- ARR was $242.6 million, up
17% from the prior year period
- Total revenue was $59.9
million, of which 92% was subscription revenue
- Acquired Symphonic, a leader
in Dynamic Authorization, to accelerate Zero Trust security and
address growing regulation and privacy mandates
Ping Identity Holding Corp. (“Ping Identity,” or the “Company”)
(NYSE: PING), the Intelligent Identity solution for the enterprise,
today announced its financial results for the three and nine months
ended September 30, 2020.
“We were pleased to deliver outperformance across all guidance
metrics for the third quarter. Our continued execution is a
testament to the importance enterprise CIOs and CISOs place on
security, digital transformation, and partnering with Ping
Identity. As we turn to the fourth quarter and beyond, our focus is
to continue to build on this momentum and deliver world-class
enterprise identity solutions,” said Andre Durand, Ping Identity’s
Chief Executive Officer.
“Identity remains at the nexus of both digital and security
transformations. As we establish a new working norm, Ping Identity
continues to partner closely with enterprises along their hybrid
and multi-cloud journey. As a result, we have focused intently on
speed of deployment, providing customers with technology and
services to assist with enterprise migrations, and unifying our
platform through a simple and elegant administrative experience,”
Durand concluded.
Financial Highlights for the Third
Quarter of 2020
ARR: Ending ARR at September 30, 2020 was $242.6 million
and represented a 17% increase compared to the same period last
year. Ping Identity defines ARR as the annualized value of all
subscription contracts as of the end of the period.
Revenue: Total revenue for the third quarter of 2020 was
$59.9 million. Subscription revenue was $55.1 million.
Cash Flow: Net cash provided by operating activities was
$20.0 million in the nine months ended September 30, 2020 compared
to $8.5 million in the nine months ended September 30, 2019.
Unlevered Free Cash Flow was $10.2 million for the nine months
ended September 30, 2020 compared to $8.1 million for the nine
months ended September 30, 2019.
Dollar-Based Net Retention Rate: For the period ended
September 30, 2020, Ping Identity’s dollar-based net retention rate
was 110%.
Please refer to the section titled “Use of Non-GAAP Financial
Information” and the tables within this press release which contain
explanations and reconciliations of the Company’s non-GAAP
financial measures.
Recent Business
Highlights
- Acquired Symphonic, a leader in Dynamic Authorization,
effective with the closing on October 31, 2020. Ping Data
Governance and Symphonic together will provide large enterprises
the ability to easily manage authorization of critical
transactions, provide access to sensitive data, and deliver new
digital services to the market faster
- Launched two new enterprise cloud services, PingOne MFA and
PingOne Risk to strengthen customer authentication and improve
security around Passwordless user experiences
- Hosted IDENTIFY, Ping Identity’s annual users conference
virtually with its partners to recognize its customers’ success,
demonstrate multiple new products, and deliver keynote
presentations from industry leaders
- Ended the quarter with 252 customers over $250,000 in ARR,
representing an 11% year-over-year growth rate in that customer
cohort
Commenting on the company’s financial results, Raj Dani, Ping
Identity’s CFO added, “Ping Identity’s year-over-year ARR growth of
17% proves our ability to successfully navigate the economic
climate. We saw solid improvement in our cash flow from operations,
increasing $11.5 million year over year, while our Unlevered Free
Cash Flow margin for the nine months ended September 30, 2020 was
6%. Enterprises continue to choose Ping Identity’s hybrid cloud
platform and SaaS services to go wall-to-wall in securing their
customers, employees and other key partners.”
Financial Outlook
Ping Identity provides the following expected financial guidance
for the quarter ending December 31, 2020:
Total ARR of $255.0 million to $257.0
million
Total Revenue of $67.0 million to
$70.0 million
Unlevered Free Cash Flow of $(5.0)
million to $(3.0) million
Webcast / Conference Call Details
In conjunction with this announcement, Ping Identity will host a
webcast conference call today, November 4, 2020, at 5:00 p.m.
Eastern Time to discuss its financial results. The listen-only
webcast is available at https://investor.pingidentity.com.
Investors and participants can register for the telephonic version
of the conference call in advance by visiting
http://www.directeventreg.com/registration/event/6159505. After
registering, instructions will be shared on how to join the call
including dial-in information as well as a unique passcode and
registrant ID. At the time of the call, registered participants
will dial in using the numbers from the confirmation email, and
upon entering their unique passcode and ID, will be entered
directly into the conference.
Following the conference call, a replay will be available until
11:59 p.m. Eastern time on November 11, 2020. The replay dial-in
number will be (800) 585-8367 or for international (416) 621-4642,
using the replay number pin: 6159505. An archived webcast of the
call will also be available at
https://investor.pingidentity.com.
Use of Non-GAAP Financial Information
In addition to Ping Identity’s results determined in accordance
with generally accepted accounting principles in the United States
(“GAAP”), the Company believes the following non-GAAP measures
presented in this press release and discussed on the related
teleconference call are useful in evaluating its operating
performance: Non-GAAP Gross Profit, Non-GAAP Gross Profit Margin,
Non-GAAP Operating Expenses, Non-GAAP Net Income, Non-GAAP Net
Income Per Share, Levered Free Cash Flow, Unlevered Free Cash Flow,
Adjusted EBITDA, and Adjusted EBITDA Margin. Certain of these
non-GAAP measures exclude stock-based compensation, depreciation
and amortization expense, loss on extinguishment of debt and
acquisition-related expenses. Ping Identity believes that non-GAAP
financial information, when taken collectively, may be helpful to
investors because it provides consistency and comparability with
past financial performance and assists in comparisons with other
companies, some of which use similar non-GAAP financial information
to supplement their GAAP results. The non-GAAP financial
information is presented for supplemental informational purposes
only, and should not be considered a substitute for financial
information presented in accordance with GAAP, and may be different
from similarly titled non-GAAP measures used by other companies. A
reconciliation is provided herein for each non-GAAP financial
measure to the most directly comparable financial measure stated in
accordance with GAAP. Investors are encouraged to review the
related GAAP financial measures and the reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP
financial measures.
Forward-Looking Statements
In addition to historical consolidated financial information,
certain statements in this press release and on the related
teleconference call may contain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve substantial risks and uncertainties. All statements
other than statements of historical fact included in this press
release and on the related teleconference call are forward-looking
statements. These statements may include words such as
“anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,”
“believe,” “may,” “will,” “should,” “can have,” “likely” and other
words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial
performance or other events. For example, all statements Ping
Identity makes relating to its estimated and projected costs,
expenditures, cash flows, growth rates and financial results or its
plans and objectives for future operations, growth initiatives, or
strategies are forward-looking statements. All forward-looking
statements are subject to risks and uncertainties that may cause
actual results to differ materially from those that the Company
expected. Specific factors that could cause such a difference
include, but are not limited to, those disclosed previously in the
Company’s other filings with the SEC which include, but are not
limited to: the impact of the COVID-19 outbreak; our ability to
adapt to rapid technological change, evolving industry standards
and changing customer needs, requirements or preferences; our
ability to enhance and deploy our cloud-based offerings while
continuing to effectively offer our on-premise offerings; our
ability to maintain or improve our competitive position; the impact
on our business of a network or data security incident or
unauthorized access to our network or data or our customers’ data;
the effects on our business if we are unable to acquire new
customers, if our customers do not renew their arrangements with
us, or if we are unable to expand sales to our existing customers
or develop new solutions or solution packages that achieve market
acceptance; our ability to manage our growth effectively, execute
our business plan, maintain high levels of service and customer
satisfaction or adequately address competitive challenges; our
dependence on our senior management team and other key employees;
our ability to enhance and expand our sales and marketing
capabilities; our ability to attract and retain highly qualified
personnel to execute our growth plan; the risks associated with
interruptions or performance problems of our technology,
infrastructure and service providers; our dependence on Amazon Web
Services cloud infrastructure services; the impact of data privacy
concerns, evolving regulations of cloud computing, cross-border
data transfer restrictions and other domestic and foreign laws and
regulations; the impact of volatility in quarterly operating
results; the risks associated with our revenue recognition policy
and other factors may distort our financial results in any given
period; the effects on our customer base and business if we are
unable to enhance our brand cost-effectively; our ability to comply
with anti-corruption, anti-bribery and similar laws; our ability to
comply with governmental export and import controls and economic
sanctions laws; our ability to comply with HIPAA; the potential
adverse impact of legal proceedings; the impact of our frequently
long and unpredictable sales cycle; our ability to identify
suitable acquisition targets or otherwise successfully implement
our growth strategy; the impact of a change in our pricing model;
our ability to meet service level commitments under our customer
contracts; the impact on our business and reputation if we are
unable to provide high-quality customer support; our dependence on
strategic relationships with third parties; the impact of adverse
general and industry-specific economic and market conditions and
reductions in IT and identity spending; the ability of our
platform, solutions and solution packages to interoperate with our
customers’ existing or future IT infrastructures; our dependence on
adequate research and development resources and our ability to
successfully complete acquisitions; our dependence on the integrity
and scalability of our systems and infrastructures; our reliance on
software and services from other parties; the impact of real or
perceived errors, failures, vulnerabilities or bugs in our
solutions; our ability to protect our proprietary rights; the
impact on our business if we are subject to infringement claim or a
claim that results in a significant damage award; the risks
associated with our use of open source software in our solutions,
solution packages and subscriptions; our reliance on SaaS vendors
to operate certain functions of our business; the risks associated
with indemnity provisions in our agreements; the risks associated
with liability claims if we breach our contracts; the impact of the
failure by our customers to pay us in accordance with the terms of
their agreements; our ability to expand the sales of our solutions
and solution packages to customers located outside of the United
States; the risks associated with exposure to foreign currency
fluctuations; the impact of Brexit; the impact of potentially
adverse tax consequences associated with our international
operations; the impact of changes in tax laws or regulations; the
impact of the Tax Act; our ability to maintain our corporate
culture; our ability to develop and maintain proper and effective
internal control over financial reporting; our management team’s
limited experience managing a public company; the risks associated
with having operations and employees located in Israel; the risks
associated with doing business with governmental entities; and the
impact of catastrophic events on our business. Given these factors,
as well as other variables that may affect Ping Identity’s
operating results, you should not rely on forward-looking
statements, assume that past financial performance will be a
reliable indicator of future performance, or use historical trends
to anticipate results or trends in future periods. The
forward-looking statements included in this press release and on
the related teleconference call relate only to events as of the
date hereof. The Company undertakes no obligation to update or
revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise
required by law.
About Ping Identity
Ping Identity is the Intelligent Identity solution for the
enterprise. We enable companies to achieve Zero Trust
identity-defined security and more personalized, streamlined user
experiences. The Ping Intelligent Identity™ platform provides
customers, workforce, and partners with access to cloud, mobile,
SaaS and on-premises applications across the hybrid enterprise.
Over half of the Fortune 100 choose us for our identity expertise,
open standards, and partnerships with companies including Microsoft
and Amazon. We provide flexible identity solutions that accelerate
digital business initiatives, delight customers, and secure the
enterprise through multi-factor authentication, single sign-on,
access management, intelligent API security, directory, and data
governance capabilities. For more information, visit
www.pingidentity.com.
PING IDENTITY HOLDING
CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share
amounts)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Revenue:
Subscription
$
55,113
$
57,495
$
166,199
$
161,387
Professional services and other
4,828
4,270
14,135
13,276
Total revenue
59,941
61,765
180,334
174,663
Cost of revenue:
Subscription (exclusive of amortization
shown below)(1)
8,091
5,995
22,709
16,828
Professional services and other (exclusive
of amortization shown below)(1)
4,083
4,086
12,322
11,002
Amortization expense
5,177
4,159
14,723
11,981
Total cost of revenue
17,351
14,240
49,754
39,811
Gross profit
42,590
47,525
130,580
134,852
Operating expenses:
Sales and marketing(1)
21,164
17,819
64,105
55,153
Research and development(1)
12,224
11,283
35,849
33,594
General and administrative(1)
10,702
10,984
33,817
26,732
Depreciation and amortization
4,223
4,060
12,705
12,334
Total operating expenses
48,313
44,146
146,476
127,813
Income (loss) from operations
(5,723
)
3,379
(15,896
)
7,039
Other income (expense):
Interest expense
(605
)
(3,818
)
(1,835
)
(12,067
)
Loss on extinguishment of debt
—
(3,150
)
—
(3,150
)
Other income (expense), net
1,271
(992
)
716
(767
)
Total other income (expense)
666
(7,960
)
(1,119
)
(15,984
)
Loss before income taxes
(5,057
)
(4,581
)
(17,015
)
(8,945
)
Benefit for income taxes
4,061
3,986
8,937
5,227
Net loss
$
(996
)
$
(595
)
$
(8,078
)
$
(3,718
)
Net loss per share:
Basic and diluted
$
(0.01
)
$
(0.01
)
$
(0.10
)
$
(0.06
)
Weighted-average shares used in computing
net loss per share:
Basic and diluted
80,692
66,269
80,203
65,436
______________________________________
(1) Includes stock-based compensation as follows:
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Subscription cost of revenue
$
166
$
—
$
486
$
—
Professional services and other cost of
revenue
98
—
281
—
Sales and marketing
1,169
283
3,209
693
Research and development
1,602
225
3,788
658
General and administrative
1,546
1,190
4,219
2,446
Total
$
4,581
$
1,698
$
11,983
$
3,797
PING IDENTITY HOLDING
CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(unaudited)
September 30,
December 31,
2020
2019
Assets
Current assets:
Cash and cash equivalents
$
173,206
$
67,637
Accounts receivable, net of allowances of
$728 and $873
49,659
67,642
Contract assets, current
69,766
70,031
Deferred commissions, current
5,773
5,814
Prepaid expenses
17,703
12,768
Other current assets
1,068
3,774
Total current assets
317,175
227,666
Noncurrent assets:
Property and equipment, net
9,564
11,183
Goodwill
418,660
417,696
Intangible assets, net
177,447
187,868
Contract assets, noncurrent
14,239
15,979
Deferred commissions, noncurrent
8,231
7,856
Deferred income taxes, net
2,685
2,755
Operating lease right-of-use assets
15,052
—
Other noncurrent assets
2,518
1,808
Total noncurrent assets
648,396
645,145
Total assets
$
965,571
$
872,811
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
748
$
1,118
Accrued expenses and other current
liabilities
6,837
9,302
Accrued compensation
10,427
18,126
Deferred revenue, current
35,640
45,446
Operating lease liabilities, current
3,770
—
Total current liabilities
57,422
73,992
Noncurrent liabilities:
Deferred revenue, noncurrent
2,352
2,061
Long-term debt, net of current portion
148,951
50,941
Deferred income taxes, net
19,679
30,571
Operating lease liabilities,
noncurrent
17,005
—
Other liabilities, noncurrent
2,607
4,775
Total noncurrent liabilities
190,594
88,348
Total liabilities
248,016
162,340
Commitments and contingencies
Stockholders' equity:
Preferred stock
—
—
Common stock
81
80
Additional paid-in capital
733,769
718,446
Accumulated other comprehensive loss
(561)
(399)
Accumulated deficit
(15,734)
(7,656)
Total stockholders' equity
717,555
710,471
Total liabilities and stockholders'
equity
$
965,571
$
872,811
PING IDENTITY HOLDING
CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended September
30,
2020
2019
Cash flows from operating
activities
Net loss
$
(8,078
)
$
(3,718
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Loss on extinguishment of debt
—
3,150
Depreciation and amortization
27,428
24,315
Stock-based compensation expense
11,983
3,797
Amortization of deferred commissions
5,432
4,110
Amortization of deferred debt issuance
costs
187
626
Operating leases, net
(105
)
—
Deferred taxes
(11,391
)
(6,910
)
Other
(13
)
292
Changes in operating assets and
liabilities:
Accounts receivable
18,029
15,980
Contract assets
2,005
(15,931
)
Deferred commissions
(5,766
)
(5,295
)
Prepaid expenses and other current
assets
(2,869
)
(4,486
)
Other assets
(700
)
305
Accounts payable
(322
)
736
Accrued compensation
(9,017
)
(7,639
)
Accrued expenses and other
2,682
2,302
Deferred revenue
(9,515
)
(3,160
)
Net cash provided by operating
activities
19,970
8,474
Cash flows from investing
activities
Purchases of property and equipment and
other
(1,716
)
(4,517
)
Capitalized software development costs
(9,824
)
(7,260
)
Acquisition of ShoCard, net of cash
acquired of $0
(4,703
)
—
Other investing activities
—
(300
)
Net cash used in investing activities
(16,243
)
(12,077
)
Cash flows from financing
activities
Payment of Elastic Beam consideration and
holdbacks
(424
)
(1,136
)
Proceeds from initial public offering, net
of underwriting discounts and commissions
—
174,375
Payment of offering costs
(295
)
(1,093
)
Proceeds from stock option exercises
9,027
1,571
Payment for tax withholding on equity
awards
(4,422
)
—
Proceeds from long-term debt
97,823
—
Payment of long-term debt
—
(171,743
)
Net cash provided by financing
activities
101,709
1,974
Effect of exchange rates on cash and cash
equivalents and restricted cash
132
168
Net increase (decrease) in cash and cash
equivalents and restricted cash
105,568
(1,461
)
Cash and cash equivalents and
restricted cash
Beginning of period
68,386
84,143
End of period
$
173,954
$
82,682
PING IDENTITY HOLDING
CORP.
SUPPLEMENTAL FINANCIAL
INFORMATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL DATA
(In thousands, except per share
amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Gross profit
$
42,590
$
47,525
$
130,580
$
134,852
Amortization expense
5,177
4,159
14,723
11,981
Stock-based compensation
264
—
767
—
Non-GAAP Gross Profit
$
48,031
$
51,684
$
146,070
$
146,833
Non-GAAP Gross Profit Margin
80%
84%
81%
84%
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Total operating expenses
$
48,313
$
44,146
$
146,476
$
127,813
Stock-based compensation
(4,317)
(1,698)
(11,216)
(3,797)
Acquisition related expenses
(20)
(522)
(1,119)
(2,799)
Amortization expense
(3,352)
(3,361)
(10,041)
(10,316)
Non-GAAP Operating Expenses
$
40,624
$
38,565
$
124,100
$
110,901
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Net loss
$
(996)
$
(595)
$
(8,078)
$
(3,718)
Stock-based compensation
4,581
1,698
11,983
3,797
Acquisition related expenses
20
522
1,119
2,799
Amortization expense
8,529
7,520
24,764
22,297
Loss on extinguishment of debt
—
3,150
—
3,150
Provision for income taxes(1)
(3,283)
(3,351)
(9,467)
(8,331)
Non-GAAP Net Income
$
8,851
$
8,944
$
20,321
$
19,994
Net loss per share:
Basic and diluted
$
(0.01)
$
(0.01)
$
(0.10)
$
(0.06)
Weighted-average shares used in computing
net loss per share:
Basic and diluted
80,692
66,269
80,203
65,436
Non-GAAP Net Income per Share:
Basic
$
0.11
$
0.13
$
0.25
$
0.31
Diluted
$
0.11
$
0.13
$
0.24
$
0.30
Weighted-average shares used in computing
Non-GAAP Net Income per Share:
Basic
80,692
66,269
80,203
65,436
Diluted
83,888
67,978
83,043
66,801
_____________________________________
(1) The related tax effects of the adjustments to Non-GAAP Net
Income were calculated using the respective statutory tax rates for
applicable jurisdictions.
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Net loss
$
(996
)
$
(595
)
$
(8,078
)
$
(3,718
)
Interest expense(1)
605
3,818
1,835
12,067
Loss on extinguishment of debt
—
3,150
—
3,150
Benefit for income taxes
(4,061
)
(3,986
)
(8,937
)
(5,227
)
Depreciation and amortization
9,400
8,219
27,428
24,315
Stock-based compensation expense
4,581
1,698
11,983
3,797
Acquisition related expense
20
522
1,119
2,799
Other (income) expense, net(2)
(1,271
)
992
(716
)
767
Adjusted EBITDA
$
8,278
$
13,818
$
24,634
$
37,950
Adjusted EBITDA Margin
14
%
22
%
14
%
22
%
______________________________________
(1) Includes amortization of debt issuance costs. (2) Includes
gains and losses from transactions denominated in a currency other
than the functional currency, interest income and other income
(expense).
Nine Months Ended
September 30,
2020
2019
Net cash provided by operating
activities
$
19,970
$
8,474
Add:
Cash paid for interest
1,728
11,441
Less:
Purchases of property and equipment
(1,716
)
(4,517
)
Capitalized software development costs
(9,824
)
(7,260
)
Unlevered Free Cash Flow
$
10,158
$
8,138
Net cash used in investing activities
$
(16,243
)
$
(12,077
)
Net cash provided by financing
activities
$
101,709
$
1,974
Cash paid for Elastic Beam compensation
and bonus retention payments
$
4,173
$
4,868
Reconciliation of Unlevered Free Cash Flow Guidance for the
Three Months Ended December 31, 2020:
Three Months Ended December
31, 2020
Low
High
Net cash provided by (used in) operating
activities
$
(1,325
)
$
675
Add:
Cash paid for interest
595
595
Less:
Purchases of property and equipment
(545
)
(545
)
Capitalized software development costs
(3,725
)
(3,725
)
Unlevered Free Cash Flow
$
(5,000
)
$
(3,000
)
PING IDENTITY HOLDING
CORP.
SUPPLEMENTAL FINANCIAL
INFORMATION
KEY BUSINESS METRICS
(In thousands)
September 30,
Change
2020
2019
$
%
(dollars in thousands)
ARR
$
242,594
$
206,730
$
35,864
17
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201104005585/en/
Investor Relations Contact: David Banks
investor@pingidentity.com
Media Contact: Kristin Miller press@pingidentity.com
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