Investor Deck. May 2018

Transcription

1 Investor Deck May

2 Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of All statements contained in this presentation other than statements of historical facts, including statements regarding future results of operations and financial position of SailPoint Technologies Holdings, Inc. ( SailPoint, we, us or our ), our business strategy and plans, our objectives for future operations and our market opportunity, are forward-looking statements. The words may, will, will be, will likely result, should, expects, plans, anticipates, could, would, foresees, intends, target, projects, contemplates, believes, estimates, predicts, potential or continue or the negative of these words or other similar terms or expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance, but are based on management s current expectations, assumptions and beliefs concerning future developments and their potential effect on us, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Our expectations expressed or implied in these forward-looking statements may not turn out to be correct. Our results could be materially different from our expectations because of various risks. Important factors, some of which are beyond our control, that could cause actual results to differ materially from our historical results or those expressed or implied by these forward-looking statements include the following: our ability to attract and retain customers and our ability to deepen our relationships with existing customers; our expectations regarding our customer growth rate; our ability to maintain successful relationships with our channel partners and further develop strategic relationships; our ability to develop or acquire new solutions, improve our platform and solutions and increase the value of and benefits associated with our platform and solutions; our ability to compete successfully against current and future competitors; our plans to further invest in and grow our business, and our ability to effectively manage our growth and associated investments; our ability to adapt and respond to rapidly changing technology, evolving industry standards, changing regulations and changing customer needs; our ability to maintain and enhance our brand or reputation as an industry leader and innovator; our ability to hire, retain, train and motivate our senior management team and key employees; our ability to successfully enter new markets and manage our international expansion; adverse economic conditions in the United States, Europe or the global economy; significant changes in the contracting or fiscal policies of the public sector; actual or perceived failures by us to comply with privacy policy or legal or regulatory requirements; our ability to maintain third-party licensed software in or with our solutions; and our ability to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies. These and other important risk factors are described more fully in our reports and other documents filed with the Securities and Exchange Commission (the SEC ), including the detailed factors discussed under (i) Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the SEC on March 19, 2018, and (ii) Part II, Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, which was filed with the SEC on May 9, 2018, and could cause actual results to vary from expectations. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Any forward-looking statement speaks only as of the date as of which such statement is made, and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise. Industry and Market Data This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Neither we nor any other person makes any representation as to the accuracy or completeness of such data or undertakes any obligation to update such data after the date of this presentation. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk. Non-GAAP Financial Measures This presentation contains certain supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles ( GAAP ). These non-gaap measures, which may be different than similarly titled measures used by other companies, are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of non-gaap measures to the most directly comparable GAAP measures is contained in the Appendix. 2

3 SailPoint secures digital identities Enabling organizations to answer three critical questions How is access being used? Who currently has access? Identity Governance Who should have access? 3

4 SailPoint today (1) Robust platform Expanding market opportunity Leader in identity governance Gartner Magic Quadrant $10B TAM Revenue and adjusted EBITDA margin (2) ($M) except where noted 41% $186 Enterprise focus 984 customers 35+ countries $132 Loyal customers 95%+ maintenance renewal rate Management team 3 rd generation identity company FY16 FY17 Adj. EBITDA margin 11% 14% 1. Please see the Endnotes in the Appendix for details on the sources and relevant dates of the figured presented 2. Please see Appendix for calculation of adjusted EBITDA 4

5 Digital transformation increases the complexity of managing identities across the enterprise Employees Contractors, suppliers business partners System resources Robot identities IoT devices 5

6 Organizations need to govern these identities accessing various connected resources in hybrid environments Mainframe apps On-prem apps Cloud apps Directories Databases Unstructured data 6

7 Identity management is critical to the modern enterprise Identity Governance Privileged Account Management Access Management 7

8 Identity governance Access management Sales rep Homegrown commissioning tool APAC Americas EMEA Calculate commissions View personal paystub US West US Central US East View commissions View benefits Close deal Approve commissions Process commissions to payroll 8

9 System of record for digital identities IT operations Security Compliance Enabling all users efficiently Protecting access to applications and data Staying compliant amidst mounting regulations 9

10 Product leadership drivers Comprehensive and scalable Flexible deployment: on-premises or cloud Open architecture and broad ecosystem Low total cost of ownership Address IT operations, security, and compliance 10

11 Our open identity platform SailPoint Identity Governance Access Request Provisioning Access Certification Policy Management Password Management Identity Governance for data in files Analytics Governance Platform Services Identity Warehouse Policy Model Role Model Risk Model Workflow Engine Integration Framework Connectors APIs Plugins SDKs Integration Modules Dashboard & Reporting Hybrid Environments Cloud Apps On-prem Apps Directories Databases Mainframe Apps File Storage Operating Systems 11

12 We are foundational to an identity-aware enterprise ServiceNow (ArcSight) APIs SDKs Plugins 12

13 Large and growing market Identity and access management $9 B $8.8B (1) Data-centric audit and protection $1.2B (2) + = Total addressable market $10B Over 80,000 addressable companies globally ( 1,000 employees) (3) 65,000 companies in our existing (3) markets +11% annual growth through % annual growth in 2016 Less than 2% penetrated today 1. Forrester, Identity and Access Management Software Forecast, Gartner, Market Guide for Data-Centric Audit and Protection, Per S&P Global Market Intelligence 13

14 Our market focus Market segment Market opportunity Competitors Sales strategy Large enterprise (7,500+ employees) Ripe for disruption First-gen provisioning replacement Compliance and data governance greenfield Oracle IBM CA Direct sales force: account executives Global SIs Mid-market enterprise (1,000-7,500 employees) Greenfield Homegrown Manual processes Direct sales force: territory managers & inside sales Resellers and boutique SIs 14

15 Established partner network that provides significant leverage over 80% of new deals involved partners Resellers System integrators Technology partners 15

16 7/15 4/6 9/15 Global customer base TOP BANKS (1) TOP HEALTHCARE INSURANCE AND MANAGED CARE PROVIDERS (1) TOP PROPERTY AND CASUALTY INSURANCE PROVIDERS (1) 984 CUSTOMERS (3) 5/15 TOP PHARMACEUTICAL COMPANIES (1) 11/15 LARGEST U.S. FEDERAL GOVERNMENT AGENCIES (2) 1. Based on Fortune s 2017 Global 500 list 2. Federal agency rankings based on employee count provided in most recent Employment and Trends report from US OPM 3. Customer count as of 3/31/

17 Customer case studies Fortune 500 Manufacturer Fortune 500 Transportation Company International Consumer Brand Problem: Outdated legacy solution Manual security processes Problem: Internally developed solution Compliance deficiencies Problem: Mid-market customer Need for cloud-first governance SailPoint solution: Modern, governance-based platform Automated 60K+ requests Estimated $1M savings annually SailPoint solution: Visibility / control over 450K users Elimination of SoD violations Addresses scale and complexity SailPoint solution: Management of hybrid environment Reduced processing time (months to < 1 day) Risk-based compliance 17

18 Multiple growth drivers Sell to new customers Expand within existing customers Extend global presence Leverage partner network Invest in platform and products 18

19 Financial highlights Attractive combination of growth and profitability (1) Increasing recurring revenue and visibility Global customer base Broad vertical representation High customer retention rate 1. Based on adjusted EBITDA 19

20 Our business model Products Modules Revenue models Compliance Controls Provisioning Access Request Password Management Perpetual license & maintenance (1) Windows and Unix File Shares Active Directory Exchange SharePoint Cloud Storage Systems Compliance Controls Provisioning Access Request Password Management SaaS Identity Analytics 1. Small portion of IdentityIQ and SecurityIQ sold on a term license basis 20

21 Sustained revenue growth Annual revenue ($M) Quarterly revenue ($M) 41% $186 40% $50 $132 $35 FY '16 FY '17 Q1 '17 Q1 '18 21

22 Growing and diversified customer base Customer count (1) (1) Customer composition Manufacturing, Energy and Industrials 17% Banking 15% Other 4% Retail and Consumer 8% Government, Education and Non-Profit 13% Insurance 10% Technology, Media and Telecom 12% FY '15 FY '16 FY '17 Q1 '18 Healthcare 10% Finance 11% 1. Current customer count and industry composition percentages as of 3/31/

23 Powerful land and expand opportunity ($M, unless otherwise noted) Cumulative license revenue Global insurance customer Multinational telecommunications customer $2.5 $2.5 $2.0 $2.0 $1.5 $1.5 $1.0 $1.0 $0.5 $0.5 $0.0 Year 1 Year 2 Year 3 Year 4 Year 5 $0.0 Year 1 Year 2 Year 3 Year 4 Year 5 7.6x 5-Year purchase multiple 12.4x 5-Year purchase multiple 23

24 Attractive gross and EBITDA margins Total non-gaap gross margin (%) (1) Total adjusted EBITDA margin (%) (1) 75% 79% 75% 78% 14% 11% 9% 7% FY '16 FY '17 Q1 '17 Q1 '18 FY '16 FY '17 Q1 '17 Q1 '18 1. Please see Appendix for GAAP to non-gaap reconciliations 24

25 Appendix 25

26 Reconciliation of non-gaap gross margin ($ 000 s) FY2016 FY2017 Q12017 Q12018 GAAP revenue $132,412 $186,056 $35,466 $49,714 GAAP total cost of revenue 37,038 44,590 10,135 12,770 GAAP gross profit $95,374 $141,466 $25,331 $36,944 GAAP gross margin 72% 76% 71% 74% FY2016 FY2017 Q12017 Q12018 GAAP total cost of revenue $37,038 $44,590 $10,135 $12,770 Stock-based compensation (97) (591) (27) (496) Amortization of acquired intangibles (4,416) (4,416) (1,104) (1,104) Non-GAAP cost of revenue $32,525 $39,583 $9,004 $11,170 FY2016 FY2017 Q12017 Q12018 Non-GAAP gross profit (1) $99,887 $146,473 $26,462 $38,544 Non-GAAP gross margin (2) 75% 79% 75% 78% 1. Non-GAAP gross profit = GAAP revenue non-gaap cost of revenue 2. Non-GAAP gross margin = non-gaap gross profit / GAAP revenue 26

27 Reconciliation of adjusted EBITDA ($ 000 s) Adjusted EBITDA FY2016 FY2017 Q12017 Q12018 Net loss $(3,173) $(7,592) $(2,283) $(5,967) Income tax (benefit) expense (1,985) 2,293 (239) 352 Interest expense, net 7,277 14,783 2,657 1,178 Amortization 9,092 8,841 2,221 2,206 Depreciation 890 1, Purchase accounting adjustment 1, Acquisition and sponsor related costs 1,093 1, Stock-based compensation 568 4, ,139 Adjusted EBITDA $15,135 $25,501 $3,152 $3,342 GAAP Revenue $132,412 $186,056 $35,466 $49,714 Adjusted EBITDA margin (1) 11% 14% 9% 7% 1. Adjusted EBITDA margin = adjusted EBITDA / GAAP revenue 27

28 Endnotes Referenced from Page 4: Robust Platform: 1. Gartner, Magic Quadrant for Identity Governance and Administration, 2018 Expanding Market Opportunity: 1. Forrester, Identity and Access Management Software Forecast, Gartner, Market Guide for Data-Centric Audit and Protection, 2017 Enterprise Focus: 1. Customers: As of 3/31/ Countries: As of 3/31/2018 Loyal Customers: 1. Maintenance Renewal Rate: For IdentityIQ for the year ended December 31,