INVESTOR DECK MAY 2018 - INVESTOR RELATIONS | SAILPOINT
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Investor Deck
May 2018
1
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.
2
Who
currently
has access?
SailPoint
secures
digital
identities Identity
Governance
Enabling
organizations Who
to answer How is
three critical
should
access being used?
questions have access?
3
SailPoint today(1)
Revenue and adjusted EBITDA margin(2)
Leader in identity governance ($M) except where noted
Robust platform
Gartner Magic Quadrant
41%
$186
Expanding market
opportunity
$10B TAM
$132
Enterprise focus
984 35+
customers countries
Loyal customers 95%+
maintenance renewal rate
Management team 3rd 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
Digital
transformation
increases the
complexity
of managing
identities across
the enterprise
Employees
Contractors, suppliers
business partners
System resources
Robot identities
IoT devices
5Organizations need
to govern these
identities accessing
various connected
resources in hybrid
environments
Mainframe apps
On-prem apps
Cloud apps
Directories
Databases
Unstructured data
6Identity management is critical to the modern enterprise
Identity Governance
Privileged Account Access
Management Management
7Sales rep
management
Access
Homegrown
commissioning
tool
View personal
paystub
APAC Americas EMEA Calculate
commissions
governance
View
Identity
benefits
View
US West US Central US East
commissions
Close deal
Approve Process
commissions commissions
to payroll
8System of record for digital identities
IT operations Security Compliance
Enabling all Protecting access Staying compliant
users efficiently to applications amidst mounting
and data regulations
9Product 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
10Our open identity platform
SailPoint Identity Governance
Access Provisioning Access Policy Password Identity Analytics
Request Certification Management Management Governance for
data in files
Governance Platform Services
Identity Warehouse Policy Model Role Model Risk Model Workflow Engine Dashboard & Reporting
Integration Framework
Connectors APIs Plugins SDKs Integration Modules
Hybrid Environments
Cloud Apps On-prem Apps Directories Databases Mainframe Apps File Storage Operating Systems
11We are foundational to an identity-aware enterprise
ServiceNow
(ArcSight)
APIs SDKs Plugins
12Large and growing market
Identity and access Data-centric audit Total addressable
management and protection market
Over 80,000
addressable
companies globally(3)
(≥ 1,000 employees)
(2)
$10B
$9 (1) $1.2B
$8.8B
B
+ =
65,000
companies
in our existing
(3)
markets
Less than 2%
+11% +20%
annual growth
penetrated today
annual growth
through 2020 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
13Our market focus
Market segment Market opportunity Competitors Sales strategy
• Ripe for disruption
• First-gen provisioning • Oracle • Direct sales force:
Large enterprise replacement • IBM account executives
(7,500+ employees) • Compliance and data • CA • Global SIs
governance greenfield
• Direct sales force:
• Homegrown territory managers
Mid-market enterprise • Greenfield • Manual & inside sales
(1,000 - 7,500 employees) processes • Resellers and
boutique SIs
14Established partner network that provides significant leverage
over 80% of new deals involved partners
Resellers System integrators Technology partners
157/15 4/6 9/15
TOP BANKS(1) TOP HEALTHCARE TOP PROPERTY AND
INSURANCE AND MANAGED CASUALTY INSURANCE
Global CARE PROVIDERS(1) PROVIDERS(1)
customer base
984
CUSTOMERS(3)
5/15 11/15
TOP LARGEST U.S. FEDERAL
PHARMACEUTICAL GOVERNMENT
COMPANIES(1) 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 16
3. Customer count as of 3/31/2018Customer case studies
Fortune 500 Fortune 500 International Consumer
Manufacturer Transportation Company Brand
Problem: Problem: Problem:
• Outdated legacy solution • Internally developed solution • Mid-market customer
• Manual security processes • Compliance deficiencies • Need for “cloud-first” governance
SailPoint solution: SailPoint solution: SailPoint solution:
• Modern, governance-based platform • Visibility / control over 450K users • Management of hybrid environment
• Automated 60K+ requests • Elimination of SoD violations • Reduced processing time
• Estimated $1M savings annually • Addresses scale and complexity (months to < 1 day)
• Risk-based compliance
17Multiple growth drivers
Sell to new customers
Expand within existing customers
Extend global presence
Leverage partner network
Invest in platform and products
18Financial highlights
Attractive combination of growth and profitability(1)
Increasing recurring revenue and visibility
Global customer base
Broad vertical representation
High customer retention rate
1. Based on adjusted EBITDA
19Our business model
Products Modules Revenue models
Compliance Provisioning Access Password
Controls Request Management
Perpetual license
& maintenance (1)
Windows and Active Exchange SharePoint Cloud Storage
Unix File Shares Directory Systems
Compliance Provisioning Access Password
Controls Request Management
SaaS
Identity Analytics
1. Small portion of IdentityIQ and SecurityIQ sold on a term license basis
20Sustained revenue growth
Annual revenue ($M) Quarterly revenue ($M)
41% $186
40%
$50
$132
$35
FY '16 FY '17 Q1 '17 Q1 '18
21Growing and diversified customer base
(1) (1)
Customer count Customer composition
Manufacturing,
984 Energy and Banking
933 Industrials 15%
17%
695 Other
Government,
Education and
4% Non-Profit
520 13%
Retail and
Consumer
8%
Insurance Technology, Media
10% and Telecom
12%
FY '15 FY '16 FY '17 Q1 '18 Healthcare Finance
10% 11%
1. Current customer count and industry composition percentages as of 3/31/2018
22Powerful land and expand opportunity
Cumulative license revenue
($M, unless otherwise noted)
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 $0.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5
7.6x 5-Year purchase multiple 12.4x 5-Year purchase multiple
23Attractive gross and EBITDA margins
(1) (1)
Total non-GAAP gross margin (%) Total adjusted EBITDA margin (%)
79% 78% 14%
75% 75%
11%
9%
7%
FY '16 FY '17 Q1 '17 Q1 '18 FY '16 FY '17 Q1 '17 Q1 '18
1. Please see Appendix for GAAP to non-GAAP reconciliations
24Appendix
25Reconciliation of non-GAAP gross margin
($ ‘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 $38,544
Non-GAAP gross margin (2) 75% 79% 75% 78%
1. Non-GAAP gross profit = GAAP revenue – non-GAAP cost of revenue
2. Non-GAAP gross margin = non-GAAP gross profit / GAAP revenue 26Reconciliation of adjusted EBITDA
($ ‘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 1,379 255 421
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%
1. Adjusted EBITDA margin = adjusted EBITDA / GAAP revenue
27Endnotes
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
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