Complete ARR
will not be a forecast of future income, which might be impacted by contract begin and
finish dates and renewal charges, and doesn’t embrace income from perpetual
licenses, coaching, skilled companies or different sources of income which can be
not deemed to be recurring in nature.
Elements of Outcomes of Operations
See “Elements of Outcomes of Operations” inside “Administration’s Dialogue and
Evaluation of Monetary Situation and Outcomes of Operations” in Half II, Merchandise 7 of
the Annual Report for info concerning the elements of our outcomes of
operations.
Seasonality
We usually expertise seasonal fluctuations in demand for our merchandise and
companies. Our quarterly gross sales are impacted by business shopping for patterns. As a
outcome, our gross sales have usually been highest within the fourth quarter of a
calendar 12 months and lowest within the first quarter. Though these seasonal components
are widespread within the expertise business, historic patterns shouldn’t be
thought of a dependable indicator of our future gross sales exercise or efficiency.
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Outcomes of Operations
The next desk units forth our unaudited condensed consolidated statements
of operations for the intervals offered:
Three Months Ended 9 Months Ended
September 30, September 30, September 30, September 30,
2021 2020 2021 2020
(In 1000’s)
Income
Licenses $ 26,087 $ 30,864 $ 69,772 $ 86,748
Subscription 70,796 51,004 194,393 140,807
Companies and different 13,227 12,145 39,193 34,358
Complete income 110,110 94,013 303,358 261,913
Value of income
Licenses 1,994 1,083 4,596 3,269
Subscription (1) 15,711 9,794 40,731 26,927
Companies and different (1) 13,408 9,922 37,726 27,597
Complete value of income 31,113 20,799 83,053 57,793
Gross revenue 78,997 73,214 220,305 204,120
Working bills
Analysis and improvement (1) 26,879 19,314 69,478 52,775
Basic and administrative (1) 12,192 8,846 33,920 27,731
Gross sales and advertising (1) 58,624 44,092 168,194 119,886
Complete working bills 97,695 72,252 271,592 200,392
Earnings (loss) from operations (18,698) 962 (51,287) 3,728
Different expense, web
Curiosity earnings 223 349 635 1,790
Curiosity expense (630) (4,639) (2,051) (13,757)
Different earnings (expense), web (122) 214 (342) (222)
Complete different expense, web (529) (4,076) (1,758) (12,189)
Loss earlier than earnings taxes (19,227) (3,114) (53,045) (8,461)
Earnings tax (expense) profit (669) 2,438 1,116 2,410
Internet loss $ (19,896) $ (676) $ (51,929) $ (6,051)
(1)Contains stock-based compensation expense as follows:
Three Months Ended 9 Months Ended
September 30, September 30, September 30, September 30,
2021 2020 2021 2020
(In 1000’s)
Value of income – subscription $ 1,061 $ 485 $ 2,596 $ 1,270
Value of income – companies and different 1,037 550 2,749 1,368
Analysis and improvement 3,604 1,712 9,010 4,700
Basic and administrative 2,883 1,944 7,479 4,896
Gross sales and advertising 5,819 3,147 15,515 8,945
Complete stock-based compensation expense $ 14,404 $ 7,838 $ 37,349 $ 21,179
The next desk units forth the unaudited condensed consolidated statements
of operations information for every of the
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intervals offered as a proportion of whole income:
Three Months Ended 9 Months Ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Income
Licenses 24 % 33 % 23 % 33 %
Subscription 64 54 64 54
Companies and different 12 13 13 13
Complete income 100 100 100 100
Value of income
Licenses 2 1 2 1
Subscription 14 10 13 10
Companies and different 12 11 12 11
Complete value of income 28 22 27 22
Gross revenue 72 78 73 78
Working bills
Analysis and improvement 24 21 23 20
Basic and administrative 11 9 11 11
Gross sales and advertising 53 47 55 46
Complete working bills 88 77 89 77
Earnings (loss) from operations (16) 1 (16) 1
Different expense, web
Curiosity earnings – – – 1
Curiosity expense (1) (5) (1) (5)
Different earnings (expense), web – – – –
Complete different expense, web (1) (5) (1) (4)
Loss earlier than earnings taxes (17) (4) (17) (3)
Earnings tax (expense) profit (1) 3 – 1
Internet loss (18) % (1) % (17) % (2) %
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Comparability of the Three and 9 Months Ended September 30, 2021 and 2020
Income
Three Months Ended 9 Months Ended
September 30, September 30, September 30, September 30,
2021 2020 variance $ variance % 2021 2020 variance $ variance %
(In 1000’s, besides percentages)
Income
Licenses $ 26,087 $ 30,864 $ (4,777) (15) % $ 69,772 $ 86,748 $ (16,976) (20) %
Subscription
SaaS 29,842 17,407 12,435 71 % 77,100 46,780 30,320 65 %
Upkeep and assist 39,361 32,511 6,850 21 % 112,139 91,735 20,404 22 %
Different subscription companies 1,593 1,086 507 47 % 5,154 2,292 2,862 125 %
Complete subscription 70,796 51,004 19,792 39 % 194,393 140,807 53,586 38 %
Companies and different 13,227 12,145 1,082 9 % 39,193 34,358 4,835 14 %
Complete income $ 110,110 $ 94,013 $ 16,097 17 % $ 303,358 $ 261,913 $ 41,445 16 %
License Income. License income decreased by $4.Eight million, or 15%, for the
three months ended September 30, 2021 in comparison with the three months ended
September 30, 2020 primarily resulting from SaaS choices turning into a bigger portion of
new gross sales.
License income decreased by $17.Zero million, or 20%, for the 9 months ended
September 30, 2021 in comparison with the 9 months ended September 30, 2020
primarily resulting from SaaS choices turning into a bigger portion of latest gross sales.
Subscription Income. Subscription income elevated by $19.Eight million, or 39%,
for the three months ended September 30, 2021 in comparison with the three months ended
September 30, 2020 primarily resulting from new gross sales of our SaaS choices and an
enhance in ongoing upkeep and assist income from our put in base.
Subscription income elevated by $53.6 million, or 38%, for the 9 months
ended September 30, 2021 in comparison with the 9 months ended September 30, 2020
primarily resulting from new gross sales of our SaaS choices and a rise in ongoing
upkeep and assist income from our put in base.
Companies and Different Income. Companies and different income elevated by $1.1
million, or 9%, for the three months ended September 30, 2021 in comparison with the
three months ended September 30, 2020 primarily because of a rise in
the variety of clients utilizing our consulting and coaching companies.
Companies and different income elevated by $4.Eight million, or 14%, for the 9
months ended September 30, 2021 in comparison with the 9 months ended September 30,
2020 primarily a results of a rise within the variety of clients utilizing our
consulting and coaching companies.
Geographic Areas. Our clients in america contributed the most important
portion of our income in every reporting interval ended September 30, 2021 and
2020 as a result of now we have extra market momentum associated to our bigger and extra
established gross sales drive, gross sales pipeline and model recognition and consciousness in
america as in comparison with our different areas. Income is assessed by the
following main geographic areas: (i) United States, (ii) Europe, the Center
East and Africa (“EMEA”) and (iii) remainder of the world. We proceed to spend money on
growing the scale of our worldwide gross sales drive and strengthening
partnerships with international system integrators and resellers worldwide. For the
three and 9 months ended September 30, 2021, income in america,
EMEA and the remainder of the world elevated year-over-year.
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The next desk units forth, for every of the intervals offered, our
consolidated whole income by geography and the respective percentages of whole
income:
Three Months Ended 9 Months Ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
$ % of income $ % of income $ % of income $ % of income
(In 1000’s, besides percentages)
United States $ 79,481 72 % $ 67,917 72 % $ 214,630 71 % $ 191,613 73 %
EMEA (1) 17,039 16 % 16,329 17 % 51,917 17 % 43,104 17 %
Remainder of the World (1) 13,590 12 % 9,767 11 % 36,811 12 % 27,196 10 %
Complete income $ 110,110 100 % $ 94,013 100 % $ 303,358 100 % $ 261,913 100 %
(1)No single nation exterior of america represented greater than 10% of
our income.
Gross Revenue and Gross Margin
Three Months Ended 9 Months Ended
September 30, September 30, September 30, September 30,
2021 2020 variance $ variance % 2021 2020 variance $ variance %
(In 1000’s, besides percentages)
Gross revenue
Licenses $ 24,093 $ 29,781 $ (5,688) (19) % $ 65,176 $ 83,479 $ (18,303) (22) %
Subscription 55,085 41,210 13,875 34 % 153,662 113,880 39,782 35 %
Companies and different (181) 2,223 (2,404) (108) % 1,467 6,761 (5,294) (78) %
Complete gross revenue $ 78,997 $ 73,214 $ 5,783 8 % $ 220,305 $ 204,120 $ 16,185 8 %
Gross margin
Licenses 92 % 96 % 93 % 96 %
Subscription 78 % 81 % 79 % 81 %
Companies and different (1) % 18 % 4 % 20 %
Complete gross margin 72 % 78 % 73 % 78 %
Licenses. License gross revenue decreased by $5.7 million, or 19%, for the three
months ended September 30, 2021 in comparison with the three months ended September 30,
2020. The lower in gross revenue was primarily the results of decreased license
revenues, as described above, along with elevated royalty prices. Gross
margin remained materially per the prior interval.
License gross revenue decreased by $18.Three million, or 22%, for the 9 months
ended September 30, 2021 in comparison with the 9 months ended September 30, 2020.
The lower in gross revenue was primarily the results of decreased license
revenues, as described above, along with elevated royalty prices. Gross
margin remained materially per the prior interval.
Subscription. Subscription gross revenue elevated by $13.9 million, or 34%, for
the three months ended September 30, 2021 in comparison with the three months ended
September 30, 2020. The rise in gross revenue was the results of development in
subscription income, as described above, partially offset by a $5.9 million
enhance in value of income in comparison with the prior interval. The rise in value
of income was primarily pushed by a $2.1 million enhance in cloud-based
internet hosting prices to additional assist the scalability of our SaaS choices, a $3.1
million enhance in employee-based prices to assist the expansion of our SaaS
choices and ongoing upkeep and assist to our increasing put in
buyer base and a $0.6 million enhance in amortization of intangibles,
primarily from our acquired intangible belongings through the first quarter of 2021.
Subscription gross revenue elevated by $39.Eight million, or 35%, for the 9
months ended September 30, 2021 in comparison with the 9 months ended September 30,
2020. The rise in gross revenue was the results of development in subscription
income, as
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described above, partially offset by a $13.Eight million enhance in value of income
in comparison with the prior interval. The rise in value of income was primarily
pushed by a $5.Eight million enhance in cloud-based internet hosting prices to additional
assist the scalability of our SaaS choices, a $6.9 million enhance in
employee-based prices to assist the expansion of our SaaS choices and ongoing
upkeep and assist to our increasing put in buyer base and a $1.2
million enhance in amortization of intangibles, primarily from our acquired
intangible belongings through the first quarter of 2021.
Companies and Different. Companies and different gross revenue decreased by $2.Four million,
or 108%, for the three months ended September 30, 2021 in comparison with the three
months ended September 30, 2020. The lower in gross revenue is primarily
attributable to a $3.5 million enhance in value of income in comparison with the prior
interval, partially offset by elevated revenues resulting from buyer development. The
enhance in value of income was primarily pushed by a $2.7 million enhance in
employee-based prices to assist an growing variety of clients and a $0.7
million enhance in accomplice prices resulting from larger accomplice utilization in our
skilled companies and coaching group.
Companies and different gross revenue decreased by $5.Three million, or 78%, for the 9
months ended September 30, 2021 in comparison with the 9 months ended September 30,
2020. The lower in gross revenue is primarily attributable to a $10.1 million
enhance in value of income in comparison with the prior interval, partially offset by
elevated revenues resulting from buyer development. The rise in value of income was
primarily pushed by a $7.Zero million enhance in employee-based prices to assist
an growing variety of clients and a $3.Zero million enhance in accomplice prices
resulting from larger accomplice utilization in our skilled companies and coaching
group.
Working Bills
Three Months Ended 9 Months Ended
September 30, September 30, September 30, September 30,
2021 2020 variance $ variance % 2021 2020 variance $ variance %
(In 1000’s, besides percentages)
Working bills
Analysis and improvement $ 26,879 $ 19,314 $ 7,565 39 % $ 69,478 $ 52,775 $ 16,703 32 %
Basic and administrative 12,192 8,846 3,346 38 % 33,920 27,731 6,189 22 %
Gross sales and advertising 58,624 44,092 14,532 33 % 168,194 119,886 48,308 40 %
Complete working bills $ 97,695 $ 72,252 $ 25,443 35 % $ 271,592 $ 200,392 $ 71,200 36 %
Analysis and Growth. Analysis and improvement bills elevated by $7.6
million, or 39%, for the three months ended September 30, 2021 in comparison with the
three months ended September 30, 2020. This enhance was primarily pushed by a
$6.Eight million enhance in employee-based prices resulting from a rise in headcount as
we proceed investing in extra merchandise and capabilities.
Analysis and improvement bills elevated by $16.7 million, or 32%, for the
9 months ended September 30, 2021 in comparison with the 9 months ended September
30, 2020. The rise was primarily pushed by a $15.9 million enhance in
employee-based prices resulting from a rise in headcount as we proceed investing in
extra merchandise and capabilities and a $1.5 million enhance in software program and
internet hosting association bills, partially offset by a $0.6 million lower in
skilled companies expense.
Basic and Administrative. Basic and administrative bills elevated by
$3.Three million, or 38%, for the three months ended September 30, 2021 in comparison with
the three months ended September 30, 2020. This enhance was primarily pushed by
employee-related prices {and professional} service charges related to consulting
companies.
Basic and administrative bills elevated by $6.2 million, or 22%, for the
9 months ended September 30, 2021 in comparison with the 9 months ended September
30, 2020. The rise was primarily pushed by a $3.Eight million enhance in
skilled service charges related to our acquisitions of Intello and ERP
Maestro and consulting companies, a $2.1 million enhance in worker associated
prices for stock-based compensation and a $0.5 million enhance in software program and
internet hosting association bills.
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Gross sales and Advertising. Gross sales and advertising bills elevated by $14.5 million, or
33%, for the three months ended September 30, 2021 in comparison with the three months
ended September 30, 2020. This enhance was primarily pushed by a $14.7 million
enhance in employee-based prices to assist elevated penetration into our
current buyer base and enlargement into new business verticals and geographic
markets, in addition to a $0.7 million enhance in software program and internet hosting association
bills, partially offset by a $1.2 million lower in skilled companies
expense relating primarily to advisory companies.
Gross sales and advertising bills elevated by $48.Three million, or 40%, for the 9
months ended September 30, 2021 in comparison with the 9 months ended September 30,
2020. The rise was primarily pushed by a $44.5 million enhance in
employee-based prices to assist elevated penetration into our current buyer
base and enlargement into new business verticals and geographic markets, as nicely
as a $1.2 million enhance in skilled companies expense relating primarily
to advisory companies and a $2.Three million enhance in software program and internet hosting
association bills primarily to assist headcount, partially offset by a $1.0
million lower in journey expense resulting from COVID-19 associated limitations.
Curiosity Earnings and Curiosity Expense
Curiosity Earnings
Curiosity earnings for the three months ended September 30, 2021 remained
constant in comparison with the three months ended September 30, 2020.
Curiosity earnings decreased by $1.2 million for the 9 months ended September
30, 2021 in comparison with the 9 months ended September 30, 2020. The lower was
primarily resulting from a major lower in rates of interest on our cash market
accounts and a lower in our money stability.
Curiosity Expense
Curiosity expense decreased by $4.Zero million for the three months ended September
30, 2021 in comparison with the three months ended September 30, 2020 primarily resulting from
decrease amortization expense associated to the Notes (outlined beneath) because of
our adoption of Accounting Requirements Replace (“ASU”) 2020-06, which eradicated
the embedded conversion function of the Notes. See Word 1 “Description of
Enterprise and Abstract of Important Accounting Insurance policies” in our notes to our
unaudited condensed consolidated monetary statements included on this Quarterly
Report for extra info concerning the adoption of ASU 2020-06.
Curiosity expense decreased by $11.7 million for the 9 months ended September
30, 2021 in comparison with the 9 months ended September 30, 2020 primarily resulting from
decrease amortization expense associated to the Notes because of our adoption of
ASU 2020-06.
Earnings Tax (Expense) Profit
The Firm recorded an earnings tax good thing about $1.1 million and earnings tax
good thing about $2.Four million for the 9 months ended September 30, 2021 and 2020,
respectively, resulting in a lower in web good thing about $1.Three million
year-over-year. Provision for earnings taxes consists of U.S. federal and state
earnings taxes and earnings taxes in sure overseas jurisdictions through which we
conduct enterprise. The Firm is in an general deferred tax asset place and
has established a valuation allowance for federal and state tax functions as we
don’t anticipate our deferred tax liabilities to offset our deferred tax belongings
previous to expiration. We nonetheless keep a full valuation allowance for our Israel
tax place due its lack of taxable earnings for the foreseeable future.
The efficient tax price for the three and 9 months ended September 30, 2021
is (3.5)% and a pair of.1%, respectively, in comparison with 78.3% and 28.5% for the three and
9 months ended September 30, 2020, respectively. The primary drivers of the
variations within the charges from the prior interval to the present interval are associated
to variations in forecasted pre-tax e-book loss, the influence of inventory
compensation, a rise in overseas tax liabilities, acquisition influence,
valuation allowance construct and the impact of analysis and improvement credit. We
anticipate this fluctuation in earnings tax charges, in addition to its potential influence on
our outcomes of operations, to proceed.
Liquidity and Capital Sources
As of September 30, 2021, we had $421.Eight million of money and money equivalents (of
which $6.Eight million is held in our overseas subsidiaries), $75.Zero million of
availability beneath the Credit score Settlement (as outlined beneath) and $6.Zero million in
our irrevocable, money collateralized, unconditional standby letter of credit score
issued in reference to our company headquarters
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lease. As of September 30, 2021, we had $158.Eight million in web working capital,
which we outline as present belongings much less present liabilities, excluding deferred
income.
On March 11, 2019, SailPoint Applied sciences, Inc., as borrower, and sure of our
different wholly owned subsidiaries entered right into a credit score settlement (as amended, the
“Credit score Settlement”) which incorporates commitments for revolving credit score loans of
$75.Zero million, with a $15.Zero million letter of credit score sublimit, which quantity can
be elevated or decreased beneath specified circumstances and is topic to
sure monetary covenants. We had no excellent revolving credit score mortgage stability
and we had been in compliance with all relevant covenants as of September 30,
2021. See Word 8 “Credit score Settlement” in our notes to our unaudited condensed
consolidated monetary statements included on this Quarterly Report for extra
info concerning phrases and situations of the Credit score Settlement.
In September 2019, we issued $400.Zero million mixture principal quantity of 0.125%
convertible senior notes due 2024 (the “Notes”) in a personal providing (the
“Providing”) to certified institutional consumers. The web proceeds from the
Providing had been roughly $391.2 million, after deducting reductions and
commissions and different charges and bills payable by the Firm in connection
with the Providing. Along with the issuance of the Notes, and train
in stuffed with the preliminary purchasers’ possibility, the Firm used roughly $37.1
million of the web proceeds to pay the price of privately negotiated capped name
transactions (the “Capped Name Transactions”) to scale back our publicity to
extra money funds above principal balances within the occasion of a money
conversion of the Notes. The Notes will mature on September 15, 2024, except
earlier redeemed, repurchased or transformed. The Notes bear curiosity at a hard and fast
price of 0.125% per 12 months payable semiannually in arrears on March 15 and
September 15 of every 12 months. As of September 30, 2021, we had in mixture $1.4
million in contractual curiosity funds, of which $0.5 million are due inside
the following 12 months.
As of September 30, 2021, the Notes are convertible on the possibility of the
holders. Now we have the power to settle the Notes in money, shares of our widespread
inventory, or a mix of money and shares of our widespread inventory at our personal
election. The influence of the Notes on our liquidity will depend upon whether or not we
elect to settle any conversion in shares of our widespread inventory or a mix of
money and shares. Throughout the three months ended March 31, 2021, the Firm
settled conversion requests within the mixture principal quantity of $10.2 million
of the Notes and terminated corresponding Capped Name Transactions. In
reference to these transactions, we paid $10.2 million in money to the
changing holders for the principal quantity, issued to the changing holders
181,629 shares of the Firm’s widespread inventory with a good worth of roughly
$10.1 million, and acquired 37,301 shares of the Firm’s widespread inventory bearing
a good worth of $1.9 million. As of the date of this submitting, no different holders of
the Notes have submitted requests for conversion. See Word 9 “Convertible Senior
Notes and Capped Name Transactions” in our notes to our unaudited condensed
consolidated monetary statements included on this Quarterly Report for extra
info concerning the phrases and situations of the Notes and Capped Name
Transactions.
The Firm acquired two firms through the first quarter of 2021, ensuing
in $71.Zero million of money paid for enterprise acquisitions, web of money acquired.
See Word 4 “Enterprise Mixtures” and Word 5 “Goodwill and Intangible Property”
in our notes to our unaudited condensed consolidated monetary statements
included on this Quarterly Report for extra info. Apart from the
acquisitions and settled Notes conversion requests, there have been no materials
modifications exterior the odd course of enterprise to the money necessities from
our contractual and different obligations, as disclosed within the Annual Report.
We imagine that current money and money equivalents, any constructive money flows from
operations and out there borrowings beneath our Credit score Settlement will probably be
enough to assist working capital, capital expenditures and different money
necessities for no less than the following 12 months and, primarily based on our present
expectations, for the foreseeable future thereafter. Our future capital
necessities, each near-term and long-term, will depend upon many components,
together with our development price, the timing and extent of spending to assist analysis
and improvement efforts, the continued enlargement of gross sales and advertising
actions, the introduction of latest options and product enhancements, the
persevering with market acceptance of our choices and companies, the prices of any
future acquisitions in complementary companies and applied sciences and the influence
of the COVID-19 pandemic to our and our clients’, distributors’ and companions’
companies. To the extent current money and money equivalents should not enough
to fund future actions, we might borrow beneath our Credit score Settlement or search to
elevate extra funds via fairness, equity-linked or debt financings. Any
extra fairness financing could also be dilutive to our current stockholders. We might
enter into agreements or letters of intent with respect to potential investments
in, or acquisitions of, complementary companies, companies or applied sciences,
which may additionally require us to hunt extra fairness financing, incur
indebtedness or use money assets. Within the occasion that extra financing is
required from exterior sources, we might not be capable of elevate it on phrases
acceptable to us or in any respect. If we’re unable to boost extra capital when
desired, or if we can’t develop our operations or in any other case capitalize on our
enterprise alternatives as a result of we lack enough capital, our enterprise,
working outcomes and monetary situation can be adversely affected.
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Since inception, now we have financed operations primarily via license charges,
SaaS subscription charges, upkeep and assist charges, consulting and coaching
charges, borrowings beneath our prior credit score settlement and, to a lesser diploma, the
sale of fairness securities. Our principal makes use of of money are funding operations and
capital expenditures. Over the previous a number of years, income has elevated
considerably from 12 months to 12 months and, in consequence, money flows from buyer
collections have elevated. Nevertheless, working bills have additionally elevated as
now we have invested in rising our enterprise. Our working money necessities might
enhance sooner or later as we proceed to spend money on key initiatives to drive the
Firm’s long-term development.
Abstract of Money Flows
The next desk summarizes our money flows for the intervals offered:
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