Shares of SailPoint declined Wednesday as the cybersecurity's quarterly earnings failed to sufficiently impress Wall Street as cybersecurity has risen in profile with threats of artificial-intelligence hacking exponentially growing.

SailPoint stock fell 0.5% to $17.70 on Wednesday after ending Tuesday down 5.5%. Shares have fallen 14% this month as of the closing bell on Tuesday and have retreated 12% this year.

The company posted adjusted earnings of 9 cents a share in the fiscal second quarter ended July 31, up from 7 cents a year ago and above Wall Street expectations of 8 cents. Total revenue grew 17% to $308.81 million, missing the analyst consensus call for $310.3 million, according to FactSet.

Annual recurring revenue, a key metric for investors, increased 25% to $1.231 billion and slightly surpassed Wall Street expectations of $1.22 billion. At a more granular level, SailPoint reported that "AI-driven solutions" accounted for more than 30% of net new annual recurring revenue in the quarter.

The cybersecurity company also raised its fiscal 2027 annual recurring revenue outlook to $1.375 billion to $1.385 billion up from $1.364 billion to $1.374 billion. The analyst consensus expects $1.371 billion in annual recurring revenue.

The updated outlook implies total net new annual recurring revenue additions of $255 million up from $248 million added in fiscal 2026.

SailPoint also projected for its fiscal third quarter total revenue between $326 million and $330 million. The midpoint of that guidance is below Wall Street expectations for $328.5 million. The company also forecast annual recurring revenue of $1.288 billion to $1.292 billion in the fiscal third quarter, above the analyst consensus call for $1.28 billion, according to FactSet.

CEO Mark McClain said in the earnings release that SailPoint remained on pace to hit its fiscal 2029 targets and that the company is "unifying human and agentic identity under one control plane."

"SailPoint is redefining security for the AI era," McClain said.

BTIG analyst Gray Powell on Wednesday maintained a Buy rating on the stock but added that the firm's estimates were under review.

"We thought it was a good report, with few surprises," Powell wrote.

The analyst was particularly impressed by SailPoint's annual recurring revenue and noted that the company also saw solid growth in its AI-driven solutions.

Cybersecurity companies have risen in profile as threats of cyberattacks from AI agents has increased.

Wall Street believes SailPoint is well positioned to take advantage of the opportunity with its identity security cloud product that provides an all-in-one solution for enterprises to better secure employees, non-employees, and "machines" or agentic non-humans.

Investors, however, have been cautious with SailPoint stock this year.

That caution continued Wednesday following the company's earnings.