A cybersecurity play makes another return to public markets.
SailPoint (SAIL) is poised to start trading at the Nasdaq on Thursday. The company priced its initial public offering (IPO) at the top end of its targeted range of $21 to $23, raising $1.38 billion in proceeds.
The company's valuation ahead of its IPO stood at $12.6 billion. Its closest competitor, Okta (OKTA), is valued at $16.8 billion.
"The market seems to be hungry today for what we call growth at scale with profitability. If you've built a pretty large business, you're able to grow that business and do so profitably, that's kind of the magic combo of today. And we were that profile. I think [investors on the roadshow] found that interesting," SailPoint founder and CEO Mark McClain told me on chof360 Finance (video above).
The identity management tech firm is no stranger to public markets.
Thoma Bravo took SailPoint public on Nov. 18, 2017, around the same time as quasi-competitor Okta debuted.
On its first day of trading, the stock finished up 8.3% at $13. The company had priced its IPO then at $12 a share.
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At the time, SailPoint touted sales of $118.3 million and growth of 34% in the nine months before its IPO. It had a $13 million net loss.
Thoma Bravo took the company private in 2022 for $6.9 billion or $65.25 a share.
Today, Sailpoint is a more mature company operationally and financially — though it's producing losses despite a shift to a software-as-a-service model.
For the year ended Jan. 31, 2025, the company estimated in its prospectus it would earn $875 million to $877 million in annual recurring revenue. That would be up about 41% year over year.
SailPoint didn't disclose guidance for its fiscal year's bottom line.
Through the nine months ended Oct. 31, 2024, SailPoint's net loss totaled $235.8 million, better than the $308 million loss a year earlier. McClain says the company is profitable on a non-GAAP basis.
SailPoint will be defined as a controlled company now that it's public. Thoma Bravo is expected to own 88% of SailPoint post-IPO, and it will have final say over board-level decisions. It will also be able to nominate members to SailPoint's board.
SailPoint is the first big test of the tech IPO market in 2025, which is expected to see well-known names such as Stripe potentially debut as companies bank on a friendlier regulatory backdrop under President Trump.
Renaissance Macro expects a "banner" year for IPOs this year, with an estimated volume range of 155 to 195 companies coming to market. They could collectively raise $40 billion to $55 billion in funding.
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"There's generally a sense that we're going to move to a less regulatory-oriented administration. Now, I don't think it's going to all go away, of course, but I think the idea that business will be a little freer to run without as much focus from the regulators, that probably sets up a better backdrop," McClain said.
Last year saw some improvement in IPOs, however.
The number of IPOs jumped by 38% and proceeds rose 48%, according to EY. The 2024 IPO aftermarket performance on US exchanges showed strength, with average gains tallying 30% for deals that raised $50 million and above.
In total, 176 US IPOs raised $33 billion in 2024.
Brian Sozzi is chof360 Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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