SailPoint, Inc.

SAILPOINT, INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Summary of Significant Accounting Policies

Organization

On February 12, 2025, in connection with our initial public offering ("IPO"), SailPoint Parent, LP converted into a Delaware corporation pursuant to a statutory conversion and changed its name to SailPoint, Inc. (the "Corporate Conversion"). The purpose of the Corporate Conversion was to reorganize the Company's corporate structure so that the entity offering its securities to the public in the IPO would be a corporation rather than a limited partnership. References in this Annual Report on Form 10-K to “SailPoint,” the “Company,” “we,” “us” and “our” (i) for periods prior to the Corporate Conversion, refer to SailPoint Parent, LP and, where appropriate, its consolidated subsidiaries and (ii) for periods after the Corporate Conversion, refer to SailPoint, Inc. and, where appropriate, its consolidated subsidiaries.

In conjunction with the Corporate Conversion, all of the Company's outstanding partnership units were converted into an aggregate of 499,060,464 shares of our common stock. The number of shares of common stock issuable to holders of Class A Units of SailPoint Parent, LP ("Class A Units") and holders of Class B Units of SailPoint Parent, LP ("Class B Units") in connection with the Corporate Conversion were determined pursuant to the applicable provisions of the plan of conversion. The Company continues to be controlled by Thoma Bravo UGP, LLC (together with its affiliated entities, "Thoma Bravo") following the Corporate Conversion. After giving effect to the Corporate Conversion and the closing of the Company's IPO, Thoma Bravo controlled approximately 86.2% of the voting power of the Company.

As a result of the Corporate Conversion, SailPoint, Inc. succeeded to all of the property and assets of SailPoint Parent, LP and succeeded to all of the debts, obligations and liabilities of SailPoint Parent, LP. SailPoint, Inc. is governed by a certificate of incorporation filed with the Delaware Secretary of State. The consolidated financial statements and footnotes give effect to the Corporate Conversion on a prospective basis as of the conversion date.

The Company conducts business as SailPoint and delivers solutions to enable comprehensive identity security for the enterprise.

Unit Split

On January 31, 2025, the Company effected a 60.91-for-1 forward unit split and a 0.45-for-1 reverse unit split of the Company’s Class A Units and Class B Units, respectively. All Class A Unit and Class B Unit and per unit information included in the accompanying consolidated financial statements and footnotes have been retroactively adjusted to reflect this unit split for all periods presented. Additionally, all incentive unit and per unit information in the consolidated financial statements and footnotes was adjusted to reflect the 0.45-for-1 reverse unit split of the Company’s Class B Units.

Completion of Initial Public Offering

On February 14, 2025, the Company closed its IPO of 60.0 million shares of its common stock, of which 57.5 million shares were sold by the Company and 2.5 million shares were sold by certain selling stockholders, at an initial offering price to the public of $23.00 per share for an aggregate offering price of $1.4 billion. The Company received net proceeds of approximately $1.2 billion, net of approximately $62.8 million of underwriting discounts and commissions and approximately $11.5 million of offering costs, net. The Company also realized a tax benefit of $3.2 million and recorded it as part of additional paid-in capital in the consolidated balance sheets as of January 31, 2026.

Basis of Presentation

The accompanying consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of SailPoint, Inc and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. For the year ended January 31, 2026, the Company has begun presenting "perpetual license revenue" and "cost of perpetual license revenue" as part of "revenue - services and other" and "cost of revenue - services and other", respectively, as the amounts were not material and has recast prior year amounts accordingly.

The Company has not entered into transactions that require presentation as other comprehensive income (loss). Total

comprehensive income (loss) is equal to net income (loss) for all periods presented.

Segments

The Company reports segment information based on the management approach, which designates the internal reporting used by the Chief Operating Decision Maker (CODM) for making decisions and assessing performance as the source of our reportable segments. The measure used by our CODM for evaluating the Company's overall performance and inform resource allocation to support strategic priorities that is most consistent with GAAP is net loss. Significant expense categories regularly provided to the CODM are those disclosed in the consolidated financial statements and related notes.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Future events and their effects cannot be determined with certainty. On an ongoing basis, management evaluates these estimates judgments and assumptions.

The Company bases its estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. In particular, the Company makes estimates with respect to the fair value allocation of multiple performance obligations in revenue recognition, the expected period of benefit of contract acquisition costs, the assumptions underlying the fair value used for equity-based compensation expense for awards prior to the Company's IPO, and estimated useful lives and impairment of intangible assets and goodwill arising from business combinations and the assumptions underlying the fair value used for the redemption value of the redeemable convertible units issued prior to the Company's IPO. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less from date of purchase to be cash equivalents. The Company is required to maintain cash collateral for an unconditional standby letter of creditin the amount of $2.7 million related to the Company’s corporate headquarters lease, and this amount predominantly represents the Company's total restricted cash.

Fair Value of Financial Instruments

Assets and liabilities recorded at fair value in the financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows:

•Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

•Level 2: Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

Concentration of Credit and Other Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, accounts receivable, and contract assets. The Company maintains its cash in bank deposit accounts that exceeded federally insured limits as of January 31, 2026 and 2025. There was no concentration of credit risk for customers as of January 31, 2026 and 2025 as no individual entity represented more than 10% of accounts receivable and contract assets. No customer accounted for more than 10% of revenue during the year ended January 31, 2026, 2025 and 2024. The Company does not experience concentration of credit risk in foreign countries as no foreign country represents more than 10% of the Company’s consolidated revenues or net assets.

The Company’s revenue by geographic region based on the customer’s location is presented in Note 15 “Segments and Geographic Information.”

Accounts Receivable and Allowance for Expected Credit Losses

The Company continuously assesses the collectability of outstanding customer balances and in doing so, the Company assesses the need to maintain an allowance for expected credit losses resulting from the non-collection of customer balances. The allowance for expected credit losses is a valuation account that is deducted from the financial asset’s amortized cost basis to present the net amount expected to be collected on contracts with customers. Accounts receivable and contract assets are written off when management believes the amount is not collectible. Recoveries of financial assets previously written off are recorded directly to earnings when received.

Management estimates the allowance for expected credit losses using relevant available information relating to past events, current conditions and reasonable and supportable forecasts over a financial asset’s contractual term. The Company’s historical credit loss experience provides the basis for the estimation of expected credit losses. The Company reviews renewals and new businesses for factors such as past collection experience, age of the customer balances, significant trends in current balances, internal operations, and macroeconomic conditions. The Company evaluates these economic conditions and makes adjustments to historical loss information for certain economic risk factors. In development of the expected credit loss model, the Company evaluated its financial assets with similar risk characteristics on a collective (pool) basis. A financial asset will be measured individually only if it does not share similar risk characteristics with other financial assets.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, generally three years tofive years. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the related lease term. Repairs and maintenance costs are expensed as incurred. Assets to be disposed of are reported at the lower of carrying value or net realizable value.

Goodwill

Goodwill represents acquisition costs in excess of the fair value of the identified net assets acquired. The Company hasone reporting unit for goodwill impairment purposes. Goodwill is tested for impairment annually, or more often if and when events or circumstances indicate that an impairment may exist. The Company performs the annual impairment test in the fourth quarter of each fiscal year.

The Company first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the assessment indicates that the fair value of the reporting unit is less than its carrying amount, a quantitative assessment is performed. The Company estimates the fair value of the reporting unit and compares this amount to the carrying value of the reporting unit. If the carrying value of the reporting unit exceeds its fair value, an impairment charge is recorded.

Intangible Assets

Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense is recognized in the consolidated statements of operations based on the use of the intangible asset. The Company’s intangible assets primarily consist of customer relationships, developed technology, and trade names. The Company periodically reviews the estimated remaining useful life of intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization.

Long-Lived Assets

Periodically, the Company evaluates the recoverability of its long-lived assets, including property and equipment and intangible assets, for possible impairment whenever events or circumstances indicate that the carrying amount of such assets or asset groups may not be recoverable. Recoverability of these assets or asset groups is measured by comparison of the carrying amount of each asset, or related asset group, to the future undiscounted cash flows the asset or asset group is expected to generate. If the undiscounted cash flows are less than the carrying amount, an impairment charge is recorded to reduce the carrying amount of the asset group to its fair value.

The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated acquisition-date fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets may include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Software Development Costs

Software development costs for products intended to be sold, leased or otherwise marketed are expensed as incurred until technological feasibility has been established, at which time such costs are capitalized until the product is available for general release to customers. Technological feasibility is established when a product design and working model have been completed and the completeness of the working model and its consistency with the product design have been confirmed by testing. To date, the establishment of technological feasibility of the Company’s products and general release of such software have substantially coincided. As a result, the Company has not capitalized any software development costs through January 31, 2026 and all such costs have been recorded as research and development expenses as incurred in the consolidated statements of operations.

Internal Use Software Development Costs

Costs to develop software internally related to the Company's products are capitalized and recorded as a component of property and equipment, net. The Company capitalizes qualifying costs associated with internally-developed software incurred during the application development stage. Costs incurred during the preliminary project and post-implementation stages, including training and maintenance, are expensed as incurred. Capitalized costs are amortized on a project-by-project basis using the straight-line method over an estimated useful life ofsix years and is recorded as cost of subscription revenue in the consolidated statements of operations. The Company capitalized internal use software development costs of$15.1 million and $8.2 million for the year ended January 31, 2026 and 2025, respectively. Amortization expense was$1.7 million and$0.4 million for the years ended January 31, 2026 and 2025, respectively, and is included in cost of subscription revenue in the consolidated statements of operations. There was no amount recorded for amortization expense for the year ended January 31, 2024.

Capitalized Implementation Costs

Costs to implement cloud computing hosting arrangements are capitalized and amortized using the straight-line method over the expected term of the arrangement, including periods which are reasonably expected to be renewed. Costs include direct costs for third-party consulting services supporting the implementation. Software maintenance and training costs are expensed in the period in which the services are received. Capitalized costs, net of accumulated amortization, are included in prepayments and other non-current assets. The Company capitalized implementation costs of$1.3 million and$5.8 million for the year ended January 31, 2026 and 2025, respectively. Amortization expense was$1.7 million and$1.4 million for the year ended January 31, 2026 and 2025, respectively. Amortization expense for the year ended January 31, 2024 was not material.

Deferred Offering Costs

Deferred offering costs, which consist of direct incremental legal, accounting, consulting, and other fees related to the Company’s IPO are capitalized in prepayments and other current assets on the consolidated balance sheets. The deferred offering costs were offset against IPO proceeds upon the consummation of the IPO. There wereno deferred offering costsas of January 31, 2026. There were deferred offering costs of $9.7 million as of January 31, 2025.

The Company recognizes revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services. To achieve this, the following steps are applied:

•Identify the contract with a customer

•Identify the performance obligations in the contract

•Determine the transaction price

•Allocate the transaction price to the performance obligations in the contract

•Recognize revenue when or as performance obligations are satisfied

Revenue consists of fees for software-as-a-service (“SaaS”) subscriptions, perpetual and term licenses for the Company’s software products, post-contract customer support (referred to as maintenance and support) and other subscription services and professional services including training and other revenue. The Company recognizes revenue net of any applicable value added or sales tax.

Subscription Revenue

Subscription revenue consists of (i) fees for access to, and related support for, the SaaS offerings, (ii) fees for term subscriptions to the Company’s software solutions, (iii) fees for ongoing maintenance and support of perpetual licensed solutions and (iv) other subscription services, which includes cloud managed services, and certain professional services.

Term subscriptions include the term licenses and ongoing maintenance and support. Maintenance and support agreements consist of fees for providing software updates on a when and if available basis and for providing technical support for software products for a specified term.

Subscription revenue, including support for term licenses, is recognized straight-line over the term of the applicable agreement. Revenue related to term license performance obligations is generally recognized upfront at the point in time when the customer has taken control of the software license.

Subscription arrangements generally have a term ofthree years and are non-cancellable. The Company typically invoices the customer in advance and in annual installments.

Services and Other Revenue

Services and other revenue consist primarily of fees from professional services provided to customers and partners to configure and optimize the use of the Company’s solutions as well as non-subscription training services. The Company’s professional services are structured on a time-and-materials or fixed priced basis and the related revenue is recognized as the services are rendered. For time-and-material contracts, as the invoiced amount corresponds directly with the value to the customer, the Company applied the practical expedient to recognize revenue in the amount for which it has the right to invoice. For fixed price contracts, the Company uses a cost-based input method as the measure of progress toward satisfying the performance obligation.

Services and other revenue also consists of perpetual licenses that provide customers with the same functionality as term licenses but differs primarily in duration of the license. Revenues from license performance obligations are generally recognized upfront at the point in time when the customer has taken control of the software license. All license transactions include maintenance and support performance obligations, which are recognized as subscription revenue. For the year ended January 31, 2026, the Company has begun presenting perpetual license revenue as part of services and other revenue due to amounts no longer being significant and has recast prior year amounts accordingly.

Contracts with Multiple Performance Obligations

The majority of the Company’s contracts with its customers include various combinations of licenses, subscriptions and professional services. The Company accounts for individual performance obligations separately if they are distinct from other promises in the contract. If not considered distinct, the promised goods or services are combined with other goods or services and accounted for as a combined performance obligation. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis.

Judgment is required to determine the SSP for each distinct performance obligation. The Company typically determines SSP based on observable prices for performance obligations when sold separately. When such observable prices are not available, the Company estimates SSP based on pricing objectives, market conditions and other factors, including customer size and geography, and product and service specific factors.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to invoicing and payment will become due solely based on the passage of time. A contract asset results when revenue is recognized prior to invoicing and payment is contingent upon transfer of control of another separate performance obligation. Deferred revenue is recorded when payment is received prior to the recognition of revenue. Contract assets and deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining balance of deferred revenue is recorded as non-current.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days from the date of invoice. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts generally do not include a significant financing component.

Sales commissions paid to the Company’s sales force and the related employer payroll taxes, collectively “contract acquisition costs,” are considered incremental and recoverable costs of obtaining a contract with a customer. The Company defers these costs and amortizes them over the expected period of benefit provided. The Company typically pays sales commissions for both initial and follow-on sales of term subscriptions and SaaS subscriptions. Commissions for subscriptions are amortized over the expected period of benefit which the Company has determined to be five years. Commissions for renewals of subscription offerings are amortized over each renewal’s expected period of benefit. The Company determines the period of benefit by taking into consideration customer contracts, customer turnover rates, the life of the Company’s technology and other factors.

The portion of contract acquisition costs that the Company anticipates will be recognized within twelve months is recorded as current contract acquisition costs and the remaining portion is recorded as non-current contract acquisition costs in the consolidated balance sheets. Amortization of contract acquisition costs is included in sales and marketing expenses in the accompanying consolidated statements of operations.

Cost of Subscription Revenue. Cost of subscription revenue consists primarily of employee-based costs (which consists of salaries, benefits, bonuses, and equity-based compensation and allocated overhead) of the customer support organization, contractor costs to supplement staff levels, amortization expense for developed technology acquired, amortization expense for capitalized software development costs, third party royalties, facilities costs and third-party cloud-based hosting costs.

Cost of Services and Other Revenue. Cost of services and other revenue consists primarily of (1) employee-based costs of professional services and training organizations, travel-related costs, facilities costs and contractor costs to supplement staff levels; and (2) amortization expense for developed technology acquired, and third-party royalties related to perpetual licenses. For the year ended January 31, 2026, the Company has begun presenting cost of perpetual license revenue as part of cost of services and other revenue due to amounts no longer being significant and has recast prior year amounts accordingly.

Research and Development Expenses

Research and development expenses consist primarily of employee-based costs, software and hosting arrangement expenses, professional services expense, and amortization expense for acquired intangible assets.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of personnel costs (which includes commissions) and the related overhead costs to support the Company’s staff, costs for events and travel, costs of general marketing and promotional activities, payment processing fees, and allocated facilities and overhead costs.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs and the related overhead costs to support the Company’s staff across the corporate functions of executive, finance, human resources, information technology, internal operations and legal, as well as third-party professional fees, bad debt expense, travel and facilities costs.

Advertising Expenses

Advertising costs are expensed as incurred and are included in sales and marketing expense. Advertising expenses were approximately $33.4 million, $25.5 million, and $22.3 million for the years ended January 31, 2026, 2025, and 2024, respectively.

Redeemable Convertible Units

The Class A and Class B Units are classified as mezzanine equity and outside of Partners’ deficit because they include a redemption provision upon a sale or reorganization, which are deemed liquidation events that are considered outside of the Company’s control. The Class A and Class B Units were recorded at the original issue price. The Company adjusted the carrying values of the Class A and Class B Units to the redemption value that represents the fair value associated with such deemed liquidation events as the closing of the IPO was considered probable as of January 31, 2025. See Note 12 for additional information.

Certain of the Class A and Class B Units issued pursuant to individual equity agreements contain repurchase provisions allowing for the repurchase of such units, generally at fair value, at the Company’s option upon the unitholders’ termination of services to the Company. Subsequent adjustments to increase or decrease the carrying values to their respective redemption values are to be made only if and when the redemption event becomes probable. Increases to the carrying value of redeemable convertible units recognized are charged to retained earnings, or in the absence of retained earnings, to additional paid in capital, or in the absence of additional paid in capital, to accumulated deficit.

Equity-Based Compensation

Post-IPO

Since the IPO, the Company predominantly grants service-based restricted stock units (“RSUs”) to employees, directors, and nonemployees. The Company recognizes equity-based compensation expense for its awards on a straight-line basis over the requisite service period of the individual grants, which is generally the vesting period, based on the estimated grant date fair values. The fair value of RSUs is estimated on the date of grant based on the fair value of the Company’s common stock. The Company recognizes the effect of forfeitures in equity-based compensation expense based on actual forfeitures when they occur.

Pre-IPO

During the years ended January 31, 2025 and 2024, service-based and performance based incentive units were granted to employees, directors, and non-employees. Equity-based compensation costs for granted units are recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period for awards with only a service condition. For units subject to performance conditions, the Company records expense based on the accelerated attribution method when the performance condition becomes probable. The Company recognizes the effect of forfeitures in equity-based compensation expense based on actual forfeitures when they occur.

The fair value of the units underlying the incentive awards had been determined by the Board of Managers (the “Board”), with input from management and contemporaneous third-party valuations, as there was no public market for the Company’s units. Given the absence of a public trading market, and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, the Board exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of the units at each option grant date using an option pricing method. The Company makes assumptions to determine the fair value of the units, including the value of the Company, expected time to liquidity, and expected volatility.

The Company adjusted the carrying value of the vested and unvested incentive units to the redemption value as the closing of the IPO was considered probable as of January 31, 2025. The redemption value is equal to the fair value of the Class B Units for the proportion of service provided for the award as of January 31, 2025. Increases to the carrying value of the incentive units are charged to retained earnings, or in the absence of retained earnings, to additional paid in capital, or in the absence of additional paid in capital, to accumulated deficit.

Foreign Currency

The Company manages its foreign subsidiaries as integral direct components of its operations. The Company has determined that its functional currency is the U.S. dollar. The Company periodically assesses the applicability of the U.S. dollar as the Company’s functional currency by reviewing the salient indicators as indicated in the authoritative guidance for foreign currency matters. Assets and liabilities denominated in other currencies are remeasured into U.S. dollars at current exchange rates for monetary assets and liabilities and at historical exchange rates for non-monetary assets and liabilities. Revenue and expense incurred in other currencies are remeasured into U.S. dollars when incurred. Remeasurement losses in currencies other than the functional currency were $2.5 million, $3.8 million and $2.9 million in January 31, 2026, 2025 and 2024, respectively.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.

Deferred income tax assets are reduced by a valuation allowance when, considering all sources of taxable income, in the opinion of management, it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Accordingly, the need to establish such allowance is assessed periodically by considering matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. The evaluation of recoverability of the deferred tax assets requires the Company to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The Company accounts for uncertainty of income taxes based on a “more-likely-than-not” threshold for the recognition and de-recognition of tax positions, which includes the accounting for interest and penalties relating to tax positions. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, solely based on its technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority.

Leases

The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the assets’ economic benefits. The Company’s non-cancelable operating lease agreements are primarily for facilities.

Right-of-use (“ROU”) assets and lease liabilities are recognized upon lease commencement at the present value of future lease payments. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets include adjustments related to lease incentives, and upfront lease payments. ROU assets are subject to evaluation for impairment or disposal on a basis consistent with other long-lived assets.

The implicit rates within the operating leases are generally not determinable and therefore the Company uses the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The lease term includes the non-cancelable period of the lease plus any additional periods covered by an option to extend that the Company is reasonably certain to exercise. Lease expense is recognized on a straight-line basis over the lease term. The Company does not recognize right-of-use assets and lease liabilities for leases with a term of twelve months or less.

The Company accounts for lease agreements with lease and non-lease components as a single lease component. The Company’s non-lease components are primarily related to property taxes, insurance and maintenance costs, which are typically variable in nature, and are expensed in the period incurred.

Net Loss Per Share/Unit Attributable to Common Stockholders

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without the consideration of potential dilutive common shares.

For purposes of calculating net loss per share attributable to common stockholders for the year ended January 31, 2026 (during which a portion of the period preceded the IPO), the Company retrospectively applied the effects of the Corporate Conversion to the Class B Units. The Class B Units were included in the net loss per share calculations. For the periods that preceded the IPO and Corporate Conversion, the weighted-average number of common shares / units outstanding excludes the common stock sold in the IPO and the Class A Units outstanding. The Company calculated the net loss attributable to common stockholders by adjusting the net loss to include the yield earned by the Class A Units through the Corporate Conversion. The Company did not retrospectively adjust for the effect of the Corporate Conversion for periods prior to fiscal year 2026.

For the year ended January 31, 2025, the Class A yield included $644.2 million of yield earned during the period and a deemed dividend of $120.4 million. The deemed dividend primarily represents the difference between the proceeds received by the Company and the fair value of the units issued to Thoma Bravo in December 2024. Refer to Note 11 for further details regarding the Class A yield.

Dilutive net loss per share and per unit is computed by giving effect to all of the Company’s potential common shares outstanding to the extent the potential shares are dilutive. Basic and diluted net loss per share and per unit was the same, and the inclusion of all potential shares and per unit of the Company’s common stock would have been anti-dilutive. As of January 31, 2026, there was 12.1 million of unvested restricted stock units and restricted stock that could have potentially diluted basic EPS in the future that were not included in the computation of diluted EPS. Prior to the Company's IPO and as of January 31, 2025 and 2024, there were 3.9 million and 5.7 million, respectively, of unvested incentive units that would have potentially diluted basic EPS in the future that were not included in the computation of diluted EPS.

Recently Adopted Accounting Pronouncements

Accounting Standards Update 2023-09

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, (“ASU 2023-09”), which requires public business entities on an annual basis to disclose specific categories in a tabular rate reconciliation and provide additional information for reconciling items that meet a five percent quantitative threshold. Additionally, the ASU requires all entities to disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes, as well as individual jurisdictions where income taxes paid are equal to or greater than five percent of total income taxes paid. The Company adopted this standard on a prospective basis and it did not have a material impact on its consolidated financial statements other than expanded income tax disclosures.

Accounting Standards Update 2023-07

In November 2023, the FASB issued ASU-2023-07, Improvements to Reportable Segment Disclosures, (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted. Adoption of ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted this standard on a retrospective basis and did not have a material impact on its consolidated financial statements or disclosures. Refer to Note 15 for further details.

Recently Issued Accounting Standards Not Yet Adopted

Accounting Standards Update 2025-06

In September 2025, the FASB issued ASU-2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software("ASU 2025-06"), which amends the guidance in ASC 350-40, Intangibles—Goodwill and Other—Internal-Use Software. The amendments modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements and related disclosures.

Accounting Standards Update 2025-05

In July 2025, the FASB issued ASU-2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), which amends Topic 326 to provide a practical expedient and an accounting policy election related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Specifically, in developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively. The Company is currently evaluating the impact and doesnot expect the adoption of this standard to have a material impact on its consolidated financial statements or disclosures.

Accounting Standards Update 2024-03

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. ASU 2024-03 should be applied on a prospective basis, with a retrospective application permitted in the financial statements. The Company is currently evaluating the impact of the new standard on its consolidated financial statements and related disclosures.

2. Revenue Recognition

Disaggregation of Revenue

The following table presents the Company’s revenue disaggregated by subscription product categories (in thousands):

The following table summarizes the revenue the Company recognizes at a point in time and over time (in thousands):

A summary of the activity impacting contract acquisition costs is presented below (in thousands):

There wereno material impairments of contract acquisition costs for the years ended January 31, 2026, 2025, and 2024.

Contract Balances

Contract liabilities consist of deferred revenue and include payments received in advance of revenue recognition under the Company’s contracts with customers. Revenue recognized during the reporting periods that was previously deferred was$413.7 million and $339.6 million, and $272.3 million, for the years ended January 31, 2026, 2025, and 2024, respectively.

Remaining Performance Obligations

The Company’s contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. These remaining performance obligations represent contract value that has not yet been recognized as revenue. Remaining performance obligations includes both invoices that have been issued to customers but have not been recognized as revenues and amounts that will be invoiced and recognized as revenue in future periods. As of January 31, 2026, remaining performance obligations were$1.8 billion, of which the Company expects to recognize$857.8 million as revenue over the next 12 months.

3. Allowance for Expected Credit Losses

The following tables present the changes in the allowance for expected credit losses for accounts receivable measured at amortized cost (in thousands):

The following tables present the changes in the allowance for expected credit losses for contract assets measured at amortized cost (in thousands):

4. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present information about the Company’s financial assets that are measured at fair value on a recurring basis (in thousands):

The Company’s carrying amounts of financial instruments, including cash, accounts receivable, accounts payable, and accrued expenses are considered Level 1 and approximate their fair values due to their short maturities as of January 31, 2026 and January 31, 2025 and are excluded from the fair value tables above. The carrying value of debt at January 31, 2025 is considered Level 1 and approximates fair value.

The Company measured the fair value of the contingent consideration associated with its Imprivata acquisition on a recurring basis using significant unobservable inputs, classified as Level 3. The Company recorded the contingent consideration at its fair value on the acquisition date. The Company determined the fair value of contingent consideration using a probability weighted discounted cash flow method. Each reporting period thereafter, the obligation is revalued and changes in its fair values are recorded within sales and marketing expenses within the consolidated statements of operations. Changes in the fair value of the contingent consideration can result from changes in assumed discount periods and rates and from changes pertaining to the estimated or actual achievement of the defined milestones. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions described above, can materially impact the fair value and corresponding changes in fair value of the contingent consideration the Company records in any given period.

During the year ended January 31, 2026, the Company remeasured the fair value of the contingent consideration associated with the Imprivata acquisition of $5.7 million reported as of January 31, 2025. This remeasurement resulted in a $1.6 million increase to the obligation, with the additional expense recorded in sales and marketing expenses within the consolidated statements of operations for the year ended January 31, 2026. The fair value of the contingent consideration was determined using a 99% probability of achievement with no additional discount rate due to the short-term expected timing of payment. The contingent consideration balance of $7.3 million was fully settled during August 2025.

The estimated fair value of the contingent consideration associated with the Imprivata acquisition was determined with the following key inputs:

The estimated fair value of the contingent consideration of $0.2 million associated with the Savvy Security Ltd. acquisition was determined using a 100% probability of achievement as of December 31, 2025 and as of the acquisition date. Prior to January 31, 2026, the contingency was satisfied and the liability was fully settled. See Note 5 for additional information on the Savvy acquisition.

There were no transfers between fair value measurement levels during the period ended January 31, 2026 and January 31, 2025.

5. Acquisitions

Asset Acquisitions

Security Savvy Ltd

On September 15, 2025, the Company acquired certain assets of Security Savvy Ltd, a third-party software as a service ("SaaS") security platform that helps organizations manage identity-related risks associated with their SaaS applications, for $18.4 million, which includes $0.5 million in direct transaction costs that were capitalized as a component of the consideration transferred. The transaction was accounted for as an asset acquisition and substantially all of the acquired assets consisted of developed technology. The purchase price includes a holdback amount of $1.8 million to be paid 12 months from the date of closing subject to the resolution of certain indemnities. The purchase price also includes a contingent consideration of $0.2 million, which the Company was required to pay if it were to obtain the assignment of a specific customer contract by December 31, 2025. See Note 4 for additional information on the fair value of the contingent consideration as of the acquisition date. On October 31, 2025, the Company obtained the assignment of the remaining customer contract and satisfied the contingency. During November 2025, the Company fully settled a liability of $0.2 million, associated with the acquisition.

The purchase price consideration was allocated to a developed technology intangible asset of $18.2 million based on the replacement cost method and assembled workforce intangible of $0.5 million, with useful lives of 6 years and 3 years, respectively. Approximately $0.3 million was allocated to deferred revenue, current and $0.1 million to accounts receivable.

Imprivata

On December 13, 2024, the Company acquired the Identity Governance and Administration business of Imprivata, a digital identity company for life- and mission-critical industries that is majority owned by Thoma Bravo, for a cash payment at closing of $10.7 million and up to an additional cash amount of $7.4 million related to contingent consideration subject tothe achievement of certain customer contract assignments or migrations. The contingent consideration was initially recorded in the consolidated balance sheets in accrued expenses and other liabilities at a fair value of $5.7 million. The revised fair value of the contingent consideration of $7.3 million was settled in August 2025. See Note 4 “Fair Value Measurements” for additional information on the fair value of the contingent consideration.

The fair value estimates and assumptions regarding certain tangible assets acquired and liabilities assumed and the valuation of intangible assets acquired are subject to change as additional information is obtained during the measurement period. The goodwill arising from the acquisition is deductible for tax purposes.

The fair value of the developed technology was estimated using a market approach. The fair value of customer relationships was estimated using the excess earnings method. The following table presents the fair values and useful lives of the identifiable intangible assets acquired:

Double Zero

On April 9, 2024 (“Acquisition Date”), the Company acquired all of the outstanding stock of Double Zero Security, Inc. (“Double Zero”), a third-party provider of digital-identity threat detection and response for secure enterprise access. The aggregate consideration transferred in connection with this acquisition was $5.4 million, net of cash acquired, and $0.8 million was related to certain indemnities (the "Holdback Consideration"). The Company paid $0.1 million of the Holdback Consideration 60 days after the Acquisition Date and the remaining Holdback Consideration of $0.7 million was paid in April 2025.

The fair value of the developed technology was estimated using a market approach. The following table presents the estimated fair values and useful lives of the identifiable intangible assets acquired:

Osirium

On October 30, 2023, the Company acquired all of the outstanding stock of Osirium Technologies PLC (“Osirium”), a SaaS company delivering privileged access management, privileged endpoint management, and IT process automation solutions. The aggregate consideration paid in connection with this acquisition was $8.2 million, net of cash acquired.

The fair value of the developed technology was estimated using a market approach.

The following table presents the fair values and useful lives of the identifiable intangible assets acquired:

Additional Business Combination Related Information

The operating results of the acquired companies are included in the Company’s consolidated statements of operations from the respective dates of acquisition. Pro forma results of operations have not been presented because the effects of these acquisitions, individually and in the aggregate, were not material to the Company’s consolidated statements of operations.

The Company believes that for each business combination, the acquired companies will provide opportunities for growth through investing in additional products and capabilities, among other factors. This contributed to a purchase price in excess of the estimated fair value of each acquired company’s net identifiable assets acquired and, as a result, goodwill was recorded in connection with each acquisition. Unless otherwise noted above, goodwill arising from these acquisitions is not deductible for tax purposes.

6. Goodwill and Intangible Assets

Goodwill

As of January 31, 2026 and 2025, goodwill was $5.2 billion. No goodwill measurement adjustments were recorded during the years ended January 31, 2026 and 2025. No goodwill impairments were recorded during the years ended January 31, 2026, 2025, and 2024

Intangible Assets

Total cost and amortization of intangible assets comprised of the following:

Total accumulated amortization of intangible assets is comprised of the following (in thousands):

There wereno impairments for intangible assets during the years ended January 31, 2026, 2025 and 2024.

Amortization expense for the periods presented was as follows (in thousands):

The total estimated future amortization expense of intangible assets as of January 31, 2026 is as follows (in thousands):

7. Leases

As of January 31, 2026, the Company’s leases, primarily relating to office leases, have remaining lease terms of less than 1 year to 4 years. Certain leases include early termination and/or extension options; however, exercises of these options are at the Company’s sole discretion. As of January 31, 2026, the Company determined it is not reasonably certain it will exercise the options to extend its leases or terminate them early. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of January 31, 2026 and 2025, the Company had no financing leases.

The Company measures its lease liabilities at the net present value of the remaining lease payments. The Company’s incremental borrowing rate is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located.

As of January 31, 2026 and 2025, the Company’s weighted-average discount rate was 9.15%, and 9.26%, respectively.

As of January 31, 2026 and 2025, the Company’s weighted-average remaining lease term was 3.2 years and 4.1 years, respectively.

Operating lease costs for the periods presented were as follows (in thousands):

The undiscounted annual future minimum lease payments are summarized by year in the table below (in thousands):

8. Commitments and Contingencies

As of January 31, 2026, the Company had in aggregate $196.3 million in contractual purchase commitments associated with agreements that are enforceable and legally binding, of which $113.4 million are due within the next 12 months.

Such amounts do not include obligations under contracts that the Company can cancel without significant penalty or purchase orders as the purchase orders represent authorizations to purchase rather than binding agreements.

Included in the aggregate contractual purchase commitments as of January 31, 2026 is the remaining commitment with a cloud storage provider that has a term of July 2023 through June 2028. Under the terms of the agreement, the Company committed to spend $54.0 million, $59.0 million, $62.0 million, $65.0 million, and $67.5 million in contract years one, two, three, four, and five, respectively, for a total of $307.5 million. If the Company does not meet the minimum purchase obligation during any of those years, it will be required to pay the difference. The Company met the minimum spend requirements for years one, two and three, As of January 31, 2026, the Company has made payments of $177.0 million under the agreement. On February 1, 2026, a new amendment to the agreement was entered with the cloud storage provider, which terminated the previous arrangement. The new arrangement has a term of February 1, 2026 through January 31, 2031. Under the terms of the new arrangement the Company committed to spend $107.0 million, $127.0 million, $147.0 million, $162.0 million and $178.0 million in contract years one, two, three, four and five, respectively, for a total of $721.0 million. If the Company does not meet the minimum purchase obligation during any of those years, it will be required to pay the difference.

Indemnification Arrangements

In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to customers, business partners and other parties with respect to certain matters, including, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties, and other liabilities with respect to the Company’s products and services and business. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in a particular contract. The Company includes service level commitments to the Company’s cloud customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event that the Company fails to meet those levels.

To date, the Company has not incurred any material costs as a result of these commitments, and the Company expects the time between any potential claims and issuance of the credits to be short. As a result, the Company has not accrued any liabilities related to these commitments in the Company’s consolidated financial statements.

Litigation Claims and Assessments

The Company is subject to claims and suits that may arise from time to time in the ordinary course of business. In addition, some legal actions, claims and governmental inquiries may be instituted or asserted in the future against the Company and its subsidiaries. Although the outcome of these legal proceedings cannot be predicted with certainty and no assurances can be provided, based upon current information, the Company does not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on the Company’s consolidated financial statements.

9. Credit Agreement and Debt

2025 Credit Agreement

On June 25, 2025, the Company entered into a credit agreement (the "2025 Credit Agreement") that provides for afive-year $250.0 million secured revolving credit facility, including a letter of credit sub-facility of up to $10.0 million (the "2025 Revolving Credit Facility"). The 2025 Revolving Credit Facility matures on June 25, 2030. The Company incurred deferred financing costs of $2.7 million related to the issuance of the 2025 Credit Agreement, which are included in other non-current assets on the accompanying consolidated balance sheets. These costs are being amortized to interest expense over the life of the 2025 Credit Agreement on a straight-line basis. Amortization of deferred financing costs related to the 2025 Credit Agreement was$0.3 millionfor theyear ended January 31, 2026.

Pursuant to the 2025 Credit Agreement, the Company can obtain base rate loans, which bear interest at a Base Rate (as defined in the 2025 Credit Agreement) plus a margin ranging from 0.50% to 1.50%, depending on the First Lien Net Leverage Ratio (as defined in the 2025 Credit Agreement), or term SOFR loans, which bear interest at a rate equal to Term SOFR (as defined in the 2025 Credit Agreement) plus a margin ranging from 1.50% to 2.50%, depending on the First Lien Net Leverage Ratio. The Company will incur commitment fees at rates ranging from 0.175% to 0.375% per annum, depending on the First Lien Net Leverage Ratio, on the unused portion of the lender commitments. The Company will also pay customary letter of credit fees, including a fronting fee equal to 0.125% per annum of the daily maximum amount then available to be drawn under such letters of credit, as well as customary issuance and administration fees. The fees were $0.3 million for the year ended January 31, 2026 and are recorded as interest expense on the consolidated statements of operations.

The 2025 Credit Agreement contains customary representations and warranties, events of default, and various affirmative and negative covenants, including financial reporting requirements and limitations on liens, investments (including acquisitions), indebtedness, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments and transactions with affiliates. The Company is subject to quarterly financial covenants relating to maintaining a Total Net Leverage Ratio (as defined in the 2025 Credit Agreement) of generally not more than 4.00 to 1.00 (which may be increased to 4.50 to 1.00 for a limited period in the event a material acquisition is consummated). The Company was in compliance with all applicable covenants as of January 31, 2026.

All obligations under the 2025 Revolving Credit Facility are unconditionally guaranteed by the Company and each Restricted Subsidiary other than any Excluded Subsidiary (each, as defined in the 2025 Credit Agreement) and are supported by a security interest in substantially all of the borrowers' and guarantors' tangible and intangible assets (subject to permitted liens).

The Company may voluntarily repay and reborrow outstanding loans under the 2025 Revolving Credit Facility at any time without a premium or a penalty. The Company hadno outstanding 2025 Revolving Credit Facility balance as of January 31, 2026.

2022 Credit Agreement

On August 16, 2022, the Company entered into a Credit Agreement (the "2022 Credit Agreement") that provides for (i) asix-year $125.0 million senior secured revolving credit facility, including a letter of credit sub-facility of up to $5.0 million (the “2022 Revolving Credit Facility”) and (ii) aseven-year $1.59 billion term loan facility (the “Term Loans”). The 2022 Revolving Credit Facility had a maturity date in August 2028, and the Term Loans had a maturity date in August 2029. After the closing of the IPO, the Company fully repaid its Term Loans and recorded an extinguishment of debt related to the remaining balance of its deferred financing costs of $15.3 million, which is recorded within interest expense on the consolidated statement of operations.

On June 25, 2025, the 2022 Credit Agreement was terminated upon the closing of the 2025 Credit Agreement. The remaining unamortized deferred financing costs of $1.4 million for the 2022 Revolving Credit Facility was recorded as a loss from extinguishment of debt and included in interest expense on the consolidated statements of operations. Amortization of debt issuance costs, excluding the loss from extinguishment of debt, was $0.5 million, $4.4 million, and$4.2 million for the years ended January 31, 2026, 2025, and 2024, respectively.

The net carrying amount of the Term Loans is presented as follows (in thousands):

Total interest expense recognized related to the Term Loans for the year ended January 31, 2026,2025, and 2024 was$22.3 million, $186.2 million, and$186.6 million, respectively, consisting of contractual interest expense of$6.7 million, amortization of debt issuance costs of $0.2 million and $15.3 million loss from the extinguishment of debt forthe year ended January 31, 2026, contractual interest expense of$174.0 million, amortization of debt issuance costs of $3.9 million and $8.3 million loss from the extinguishment of debt for the year ended January 31, 2025, and contractual interest expense of$182.9 million and amortization of debt issuance costs of $3.7 million for the year ended January 31, 2024.

10. Related Party Transactions

The Company is an affiliate of Thoma Bravo. The Company engaged in ordinary sales transactions of $2.0 million, $0.8 million, and $1.0 million and ordinary purchase transactions of $2.7 million, $2.1 million and $2.1 million for the years ended January 31, 2026,2025, and 2024, respectively, with entities affiliated with Thoma Bravo.

The Company made payments of $9.3 million, $7.5 million, and $11.3 million under its advisory services agreement with Thoma Bravo for consultation and advice related to corporate strategy, budgeting of future corporate investments, acquisition and divestiture strategies, and debt and equity financings during the years ended January 31, 2026, 2025, and 2024, respectively. The Company expensed $0.6 million, $15.0 million, and $15.0 million during the years ended January 31, 2026,

2025, and 2024 respectively, which is included in general and administrative expenses in the Company’s consolidated statements of operations. In conjunction with the closing of the IPO, the Company settled all outstanding fees of $9.3 million payable to Thoma Bravo and its advisory services agreement was terminated.

On December 13, 2024, the Company acquired Imprivata, which is majority owned by Thoma Bravo, See Note 5 for additional information.

On December 23, 2024, SailPoint Parent, LP entered into a purchase agreement with Thoma Bravo, pursuant to which Thoma Bravo purchased Class A Units and Class B Units for an aggregate purchase price of $600.0 million. In addition, on January 7, 2025, in connection with Thoma Bravo’s purchase, certain of the Company’s directors and other equityholders exercised their preemptive rights under our partnership agreement and purchased Class A Units and Class B Units for an aggregate purchase price of approximately $0.3 million. The Company used $575.0 million of the proceeds from such transaction to repay $550.0 million and $25.0 million of the Term Loan and Revolving Credit Facility (which was drawn down by the Company on November 8, 2024), respectively, with the remainder planned for general corporate purposes.

Under the terms of the 2022 Credit Agreement, an entity affiliated with Thoma Bravo provided $50.0 million of the Term Loans as part of the syndicate of lenders on August 16, 2022. As a result, the Company made interest paym ents of $1.2 million, $4.8 million, and $5.7 million for theyears ended January 31, 2026,2025, and 2024, respectively, and incurred interest expense of $0.7 million, $5.9 million, and $5.9 million to the affiliate of Thoma Bravo for the years ended January 31, 2026,2025, and 2024, respectively. The remaining principal balance owed to the affiliate of Thoma Bravo was fully repaid upon the repayment of the Company's Term Loans.

11. Stockholders' Equity / Partners' Deficit

Stockholders’ Equity

As a result of the Corporate Conversion, the Company succeeded to all of SailPoint, Inc's property, assets, debt, and obligations. The Company’s authorized capital stock consists of 1,750,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of undesignated preferred stock, par value $0.0001 per share. The issued and outstanding shares of common stock disclosed on the consolidated balance sheet include all legally outstanding shares, including restricted stock awards ("RSAs").

Each outstanding share of common stock is entitled toone vote on all matters submitted to a vote of stockholders. Holders of shares of our common stock have no cumulative voting rights and are not entitled to dividends unless declared by the Board of Directors (the “Board”). The Company’s common stock is neither convertible nor redeemable.

No preferred stock has been issued and is outstanding as of January 31, 2026.

Partners’ Equity

The Company operated under the terms and conditions of the Second Amended and Restated Limited Partnership Agreement of SailPoint Parent, LP dated December 23, 2024 (the “Partnership Agreement”). Excluding the effects of the Corporate Conversion, there were no significant changes to the Partnership Agreement and terms related to the Class A Units and Class B Units since January 31, 2025. In conjunction with the Corporate Conversion, all of the Company's outstanding partnership units were converted into shares of common stock. The Corporate Conversion is discussed further in Note 1.

Redeemable Convertible Units

There are no redeemable convertible units outstanding as of January 31, 2026. Redeemable convertible units consisted of the following as of January 31, 2025:

(1) The net carrying value includes the redemption value of unvested incentive units that will convert to Class B Units.

The cumulative unpaid Class A yield earned was $1.5 billion as of January 31, 2025. The cumulative unpaid Class A yield earned per unit was $3.66 as of January 31, 2025.

The cumulative Class A yield earned upon the Corporate Conversion was $1.5 billion as of the date of the Corporate Conversion. The cumulative unpaid Class A yield earned per unit was $3.72 as of the date of the Corporate Conversion.

The issued and outstanding units disclosed on the consolidated balance sheet includes all legally outstanding units, which are different from the number of units considered outstanding in the table above. The number of units outstanding in the table above excludes unvested incentive units, which are not outstanding under GAAP until the vesting condition is met.

The following are the relevant terms related to the Class A and Class B Units:

Class A Yield

The Class A unitholders were entitled to a cumulative preferred return at the per annum rate of 9% (“Class A Yield”), compounded on a quarterly basis, on the sum of unpaid yield (“Unpaid Yield”) plus unreturned capital (“Unreturned Capital”). Unpaid Yield represented the amount equal to the excess of the aggregate Class A Yield accrued on such Class A Units for all prior periods, over the aggregate amount of prior distributions made by the Company related to such Class A Yield. Unreturned Capital is the aggregate contributions made in exchange for Class A Units reduced by distributions made by the Company to such unitholders for all prior periods.

At each reporting date, the Company evaluated whether the Class A Units were considered currently redeemable or probable of becoming redeemable upon a deemed liquidation event. The Company did not record the cumulative yield in the consolidated financial statements until the Company determined that such units were probable of becoming redeemable. As of January 31, 2025, the Class A and Class B Units were currently redeemable as the deemed liquidation events that would give rise to the redemption of the units were considered probable. The Board had the ability, in its discretion, to make distributions at any time or from time to time.

Class B Yield

The Class B unitholders are not entitled to any yield or dividend.

Liquidation Rights

The Class A unitholders were entitled to liquidation preference over Class B unitholders. The distribution would first be made to settle Unpaid Yield, and then to settle Unreturned Capital. Any remaining amounts was to be distributed pro rata among holders of Class B Units based on the outstanding Class B Units held at the time of such distribution. Therefore, all Class A unitholders had first priority with regard to any distributions made by the Company to its unitholders. The Class B unitholders then had the residual interests in the Company.

Redemption Rights

In accordance with the terms and conditions of the Partnership Agreement, the Class A and Class B Units were contingently redeemable upon occurrence of a sale or reorganization, which were deemed liquidation events that were considered outside of the Company’s control. Upon redemption, each Class A and Class B unitholder would receive in exchange for each unit, the same cash value of consideration and the same portion of the aggregate consideration as if a liquidation event occurred and a distribution was made pursuant to the liquidation rights. As of January 31, 2025, the Class A Units and Class B Units were considered redeemable as the closing of the IPO was considered probable. The Company recognized the increase to the redemption value of both Class A and Class B units as a charge to its additional paid in capital and accumulated deficit.

Repurchase Rights

In accordance with the terms and conditions of certain investor agreements, Co-Invest Agreements, or other incentive unit agreements entered into between the Company and its unitholders, the Class A and Class B Units were subject to repurchase at the election of the Company, Thoma Bravo, or another related party upon the unitholder’s termination or in connection with a sale of the Company. The repurchase price for each Class A Unit was the fair market value of such unit as of the date of repurchase; provided, however, that if the unitholder was terminated for cause, the repurchase price shall be the lesser of the unitholder’s original cost for such unit and the fair market value of such unit. The repurchase price for each Class B Unit was the fair market value of such unit as of the date of repurchase.

Conversion Rights

The Class A and Class B Units were contingently convertible upon occurrence of a reorganization in anticipation of a public offering. In connection with such event, the Board would determine what securities or other property the units would be converted to or exchanged for.

Voting Rights

The majority of the Class A and Class B Units were owned by funds managed by Thoma Bravo (“TB Funds”). TB Funds had control of the Board through their election rights, and the TB Funds also had certain approval rights as defined within Partnership Agreement including, but not limited to authorizing any distributions upon any securities of the Company and authorizing the issuance of any notes or debt securities.

12. Equity-Based Compensation

SailPoint Parent, LP Incentive Equity Plan

Prior to the IPO, the Company had the SailPoint Parent, LP Incentive Equity Plan (the “Plan”) and the SailPoint Parent, LP Co-Invest Agreement (the “Co-Invest Agreement”) to incentivize employees and to align the employees and management with the owners of the business.

The Plan provided for the grant of options, profits interest, equity appreciation rights and other forms of awards to employees and non-employees granted or denominated in units of SailPoint Parent, LP. Under the Plan,10,972 million Class B Units (“Incentive Units”) were reserved for issuance. The Plan allowed for awards to generally vest over four years based on continued service to the Company and/or its affiliates. Equity-based compensation costs for granted units were recognized as expense on a straight-line basis over the requisite service period as the services performed.

The Co-Invest Agreement offered employees the one-time opportunity to co-invest in the Company by purchasing units directly from the Company for cash. Under the Co-Invest Agreement, the purchase price was $16.42 for one Class A Unit and a number of Class B Units, based on a ratio of one Class A Unit to 0.2185 Class B Units. The Company determined the Co-Invest Agreement was not compensatory in nature as the terms are no more favorable than those available to all holders of the same class of equity, therefore it did not give rise to recognizable compensation cost.

As of January 31, 2025, the Incentive Units were considered redeemable as the closing of the IPO was considered probable. The Company also granted equity appreciation rights awards under the Plan that are required to be settled in cash. The awards were classified as liabilities and were remeasured each reporting period. The liability is included in other long-term liabilities on the consolidated balance sheets and is included in the consolidated statement of operations as equity-based compensation expense.

Cash-Settled Awards

As of January 31, 2025, the total unrecognized compensation expense related to non-vested cash-settled awards granted is $41.7 million and is expected to be recognized over a weighted average period of 1.1 years.

Impact of the IPO

On January 31, 2025, the Board approved modifications to accelerate the vesting of certain incentive units, equity appreciation rights (“EARs”), and cash settled awards subject to the pricing and closing of the IPO. Prior to the Corporate

Conversion, the Company modified 3,036,888 incentive units and 377,077 EARs. Upon the IPO, the vested incentive units were considered redeemable. As a result of the modifications and the closing of the IPO, the Company recognized $113.8 million of equity-based compensation expense in the consolidated statement of operations, which was comprised of $61.5 million, $12.6 million, and $39.8 million of expense for the modified incentive units, EARs, and cash settled awards, respectively. Additionally, the Company settled the vested EARs and cash settled awards, paying $75.2 million. As of January 31, 2026, the outstanding cash awards remaining to be settled were not significant.

In addition, the Company cancelled and replaced the unvested incentive units and EARs with grants of RSAs and RSUs, respectively. The Company granted 1,253,536 RSAs and 232,168 RSUs, which are governed by the SailPoint, Inc. Omnibus Incentive Plan (the “Omnibus Plan”). As a result of granting the RSUs, the Company reclassified an insignificant amount for the unvested EARs from other long-term liabilities on the consolidated balance sheets to additional paid in capital.

As of January 31, 2026, there were no outstanding awards under the SailPoint Parent, LP Incentive Equity Plan.

Omnibus Plan

On February 12, 2025, the shareholders and Board approved the Omnibus Plan, which then became effective. The Omnibus Plan provides for the grant of stock options, stock appreciation rights, restricted stock, RSUs, stock awards, dividend equivalents, other stock-based awards, cash awards, and substitute awards intended to align the interests of award holders with those of the Company’s stockholders.

The aggregate number of shares of common stock that may be issued pursuant to the Omnibus Plan is 61,083,763, which shall increase on February 1 of each fiscal year, equal to the lesser of (a)5% of the aggregate number of shares of common stock outstanding on January 31 of the immediately preceding fiscal year and (b) such smaller number of shares as determined by the Board.

The Omnibus Plan primarily allows for awards to vest based on continued service to the Company and/or its affiliates. Equity-based compensation costs for granted awards are recognized as an expense on a straight-line basis over the requisite service period as the services are performed.

Capitalized equity-based compensation expense is recorded as part of property and equipment, net on the consolidated balance sheets and is amortized on a project-by-project basis using the straight-line method.

During the year ended January 31, 2026, the Company granted 19,753,701 RSUs that vest ratably predominantly overtwo tofour years based on continued service to the Company.

As of January 31, 2026, there were a total of 40.8 million shares of common stock available for grant under the Omnibus Plan.

Restricted stock and RSU activity under the Omnibus Plan for the year ended January 31, 2026 was as follows:

The total grant date fair value for vested restricted stock and RSUs were $172.3 million the year ended January 31, 2026. As of January 31, 2026, the total unrecognized stock-based compensation expense related to restricted stock and RSUs was $231.3 million that is expected to be recognized over a weighted-average period of 1.7 years.

During the first quarter of fiscal year 2027, we issued 20,799,064 RSUs to certain of our employees, including executive officers. Stock-based compensation expense is estimated to be $289.7 million and will be recognized over four years based on continued service.

Equity-based Compensation Expense

A summary of the Company’s equity-based compensation expense by award type is presented below (in thousands):

A summary of the Company’s equity-based compensation expense as recognized in the consolidated statements of operations is presented below (in thousands):

13. Balance Sheet Related Items

Property and Equipment

The cost and accumulated depreciation of property and equipment are as follows (in thousands):

Depreciation and amortization expense was $8.7 million, $6.6 million, and $6.6 million for the years ended January 31, 2026, 2025, 2024, respectively.

Prepayments and Other Current Assets and Other Non-Current Assets

Prepayments and other current assets consisted of the following (in thousands):

Other non-current assets consisted of the following (in thousands):

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

Other Long-Term Liabilities

Other long-term liabilities consisted of the following (in thousands):

14. Income Taxes

Provision for income taxes consists of U.S. and state income taxes and income taxes in certain foreign jurisdictions in which the Company conducts business.

The following table presents consolidated loss before income taxes (in thousands):

The provision (benefit) expense for income taxes consisted of the following (in thousands):

The significant components of the Company’s deferred taxes are as follows (in thousands):

As of January 31, 2026, the Company has federal, state and foreign net operating loss carryforwards of $227.3 million, $205.1 million and $31.5 million, respectively. Approximately $0.2 million of the federal net operating loss carryforwards will begin to expire in 2037 and $227.1 million do not expire. The state net operating loss carryforwards will begin to expire in 2029, if not utilized. The foreign net operating losses do not expire.

As of January 31, 2026, the Company has federal and state research and development credit carryforwards of $30.4 million and $8.6 million, respectively. The federal and state research and development credits will begin to expire in 2027 and 2033, respectively, if not utilized.

The Company assessed all available positive and negative evidence to determine whether it expects that sufficient future taxable income will be generated to allow it to realize its existing deferred tax assets. The Company determined that it is more likely than not to realize a portion of the benefits of its U.S. federal and state interest expense carryforward. The Company decreased the valuation allowance to $20.3 million from $32.3 million as of January 31, 2026 and 2025, respectively.

The following table reconciles the Company's effective tax rate to the federal statutory tax rate under the updated requirements of ASU 2023-09.

(1) State taxes in California, New Jersey, Illinois, New York, New York City and District of Columbia made up the majority (greater than 50%) of the tax effect in this category

As previously disclosed for the years January 31, 2025 and 2024, prior to the adoption of ASU 2023-09, the following table reconciles the Company’s effective tax rate to the federal statutory tax rate:

Judgment is required in evaluating the Company’s uncertain tax positions and determining the Company’s provision for income taxes. The reconciliation of unrecognized tax benefits is as follows (in thousands):

Included in the balance of unrecognized tax benefits as of January 31, 2026, 2025, and 2024 is $49.5 million, $48.7 million and $48.6 million, respectively, of tax benefits that, if recognized, would affect the Company’s effective tax rate.

The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. During the years ended January 31, 2026, 2025 and 2024, the Company didnot record any material interest or penalties.

The Company files income tax returns in U.S. federal, state, and foreign jurisdictions. The Company has net operating loss carryforwards and tax credits for the U.S. federal and certain state jurisdictions allowing the statute of limitations to remain open for all years. The foreign jurisdiction’s statute of limitations is closed for tax years before 2022.

Deferred income taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are indefinitely reinvested outside the U.S. Determination of the unrecognized deferred tax liability related to the outside basis difference in investments in the foreign subsidiaries is not practicable. If the Company repatriated its foreign earnings, any deferred income taxes for the estimated U.S. income tax, foreign income tax, and applicable withholding taxes is not material.

15. Segments and Geographic Information

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker, or CODM. The CODM is comprised of the Company's Chief Executive Officer, Chief Financial Officer and President. The Company's CODM reviews financial information presented on a consolidated basis for the purposes of making operating decisions, allocating resources, and evaluating financial performance. Accordingly, the Company determined that it operates inone reportable segment. The CODM utilizes GAAP and non-GAAP measures of profit and loss for evaluating the Company's overall performance and inform resource allocation to support strategic priorities. The profit and loss measure most consistent with GAAP used by the CODM is net loss. Significant expense categories regularly provided to the CODM are those disclosed in the consolidated financial statements and related notes.

The following is a summary of consolidated revenues within geographic areas determined by the billing address of the customer for the periods presented (in thousands):

No single country other than the United States represented more than 10% of the Company's revenue or total long-lived assets.

Substantially all of the Company’s long-lived assets were held in the United States as of January 31, 2026 and 2025.

16. Employee Benefit Plans

The Company has established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a percentage of their annual compensation as defined in the 401(k) Plan. The Company matches portions of employees’ voluntary contributions. Additional employer contributions may also be made at the Company’s discretion. The Company recorded expense of $8.4 million, $7.1 million, and $6.4 million, for the years ended January 31, 2026, 2025, and 2024, respectively, for matching contributions to the 401(k) Plan.