11:11 AM EDT, 09/09/2025 (MT Newswires) -- SailPoint ( SAIL ) on Tuesday issued a fiscal third-quarter revenue outlook that fell short of Wall Street's estimates, but the security software company raised its full-year guidance after sales for the most recent three-month period topped analysts' views.

The company expects revenue of $269 million to $271 million this quarter, indicating a 14% to 15% increase year over year. Analysts polled by FactSet are looking for $277.4 million.

The stock was down 8.8% intraday.

Revenue for fiscal 2026 is now guided between $1.05 billion and $1.06 billion, up from a prior range of $1.03 billion to $1.04 billion and representing annual growth of 22% to 23%. The Street is projecting $1.04 billion. Annual recurring revenue is now expected to grow 26% to 27%, reaching $1.11 billion to $1.12 billion, compared with the previous outlook of $1.10 billion to $1.11 billion. Analysts expect ARR of $1.10 billion for the year.

The third-quarter revenue guidance reflects a timing shift of $7 million to the second quarter due to term renewals, Chief Financial Officer Brian Carolan said on a conference call, according to a FactSet transcript.

Revenue rose to $264.4 million for the quarter ended July 31 from $198.6 million a year earlier, exceeding analysts' estimate of $243.2 million. ARR surged 28% to $982 million, surpassing the Street's $965.5 million view. SailPoint ( SAIL ) reported adjusted earnings of $0.07 per share for the quarter.

"SailPoint ( SAIL ) delivered strong second quarter results that exceeded all previously guided metrics, driven by 37% year-over-year (software-as-a-service) ARR growth and record cash flow from operations," Chief Executive Mark McClain said in a statement. "We are seeing strong continued demand for our comprehensive, intelligent approach to secure humans and machines in the (artificial intelligence) era."

SailPoint ( SAIL ) did not pass on the entire second-quarter beat to its full-year guidance, Truist Securities said in a note.

"We believe the company's ability to manage all identity types from employees, non-employees, and machines in a variety of deployment environments and its increasing number of use cases, technology innovation, and high recurring revenue have positioned it strongly for durable growth," analyst Junaid Siddiqui said in the note e-mailed to MT Newswires.

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