WEBVTT - Sailpoint CEO Mark McClain Talks IPO

0:00:02.560 --> 0:00:07.080
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

0:00:07.520 --> 0:00:09.600
<v Speaker 2>We're lucky that we have the CEO of sale Point

0:00:09.640 --> 0:00:13.680
<v Speaker 2>Technologies with us, Mark mclin. He joins us. Now, how

0:00:13.680 --> 0:00:17.639
<v Speaker 2>does this IPO mesh with your long term vision for

0:00:17.680 --> 0:00:18.200
<v Speaker 2>the company?

0:00:18.920 --> 0:00:20.919
<v Speaker 1>Well, I think in general, we've tried to stay focused

0:00:20.920 --> 0:00:23.960
<v Speaker 1>as a business on building great business with our customers

0:00:24.079 --> 0:00:26.440
<v Speaker 1>and winning in the market. In some ways, what happens

0:00:26.440 --> 0:00:28.560
<v Speaker 1>in the financial ownership of the business matters a lot,

0:00:28.560 --> 0:00:30.520
<v Speaker 1>but it doesn't actually affect our day to day lives,

0:00:30.520 --> 0:00:34.000
<v Speaker 1>if you will, and finding and securing customers and making

0:00:34.000 --> 0:00:36.879
<v Speaker 1>them successful, that's certainly always our focus. We do think though,

0:00:36.880 --> 0:00:38.840
<v Speaker 1>that the IPO gets us back out in the public

0:00:38.880 --> 0:00:41.360
<v Speaker 1>eye a little more. The importance of what we do

0:00:41.400 --> 0:00:45.600
<v Speaker 1>and what's called identity security is raising an awareness and

0:00:45.600 --> 0:00:47.760
<v Speaker 1>importance to the large companies all around the world that

0:00:47.800 --> 0:00:50.720
<v Speaker 1>we typically serve, and this will help with our visibility.

0:00:50.760 --> 0:00:53.920
<v Speaker 1>It'll give us future fuel to grow the business. We've

0:00:53.960 --> 0:00:56.400
<v Speaker 1>had a great run as a private company with Telebravo.

0:00:56.720 --> 0:00:59.880
<v Speaker 1>Some folks know this. We were public before and before

0:01:00.200 --> 0:01:01.720
<v Speaker 1>we were owned by Toma Bravo. It's a little bit

0:01:01.720 --> 0:01:05.520
<v Speaker 1>of an interesting story of a PE backed IPO same

0:01:05.600 --> 0:01:08.600
<v Speaker 1>Pe backed IPO again. But all the while, our focus

0:01:08.600 --> 0:01:11.320
<v Speaker 1>continues to be on doing great things for our customers

0:01:11.360 --> 0:01:14.119
<v Speaker 1>and helping them secure their enterprises with identity.

0:01:14.160 --> 0:01:17.559
<v Speaker 3>Well, cyber threats have continued to increase. How does sale

0:01:17.640 --> 0:01:19.959
<v Speaker 3>Points stay ahead in identity security?

0:01:20.840 --> 0:01:23.320
<v Speaker 1>Yeah, what's happened in the world of cybersecurity. There's a

0:01:23.360 --> 0:01:26.240
<v Speaker 1>lot of shifting things in the landscape. A simple metaphor

0:01:26.280 --> 0:01:29.120
<v Speaker 1>that sometimes helps folks is that the bad actors are

0:01:29.120 --> 0:01:31.280
<v Speaker 1>the attackers. Not so long ago, their metaphor was to

0:01:31.319 --> 0:01:34.000
<v Speaker 1>break the glass and grab the jewels and run. Quite

0:01:34.040 --> 0:01:36.280
<v Speaker 1>often now, and we've seen this in breach reports, they'll

0:01:36.360 --> 0:01:38.280
<v Speaker 1>try to sneak in the back of the jewelry store,

0:01:38.560 --> 0:01:40.920
<v Speaker 1>poses an employee and eventually try to quote clean out

0:01:40.920 --> 0:01:43.800
<v Speaker 1>the jewelry store. And that's because they've been able to impersonate,

0:01:43.840 --> 0:01:46.839
<v Speaker 1>so to speak, an employee, and that's a compromised identity.

0:01:47.040 --> 0:01:50.120
<v Speaker 1>What we do is help businesses, typically mid to large

0:01:50.200 --> 0:01:54.280
<v Speaker 1>enterprises around the world, focus on understanding all the identities

0:01:54.280 --> 0:01:57.040
<v Speaker 1>they have, both human and nonhuman, all the data they

0:01:57.080 --> 0:01:59.520
<v Speaker 1>care about protecting, and making sure that at any point

0:01:59.520 --> 0:02:01.960
<v Speaker 1>in time, all of those connections are secure. It's a

0:02:01.960 --> 0:02:03.960
<v Speaker 1>pretty complex problem. At scale.

0:02:04.280 --> 0:02:06.320
<v Speaker 2>Who are your competitors right now and how can you

0:02:06.400 --> 0:02:07.200
<v Speaker 2>help differentiate?

0:02:07.920 --> 0:02:10.959
<v Speaker 1>Yeah, the truth is we've got more I like to

0:02:11.000 --> 0:02:13.639
<v Speaker 1>call them PowerPoint competitors than real competitors. I mean, there's

0:02:13.639 --> 0:02:15.919
<v Speaker 1>folks that are talking about this space quite a bit,

0:02:16.160 --> 0:02:17.760
<v Speaker 1>but if you look at what happens day to day

0:02:17.760 --> 0:02:19.720
<v Speaker 1>when we're out in the market, there's very few companies

0:02:19.760 --> 0:02:22.320
<v Speaker 1>that are capable of delivering the success at scale that

0:02:22.360 --> 0:02:25.280
<v Speaker 1>we have. We're fortunate to be in almost half of

0:02:25.320 --> 0:02:27.800
<v Speaker 1>the Fortune five hundred, about a quarter of the Fortune

0:02:27.800 --> 0:02:31.800
<v Speaker 1>two thousand, and they're generally throwing out older legacy products

0:02:31.840 --> 0:02:34.160
<v Speaker 1>like from Oracle and IBM. There really hasn't been a

0:02:34.160 --> 0:02:37.000
<v Speaker 1>strong challenger to us in this key space, and that's

0:02:37.440 --> 0:02:39.520
<v Speaker 1>part of what I think has gotten investors excited about

0:02:39.520 --> 0:02:41.480
<v Speaker 1>our potential for long term, durable growth.

0:02:42.280 --> 0:02:45.240
<v Speaker 3>So another thing that's been in conversation, I'm curious, how

0:02:45.280 --> 0:02:47.600
<v Speaker 3>are you all planning to address your debt load?

0:02:48.360 --> 0:02:50.600
<v Speaker 1>Well, you know, one of the key use of proceeds

0:02:50.639 --> 0:02:52.040
<v Speaker 1>will be to pay down a lot of the debt.

0:02:52.080 --> 0:02:54.799
<v Speaker 1>We actually had a little more debt about six months ago.

0:02:55.160 --> 0:02:57.280
<v Speaker 1>Our backers Home of Bravo chose to take some of

0:02:57.320 --> 0:02:59.800
<v Speaker 1>that debt out with equity before the IPO, and we'll

0:02:59.880 --> 0:03:01.800
<v Speaker 1>use the bulk of the proceeds from the IPO to

0:03:01.840 --> 0:03:04.799
<v Speaker 1>pay down significantly, putting ourselves in what they call it

0:03:05.520 --> 0:03:08.160
<v Speaker 1>debt zero, meaning we'll have as as much more cash

0:03:08.200 --> 0:03:10.799
<v Speaker 1>as we have debt, which from a financial profile standpoint

0:03:10.800 --> 0:03:12.000
<v Speaker 1>makes investors really happy.

0:03:12.800 --> 0:03:14.760
<v Speaker 2>Why do you guys decide to do the IPO? Now?

0:03:14.840 --> 0:03:16.800
<v Speaker 2>We were just talking about IPOs in general, and I

0:03:16.880 --> 0:03:20.200
<v Speaker 2>was talking about an LNG export that went public at

0:03:20.280 --> 0:03:23.600
<v Speaker 2>seemingly a great time and it didn't go so well.

0:03:23.639 --> 0:03:26.440
<v Speaker 2>So I wonder why strategically you guys chose right now.

0:03:27.000 --> 0:03:29.720
<v Speaker 1>Well, we've been watching markets as everyone has, and I

0:03:29.760 --> 0:03:31.960
<v Speaker 1>think we were really pleased with the progress of the business.

0:03:31.960 --> 0:03:33.639
<v Speaker 1>We went private about two and a half years ago.

0:03:34.240 --> 0:03:36.040
<v Speaker 1>As part of our S one filing, we talked about

0:03:36.080 --> 0:03:37.880
<v Speaker 1>the fact that as of our third quarter last year,

0:03:37.880 --> 0:03:40.200
<v Speaker 1>we'd grown the business at thirty percent. We've been able

0:03:40.200 --> 0:03:43.600
<v Speaker 1>to deliver non gap margins of about fourteen percent, and

0:03:43.680 --> 0:03:46.360
<v Speaker 1>had a strong sense that durable growth would continue, and

0:03:46.400 --> 0:03:48.400
<v Speaker 1>that was at scale. We're over an eight hundred million

0:03:48.400 --> 0:03:50.920
<v Speaker 1>dollar revenue business now and investors don't see a lot

0:03:50.960 --> 0:03:54.160
<v Speaker 1>of profiles of growth at scale with profit, and I

0:03:54.200 --> 0:03:56.720
<v Speaker 1>think our sense was that the markets were kind of hungry,

0:03:56.760 --> 0:03:59.640
<v Speaker 1>so to speak, for new issuances, particularly I think in

0:03:59.640 --> 0:04:03.040
<v Speaker 1>technology security has been considered a really good market for

0:04:03.080 --> 0:04:05.440
<v Speaker 1>a long time. I think we looked like a company

0:04:05.440 --> 0:04:08.640
<v Speaker 1>that would fit many of their requests, so to speak,

0:04:08.680 --> 0:04:11.160
<v Speaker 1>for a durable growth company in the security space.

0:04:11.640 --> 0:04:15.839
<v Speaker 3>How are regulatory shifts driving demand for identity security solutions

0:04:15.960 --> 0:04:18.800
<v Speaker 3>as enterprises continue shifting to the cloud. How is sale

0:04:18.839 --> 0:04:20.880
<v Speaker 3>point evolving its offerings?

0:04:21.160 --> 0:04:24.200
<v Speaker 1>Well, it's interesting you mentioned that regulatory is indeed part

0:04:24.240 --> 0:04:26.800
<v Speaker 1>of the landscape we're addressing. Sometimes, you know, audits or

0:04:26.800 --> 0:04:28.640
<v Speaker 1>the threat of failed audits or not being able to

0:04:28.760 --> 0:04:32.279
<v Speaker 1>comply with regulations is a driver. But increasingly our space

0:04:32.360 --> 0:04:35.600
<v Speaker 1>is less about that. Not it hasn't moved away from that,

0:04:35.800 --> 0:04:39.200
<v Speaker 1>but it's less about that than truly securing their data. Again,

0:04:39.240 --> 0:04:42.360
<v Speaker 1>what's happened is this concern that data can be compromised

0:04:42.560 --> 0:04:44.760
<v Speaker 1>through this lens of identity. If a bad actor can

0:04:44.800 --> 0:04:48.040
<v Speaker 1>somehow you know, get in, break in, steal an identity,

0:04:48.440 --> 0:04:52.280
<v Speaker 1>or in some way get access to data through those identities,

0:04:52.600 --> 0:04:54.359
<v Speaker 1>they can do a lot of damage. So that that

0:04:54.480 --> 0:04:57.040
<v Speaker 1>focus on truly protecting the data is really more of

0:04:57.040 --> 0:04:59.040
<v Speaker 1>an issue today than just regulatory compliance.

0:05:00.120 --> 0:05:03.960
<v Speaker 2>You go, what's it like attracting talent right now in

0:05:04.000 --> 0:05:04.600
<v Speaker 2>the market.

0:05:05.120 --> 0:05:07.520
<v Speaker 1>Well, I'd say attracting talent is never easy in a

0:05:07.640 --> 0:05:10.520
<v Speaker 1>very competitive technology market. I think we're very fortunate at

0:05:10.560 --> 0:05:12.680
<v Speaker 1>sale Point. One of the things that we pay a

0:05:12.680 --> 0:05:15.080
<v Speaker 1>lot of attention to is our culture and our values

0:05:15.120 --> 0:05:17.640
<v Speaker 1>and how that shows up. And as you probably familiar,

0:05:17.800 --> 0:05:20.640
<v Speaker 1>a glass Door runs around and surveys the world and

0:05:20.640 --> 0:05:23.520
<v Speaker 1>tries to understand how companies are doing. We're super pleased

0:05:23.720 --> 0:05:26.839
<v Speaker 1>they released those results recently. We were number seventeen in

0:05:26.880 --> 0:05:28.520
<v Speaker 1>the world, and if you want to cut it by

0:05:28.560 --> 0:05:32.280
<v Speaker 1>an interesting factor, we were the highest ranked tech company

0:05:32.279 --> 0:05:35.240
<v Speaker 1>with under five thousand employees on Glassdoor. I think that

0:05:35.279 --> 0:05:37.240
<v Speaker 1>speaks a lot about the kind of culture and the

0:05:37.320 --> 0:05:39.640
<v Speaker 1>values that we live out in our company. It attracts

0:05:39.640 --> 0:05:42.120
<v Speaker 1>and retains very good talent, and we're very fortunate.

0:05:42.520 --> 0:05:44.640
<v Speaker 2>Hey, Mark, we appreciate your time today. We look forward

0:05:44.640 --> 0:05:46.200
<v Speaker 2>to catching up with you again once you've had some

0:05:46.240 --> 0:05:49.839
<v Speaker 2>time to be public. Mark mclains, CEO of sale Point Technologies,