The Identity Security Profit Machine Pulls Ahead While Its Faster Growing Rival Burns Cash

Okta (NASDAQ: OKTA) and SailPoint Technologies (NYSE: SAIL) some bushed Q3 2026 net expectations, but their fiscal trajectories diverge sharply. Okta delivered $742 cardinal successful gross with $43 cardinal successful GAAP nett income. SailPoint posted $282 cardinal successful gross portion losing $36 million.

Okta's 4th showed operational maturity. Revenue climbed 12% twelvemonth implicit year, but operating currency travel surged 37% to $218 million. Free currency travel reached $211 million. The institution turned a $16 cardinal nonaccomplishment into $23 cardinal successful operating income. CEO Todd McKinnon highlighted "continued spot with ample customers" and adoption of Okta Identity Governance and Auth0 for AI Agents. Large endeavor deals transportation higher margins and stickier retention.

SailPoint grew faster astatine 20% gross maturation and 38% SaaS ARR expansion. The institution crossed $1 cardinal successful full ARR, a milestone CEO Mark McClain called impervious of "the spot of SailPoint's strategy and the durability of our business." But SailPoint's GAAP operating nonaccomplishment widened to $42 cardinal from $24 cardinal a twelvemonth earlier. The institution reports a 20% adjusted operating margin, but that requires adding backmost $98 cardinal successful banal compensation and different expenses. Okta doesn't request those adjustments to amusement profit.

Okta operates astatine astir 3 times SailPoint's gross standard and generates 4 times the operating currency flow. That spread matters erstwhile some companies request to money AI merchandise improvement and vie for the aforesaid endeavor individuality information budgets. Okta's $2.46 cardinal currency presumption provides country to put aggressively oregon upwind borderline pressure. SailPoint's $298 cardinal successful currency leaves little borderline for error, particularly with a price-to-sales ratio of 12.7x compared to Okta's 5.6x.

The valuation disconnect reflects marketplace expectations. SailPoint trades astatine 119x guardant net contempt existent losses, portion Okta sits astatine 24x guardant net with existent profit. Analysts favour SailPoint somewhat more, with 86% bargain ratings versus Okta's 64%. The marketplace believes SailPoint's maturation complaint justifies the premium, but lone if the institution tin person gross into currency travel without destroying margins further.