“We expect our diluted share count to be approximately 564 million shares and adjusted EPS to be a loss of $0.01.”

In context

“Brian Carolan (CFO): Thank you, Mark, and good morning, everyone. I'm extremely proud of everything we accomplished over the last couple of years, including our recent return to the public markets while delivering efficient growth at scale. The explosion of data, applications, and the number and type of identities provides a solid foundation for growth, as we believe identity is becoming the center of enterprise security. Building off Mark's three key themes, we believe our results showcase our leadership position, strong competitive advantage, and durable growth profile. We ended fiscal year 2025 with ARR of $877 million, an increase of 29% year-over-year, and with SaaS ARR growing 39% year-over-year. SaaS ARR now represents over 60% of our total ARR. As a reminder, we previously provided a preliminary estimated range for ARR at the beginning of our IPO roadshow, and this result is at the high end of that range. In Q4, we delivered total revenue of $240 million, up 18% year-over-year, with subscription revenue of $224 million, up 22% year-over-year. Adjusted gross profit margin increased by 80 basis points year-over-year to 78.9%, and adjusted operating margin increased by 530 basis points year-over-year to 19%. We believe we deliver exceptional value to our customers, helping them to achieve a more robust security posture with a measurable ROI that results in a high retention rate. We finished the fiscal year with approximately 3,000 customers, and we saw an almost 80% year-over-year increase in customers with ARR greater than $1 million. Our initial customer lands continue to get larger as we become a more strategic platform for securing all enterprise identities and their access to enterprise data. Our large customer lands are complemented by expanding existing customer relationships. As of January 31st, 2025, our dollar-based net retention rate remained steady at 114% and was driven by nearly even contributions from suite upgrades, migrations, upsell, and cross-sell initiatives. We believe our balanced and durable growth profile from both new and existing customers, as well as our transition to a subscription model, is increasing the visibility and predictability of our financial model. In fiscal year 2025, we delivered total revenue of $862 million, an increase of 23% year-over-year, with subscription revenue of $794 million, increasing 27% year-over-year. Our adjusted gross profit margin expanded 110 basis points year-over-year to 78.1% in fiscal year 2025, driven by a higher mix of subscription revenue. For the year, our adjusted subscription gross profit margin was 84.1%. Our adjusted operating margin increased by 760 basis points to 15.4% in fiscal year 2025. This was driven by leverage in R&D and sales and marketing. Combining our strong adjusted operating margin performance and durable ARR growth, we continue to exceed the Rule of 40, underscoring our efficient growth strategy. Turning now to guidance. For simplicity, I will refer to the midpoint of our guidance ranges. Full details can be found in our press release and supplemental earnings deck. As a reminder, we believe ARR is the best indicator of our business, as opposed to revenue which can be impacted by SaaS and term mix. For the fiscal first quarter of 2026, we expect ARR to be $898 million, up 27% year-over-year. We expect revenue to be $225 million, an increase of 20% year-over-year, with adjusted operating margin of 6.4%. The implied year-over-year change in our adjusted operating margin is the result of higher public company costs and lower term revenue mix. We expect our diluted share count to be approximately 564 million shares and adjusted EPS to be a loss of $0.01. It's also worth noting that in March, we paid off all the outstanding debt on our balance sheet. We expect a partial interest payment in Q1 of approximately $37 million, with $19 million of interest expense running through our P&L. For our fiscal year, 2026, we expect ARR to be $1.08 billion, up 23% year-over-year. We expect revenue to be approximately $1.03 billion, an increase of 20% year-over-year, with adjusted operating margin of 14.9%. We expect our diluted share count to be approximately 570 million shares and adjusted EPS to be $0.16. We believe we're well positioned to win the next generation of identity security because of the depth and breadth of our platform, our enterprise scale, and our innate ability to listen and respond to market needs. With the combination of these core fundamental drivers and our strong pipelines, we believe this guidance is the right place to start as we re-enter the public markets. As an essential business platform, we see significant growth potential through a universe of new customers that are primed for a more modern solution. We also see a large opportunity just within our existing install base as we continue to convert customers to SaaS and cross-sell new modules. In summary, we believe there are several drivers that position us for sustained long-term growth, and we are truly excited about the opportunities ahead. With that, let's open the call for questions.”