investor deck - sailpoint/media/files/s/sail...13 large and growing market $9 b identity and access...
TRANSCRIPT
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May 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;
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.
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SailPoint secures digital
identities IdentityGovernance
How is Who
should
Who
currently
Enabling
organizations
to answer
three critical
questions
has access?
have access?access being used?
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Enterprise focus
Leader in identity governance
Gartner Magic Quadrant
$10B TAM
35+countries
1. Please see the Endnotes in the Appendix for details on the sources and relevant dates of the figured presented
2. Please see Appendix for calculation of adjusted EBITDA
984customers
Revenue and adjusted EBITDA margin(2)
($M) except where noted
3rd generation identity company
Robust platform
Expanding market
opportunity
Loyal customers 95%+maintenance renewal rate
Management team
SailPoint today(1)
$132
$186
FY16 FY17
Adj. EBITDA margin
41%
11% 14%
5
Digital transformationincreases the
complexityof managing
identities acrossthe enterprise
Employees
Contractors, suppliers
business partners
System resources
Robot identities
IoT devices
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
7
AccessManagement
Identity Governance
Identity management is critical to the modern enterprise
Privileged AccountManagement
8
Access
man
ag
em
en
t
APAC Americas EMEA
Homegrown
commissioning
tool
Close deal
Iden
tity
g
overn
an
ce
Calculate
commissions
View
commissions
Approve
commissions
View personal
paystub
View
benefits
Process
commissions
to payroll
US West US Central US East
Sales rep
9
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
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
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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 EngineIdentity Warehouse Dashboard & ReportingRisk Model
Policy
Management
Mainframe Apps
Hybrid Environments
Cloud Apps Directories DatabasesOn-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
$9B
Identity and access management
Data-centric audit and protection
Total addressablemarket
+11%
annual growth
through 2020
+ =$8.8B
$1.2B$10B
+20%
annual growth
in 2016
1. Forrester, “Identity and Access Management Software Forecast”, 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
• Ripe for disruption
• First-gen provisioning
replacement
• Compliance and data
governance greenfield
• Greenfield
• Oracle
• IBM
• CA
• Homegrown
• Manual
processes
• Direct sales force:
account executives
• Global SIs
• Direct sales force:
territory managers
& inside sales
• Resellers and
boutique SIs
Our market focus
Large enterprise(7,500+ employees)
Mid-market enterprise(1,000 - 7,500 employees)
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Technology partnersSystem integratorsResellers
Established partner network that provides significant leverage
over 80% of new deals involved partners
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CUSTOMERS(3)
984
Globalcustomer base
7/15 4/6TOP HEALTHCARE
INSURANCE AND MANAGED
CARE PROVIDERS(1)
9/15
5/15TOP
PHARMACEUTICAL
COMPANIES(1)
11/15LARGEST 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 3/31/2018
TOP PROPERTY AND
CASUALTY INSURANCE
PROVIDERS(1)
TOP BANKS(1)
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Customer case studies
Fortune 500
Manufacturer
Problem:
• Outdated legacy solution
• Manual security processes
SailPoint solution:
• Modern, governance-based platform
• Automated 60K+ requests
• Estimated $1M savings annually
Fortune 500
Transportation Company
Problem:
• Internally developed solution
• Compliance deficiencies
SailPoint solution:
• Visibility / control over 450K users
• Elimination of SoD violations
• Addresses scale and complexity
International Consumer
Brand
Problem:
• Mid-market customer
• Need for “cloud-first” governance
SailPoint solution:
• Management of hybrid environment
• Reduced processing time
(months to < 1 day)
• Risk-based compliance
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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 EBITDA
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1. Small portion of IdentityIQ and SecurityIQ sold on a term license basis
Our 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 SharePointWindows and
Unix File Shares
Active
Directory
Cloud Storage
Systems
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$132
$186
FY '16 FY '17
$35
$50
Q1 '17 Q1 '18
41%
Sustained revenue growth
Annual revenue ($M) Quarterly revenue ($M)
40%
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Growing and diversified customer base
Customer count
1. Current customer count and industry composition percentages as of 3/31/2018
Customer composition(1) (1)
520
695
933984
FY '15 FY '16 FY '17 Q1 '18
Manufacturing, Energy and Industrials
17%
Banking15%
Government, Education and
Non-Profit13%
Technology, Media and Telecom
12%
Finance11%
Healthcare10%
Insurance10%
Retail and Consumer
8%
Other4%
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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
75% 78%
Q1 '17 Q1 '18
11%
14%
FY '16 FY '17
9%
7%
Q1 '17 Q1 '18
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Appendix
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Reconciliation of non-GAAP gross margin
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 $11,170
($ ‘000’s)
1. Non-GAAP gross profit = GAAP revenue – non-GAAP cost of revenue
2. Non-GAAP gross margin = non-GAAP gross profit / GAAP revenue
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%
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Reconciliation of adjusted EBITDA
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 1,379 255 421
Purchase accounting adjustment 1,373 141 55 13
Acquisition and sponsor related costs 1,093 1,142 328 -
Stock-based compensation 568 4,514 158 5,139
Adjusted EBITDA $15,135 $25,501 $3,152 $3,342
GAAP Revenue $132,412 $186,056 $35,466 $49,714
Adjusted EBITDA margin (1) 11% 14% 9% 7%
($ ‘000’s)
1. Adjusted EBITDA margin = adjusted EBITDA / GAAP revenue
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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 3/31/2018
2. Countries: As of 3/31/2018
Loyal Customers:
1. Maintenance Renewal Rate: For IdentityIQ for the year ended December 31, 2017