Q1 2026 SailPoint Inc Earnings Call

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Yeah.

Speaker Change: Good day, and thank you for standing by and welcome to sell Point's first quarter 2026 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during the session need to press star one on your telephone you will then hear an automated message about your hand is raised to withdraw your question. Please press star one.

Speaker Change: One again, please be advised today's conference is being recorded I would now like to HIMSS conference over to your Speaker today Scott Smith. Please go ahead.

Speaker Change: Good morning, and thank you for joining us today to discuss standpoint, its fiscal first quarter 2026 financial results.

Mark Mcclain: Joining me today are Sailpoint is founder and CEO, Mark Mcclain, and our Chief Financial Officer, Brian Carolyn.

Mark Mcclain: For the Q&A portion of today's call. We will also be joined by our President Matt Mills.

Mark Mcclain: Please note that today's call will include forward looking statements and because these statements are based on the company's current intent expectations and projections. They are not guarantees of future performance and a variety of factors could cause actual results to differ materially.

Mark Mcclain: This call will also include references to non-GAAP results, which exclude certain items that do not reflect our underlying business performance.

Mark Mcclain: Please reference this morning's press release in the investors section of Sailpoint Dot com for further information regarding forward looking statements and reconciliations of GAAP to non-GAAP financial measures.

Mark Mcclain: And with that I'd like to turn the call over to Mark.

Mark Mcclain: Thank you Scott.

Mark Mcclain: Morning, everyone and thank you for joining us today, we're thrilled to share our fiscal Q1 2026 results.

Mark Mcclain: We closed the quarter with $925 million in annual recurring revenue or.

Mark Mcclain: A 30% year over year increase with SaaS growing 39% year over year. Our AOR growth reflects continued high demand as we believe identity security continues to be a top cyber security investment priority for enterprise leaders.

Mark Mcclain: We also saw a 62% year over year increase in customers with IRR greater than $1 billion.

Mark Mcclain: This highlights our continued ability to support the significant scale and complexity prevalent among enterprises today.

Mark Mcclain: Today's digital enterprises demand a trusted partner, who can secure the full spectrum of identities from the human workforce, which includes employees contractors and third party suppliers, because the digital workforce, which spans machines and autonomous AI agents across a hybrid environment.

Mark Mcclain: Organizations with this level of scale and complexity need identity controls that are both broad and deep. This is for sailpoint stands apart in the market is taking notice our expertise in enterprise class governance continues to drive share gains over both legacy and niche players.

Mark Mcclain: <unk> latest Iga market sizing report, placing us at nearly 21% market share, which represents about 5% ex the gain of our nearest direct competitor.

Mark Mcclain: We believe this leadership reflects our commitment to meet the evolving identity security needs of our customers as well as their belief that sailpoint is more than just an iga vendor.

Mark Mcclain: Our innovation strategy is central to our long term durable growth and our differentiation in the market. Let me highlight the key tenets behind that strategy.

Mark Mcclain: First our foundational principle is simple.

Mark Mcclain: Least privilege for all enterprise identities.

Mark Mcclain: Every identity human or digital carry some level of privilege with matters if context the role it plays where it operates and what it needs access to <unk>.

Mark Mcclain: Contractor with temporary access to intellectual property, our payroll by executing critical transactions are a remote agent handling regulated data all our privileged that each in a different way.

Mark Mcclain: Legacy Pan tools were built for a narrow world admin accounts on static infrastructure.

Mark Mcclain: Some point breaks that mould delivering fine-grained contextual governance for all identities systems and access levels at enterprise scale, our policy driven model defines who or what gets access to information and what actions. They can take a modern unified approach that we believe is fundamentally different from <unk>.

Mark Mcclain: Others manage identities today.

Mark Mcclain: Second we're leading in the governance of emerging identity types, particularly machine identities and AI agents.

Mark Mcclain: Machine identities have proliferated with some hidden deep within directories like active directory and track, making them difficult to track or secure.

Mark Mcclain: Sailpoint machine identity security delivers deep visibility control and entitlement level governance for these often overlooked assets such as service accounts software box and intelligent devices. When it comes to machines. Other vendors, primarily managed keys and certificates that the actual access rights our approach.

Mark Mcclain: Goes far deeper providing the full identity governance lifecycle for the actual machines, those keys and certificates belong to.

Mark Mcclain: AIA agents represent the next frontier. These autonomous systems are now underwriting loans onboarding customers and executing critical operations across both cloud native apps and legacy systems. They.

Mark Mcclain: They make decisions independently often operating with a level of self governance that redefines, what it means to be an identity.

Mark Mcclain: Our new offering agent identity security plan for release. This fall. We believe Sailpoint is uniquely positioned to govern this new class of digital identities alongside all human and machine identities across the full spectrum of access from the cloud to the mainframe.

Mark Mcclain: Third we are embracing AI, not just as a disruptor, but as a catalyst for cyber resilience.

Mark Mcclain: Just last quarter, we introduced harbor pilot, our AI powered assistant is already gaining strong traction.

Mark Mcclain: Harbor pilot Embeds AI to the fabric of identity programs servicing recommendations guiding configurations and driving faster smarter decisions.

Mark Mcclain: Users can issue products such as.

Mark Mcclain: Sure all roles with no entitlements.

Mark Mcclain: Or make me a workflow that creates a certification when it users department changes to surface actionable insights in real time.

Mark Mcclain: It's also fueling a new wave of low code no code workflow automation, enabling intuitive intelligent management of identity processes. These.

Mark Mcclain: Innovations make our platform, even more powerful and easier to use helping security teams achieve more with less.

Mark Mcclain: In many ways Harbor pilot functions like a digital employee with deep expertise in both Sailpoint and identity security.

Mark Mcclain: Fourth threat prevention must evolve and with Atlas, we are transforming how it's done.

Mark Mcclain: Atlas is our unified intelligence platform built on a consolidated data model and shared services architecture designed to deliver deep identity context at scale.

Mark Mcclain: As the authoritative source of identity entitlements for many of the world's most complex organizations, we enabled advanced entitlement level risk modeling the surfaces granular signals in real time.

Mark Mcclain: This allows for proactive detection and response identifying threats before they can be exploited by.

Mark Mcclain: By continuously mapping identities entitlements behaviors and risks Atlas becomes an intelligent foundation of modern identity security.

Mark Mcclain: We're in decisions with context, and fortifying the entire enterprise security stack.

Mark Mcclain: Innovation alone isn't enough, we know identity security must operate in lockstep with the broader ecosystem. That's why we're forging deep partnerships with cloud providers system integrators and technology leaders as we work together with forward thinking customers to ensure our Atlas platform.

Mark Mcclain: <unk> integrates seamlessly into all customer environments are shared data model and flexible architecture enable partners to build on sale point enhancing coverage and accelerating outcomes across a wide range of identity security needs.

Mark Mcclain: We're continuously focused on expanding connectivity across the portfolio, making it easier for customers to govern access to more business critical applications.

Mark Mcclain: This ecosystem strategy is helping us scale across the market.

Mark Mcclain: Large enterprises are expanded strategic alliance with Deloitte is a prime example.

Mark Mcclain: Together, we are enabling organizations to navigate the rise of AI agents harnessing them as a force for efficiency, while helping improve governance and security.

Mark Mcclain: At the same time, we're extending our reach into the mid market through our managed service provider or MSP program, which gives midsized enterprises access to sale points industry, leading solution through trusted partners.

Mark Mcclain: Across the board our ecosystem as a growth engine, bringing sailpoint to more customers with more efficiency and greater impact.

Mark Mcclain: Our ecosystem as a force multiplier and our consistent NRI is the proof.

Mark Mcclain: <unk> of our new bookings this quarter came from existing customers a strong indicator of the trust and value. We continue to deliver and these customers are just renewing their expanded for us. It's not just about the number of individual solutions a customer buys.

Mark Mcclain: The outcomes, we deliver the breadth and depth of identity coverage, we provide and the unique high stakes problems, we help solve.

Mark Mcclain: That value is reflected in the numbers.

Mark Mcclain: Our average <unk> per customer is nearly three times higher than that of other identity security vendors, a clear signal of the comprehensive enterprise wide role sailpoint plays across our customers' environments.

Mark Mcclain: As an example, a leading mortgage lenders significantly deepened their investment with us as part of their broader digital transformation and modernization efforts they upgraded to our identity security cloud business, plus suite, adding machine identity security and data access security plus training and services support.

Mark Mcclain: Their decision was driven by the proven ROI they had already seen in the value of our unified solution built on the scalable integrated architecture and the Atlas platform.

Mark Mcclain: We continue to see strong customer adoption across our platform.

Mark Mcclain: Our workflow usage hit an all time high during fiscal Q1 2026 with a record number of identity workflows being built they are evidenced that our customers are scaling their use of sailpoint to govern more apps, new use cases and diverse identity types.

Mark Mcclain: This includes machine identities, where we've seen robust demand and a strong and growing pipeline since the initial launch of Sailpoint machine identity security last fall.

Mark Mcclain: This quarter interest in machine identity security continues to grow among both existing and new customers are fortune 500 manufacturer expanded their sailpoint investment to better managed services accounts with greater precision.

Mark Mcclain: While a fortune 25 retailer became a new sailpoint customer adopting our most comprehensive identity security cloud business plus suite, along with machine identity security non employee risk management.

Mark Mcclain: We just connectors and advisory and success services. They went all in on sale point confident and our proven ability to deliver identity security at the scale and sophistication required to support their massive identity landscape.

Mark Mcclain: As we look ahead, we remain confident in the depth of our pipeline the velocity of our sales motion and the resilience of identity and cyber security budgets.

Mark Mcclain: As identity centric threats continue to be a tough challenge for global enterprises. Today, We believe it's clear that identity has become the hub of modern security strategy, serving as the common link across all aspects of enterprise security from networks and cloud infrastructure to endpoints data and application.

Mark Mcclain: And while some competitors tout momentum with a collection of products, we're not seeing that approach resonate in our core enterprise market. Our win rate remains strong among large complex organizations demand the depth breadth and sophistication that we believe only sailpoint can deliver.

Mark Mcclain: This represents clear validation that our focused platform driven strategy is winning where it matters most.

Mark Mcclain: In closing I am grateful to everyone at <unk> and our partners for ensuring we continue to stay in front, we're executing with focus innovating with purpose and delivering real value where it matters most.

Mark Mcclain: The industry increasingly recognizes identity security is the backbone of enterprise resilience Sailpoint will continue to be the identity security innovator and trusted partner, leading the way.

Mark Mcclain: And now let me hand, it off to Brian who will share more details on our financial results for the quarter.

Brian: Thank you Mark and good morning, everyone. Thank you for joining US today, our fiscal year 2026 is off to a strong start with IRR revenue and adjusted operating margin each exceeding the high end of our first quarter guidance as we continue to deliver durable growth at scale.

Brian: We ended fiscal Q1, 'twenty six with IRR of $925 million, an increase of 30% year over year with SaaS <unk> of $574 million growing 39% year over year.

Brian: Currency was less than a one point benefit to our total <unk> growth.

Brian: Our strong results showcase our leadership position strong competitive advantage and durable growth profile importantly, we have not seen a fundamental change in demand due to the macro environment.

Brian: Today more than ever enterprises are focused on what they believe to be most critical.

Brian: We continue to see evidence that identity security is business essential and often at the top of the spending priority list.

Brian: As such we plan to continue to execute on the large opportunity in front of us delivering value to our customers more.

Brian: More specifically, our pipelines remain robust with deal velocity and close rates consistent with prior quarters.

Brian: Our customer retention rates continued to be very strong.

Brian: And our growth drivers are consistent with approximately half of our Q1 <unk>.

Brian: Our growth coming from new customers and half from existing customer expansion.

Brian: We continue to see significant growth potential through a universe of new customers that are primed for a more modern solution.

Brian: Many of our new customer wins are displacements of other solutions that cannot keep up with the scale and complexity of enterprise environments.

Brian: We also see a large opportunity to expand within our installed base.

Brian: Our <unk> of 115% remained steady this quarter with many drivers including suite upgrades migrations.

Brian: Sell and cross sell initiatives.

Brian: We were encouraged by the growing contribution from our non employee risk management machine identity security and data access security modules, which more than doubled from the same period a year ago.

Brian: Let me now cover our strong Q1 results.

Brian: In Q1, 'twenty six we delivered total revenue of $230 million up 23% year over year with subscription revenue of $215 million up 27% year over year.

Brian: Adjusted gross profit margin was 76, 3% and.

Brian: And adjusted operating margin remains healthy and well ahead of our expectations at 10, 2%.

Brian: Our adjusted operating margin upside versus guidance was the result of higher term revenue mix cost discipline and the timing of investments.

Brian: Moving to the balance sheet, we ended the quarter with $228 million of cash and equivalents and no debt after paying off our outstanding balance in March.

Brian: Cash used in operating activities was $97 million and includes $37 million of cash paid for interest expense and $88 million of cash paid for items that ended with our IPO such as equity award payouts and monitoring fees.

Brian: Turning now to guidance for simplicity I'll refer to the midpoint of our guidance ranges.

Brian: Full details can be found in this morning's press release and supplemental earnings deck.

Brian: For the fiscal second quarter of 2026, we expect <unk> to.

Brian: To be $965 million up approximately 26% year over year compared to current consensus of 23, 5% growth.

Brian: For our fiscal year 2026, we are increasing our outlook by $20 million to $1 1 billion up.

Brian: Up 25, 5% year over year compared to our prior guidance of 23, 2% growth.

Brian: The increase in our IRR guidance, primarily reflects organic growth of the business and assumes no material change in FX rates.

Brian: For revenue, we expect the fiscal second quarter 2026 to be $243 million, an increase of 22% year over year with an adjusted operating margin of 12, 1%.

Brian: We expect our diluted share count to be approximately 557 million shares and adjusted EPS to be four five cents.

Brian: For fiscal year 2026, we expect revenue to be approximately 1.039 billion, an increase of 21% year over year with an adjusted operating margin of 15, 7%.

Brian: We expect our diluted share count to be approximately 565 million shares and adjusted EPS to be <unk>.

Brian: Please note we included additional modeling notes in our supplemental earnings deck.

Brian: In summary, we believe we are well positioned to win the next generation of identity security because of the depth and breadth of our platform our enterprise scale on our willingness to listen and respond to market needs.

Brian: We continue to see several durable growth drivers that position us for sustained long term growth and we are relentlessly focused on executing on that opportunity.

Brian: With that let's invite Matt Mills, our president to join US and open the call for questions operator.

Brian: Thank you ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your telephone. If your question has been answered you were sticking with yourself from the queue. Please press star one again.

Brian: As a time to allow everyone to ask a question. We ask that you limit yourself to one question, we will pause for a moment, while we compile the Q&A roster.

Speaker Change: Our first question comes from Joseph <unk> with <unk>. Your line is open.

Speaker Change: Thanks for taking the question and congrats on excellent execution.

Speaker Change: I guess so.

Speaker Change: Any questions, but the first one.

Speaker Change: For you Matt in terms of machine identity. It seems like it's starting to inflect.

Speaker Change: I know you have deployed the new products coming out agent identity security in the fall can you just tell us what the what you think the pricing looks like in that market and we.

Speaker Change: We share some of the competitive dynamics that you're seeing in that market. Thanks.

Speaker Change: Yeah. Thanks for the question.

Speaker Change: Look at the end of the day, when we look at the market and we look at our customers and our prospects alike.

Speaker Change: Identity is top of the list for all of them, it's important to them.

Speaker Change: Many of our customers as you know.

Speaker Change: I mean, the idea of machine identity is not necessarily new right. We've been dealing with a lot of things around service accounts and box for some time now.

Speaker Change: But here certainly in the last 12 months, it's kind of moved its way to the threat vector and therefore, it's become a hugely important topic of concern for all of our customers and prospects alike. I think when you start talking about the pricing of it look this is.

Speaker Change: I followed a lot of the things that you guys like yourself, who put out and others.

Speaker Change: And I think it's a huge moving target and I think it is going to be value based and so I think.

Speaker Change: At this point in time, it's all going to play out, but I think it becomes quite difficult to kind of say, it's this or it's that we just know it's a significant opportunity for us.

Speaker Change: The only thing I'd add John on the competitive side Mark.

Speaker Change: Is the is the clear clarity, we're trying to help us out in the market and where we're focused on the machine identity problem versus say others around us I think we continue to see a lot of the focus from others is on what we would call. The authentication of those machines to the server certificates. The identity of the machine. We're focused as we have been for human identities on the authorization capable.

Speaker Change: What can those accounts or systems do bots, Rps et cetera. So again, we find that it may be tenable that we made coexist with other machine identity security solutions, where just like say, we coexist with an SSL vendor because theyre solving a different part of the identity problem I think where we're focused and machine identity is deferred.

Speaker Change: <unk> and we're hearing that back from the customers we're engaging with.

Speaker Change: Thank you so much.

Speaker Change: One moment for our next question.

Matt Hedberg: Our next question comes from Matt Hedberg with RBC. Your line is open.

Matt Hedberg: Thanks for taking my question guys I'll offer my congrats as well really really strong results.

Matt Hedberg: One area I wanted to ask what it sounds like you guys didn't call out any macro pressure, but I know you guys have some U S fed exposure and other cyber vendors have been calling out maybe some pressure there just curious on what youre seeing in that particular vertical.

Matt Hedberg: Yes, Hi, Matt This is Matt.

Matt Hedberg: Yes.

Speaker Change: For us thus far.

Speaker Change: Hey, it's been business as usual right, we haven't seen any.

Speaker Change: Extensive resolve their material result from from anything does related I think we continue to keep our head on a swivel and look.

Speaker Change: But our business remains resolute.

Speaker Change: Like I said, thus far we've not seen anything that would indicate.

Speaker Change: We've got challenges as a result of those.

Speaker Change: Great. Thanks, Matt.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Rob Owens with Piper Sandler Your line is open.

Rob Owens: Good morning, and thank you for taking my question wanted to unpack, the <unk> strength, which accelerated in the quarter. When we look at the growth rate I guess, the two components as you look at new customers, which I think you said were half of it just can you give us a sense of where those conversations are is there a sense of urgency, especially in this.

Speaker Change: Very uneven environment and second with regards to the existing customers, which I think came through and the better NRI quarter over quarter is this a function of more identities is this a function of modules being added on or tier upgrades. Thanks for taking the question, Yeah, Hi, Rob It's Brian here hope you're well so what.

Speaker Change: In respect to the new customer acquisition I think that what we're seeing is just great success from.

Speaker Change: This being a very resilient market for us.

Speaker Change: These are businesses central programs companies.

Speaker Change: Companies are not looking to cut back on identity security, they often rise to the top of the stack for <unk> and <unk>.

Speaker Change: And really we're seeing pipeline from failed deployments of other competitive solutions that we're able to go back in and save.

Speaker Change: And restart them for them. So we're pleased with our new customer acquisition, we continue to make great progress there.

Speaker Change: With respect to existing customers, we're continuing to see again about half of this coming from new logos, but half from expansion opportunities within our installed base and there has been this nice kind of even disposition of several growth vectors. This includes migrations of on Prem customers into net new SaaS solutions, where we typically.

Speaker Change: See two to three X uplift on their IRR spend we do see quantity upsell. So more identity is being sold.

Speaker Change: I called out Theres other cross sell initiatives. So some of those new products like non employee risk management.

Speaker Change: Machine identity security data access security, that's all contributing to.

Speaker Change: To low single digits of our expansion then also our SaaS suite upgrades. So these are customers that are moving from point level of SaaS solutions into our suites. So again, we're really pleased to see that nice cross sell and up sell disposition.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Peter Levine with Evercore. Your line is open.

Peter Levine: Thanks for taking my questions.

Speaker Change: Maybe one Mark you talked about the success, we're seeing with AI kind of a bit of an inflection point, but maybe share with us why or why is the iga better positioned to capitalize on the rise of AI or some of the <unk> vendors.

Speaker Change: The access manager providers, just curious to know why you can governance and better positioned and then maybe Brian I know you said not much of a macro but perhaps did you.

Speaker Change: Baking anything into the into the full year Guide you raised the guide, but just curious were there any guardrails that you kind of factored in into the full year guide just to kind of assume that if things get worse, but just curious to know what your philosophy with that thank you.

Peter: Thanks Peter.

Peter: First one there on a I think sometimes it helps to go back to the basics. When we first came to market. The first time in.

Speaker Change: In 2017, we were trying to help make sure we position to where we thought.

Speaker Change: Not even called Iga at that time was we said look at the end of day. We entered three simple questions for humans that was who has access to what how does that compare to who should have access kind of policy versus actual and then what are they doing with it and the truth is I think those are the same three core questions, they're going to get asked about Identic AI right is like what is this agent.

Speaker Change: Does it have access to and is it performing according to my expectations.

Speaker Change: Authorization tool like ours.

Speaker Change: <unk> tool is well designed and suited for that question access and authentication tools are not right. We often go back to a very simple metaphor. We experienced at every time, we're putting in New York for Investor meetings of the security guard at the front door knows that you've gotten into the building. That's access that's letting you in to the application of the building they really.

Speaker Change: Lose track of where you go once you leave that front desk and Thats sort of the SSO problem. They they arent designed to understand all the entitlements capabilities that an identity has inside those complex applications and thats going to be true for the agents. What does the agents have access to what is it allowed to do what data can see kind of changed data though.

Speaker Change: Hard question to answer without a governance framework and Thats really where were coming from so we think the access and privilege vendors that don't have that heritage are just going to be very challenged and tried to answer those very difficult questions and I'll turn it over to Brian for the other part yes. Thank you. So we're not expecting currently any major change in the macro environment. So we're not building.

Speaker Change: In.

Brian: Any sort of headwind, but having said that we are mindful of it and we're doing a great deal of deal scrutiny with rigorous pipeline management, but.

Speaker Change: But we continue to see good demand for the identity security space. So we're aware of it we're not immune to it.

Speaker Change: We're watching deal timing in particular, because a lot of times. These are programs that.

Speaker Change: They change from one quarter to the next but again the underlying fundamental demand is still there and are strong.

Speaker Change: Thank you.

Speaker Change: Again, ladies and gentlemen, just as a reminder, we ask that you limit yourself to one question and one moment for our next question.

Speaker Change: Our next question comes from Gary Powell with <unk>. Your line is open.

Speaker Change: Okay, great. Thank you very much.

Gary Powell: Yes, I just love to hear what Youre seeing in terms of customer willingness to migrate from legacy Iga solutions like Oracle and IBM and then that does macro uncertainty impacting any of those projects or is it really just more a function of bike.

Speaker Change: Pending end of life and.

Speaker Change: Customers need to modernize.

Speaker Change: Yeah. Thanks, Gary This is Matt.

Speaker Change: I think what we're seeing now is actually a little bit of an acceleration there I think the.

Speaker Change: The security landscape today is such that.

Speaker Change: It's really bringing out the flaws if you will on these legacy systems and in many cases as you probably know there are heavily customized.

Speaker Change: And it becomes a handful just to keep up with in of itself not to mention the <unk>.

Speaker Change: Accelerating threat landscape. So I would tell you we continue to see really good opportunities and we continue to win at a high rate.

Speaker Change: And Greg just $1 one point to add you may have seen the recent Gartner report and.

Speaker Change: In terms of our overall market share gains that we've made.

Speaker Change: In recent history, where more than five extra about buybacks. Our nearest competitor. So we feel like we're displacing legacy competition and also winning against some new competitors.

Speaker Change: Got it. Thank you very much and thanks for correcting my name there I get a lot of Gary's in Greg's in my life.

Speaker Change: Great.

Speaker Change: You bet, Greg one moment for our next question.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Charles <unk> with TD Cowen Your line is open.

Speaker Change: Okay.

Charles: Thank you so much thinking about NIM corrections.

Speaker Change: Congrats on strong results and guidance question to Mark or Matt.

Speaker Change: Given that Accenture is one of your leading partners. What are you hearing internally as it relates to their overall activity with slave point.

Speaker Change: Will they be one of your prime go to market.

Speaker Change: Partners as we think about further gain AI adoption. Thank you.

Speaker Change: Yes. Thank you Shar this is Matt.

Speaker Change: Yeah.

Speaker Change: We are very fortunate.

Speaker Change: We have a strong ecosystem of partners of which six centers.

Speaker Change: A big part of.

Speaker Change: They continue to be one of <unk>.

Speaker Change: Our largest partners and I don't see anything that would cause that to change. So we continue to work with them we invest in them. They are one of our large MSP partners right.

Speaker Change: And so I would I would tell you from an expectation perspective, we continue to invest with them and do good things for our customers and prospects.

Speaker Change: I think just agile we made a note of what we're doing with Deloitte on the call today around agents, but with all of our leading partners Pwc Accenture and many others.

Speaker Change: <unk> partnerships, we are expecting to move in the direction of supporting customers needs around agenda with all of those leading partners.

Speaker Change: Pleased to be other kind of referenced multiple multiple good things there, but yes eccentric continues to be one of our top partners around the globe and we can expect that the discontinued expand as we go.

Speaker Change: Thank you so much.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Joseph <unk> with Jefferies. Your line is open.

Speaker Change: Hey, guys. Thanks for the question, Brian It was great to see some of the margin strength, even with most of the upside come from SaaS can you just update us on where you are on the sales capacity, where youre investing and then where some of this leverage is actually coming from thanks.

Speaker Change: Sure so.

Speaker Change: We were pleased with our margin performance this year exceeding the Q1 guidance that we put out there some of that was driven by timing of investments to which will catch up on some of that as the year goes along I'd say, we're in a good spot.

Speaker Change: With capacity adds more to come on that.

Speaker Change: We're investing in things like customer success early on in the year just to make sure we're still driving a strong gross retention rate and net revenue retention rate.

Speaker Change: So we feel like this is going to be a balanced strategy. We are we're really pleased with a 30% IRR growth we want to make sure we're continuing to invest in that while still contributing in delivering some level of margin expansion, which gave us confidence to increase it for the year.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Brian Essex with J P. Morgan Your line is open.

Brian Essex: Hi, good afternoon.

Speaker Change: And thank you for taking my question and congrats on some solid results.

Speaker Change: Maybe mark for you in your prepared remarks, you called out a retailer that went quote unquote all in on sale.

Speaker Change: Could you provide a little detail there what was the catalyst to move what did you displace maybe how long was that sales cycle and how indicative is that deal with regard to what you typically see with new customer lands.

Speaker Change: Yes, I'll, probably a flip of that Bryan over to Matt Who's got more detail I will tell you that they're kind of a strategic large scale win is not atypical we certainly called that one out but in general I think we're we're finding that.

Speaker Change: Almost.

Speaker Change: Notably in those large jobs, they've got some level of deployment of something gen.

Speaker Change: Generally it's one of the one of the legacy vendors that we're displacing but we always try to reemphasize that that quite often it's fairly minimally deployed and so it's not uncommon for us to say within the first six to nine months of a deployment to run past any of the level of deployment. They had because thats really the frustration they have with those legacy tools, if they arent covering the landscape and as they.

Speaker Change: Trying to think about security that whole landscape. There just very frustrated with those legacy tools and that's often a driver, but it's a great story because they are sort of picking up on all of the core aspects of the story.

Speaker Change: Yes.

Brian Essex: I'll just add Brian.

Speaker Change: I think when you look at these large opportunities.

Speaker Change: They start with a fair amount of of relationship in education that happens before you actually start prosecuting an opportunity.

Speaker Change: And I think that was the case here, we built a very strong relationship with this company.

Speaker Change: And as Mark said Theyre running.

Speaker Change: Legacy solution in.

Speaker Change: And I feel the pain of the legacy solution in terms of what it can do and the problems it is causing for them.

Speaker Change: And so once we started the opportunity I think it went in fairly short order, but.

Speaker Change: Great win for our team.

Speaker Change: And then it kind of.

Speaker Change: It kind of validates the whole idea that we continue to win at a very high rate and replacing these legacy.

Speaker Change: Our solutions.

Speaker Change: Very helpful. Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Gabriela Borges with Goldman Sachs. Your line is open.

Gabriela Borges: Hi, good morning, Thank you.

Gabriela Borges: Mark and Matt.

Speaker Change: Talks on Ics for some time now about how one of the limiting factors for adoption of how long or how annoying can be switched from one vendor.

Speaker Change: So my question for you is what are you doing with internally, perhaps speed up some of that implementation and how do you think about the.

Speaker Change: The risks.

Speaker Change: Alright and trademarks.

Speaker Change: To enable the IGN debt come down the pipeline potentially to talk to you. Thank you.

Speaker Change: Thanks, Kevin I'll start and Steve Matt has some thoughts to add I think a couple of points. One is when we show, especially in these mid to large enterprises with fairly complex. It environments are our two decades of building connection.

Speaker Change: We're probably gonna have to come up with some terminology delineation here because they connector is not a connector in this world right. It's one thing for an access tool to say I connect an application, which means they can lock you in for us that means we can do deep governance typically around the entitlements and who can access data et cetera within these applications, but it's our it's our.

Speaker Change: Rich heritage of connection with all of the commercial apps. These enterprises care about in many bespoke apps that gives them confidence that is a big area of focus though is to leverage AI to both increase the rate of speed, where we can get to those new bespoke applications that we haven't already connected with in a typical enterprise environment and also to make it.

Speaker Change: <unk> for non technical people to do that work quite often that some of the areas of slowdown in these implementations is having to do deep technical work to kind of connect into the business applications. We're trying to use AI to speed up and leverage what we know from all the.

Speaker Change: Tens of thousands of connections, we have built to make that simpler and easier and so to your point about kind of others out there. We are certainly well aware some of the earlier stage.

Speaker Change: Vendors and identity are starting to make some strong claims about connectivity. We've we've done pretty deeply into all of that those that are making claims about very rapid expansion of connectivity are typically doing those very shallow connectors, where they can connect to a resource, but they can't really do entitlement level governance, and so we're helping make sure customers are clear on kind of the actual.

Speaker Change: <unk> capabilities that we have and how that compares to some of the claims being made by some of the newer vendors, but again, what Matt would tell you is when we get into these large complex environments. Our win rate continues to be incredibly high once customers are really clear on the differentiation of what we're offering.

Speaker Change: I appreciate the answer thank you.

Speaker Change: Good morning, sorry, one moment for our next question.

Tyler: Our next question comes from Tyler <unk> with Bank of America. Your line is open.

Tyler: Hi, guys.

Speaker Change: <unk> was very strong this quarter.

Speaker Change: $27 million above.

Speaker Change: Expectations for the next quarter, you are also guiding up $20 million above.

Speaker Change: But when I look at the full year.

Speaker Change: I have to reduce my estimates for net new IRR in order to hit because the increase in the full year is lower than what you are seeing this quarter and next quarter. So.

Speaker Change: Is there any thing that is happening with timing of orders.

Speaker Change: It is pulling things forward or is it just kind of.

Speaker Change: The way the numbers are and we shouldn't pay attention to.

Brian Essex: It's Brian here, so yes, there was nothing.

Brian Essex: Unique about pull forward of any any deals or revenue.

Brian Essex: This is basically I would really encourage you to look at <unk> on an annual basis for our FY 'twenty six guide, we're actually raising that by more than 200 basis points.

Brian Essex: And also the Q2 guide is 200 basis points above current consensus.

Brian Essex: And just keep in mind that 3% beat that we had in Q1 are the $27 million Thats an annual metric as.

Brian Essex: As compared to what other companies would do in terms of quarterly revenue numbers and when it came to the quarterly revenue and operating income beats, we passed all of that through and raised Q2 as well. So it's just part of our philosophy.

Brian Essex: We feel good about it and.

Brian Essex: It's a good place to start for Q2.

Speaker Change: Got it thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Keith Weiss with Morgan Stanley. Your line is open.

Keith Weiss: Excellent. Thank you guys for taking my question and congratulations on a great start to the fiscal year.

Speaker Change: A lot of big numbers in this.

Speaker Change: Q1 print one that we haven't really dug into yet was the large customer numbers.

Speaker Change: Really good growth on both the 250, K customers and $1 million plus customers to.

Speaker Change: Two questions within one anything in particular driving that or was it just the summation of the expanding solution portfolio traction in identity management market and then maybe somewhat related.

Speaker Change: Any change in sales strategy, our go to market strategy as we enter into the new fiscal year anything that is worth noting in terms of how you guys are approaching that market opportunity from the go to market perspective.

Speaker Change: I'll start just with respect to the increasing deal size I mean, we're really pleased with I mean.

Speaker Change: Greater than 250 K.

Speaker Change: Customer count that's up 28% year over year, the greater than $1 million as we mentioned is up 62% year over year.

Speaker Change: We're also not just the number of customers that we're landing it's just a more sizeable number.

Speaker Change: Our average IRR for customers now above $300000.

Speaker Change: It's really driven by expansion opportunities across the board in terms of just overall identity growth suite upgrades upsell and cross sell of new modules.

Speaker Change: And then I'll defer to Matt just on some additional color.

Matt: Yes, Thanks Keith.

Speaker Change: There's really no no big change relative to our go to market strategy, our selling strategy.

Matt: As you know we're fairly pragmatic in terms of market too.

Matt: We work off a target account list and so none of that has changed.

Matt: And we will continue to execute that for the remainder of the year.

Matt: Excellent. Thank you guys.

Speaker Change: One moment for our next question.

Speaker Change: Yes.

Speaker Change: Our next question comes from Michael Romanelli with Mizuho. Your line is open.

Speaker Change: Yes, Hi, this is Mike on for Gregg Moscowitz, Congrats on the strong results and thanks for taking the question here. So I guess, so I was wondering if firstly as hardware pilot is included in any of your suite.

Speaker Change: And will there be an additional charge for this technology and then just quickly on the migration impact to net retention rate I would say.

Speaker Change: Three three to four points again this quarter.

Speaker Change: I got the first part Mike.

Speaker Change: Hubbard.

Speaker Change: Quick on the migrations it did contribute low single digits in terms of the NRI contribution.

Speaker Change: Within the NRO from migrations, yet in that in that sort of.

Speaker Change: Of those four contributors all roughly a quarter of that 15% and then the first part Mike Yes hover pilot is included with our platform today.

Speaker Change: So the first two offerings the AI offerings within our pilot at this point of this included that in our offering I think as we continue to add new capabilities, we'll look at where whether and when we might price that out separately at some point based on the value delivery, where we at this point are kind of anxious for customers to adopt some of these AI capabilities to help them be more efficient and effective in.

Speaker Change: Ramping up their implementations and deployments in a lot of what these these initial harbor pilot capabilities are doing is just letting them more rapidly get the answers they need to address their issues. So we'll continue to watch how that evolves, but for now it's very buried into the cost of our platform.

Speaker Change: Great. Thank you.

Speaker Change: Thanks.

Speaker Change: Enrollment for our next question.

Speaker Change: Our next question comes from Anthony Winski with Wells Fargo. Your line is open.

Speaker Change: Okay. Thank you I'm just wondering what drove the 18% growth in your non SaaS <unk> in Q1, and I know youre, assuming 90% of net new comes from SaaS going forward, but that still implies growth in your non SaaS. There are so just wondering if you could give any more color on what's driving that thanks, So hi, Andy it's Brad.

Speaker Change: So we actually saw a fairly strong us term business for Q1, both on renewals and also a couple of new sizable customers chose to go with an on Prem solution just given their environment. So.

Speaker Change: Moving forward, we still are targeting that 90, 10 mix, meaning 90% SaaS and 10% term.

Speaker Change: So we do believe that SaaS is going to continue to be.

Speaker Change: First and foremost.

Speaker Change: Sales play for us, but we did see some nice uptick in some term business for the quarter.

Speaker Change: Thank you one moment for our next question.

Kalia: It comes from <unk> Kalia with Barclays. Your line is open.

Speaker Change: Okay, Great Hey, guys. Thanks for taking my question here and Echo the nice beat on IRR.

Brian Essex: Brian maybe maybe for you.

Speaker Change: I was wondering if you could just talk to the shape of net new AOR. This year, maybe comparing it to prior years and then separately anecdotally of course, and then separately I was wondering if you could go one level deeper into the components of the 115% NRI and particularly.

Speaker Change: Particularly whether you saw more contribution expected from migrations.

Speaker Change: So I wouldn't think there's anything materially different about.

Speaker Change: And our new customer acquisition, we're actually really pleased with the consistency of it to be honest with you and a nice business disposition between new and existing customers and as I mentioned, what's great about the expansion with the existing install base is almost even distribution among things like migrations and quantity ups.

Speaker Change: So.

Speaker Change: And then the cross sell initiatives that I called out in terms of the non employee risk management machine identity security data access security that bucket alone was more than double it was a year ago and then we're also experiencing our SaaS suite upgrades as well. So again, just think about this as half and half and we're really pleased with that.

Speaker Change: <unk>.

Speaker Change: And then anything just on the shape of net new <unk> for the year I know that last year I think Q2 was particularly healthy I can't remember if it was fed or another vertical anything you want to say just in the shape of the year.

Speaker Change: Had a fairly strong Q2 last year, we typically are kind of a second half company. When it comes to net new <unk> growth. So I'd continue to think of it that way.

Speaker Change: But nothing nothing super unusual year over year.

Speaker Change: Very helpful. Thanks.

Speaker Change: And im not showing any further questions at this time I would like to turn the call back over to Mark for any closing remarks.

Mark Mcclain: I appreciate everyone's questions today and for all.

Mark Mcclain: Great notes that have been written up over the course of our first few months here being public. So we look forward to continuing the dialogue and thanks for everyones interest on the call today, we will talk to you. Soon thanks have a great day. Thank you ladies and gentlemen. This does conclude today's presentation. We thank you for your participation you may now disconnect and have a wonderful day.

Speaker Change: [music].

Speaker Change: Good day and thank you for standing by welcome to sell Point's first quarter 2026 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during the session need to press star one on your telephone you will then hear an automated message about your hand is raised to withdraw your question. Please press star one again, please be advised.

Speaker Change: This conference is being recorded I would now like to you on this conference over to your Speaker today, Scott Schmitz. Please go ahead.

Speaker Change: Good morning, and thank you for joining us today to discuss sale points fiscal first quarter 2026 financial results Tony.

Speaker Change: Joining me today are sale, <unk>, founder and CEO, Mark Mcclain, and our Chief Financial Officer, Brian Carolyn.

Speaker Change: For the Q&A portion of today's call. We will also be joined by our President Matt Mills.

Speaker Change: Please note that today's call will include forward looking statements and because these statements are based on the company's current intent expectations and projections. They are not guarantees of future performance and a variety of factors could cause actual results to differ materially.

Speaker Change: This call will also include references to non-GAAP results, which exclude certain items that do not reflect our underlying business performance.

Speaker Change: Please reference this morning's press release in the investors section of Sailpoint Dot com for further information regarding forward looking statements and reconciliations of GAAP to non-GAAP financial measures.

Mark Mcclain: And with that I'd like to turn the call over to Mark.

Mark Mcclain: Thank you Scott.

Mark Mcclain: Everyone and thank you for joining us today, we're thrilled to share our fiscal Q1 2026 results.

Mark Mcclain: We closed the quarter with $925 million in annual recurring revenue or.

Mark Mcclain: A 30% year over year increase with SaaS AAR growing 39% year over year. Our AOR growth reflects continued high demand as we believe identity security continues to be a top cyber security investment priority for enterprise leaders.

Mark Mcclain: We also saw a 62% year over year increase in customers with <unk>.

Mark Mcclain: Greater than $1 billion.

Mark Mcclain: This highlights our continued ability to support the significant scale and complexity prevalent among enterprises today.

Mark Mcclain: Digital enterprises demand a trusted partner, who can secure the full spectrum of identities from the human workforce, which includes employees contractors and third party suppliers, because the digital workforce, which spans machines and autonomous AI agents across a hybrid environment.

Mark Mcclain: Organizations with this level of scale and complexity need identity controls that are both broad and deep. This is for sale point stands apart and the market is taking notice our expertise in enterprise class governance continues to drive share gains over both legacy and niche players the gardeners latest Iga.

Mark Mcclain: <unk> report, placing us at nearly 21% market share, which represents about 5% ex the gain of our nearest direct competitor.

Mark Mcclain: We believe this leadership reflects our commitment to meet the evolving identity security needs of our customers as well as their belief that sailpoint is more than just an iga vendor.

Mark Mcclain: Our innovation strategy is central to our long term durable growth and our differentiation in the market.

Mark Mcclain: Let me highlight the key tenets behind that strategy.

Mark Mcclain: First our foundational principle is simple.

Mark Mcclain: Least privilege for all enterprise identities.

Mark Mcclain: Every identity human or digital carry some level of privilege with matters if context the role it plays where it operates and what it needs access to a contractor with temporary access to intellectual property payroll by executing critical transactions are a remote agent handling regulated data.

Mark Mcclain: All our privileged that each in a different way.

Mark Mcclain: Legacy Pan tools were built for a narrow world admin accounts on static infrastructure.

Mark Mcclain: At some point breaks that mould delivering fine-grained contextual governance for all identities systems and access levels at enterprise scale, our policy driven model defines who or what gets access to information and what actions. They can take a modern unified approach that we believe is fundamentally different from <unk>.

Mark Mcclain: Others manage identities today.

Mark Mcclain: We're leading in the governance of emerging identity types, particularly machine identities and AI agents.

Mark Mcclain: Machine identities have proliferated with some hidden deep within directories like active directory and track, making them difficult to track or secure.

Mark Mcclain: Sailpoint machine identity security delivers deep visibility control and entitlement level governance for these often overlooked assets such as service accounts software bots and intelligent devices. When it comes to machines. Other vendors, primarily managed keys and certificates that the actual access rights our approach.

Mark Mcclain: <unk> goes far deeper providing the full identity governance lifecycle for the actual machines, those keys and certificates along too.

Mark Mcclain: AIA agents represent the next frontier. These autonomous systems are now underwriting loans onboarding customers and executing critical operations across both cloud native apps and legacy systems. They.

Mark Mcclain: They make decisions independently often operating with a level of self governance that redefines, what it means to be an identity.

Mark Mcclain: With our new offering agent identity security plan for release. This fall. We believe Sailpoint is uniquely positioned to govern this new class of digital identities alongside all human and machine identities across the full spectrum of access from the cloud to the mainframe.

Mark Mcclain: Third we are embracing AI, not just as a disruptor, but as a catalyst for cyber resilience just last quarter. We introduced harbor pilot our AI powered assistant is already gaining strong traction.

Mark Mcclain: Harper pilot Embeds AI to the fabric of identity programs servicing recommendations guiding configurations and driving faster smarter decisions.

Mark Mcclain: Users can issue products such as <unk>.

Mark Mcclain: Theyre all roles with no entitlements.

Mark Mcclain: Or make me a workflow that creates a certification when it users department changes to surface actionable insights in real time.

Mark Mcclain: It's also fueling a new wave of low code no code workflow automation, enabling intuitive intelligent management of identity processes. These innovations make our platform, even more powerful and easier to use helping security teams achieve more with less.

Mark Mcclain: In many ways Harbor pilot functions like a digital employee with deep expertise in both Sailpoint and identity security.

Mark Mcclain: Fourth threat prevention must evolve and with Atlas, we are transforming how it's done.

Mark Mcclain: Atlas is our unified intelligence platform built on a consolidated data model and shared services architecture designed to deliver deep identity context at scale.

Mark Mcclain: As the authoritative source of identity entitlements for many of the world's most complex organizations, we enabled advanced entitlement level risk modeling the surfaces granular signals in real time.

Mark Mcclain: This allows for proactive detection and response identifying threats before they can be exploited by.

Mark Mcclain: By continuously mapping identities entitlements behaviors and risks Atlas becomes an intelligent foundation of modern identity security.

Mark Mcclain: Our decisions with context, and fortifying the entire enterprise security stack.

Mark Mcclain: Innovation alone isn't enough, we know identity security must operate in lockstep with the broader ecosystem. That's why we're forging deep partnerships with cloud providers system integrators and technology leaders as we work together with forward thinking customers to ensure our Atlas platform.

Mark Mcclain: <unk> integrates seamlessly into all customer environments.

Mark Mcclain: Shared data model and flexible architecture enable partners to build on sale point enhancing coverage and accelerating outcomes across a wide range of identity security needs. We're continuously focused on expanding connectivity across the portfolio, making it easier for customers to govern access to more.

Mark Mcclain: Our business critical applications.

Mark Mcclain: This ecosystem strategy is helping us scale across the market.

Mark Mcclain: Large enterprises are expanded strategic alliance with Deloitte is a prime example.

Mark Mcclain: Together, we are enabling organizations to navigate the rise of AI agents harnessing them as a force for efficiency, while helping improve governance and security.

Mark Mcclain: At the same time, we're extending our reach into the mid market through our managed service provider or MSP program, which gives midsized enterprises access to sale points industry, leading solution through trusted partners.

Mark Mcclain: Across the board our ecosystem as a growth engine, bringing sailpoint to more customers with more efficiency and greater impact.

Mark Mcclain: Our ecosystem as a force multiplier and our consistent NRI is the proof.

Mark Mcclain: <unk> of our new bookings this quarter came from existing customers a strong indicator of the trust and value. We continue to deliver and these customers are just renewing their expanding for us. It's not just about the number of individual solutions a customer buys.

Mark Mcclain: The outcomes, we deliver the breadth and depth of identity coverage, we provide and the unique high stakes problems, we help solve.

Mark Mcclain: That value is reflected in the numbers.

Mark Mcclain: Our average <unk> per customer is nearly three times higher than that of other identity security vendors, a clear signal of the comprehensive enterprise wide role sailpoint plays across our customers' environments.

Mark Mcclain: As an example, a leading mortgage lenders significantly deepened their investment with us as part of their broader digital transformation and modernization efforts.

Mark Mcclain: They upgraded to our identity security cloud business, plus suite, adding machine identity security and data access security plus training and services support.

Mark Mcclain: Their decision was driven by the proven ROI they had already seen in the value of our unified solution built on the scalable integrated architecture and the Atlas platform.

Mark Mcclain: Today, we continue to see strong customer adoption across our platform our workflow usage hit an all time high during fiscal Q1 2026 with a record number of identity workflows being built they are evidence that our customers are scaling their use of sailpoint to govern more apps new use cases and.

Mark Mcclain: Diverse identity types.

Mark Mcclain: This includes the machine identities, where we've seen robust demand and a strong and growing pipeline since the initial launch of Sailpoint machine identity security last fall.

Mark Mcclain: This quarter interest in machine identity security continues to grow among both existing and new customers are fortune 500 manufacturer expanded their sailpoint investment to better managed services accounts with greater precision.

Mark Mcclain: While a fortune 25 retailer became a new sailpoint customer adopting our most comprehensive identity security cloud business plus suite, along with machine identity security non employee risk management, a suite of connectors and advisory and success services. They went all in on sale point.

Mark Mcclain: And our proven ability to deliver identity security at the scale and sophistication required to support their massive identity landscape.

Mark Mcclain: As we look ahead, we remain confident in the depths of our pipeline the velocity of our sales motion and the resilience of identity and cyber security budgets.

Mark Mcclain: As identity centric threats continue to be a tough challenge for global enterprises. Today. We believe it is clear that identity has become the hub of modern security strategy, serving as the common link across all aspects of enterprise security from networks and cloud infrastructure to endpoints data and application.

Mark Mcclain: And while some competitors tout momentum with a collection of products, we're not seeing that approach resonate in our core enterprise market. Our win rate remains strong among large complex organizations demand the depth breadth and sophistication that we believe only sailpoint can deliver.

Mark Mcclain: This represents a clear validation that our focused platform driven strategy is winning where it matters most.

Mark Mcclain: In closing I am grateful to everyone at Sailpoint and our partners for ensuring we continue to stay in front, we're executing with focus innovating with purpose and delivering real value where it matters most.

Mark Mcclain: The industry increasingly recognizes identity security is the backbone of enterprise resilience Sailpoint will continue to be the identity security innovator and trusted partner, leading the way.

Mark Mcclain: And now let me hand, it off to Brian who will share more details on our financial results for the quarter.

Brian Essex: Thank you Mark and good morning, everyone. Thank you for joining US today, our fiscal year 2026 is off to a strong start with IRR revenue and adjusted operating margin each exceeding the high end of our first quarter guidance as we continue to deliver durable growth at scale.

Brian Essex: We ended fiscal Q1, 'twenty six with IRR of $925 million, an increase of 30% year over year with SaaS <unk> $574 million growing 39% year over year.

Mark Mcclain: Currency was less than a one point benefit to our total <unk> growth.

Mark Mcclain: Our strong results showcase our leadership position strong competitive advantage and durable growth profile importantly, we have not seen a fundamental change in demand due to the macro environment.

Mark Mcclain: Today more than ever enterprises are focused on what they believe to be most critical.

Mark Mcclain: We continue to see evidence that identity security is business essential and often at the top of the spending priority list.

Mark Mcclain: As such we plan to continue to execute on the large opportunity in front of us delivering value to our customers.

Mark Mcclain: More specifically, our pipelines remain robust with deal velocity and close rates consistent with prior quarters.

Mark Mcclain: Our customer retention rates continued to be very strong.

Mark Mcclain: And our growth drivers are consistent with approximately half of our Q1 AOR growth coming from new customers and half from existing customer expansion.

Mark Mcclain: We continue to see significant growth potential through a universe of new customers that are primed for a more modern solution. In fact, many of our new customer wins are displacements of other solutions that cannot keep up with the scale and complexity of enterprise environments.

Mark Mcclain: We also see a large opportunity to expand within our installed base.

Mark Mcclain: Our <unk> of 115% remained steady this quarter with many drivers including suite upgrades migrations.

Mark Mcclain: Sell and cross sell initiatives we.

Mark Mcclain: We were encouraged by the growing contribution from our non employee risk management machine identity security and data access security modules, which more than doubled from the same period a year ago.

Mark Mcclain: Let me now cover our strong Q1 results.

Mark Mcclain: In Q1, 'twenty six we delivered total revenue of $230 million up 23% year over year with subscription revenue of $215 million up 27% year over year.

Mark Mcclain: Adjusted gross profit margin was 76, 3% and.

Mark Mcclain: And adjusted operating margin remained healthy and well ahead of our expectations at 10, 2%.

Mark Mcclain: Our adjusted operating margin upside versus guidance was the result of higher term revenue mix cost discipline and the timing of investments.

Mark Mcclain: Moving to the balance sheet, we ended the quarter with $228 million of cash and equivalents and no debt after paying off our outstanding balance in March.

Mark Mcclain: Cash used in operating activities was $97 million and includes $37 million of cash paid for interest expense and $88 million of cash paid for items that ended with our IPO such as equity award payouts and monitoring fees.

Mark Mcclain: Turning now to guidance for simplicity I'll refer to the midpoint of our guidance ranges.

Mark Mcclain: Full details can be found in this morning's press release and supplemental earnings deck.

Mark Mcclain: For the fiscal second quarter of 2026, we expect <unk> to.

Mark Mcclain: To be $965 million up approximately 26% year over year compared to current consensus of 23, 5% growth.

Mark Mcclain: For our fiscal year 2026, we are increasing our outlook by $20 million to $1 1 billion up.

Mark Mcclain: Up 25, 5% year over year compared to our prior guidance of 23, 2% growth.

Mark Mcclain: The increase in our IRR guidance, primarily reflects organic growth of the business and assumes no material change in FX rates.

Mark Mcclain: For revenue, we expect the fiscal second quarter 2026 to be $243 million, an increase of 22% year over year with an adjusted operating margin of 12, 1%.

Mark Mcclain: We expect our diluted share count to be approximately 557 million shares and adjusted EPS to be four five cents.

Mark Mcclain: For fiscal year 2026, we expect revenue to be approximately 1.039 billion.

Mark Mcclain: An increase of 21% year over year with an adjusted operating margin of 15, 7%.

Mark Mcclain: We expect our diluted share count to be approximately 565 million shares and adjusted EPS to be <unk> 18.

Mark Mcclain: Please note we included additional modeling notes in our supplemental earnings deck.

Mark Mcclain: In summary, we believe we are well positioned to win the next generation of identity security because of the depth and breadth of our platform our enterprise scale on our willingness to listen and respond to market needs.

Mark Mcclain: We continue to see several durable growth drivers that position us for sustained long term growth and we are relentlessly focused on executing on that opportunity.

Speaker Change: With that let's invite Matt Mills, our president to join US and open the call for questions operator.

Speaker Change: Thank you ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your telephone. If your question has been answered you were sticking with yourself from the queue. Please press star one again.

Speaker Change: Just at a time until however, you want to ask the question. We ask that you limit yourself to one question, we will pause for a moment, while we compile the Q&A roster.

Speaker Change: Our first question comes from Joseph <unk> with <unk>. Your line is open.

Speaker Change: Thanks for taking the question and congrats on excellent execution.

Speaker Change: I guess so.

Speaker Change: Many questions, but the first one.

Speaker Change: For you Matt in terms of machine identity. It seems like it's starting to inflect.

Speaker Change: Yes.

Speaker Change: The new products coming out agent identity security in the fall can you just tell us what you think the pricing looks like in that market and we share some of the competitive dynamics that you're seeing in that market. Thanks.

Speaker Change: Yeah. Thanks for the question.

Speaker Change: Look at the end of the day, when we look at the market and we look at our customers and our prospects alike.

Speaker Change: Identity is top of the list for all of them, it's important to them.

Speaker Change: Many of our customers as you know.

Speaker Change: I mean, the idea of machine identity is not necessarily new right. We've been dealing with a lot of things around service accounts and box for some time now.

Speaker Change: But here certainly in the last 12 months, it's kind of moved its way to the threat vector and therefore, it's become a hugely important topic of concern for all of our customers and prospects alike. I think when you start talking about the pricing of it but this is.

Speaker Change: I followed a lot of the things that you guys like yourself, who put out and others.

Speaker Change: And I think it's a huge moving target and I think it is going to be value based and so I think.

Speaker Change: At this point in time, it's all going to play out, but I think it becomes quite difficult to kind of say, it's this or it's that we just know it's a significant opportunity for us.

Speaker Change: The only thing I'd add John on the competitive side Mark.

Speaker Change: Is it clear clarity, we're trying to help establish the market of where we're focused on the machine identity problem versus say others around us I think we continue to see a lot of the focus from others is on what we would call. The authentication of those machines to the server certificates. The identity of the machine. We're focused as we have been for human identities on the authorization capable.

Speaker Change: What can those accounts or systems do bots, Rps et cetera. So again, we find that it may be tenable that we may coexist with other machine identity security solutions, where just like say, we coexist with in SSO vendor because they are solving a different part of the identity problem I think where we're focused and machine identity is deferred.

Speaker Change: <unk> and we're hearing that back from the customers we're engaging with.

Speaker Change: Thank you so much.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Matt Hedberg with RBC. Your line is open.

Matt Hedberg: Thanks for taking my question guys I'll offer my congrats as well really really strong results.

Speaker Change: One area I wanted to ask what it sounds like you guys didn't call out any macro pressure, but I know you guys have some U S fed exposure and other cyber vendors have been calling out maybe some pressure there just curious on what youre seeing in that particular vertical.

Matt: Yes, Hi, Matt This is Matt.

Speaker Change: Yes.

Speaker Change: For us thus far.

Speaker Change: Hey, it's been business as usual right, we haven't seen any.

Speaker Change: Extensive resolve their material result from from anything those related I think we continue to keep our head on a swivel and look.

Speaker Change: But our business remains resolute.

Speaker Change: Like I said, thus far we've not seen anything that would indicate.

Speaker Change: We've got challenges as a result of those.

Matt Hedberg: Great. Thanks, Matt.

Matt Hedberg: One moment for our next question.

Speaker Change: Our next question comes from Rob Owens with Piper Sandler Your line is open.

Speaker Change: Good morning, and thank you for taking my question wanted to unpack, the <unk> strength, which accelerated in the quarter. When we look at the growth rate I guess, the two components as you look at new customers, which I think you said were half of it just can you give us a sense of where those conversations are is there a sense of urgency, especially in this.

Brian Essex: Very uneven environment and second with regards to the existing customers, which I think came through in the <unk> quarter over quarter is this a function of more identities is this a function of modules being added on or tier upgrades. Thanks for taking the question, Yeah, Hi, Rob It's Brian here hope you're well so what.

Speaker Change: Respect to the new customer acquisition I think that what we're seeing is just great success from that.

Speaker Change: This being a very resilient market for us.

Speaker Change: These are businesses central programs companies.

Speaker Change: Companies are not looking to cut back on identity security, they often rise to the top of the stack for <unk> and <unk>.

Speaker Change: And really we're seeing pipeline from failed deployments of other competitive solutions that we're able to go back in and save.

Speaker Change: And restart them for them. So we're pleased with our new customer acquisition, we continue to make great progress there with respect to existing customers. We're continuing to see again about half of this coming from new logos, but half from expansion opportunities within our installed base and there's been this nice kind of even disposition of several grew.

Speaker Change: Vectors. This includes migrations of on Prem customers into net new SaaS solutions, where we typically see.

Speaker Change: Two to three X uplift on their IRR spend we do see quantity upsell. So more identity is being sold.

Speaker Change: Called out Theres other cross sell initiatives. So some of those new products like non employee risk management machine.

Speaker Change: Machine identity security data access security, that's all contributing to.

Speaker Change: To low single digits of our expansion.

Speaker Change: Also our SaaS suite upgrades. So these are customers that are moving from point level of SaaS solutions into our suites. So again, we're really pleased to see that nice cross sell and.

Speaker Change: <unk> disposition.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Peter Levine with Evercore. Your line is open.

Peter Levine: Thanks for taking my questions.

Speaker Change: Maybe one more.

Speaker Change: Mark you talked about the success, we're seeing with AI kind of bit of an inflection point, but maybe share with us why why is the iga better positioned to capitalize on the rise of AI or some independent vendors.

Speaker Change: The identity access management providers, just curious to know why you can governance is better positioned and then maybe Brian I know you said not much of a macro but perhaps did you.

Speaker Change: Bacon anything into the into the full year Guide you raised the guide, but just curious were there any guardrails that you kind of factored in into the full year guide just to kind of assume maybe things get worse, but just curious to know what your philosophy with thank you.

Speaker Change: Thanks, Peter Yeah on the first one there on a I think sometimes it helps to go back to the basics. When we first came to market. The first time in.

Speaker Change: In 2017, we were trying to help make sure we position to where we thought.

Speaker Change: Not even called Iga at that time was we said look at the other day, we entered three simple questions for humans that was who has access to what how does that compare to who should have access kind of policy versus actual and then what are they doing with it and the truth is I think those are the same three core questions, they're going to get asked about that take AI right is like what is this agent.

Speaker Change: Does it have access to and is it performing according to my expectations.

Speaker Change: Authorization tool like ours.

Speaker Change: <unk> tool is well designed and suited for that question access and authentication tools are not right. We often go back to a very simple metaphor. We experience. It every time, we appeared in New York for Investor meetings of the security Guard at the front door knows that you've gotten into the building. That's access that's letting you in to the application of the building they really.

Speaker Change: Lose track of where you go once you leave that front desk and thats sort of the SSO problem.

Speaker Change: Art designed to understand all the entitlements capabilities that an identity has inside those complex applications and thats going to be true for the agents.

Brian Essex: What does the agents have access to what is it allowed to do what data can see kind of changed data those are hard questions to answer without a governance framework and thats really where were coming from so we think the access and privilege vendors that don't have that heritage are just going to be very challenged and tried to answer those very difficult questions and I'll turn it over to Brian for the other part yep. Thank you.

Brian Essex: We're not expecting currently any major change in the macro environment. So we're not building in any sort of headwind, but having said that we are mindful of it and we're doing a great deal of deal scrutiny with rigorous pipeline management, but we continue to see good demand for the identity security space. So we're aware of it we're not in.

Speaker Change: <unk> to it.

Speaker Change: We're watching deal timing in particular, because a lot of times. These are programs that may change from one quarter to the next but again the underlying fundamental demand is still there and are strong.

Speaker Change: Thank you.

Speaker Change: Again, ladies and gentlemen, just as a reminder, we ask that you limit yourself to one question and one moment for our next question.

Speaker Change: Our next question comes from Gary Powell with <unk>. Your line is open.

Speaker Change: Okay, great. Thank you very much.

Gary Powell: Yes, I just love to hear what Youre seeing in terms of customer willingness to migrate from legacy Iga solutions like Oracle and IBM and then that does macro uncertainty impacting any of those projects or is it really just more a function of bike.

Speaker Change: Pending end of life.

Speaker Change: Customers need to modernize.

Speaker Change: Yeah. Thanks, Gary This is Matt.

Speaker Change: I think what we're seeing now is actually a little bit of an acceleration there I think the <unk>.

Speaker Change: Security landscape today is such that.

Speaker Change: It's really bringing out the flaws if you will on these legacy systems in many cases as you probably know they're heavily customized.

Speaker Change: And it becomes a handful just to keep up with in of itself not to mention the <unk>.

Speaker Change: Accelerating threat landscape. So I would tell you we continue to see really good opportunities and we continue to win at a high rate.

Speaker Change: And Greg just one one point to add you may have seen the recent Gartner report and.

Speaker Change: In terms of our overall market share gains that we've made.

Speaker Change: In recent history, where more than five extra about buybacks. Our nearest competitor. So we feel like we're displacing legacy competition and also winning against some new competitors.

Speaker Change: Got it. Thank you very much and thanks for correcting my name there I get a lot of Gary's in Greg's in my life.

Speaker Change: Great.

Speaker Change: You bet, Greg one moment for our next question.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Charles <unk> with TD Cowen Your line is open.

Speaker Change: Okay.

Speaker Change: Thank you so much thinking about NIM corrections.

Speaker Change: Congrats on strong results and guidance question to Mark or Matt.

Speaker Change: Given that Accenture is one of your leading partners. What are you hearing internally as it relates to their overall activity with the same point.

Speaker Change: Will they be one of your prime go to market.

Speaker Change: As we think about further gyn AI adoption. Thank you.

Matt: Yeah. Thank you sure this is Matt.

Speaker Change: Look.

Speaker Change: Fortunate.

Speaker Change: We have a strong ecosystem of partners of which six centers.

Speaker Change: A big part of it.

Speaker Change: They continue to be one of our.

Speaker Change: Our largest partners and I don't see anything that would cause that to change. So we continue to work with them we invest in them. They are one of our large MSP partners right.

Speaker Change: And so I would tell you from an expectation perspective, we continue to invest with them and do good things for our customers.

Speaker Change: And prospects.

Speaker Change: And I think just agile we made will notice of what we're doing with Deloitte on the call today around agents, but with all of our leading partners Pwc Accenture and many others.

Speaker Change: Long partnerships.

Speaker Change: We are expecting to move in the direction of supporting customers needs around agenda with all of those leading partners.

Speaker Change: Pleased to be able to kind of referenced multiple multiple good things there, but yes etcetera continues to be one of our top partners around the globe and we expect that the discontinued expand as we go.

Speaker Change: Thank you so much.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Joseph <unk> with Jefferies. Your line is open.

Speaker Change: Hey, guys. Thanks for the question, Brian It was great to see some of the margin strength, even with most of the upside coming from SaaS can you just update us on where you are on sales capacity, where youre investing and then where some of this leverage is actually coming from thanks.

Speaker Change: Sure so.

Speaker Change: We were pleased with our margin performance this year exceeding the Q1 guidance that we put out there some of that was driven by timing of investments to which will catch up on some of that as the year goes along I would say we're in a good spot.

Speaker Change: With capacity adds more to come on that we're investing in things like customer success early on in the year just to make sure. We're still driving a strong gross retention rate and net revenue retention rate.

Speaker Change: So we feel like this is going to be a balanced strategy. We are we're really pleased with a 30% IRR growth we want to make sure we're continuing to invest in that while still contributing in delivering some level of margin expansion, which gave us confidence to increase it for the year.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Unknown Moderator: Our next question comes from Brian Essex with J P. Morgan Your line is open.

Brian Essex: Hi, good afternoon.

Speaker Change: And thank you for taking the question and congrats on some solid results.

Speaker Change: Maybe mark for you in your prepared remarks, you called out a retailer that went quote unquote all in on sale.

Speaker Change: Could you provide a little detail there what was the catalyst to move what did you displace maybe how long was that sales cycle and how indicative is that deal with regard to what you typically see with new customer lands.

Speaker Change: Yes, I'll, probably a flip of that Bryan over to Matt who has got more detail I will tell you that they were kind of a strategic large scale wind is not atypical we'd certainly called that one out but in general I think we're we're finding that.

Speaker Change: Almost inevitably in those large jobs, they've got some level of deployment of something.

Speaker Change: Generally it's one of the one of the legacy vendors that we're displacing but we always try to reemphasize that that quite often it's fairly minimally deployed and so it's not uncommon for us to say within the first six to nine months of a deployment to run path.

Speaker Change: The level of deployment they had because thats really the frustration they have with those legacy tools, if they arent covering the landscape and as they try to think about security the whole landscape there just.

Speaker Change: Very frustrated with those legacy tools and that's often a driver but this is a it's a great story because they are sort of picking up on all of the core aspects of the story.

Brian Essex: I will just add Brian.

Speaker Change: I think when you look at these these large opportunities.

Speaker Change: They start with a fair amount of of relationship in education that happens before you actually start prosecuting in opportunity.

Speaker Change: And I think that was the case here, we built a very strong relationship with this company.

Mark Mcclain: And as Mark said they are running.

Mark Mcclain: Legacy solution in.

Mark Mcclain: And I feel the pain of the legacy solution in terms of what it can do and the problems it is causing for them.

Mark Mcclain: And so once we started the opportunity I think it went in fairly short order, but.

Mark Mcclain: Great win for our team.

Mark Mcclain: And then it kind of.

Mark Mcclain: It kind of validates the whole idea that we continue to win at a very high rate and replacing these legacy.

Mark Mcclain: Our solutions.

Mark Mcclain: Very helpful. Thank you.

Mark Mcclain: One moment for our next question.

Speaker Change: Our next question comes from Gabriela Borges with Goldman Sachs. Your line is open.

Gabriela Borges: Hi, good morning, Thank you.

Speaker Change: Martin from Matt We've talked on Iga for some time now about how one of the limiting factors for adoption of how long or how annoying can be switched from one lender.

Gabriela Borges: So my question for you is what are you doing with that internally, perhaps speed up some of that implementation and how do you think about the.

Speaker Change: The risks.

Speaker Change: Alright, and trademarks from you enable at the IGN debt come down the pipeline potentially.

Speaker Change: Thank you.

Speaker Change: Thanks, Kevin I'll start and Steve Matt has some thoughts to add I think a couple of points. One is when we show up especially in these mid to large enterprises with fairly complex. It environments are our two decades of building connections.

Speaker Change: We're probably going to have to come up with some terminology delineation here because a connector is not a connector in this world right. It's one thing for an excess tool to say I connect an application, which means they can lock you in for us that means we can do deep governance typically around the entitlements and who can access data et cetera within these applications, but it's our it's our.

Speaker Change: Rich heritage of connection with all of the commercial apps. These enterprises care about in many bespoke apps that gives them confidence that is a big area of focus though is to leverage AI to both increase the rate of speed, where we can get to those new bespoke applications that we haven't already connected with in a typical enterprise environment and also to make it.

Speaker Change: <unk> non technical people to do that work quite often that some of the areas of slowdown in these implementations is having to do deep technical work to kind of connect into these business applications. We're trying to use AI to speed up and leverage what we know from all the.

Speaker Change: Tens of thousands of connections, we have built to make that simpler and easier and so to your point about kind of others out there. We are certainly well aware some of the earlier stage.

Speaker Change: Vendors and identity are starting to make some strong claims about connectivity. We've we've done pretty deeply into all of that those that are making claims about very rapid expansion of connectivity are typically doing those very shallow connectors, where they can connect to a resource, but they can't really do entitlement level governance, and so we're helping make sure customers are clear on kind of the actual.

Speaker Change: <unk> capabilities that we have and how that compares to some of the claims being made by some of the newer vendors, but again, what Matt would tell you is when we get into these large complex environments. Our win rate continues to be incredibly high what's customers are really clear on the differentiation of what we're offering.

Speaker Change: I appreciate the answer thank you.

Speaker Change: Good morning, sorry, one moment for our next question.

Tal: Our next question comes from Tal <unk> with Bank of America. Your line is open.

Speaker Change: Hi, guys.

Speaker Change: <unk> was very strong this quarter.

Tal: $7 million above.

Tal: Expectations for the next quarter, you are also guiding up $20 million above.

Tal: But when I look at the full year.

Tal: Have to reduce my estimates for net new IRR in order to hit because the increase in the full year is lower than what we're seeing this quarter and next quarter. So is.

Tal: Is there any thing that is happening with timing of orders.

Tal: It is pulling things forward or is it just kind of.

Tal: The way the numbers are and we should pay attention to.

Brian Essex: It's Brian here, so yes, there was nothing.

Tal: Unique about pull forward of any any deals or revenue.

Tal: This is basically I would really encourage you to look at <unk> on an annual basis for our FY 'twenty six guide, we're actually raising debt by more than 200 basis points.

Tal: And also the Q2 guide is 200 basis points above current consensus.

Tal: Keep in mind that 3% beat that we had in Q1 are the $27 million Thats an annual metric.

Tal: As compared to what other companies would do in terms of quarterly revenue numbers and when it came to the quarterly revenue and operating income beats, we passed all of that through and raised Q2 as well. So it's just part of our philosophy.

Tal: We feel good about it and.

Tal: It's a good place to start for Q2.

Tal: Got it thank you.

Tal: One moment for our next question.

Speaker Change: Our next question comes from Keith Weiss with Morgan Stanley. Your line is open.

Keith Weiss: Excellent. Thank you guys for taking my question and congratulations on a great start to the fiscal year.

Keith Weiss: A lot of big numbers in this business.

Keith Weiss: Q1 print one that we haven't really dug into yet was the large customer numbers.

Tal: Really good growth in both the $2 50, K customers into $1 billion plus customers to.

Tal: Two questions within one anything in particular driving that or is it just the summation of the expanding solution portfolio traction in at any management market and then maybe somewhat related.

Tal: Any change in sales strategy, our go to market strategy as we enter into the new fiscal year anything that is worth noting in terms of how you guys are approaching that market opportunity from the go to market perspective.

Tal: I'll start just with respect to the increasing deal size I mean, we're really pleased with I mean greater than 250 K.

Tal: Customer count that's up 28% year over year, the greater than $1 million as we mentioned is up 62% year over year.

Tal: We're also not just the number of customers that we're landing it's just a more sizeable number.

Tal: Our average IRR for customers now above $300000.

Tal: It's really driven by expansion opportunities across the board in terms of just overall identity growth suite upgrades upsell and cross sell of new modules.

Tal: And then I'll defer to Matt just on some additional color.

Matt: Yes, Thanks Keith.

Tal: There's been really no no big change relative to our go to market strategy, our selling strategy.

Tal: As you know we're fairly pragmatic in terms of market too.

Tal: We work off a target account list and so none of that has changed.

Tal: And we will continue to execute that for the remainder of the year.

Speaker Change: Excellent. Thank you guys.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Michael Romanelli with Mizuho. Your line is open.

Speaker Change: Yes, Hi, this is Mike on for Gregg Moscowitz, Congrats on the strong results and thanks for taking the question here. So I guess so I was wondering if firstly is harbor pilot is included in any of your suite.

Speaker Change: And will there be an additional charge for this technology and then just quickly on the migration impact to net retention rate I would say.

Speaker Change: Three 3% to four points again this quarter.

Speaker Change: I forgot the first part Mike.

Tal: Hubbard.

Tal: Just real quick on the migrations that did contribute low single digits in terms of the <unk> contribution within.

Speaker Change: Within the NRO for migration.

Tal: And that sort of.

Tal: Of those four contributors all roughly a quarter of that 15%.

Speaker Change: And on the first part Mike Yes, hover pilot is included with our platform today.

Speaker Change: So the first two offerings the AI offerings within Arbor pilot at this point of this included that in our offering I think as we continue to add new capabilities, we'll look at where whether and when we might price that out separately at some point based on the value delivery, where we at this point are kind of anxious for customers to adopt some of these AI capabilities to help them be more efficient and effective in.

Speaker Change: Ramping up their implementations and deployments in a lot of what these these initial harbor pilot capabilities are doing is just letting them more rapidly get the answers they need to address their issues. So we'll continue to watch how that evolves, but for now it's just very buried into the cost of our platform.

Speaker Change: Great. Thank you.

Speaker Change: Thanks.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Anthony Winski with Wells Fargo. Your line is open.

Speaker Change: Okay. Thank you I'm just wondering what drove the 18% growth in your non SaaS <unk> in Q1, and I know youre, assuming 90% of net new comes from SaaS going forward, but that still implies growth in your non SaaS IRR. So just wondering if you could give any more color on what's driving that thanks, So hi, Andy it's.

Speaker Change: So we actually saw a fairly strong us term business for Q1, both on renewals and also a couple of new sizable customers chose to go with.

Speaker Change: An on Prem solution, just given their environment so move.

Speaker Change: Moving forward, we still are targeting that 90, 10 mix, meaning 90% SaaS and 10% term.

Speaker Change: So we do believe that SaaS is going to continue to be.

Speaker Change: First and foremost.

Speaker Change: Sales play for us, but we did see some nice uptick in some term business for the quarter.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Yeah.

Speaker Change: It comes from <unk> <unk> with Barclays. Your line is open.

Speaker Change: Okay, Great Hey, guys. Thanks for taking my question here and Echo the nice beat on IRR.

Brian Essex: Brian maybe maybe for you.

Speaker Change: I was wondering if you could just talk to the shape of net new AOR. This year, maybe comparing it to prior years and then separately anecdotally of course, and then separately I was wondering if you could go one level deeper into the components of the 115% NRI and particularly.

Brian Essex: Particularly whether you saw more contribution expected from migrations.

Brian Essex: So I wouldn't think there's anything materially different about.

Brian Essex: And our new customer acquisition, we're actually really pleased with the consistency of it to be honest with you and a nice business disposition between new and existing customers and as I mentioned, what's great about the expansion with the existing install base is almost even distribution among things like migrations and quantity ups.

Brian Essex: Cell.

Brian Essex: And then the cross sell initiatives that I called out in terms of the non employee risk management machine identity security data access security that bucket alone was more than double it was a year ago and then we're also experiencing our SaaS suite upgrades as well. So again, just think about this as half and half and we're really pleased with that.

Brian Essex: <unk>.

Brian Essex: And then anything just on the shape of net new <unk> for the year I know that last year I think Q2 was particularly healthy I can't remember if it was fed or another vertical anything you want to say just in the shape of the year.

Brian Essex: Had a fairly strong Q2 last year, we typically are kind of a second half company. When it comes to net new <unk> growth. So I'd continue to think of it that way.

Brian Essex: But nothing nothing super unusual year over year.

Speaker Change: Very helpful. Thanks.

Speaker Change: And im not showing any further questions at this time I would like to turn the call back over to Mark for any closing remarks.

Mark Mcclain: I appreciate everyone's questions today and for all of Us.

Mark Mcclain: Great notes that have been written up over the course of our first few months here being public. So we look forward to continuing the dialogue and thanks for everyones interest on the call today, we will talk to you. Soon thanks have a great day. Thank you ladies and gentlemen. This does conclude today's presentation. We thank you for your participation you may now disconnect and have a wonderful day.