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November 2018
Investor Deck
Investor Deck November 2018 1 Disclaimer Forward-Looking - - PowerPoint PPT Presentation
Investor Deck November 2018 1 Disclaimer Forward-Looking Statements This presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 19 95. All statements contained in this
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November 2018
Investor Deck
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Disclaimer
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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;
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; changes in financial accounting standards or practices; 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 Reports on Form 10-Q for the quarter ended March 31, 2018, June 30, 2018, and September 30, 2018, respectively, which were filed with the SEC on May 9, 2018, August 8, 2018, and November 7, 2018, respectively, 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.
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SailPoint secures digital identities
Identity
Governance How is Who should Who currently
Enabling
to answer three critical questions
has access? have access? access being used?
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Enterprise focus
Leader in identity governance
Forrester, Gartner and KuppingerCole
$11B
TAM
35+
countries
1. Please see the Endnotes in the Appendix for details on the sources and relevant dates of the figured presented 2. Please see Appendix for calculation of adjusted EBITDA1,090
customers
Revenue and adjusted EBITDA margin(2)
($M) except where noted
3rd generation identity company
Robust platform Expanding market
Loyal customers
95%+
maintenance renewal rate
Management team
SailPoint today(1)
$132 $186
FY16 FY17
41%
11% 14%
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Digital transformation increases the complexity
identities across the enterprise
Employees Contractors, suppliers business partners System resources Robot identities IoT devices
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Organizations need to govern these identities accessing various connected resources in hybrid environments
Mainframe apps On-prem apps Cloud apps Directories Databases Unstructured data
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Access
Management
Identity Governance
Identity management is critical to the modern enterprise
Privileged Account
Management
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Access management
APAC Americas EMEA
Homegrown commissioning tool
Close deal
Identity governance
Calculate commissions View commissions Approve commissions View personal paystub View benefits Process commissions to payroll US West US Central US East
Sales rep
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Enabling all users efficiently Protecting access to applications and data Staying compliant amidst mounting regulations
System of record for digital identities
IT operations Security Compliance
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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
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Our open identity platform
Access Request Provisioning Access Certification Password Management Identity Governance for data in files Analytics
Governance Platform Services
SailPoint Identity Governance
Policy Model Role Model Workflow Engine Identity Warehouse Dashboard & Reporting Risk Model
Policy Management Mainframe Apps
Hybrid Environments
Cloud Apps Directories Databases On-prem Apps File Storage Operating Systems
Integration Framework
Connectors APIs Plugins SDKs Integration Modules
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ServiceNow
We are foundational to an identity-aware enterprise
APIs SDKs Plugins
(ArcSight)
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Large and growing market
$1 B
Identity and access management Data-centric audit and protection Total addressable market
+11%
annual growth from 2018 through 2021
$9.8B $1.2B $11B
+20%
annual growth in 2016
1. Forrester, “The IAM Market Will Surpass $13 Billion By 2021”, 2017 2. Gartner, “Market Guide for Data-Centric Audit and Protection”, 2017 3. Per S&P Global Market Intelligence(1) (2)
Over 80,000 addressable companies globally (≥ 1,000 employees) 65,000 companies in our existing markets
Less than 2% penetrated today
(3) (3)
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Market segment Market opportunity Competitors Sales strategy
replacement
governance greenfield
processes
account executives
territory managers & inside sales
boutique SIs
Our market focus
Large enterprise
(7,500+ employees)
Mid-market enterprise
(1,000 - 7,500 employees)
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Technology partners System integrators Resellers
Established partner network that provides significant leverage
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Global customer base
TOP HEALTHCARE INSURANCE AND MANAGED CARE PROVIDERS(1)
TOP PHARMACEUTICAL COMPANIES(1)
LARGEST U.S. FEDERAL GOVERNMENT AGENCIES(2)
1. Based on Fortune’s 2018 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 9/30/2018TOP PROPERTY AND CASUALTY INSURANCE PROVIDERS(1) TOP BANKS(1)
CUSTOMERS(3)
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Customer case studies
Fortune 500 Manufacturer
Problem:
SailPoint solution:
Fortune 500 Transportation Company
Problem:
SailPoint solution:
International Consumer Brand
Problem:
SailPoint solution:
(months to < 1 day)
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Extend global presence Sell to new customers Expand within existing customers Leverage partner network Invest in platform and products
Multiple growth drivers
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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 EBITDA20
1. Small portion of IdentityIQ and SecurityIQ sold on a term license basisOur business model
Products Perpetual license & maintenance (1) SaaS Revenue models
Compliance Controls Provisioning Access Request Password Management
Identity Analytics
Modules
Compliance Controls Provisioning Access Request Password Management Exchange SharePoint Windows and Unix File Shares Active Directory Cloud Storage Systems
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$44 $66
Q3 '17 Q3 '18
$132 $186
FY '16 FY '17
41% Sustained revenue growth
Annual revenue ($M) Quarterly revenue ($M)
52%
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520 695 933 1,090 FY '15 FY '16 FY '17 Q3 '18
Growing and diversified customer base
Customer count
1. Current customer count and industry composition percentages as of 9/30/2018. Might not sum to 100% due to rounding.Customer composition
(1) (1)
Manufacturing, Energy and Industrials 16% Banking 15% Government, Education and Non-Profit 13% Technology, Media and Telecom 13% Finance 11% Healthcare 11% Insurance 9% Retail and Consumer 8% Other 4%
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Powerful land and expand opportunity
Cumulative license revenue
$0.0 $0.5 $1.0 $1.5 $2.0 $2.5
Year 1 Year 2 Year 3 Year 4 Year 5
Global insurance customer
$0.0 $0.5 $1.0 $1.5 $2.0 $2.5
Year 1 Year 2 Year 3 Year 4 Year 5
Multinational telecommunications customer
7.6x 5-Year purchase multiple 12.4x 5-Year purchase multiple
($M, unless otherwise noted)
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Total non-GAAP gross margin (%)
1. Please see Appendix for GAAP to non-GAAP reconciliations(1)
Attractive gross and EBITDA margins
Total adjusted EBITDA margin (%)
(1)
75% 79% FY '16 FY '17 77% 82% Q3 '17 Q3 '18 11% 14% FY '16 FY '17 8% 18% Q3 '17 Q3 '18
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Appendix
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Reconciliation of non-GAAP gross margin
FY2016 FY2017 Q3 2017 Q3 2018 GAAP revenue $132,412 $186,056 $43,562 $66,419 GAAP total cost of revenue 37,038 44,590 11,078 14,014 GAAP gross profit $95,374 $141,466 $32,484 $52,405 GAAP gross margin 72% 76% 75% 79% FY2016 FY2017 Q3 2017 Q3 2018 GAAP total cost of revenue $37,038 $44,590 $11,078 $14,014 Stock-based compensation (97) (591) (37) (684) Amortization of acquired intangibles (4,416) (4,416) (1,104) (1,104) Non-GAAP cost of revenue $32,525 $39,583 $9,937 $12,226
($ ‘000’s)
1. Non-GAAP gross profit = GAAP revenue – non-GAAP cost of revenue 2. Non-GAAP gross margin = non-GAAP gross profit / GAAP revenueFY2016 FY2017 Q3 2017 Q3 2018 Non-GAAP gross profit (1) $99,887 $146,473 $33,625 $54,193 Non-GAAP gross margin (2) 75% 79% 77% 82%
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Reconciliation of adjusted EBITDA
Adjusted EBITDA FY2016 FY2017 Q3 2017 Q3 2018 Net loss $(3,173) $(7,592) $(6387) $3,302 Income tax (benefit) expense (1,985) 2,293 2,906 618 Interest expense, net 7,277 14,783 3,726 202 Amortization 9,092 8,841 2,207 2,206 Depreciation 890 1,379 385 493 Purchase accounting adjustment 1,373 141 16 18 Acquisition and sponsor related costs 1,093 1,142 322 Stock-based compensation 568 4,514 201 4,932 Adjusted EBITDA $15,135 $25,501 $3,376 $11,771 GAAP Revenue $132,412 $186,056 $43,562 $66,419 Adjusted EBITDA margin (1) 11% 14% 8% 18%
($ ‘000’s)
1. Adjusted EBITDA margin = adjusted EBITDA / GAAP revenue28
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”, 2017 2. Gartner, “Market Guide for Data-Centric Audit and Protection”, 2017 Enterprise Focus: 1. Customers: As of 9/30/2018 2. Countries: As of 9/30/2018 Loyal Customers: 1. Maintenance Renewal Rate: For IdentityIQ for the year ended December 31, 2017