Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Entity File Number | 001-39056 | |
Entity Registrant Name | PING IDENTITY HOLDING CORP. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-2933383 | |
Entity Address, Address Line One | 1001 17th Street, Suite 100 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 303 | |
Local Phone Number | 468-2900 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | PING | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 85,285,543 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001679826 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 213,286 | $ 220,607 |
Accounts receivable, net of allowances of $526 and $610 at March 31, 2022 and December 31, 2021, respectively | 74,265 | 82,969 |
Contract assets, current (net of allowance) | 61,468 | 67,540 |
Deferred commissions, current | 10,829 | 10,460 |
Prepaid expenses | 21,084 | 16,654 |
Other current assets | 2,055 | 2,914 |
Total current assets | 382,987 | 401,144 |
Noncurrent assets: | ||
Property and equipment, net | 8,955 | 9,396 |
Goodwill | 527,933 | 528,548 |
Intangible assets, net | 183,289 | 190,077 |
Contract assets, noncurrent (net of allowance) | 5,565 | 3,457 |
Deferred commissions, noncurrent | 19,411 | 19,380 |
Deferred income taxes, net | 3,089 | 6,201 |
Operating lease right-of-use assets | 12,937 | 13,709 |
Other noncurrent assets | 8,962 | 6,121 |
Total noncurrent assets | 770,141 | 776,889 |
Total assets | 1,153,128 | 1,178,033 |
Current liabilities: | ||
Accounts payable | 9,665 | 4,528 |
Accrued expenses and other current liabilities | 9,822 | 10,305 |
Accrued compensation | 16,796 | 29,258 |
Deferred revenue, current | 70,446 | 71,957 |
Operating lease liabilities, current | 4,372 | 4,330 |
Current portion of long-term debt (net of issuance costs) | 1,882 | 1,132 |
Total current liabilities | 112,983 | 121,510 |
Noncurrent liabilities: | ||
Deferred revenue, noncurrent | 4,298 | 5,584 |
Long-term debt (net of issuance costs) | 290,680 | 291,154 |
Deferred income taxes, net | 777 | 4,240 |
Operating lease liabilities, noncurrent | 13,077 | 14,140 |
Total noncurrent liabilities | 308,832 | 315,118 |
Total liabilities | 421,815 | 436,628 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock; $0.001 par value; 50,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued or outstanding at March 31, 2022 or December 31, 2021 | ||
Common stock; $0.001 par value; 500,000,000 shares authorized at March 31, 2022 and December 31, 2021; 84,016,147 and 83,754,449 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 84 | 84 |
Additional paid-in capital | 835,454 | 824,455 |
Accumulated other comprehensive income (loss) | (181) | 652 |
Accumulated deficit | (104,044) | (83,786) |
Total stockholders' equity | 731,313 | 741,405 |
Total liabilities and stockholders' equity | $ 1,153,128 | $ 1,178,033 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances | $ 526 | $ 610 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 84,016,147 | 83,754,449 |
Common stock, outstanding (in shares) | 84,016,147 | 83,754,449 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue: | ||
Total revenue | $ 84,691 | $ 68,944 |
Cost of revenue: | ||
Amortization expense | 8,516 | 5,809 |
Total cost of revenue | 28,663 | 20,806 |
Gross profit | 56,028 | 48,138 |
Operating expenses: | ||
Sales and marketing | 30,941 | 25,549 |
Research and development | 20,467 | 21,702 |
General and administrative | 16,231 | 14,455 |
Depreciation and amortization | 4,388 | 4,365 |
Total operating expenses | 72,027 | 66,071 |
Loss from operations | (15,999) | (17,933) |
Other expense: | ||
Interest expense | (3,636) | (396) |
Other expense, net | (804) | (872) |
Total other expense | (4,440) | (1,268) |
Loss before income taxes | (20,439) | (19,201) |
Benefit for income taxes | 181 | 3,267 |
Net loss | $ (20,258) | $ (15,934) |
Net loss per share: | ||
Basic (in dollars per share) | $ (0.24) | $ (0.20) |
Diluted (in dollars per share) | $ (0.24) | $ (0.20) |
Weighted-average shares used in computing net loss per share: | ||
Basic (in shares) | 83,822 | 81,339 |
Diluted (in shares) | 83,822 | 81,339 |
Subscription | ||
Revenue: | ||
Total revenue | $ 80,200 | $ 64,216 |
Cost of revenue: | ||
Cost of revenue (exclusive of amortization shown below) | 13,388 | 9,414 |
Professional services and other | ||
Revenue: | ||
Total revenue | 4,491 | 4,728 |
Cost of revenue: | ||
Cost of revenue (exclusive of amortization shown below) | $ 6,759 | $ 5,583 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net loss | $ (20,258) | $ (15,934) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | (833) | 250 |
Total other comprehensive income (loss) | (833) | 250 |
Comprehensive loss | $ (21,091) | $ (15,684) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balances at Dec. 31, 2020 | $ 81 | $ 739,051 | $ 1,373 | $ (19,395) | $ 721,110 |
Balances (in shares) at Dec. 31, 2020 | 81,163,896 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (15,934) | (15,934) | |||
Stock-based compensation | 16,300 | 16,300 | |||
Reclassification of liability-classified awards upon settlement | 3,089 | 3,089 | |||
Exercise of stock options, net of tax withholding | 1,770 | 1,770 | |||
Exercise of stock options, net of tax withholding (in shares) | 198,105 | ||||
Vesting of restricted stock, net of tax withholding | (565) | (565) | |||
Vesting of restricted stock, net of tax withholding (in shares) | 113,175 | ||||
Foreign currency translation adjustments, net of tax | 250 | 250 | |||
Balances at Mar. 31, 2021 | $ 81 | 759,645 | 1,623 | (35,329) | 726,020 |
Balances (in shares) at Mar. 31, 2021 | 81,475,176 | ||||
Balances at Dec. 31, 2021 | $ 84 | 824,455 | 652 | (83,786) | 741,405 |
Balances (in shares) at Dec. 31, 2021 | 83,754,449 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (20,258) | (20,258) | |||
Stock-based compensation | 7,701 | 7,701 | |||
Reclassification of liability-classified awards upon settlement | 2,541 | 2,541 | |||
Exercise of stock options, net of tax withholding | 838 | 838 | |||
Exercise of stock options, net of tax withholding (in shares) | 106,434 | ||||
Vesting of restricted stock, net of tax withholding | (81) | (81) | |||
Vesting of restricted stock, net of tax withholding (in shares) | 155,264 | ||||
Foreign currency translation adjustments, net of tax | (833) | (833) | |||
Balances at Mar. 31, 2022 | $ 84 | $ 835,454 | $ (181) | $ (104,044) | $ 731,313 |
Balances (in shares) at Mar. 31, 2022 | 84,016,147 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (20,258) | $ (15,934) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 12,904 | 10,174 |
Stock-based compensation expense | 8,128 | 16,939 |
Amortization of deferred commissions | 3,316 | 2,329 |
Amortization of deferred debt issuance costs | 318 | 62 |
Operating leases, net | (249) | (142) |
Deferred taxes | (286) | (3,546) |
Other | 96 | (10) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 8,574 | 16,640 |
Contract assets | 4,006 | 4,128 |
Deferred commissions | (3,716) | (2,934) |
Prepaid expenses and other current assets | (3,891) | 2,466 |
Other assets | (3,707) | (820) |
Accounts payable | 5,274 | (2,013) |
Accrued compensation | (10,583) | (1,865) |
Accrued expenses and other | (413) | 1,659 |
Deferred revenue | (2,797) | (3,046) |
Net cash provided by (used in) operating activities | (3,284) | 24,087 |
Cash flows from investing activities | ||
Payments for business acquisitions, net of cash acquired | (4) | |
Purchases of property and equipment and other | (809) | (953) |
Capitalized software development costs | (4,908) | (3,974) |
Net cash used in investing activities | (5,721) | (4,927) |
Cash flows from financing activities | ||
Payment of acquisition-related holdbacks | (993) | |
Proceeds from stock option exercises | 1,093 | 1,770 |
Payment for tax withholding on equity awards | (81) | (565) |
Payment of long-term debt | (110,000) | |
Net cash provided by (used in) financing activities | 1,012 | (109,788) |
Effect of exchange rates on cash and cash equivalents and restricted cash | 717 | (111) |
Net decrease in cash and cash equivalents and restricted cash | (7,276) | (90,739) |
Cash and cash equivalents and restricted cash | ||
Beginning of period | 220,889 | 146,499 |
End of period | 213,613 | 55,760 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 3,320 | 339 |
Cash paid for taxes | 554 | 215 |
Noncash activities: | ||
Purchases of property and equipment, accrued but not yet paid | 210 | 42 |
Reclassification of liability-classified awards upon settlement | 2,541 | $ 3,089 |
Lease liabilities arising from right-of-use assets | $ 134 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Mar. 31, 2021 |
Reconciliation of cash and cash equivalents and restricted cash within the consolidated balance sheets to the amounts shown in the statements of cash flows above: | ||
Cash and cash equivalents | $ 213,286 | $ 55,003 |
Restricted cash included in other noncurrent assets | 327 | 757 |
Total cash and cash equivalents and restricted cash | $ 213,613 | $ 55,760 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Overview and Basis of Presentation | |
Overview and Basis of Presentation | 1. Overview and Basis of Presentation Organization and Description of Business Ping Identity Holding Corp. and its wholly owned subsidiaries, referred to herein as the “Company,” is headquartered in Denver, Colorado with international locations principally in Canada, the United Kingdom, France, Australia, Israel and India. The Company, doing business as Ping Identity Corporation (“Ping Identity”), provides customers, employees and partners with secure access to any service, application or application programming interface (“API”), while also managing identity and profile data at scale. Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All amounts are reported in U.S. dollars. Certain amounts for the three months ended March 31, 2021 have been reclassified to conform with current period presentation. Unaudited Interim Condensed Consolidated Financial Information The accompanying interim condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations, of comprehensive loss, of cash flows and of stockholders’ equity for the three months ended March 31, 2022 and 2021 and the related footnote disclosures are unaudited. The condensed consolidated balance sheet data as of December 31, 2021 was derived from audited financial statements, but does not include all disclosures required by GAAP. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary to state fairly the consolidated financial position of the Company as of March 31, 2022, the results of operations for the three months ended March 31, 2022 and 2021 and cash flows for the three months ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future period. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, determining the fair values of assets acquired and liabilities assumed in business combinations, valuing stock-based compensation awards and assessing the probability of the awards meeting vesting conditions, recognizing revenue, establishing allowances for expected credit losses based on expected credit losses and the collectability of financial assets, determining useful lives for finite-lived assets, assessing the recoverability of long-lived assets, determining the value of right-of-use assets and lease liabilities, accounting for income taxes and related valuation allowances against deferred tax assets, determining the amortization period for deferred commissions and assessing the accounting treatment for commitments and contingencies. Management evaluates these estimates and assumptions on an ongoing basis and makes estimates based on historical experience and various other assumptions that are believed to be reasonable. Actual results may differ from these estimates due to risks and uncertainties, including those related to the novel Coronavirus Disease 2019 (“COVID-19”) pandemic. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The Company’s significant accounting policies are discussed in “Note 2 — Summary of Significant Accounting Policies” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes to these policies that have had a material impact on the Company’s condensed consolidated financial statements and related notes for the three months ended March 31, 2022. The following describes the impact of certain policies. Recent Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU No. 2021-08"). ASU No. 2021-08 will require companies to apply the definition of a performance obligation under ASC Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a business combination. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. ASU No. 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its condensed consolidated financial statements. The impact is dependent on the size and frequency of future acquisitions and does not affect contract assets or contract liabilities related to acquisitions completed in a year prior to the adoption date. |
Revenue Recognition and Deferre
Revenue Recognition and Deferred Commissions | 3 Months Ended |
Mar. 31, 2022 | |
Revenue Recognition and Deferred Commissions | |
Revenue Recognition and Deferred Commissions | 3. Revenue Recognition and Deferred Commissions The Company recognizes revenue under Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers Disaggregation of Revenue The following table presents revenue by category: Three Months Ended March 31, 2022 2021 Subscription term-based licenses: Multi-year subscription term-based licenses $ 32,782 $ 23,838 1-year subscription term-based licenses 11,528 17,344 Total subscription term-based licenses 44,310 41,182 Subscription SaaS 20,181 11,986 Maintenance and support 15,709 11,048 Total subscription revenue 80,200 64,216 Professional services and other 4,491 4,728 Total revenue $ 84,691 $ 68,944 The following table presents revenue by geographic region, which is based on the delivery address of the customer, and is summarized by geographic area: Three Months Ended March 31, 2022 2021 United States $ 65,763 $ 53,871 International 18,928 15,073 Total revenue $ 84,691 $ 68,944 Other than the United States, no other individual country exceeded 10% of total revenue for the three months ended March 31, 2022 or 2021. Contract Balances Contract assets represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for contracts that have not yet been invoiced to customers where there is a remaining performance obligation, typically for multi-year arrangements. Three Months Ended March 31, 2022 2021 Beginning balance $ 70,997 $ 73,791 Ending balance 67,033 69,681 Change $ (3,964) $ (4,110) Contract liabilities consist of customer billings in advance of revenue being recognized. The Company primarily invoices its customers for subscription arrangements annually in advance, though certain contracts require invoicing for the entire subscription in advance. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current; the remaining portion is recorded as deferred revenue, noncurrent in the condensed consolidated balance sheets. The opening and closing balances of contract liabilities included in deferred revenue were as follows: Three Months Ended March 31, 2022 2021 Beginning balance $ 77,541 $ 52,398 Ending balance 74,744 49,352 Change $ (2,797) $ (3,046) The change in deferred revenue relates primarily to invoicing customers and recognizing revenue in conjunction with the satisfaction of performance obligations. Revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the deferred revenue balances at the beginning of the respective periods was as follows: Three Months Ended March 31, 2022 2021 Deferred revenue recognized as revenue $ 37,769 $ 25,935 Remaining Performance Obligations Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and noncancelable amounts to be invoiced. As of March 31, 2022, the Company had $294.8 million of transaction price allocated to remaining performance obligations, of which 81% is expected to be recognized as revenue over the next 24 months, with the remainder to be recognized thereafter. Deferred Commissions The following table summarizes the account activity of deferred commissions for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Beginning balance $ 29,840 $ 15,929 Additions to deferred commissions 3,716 2,934 Amortization of deferred commissions (3,316) (2,329) Ending balance $ 30,240 $ 16,534 Deferred commissions, current $ 10,829 $ 6,819 Deferred commissions, noncurrent 19,411 9,715 Total deferred commissions $ 30,240 $ 16,534 |
Allowances for Expected Credit
Allowances for Expected Credit Losses | 3 Months Ended |
Mar. 31, 2022 | |
Allowances for Expected Credit Losses | |
Allowances for Expected Credit Losses | 4. Allowances for Expected Credit Losses The following table presents the changes in allowance for expected credit losses for financial assets measured at amortized cost: Accounts Receivable Contract Assets Three Months Ended March 31, 2022 (in thousands) Beginning balance $ 610 $ 156 Provision for credit losses, net of recoveries 138 (42) Write-offs (222) — Ending balance $ 526 $ 114 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 5. Fair Value of Financial Instruments For financial assets and liabilities that are measured at fair value on a recurring basis at each reporting period, the Company uses a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company invests primarily in money market funds, which are measured and recorded at fair value on a recurring basis and are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The fair value of these financial instruments were as follows: March 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents: Money market funds $ 166,030 $ — $ — $ 166,030 December 31, 2021 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents: Money market funds $ 181,009 $ — $ — $ 181,009 The carrying amounts of the Company’s accounts receivable, accounts payable and other current liabilities approximate their fair values due to their short maturities. The carrying value of the Company’s long-term debt approximates its fair value based on Level 2 inputs as the principal amounts outstanding are subject to variable interest rates that are based on market rates (see Note 9). |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property and Equipment | |
Property and Equipment | 6. Property and Equipment Property and equipment consisted of the following: March 31, December 31, 2022 2021 (in thousands) Computer equipment $ 8,202 $ 8,117 Furniture and fixtures 4,381 4,331 Purchased computer software 785 785 Leasehold improvements 8,870 8,670 Other 448 448 Property and equipment, gross 22,686 22,351 Less: Accumulated depreciation (13,731) (12,955) Property and equipment, net $ 8,955 $ 9,396 Depreciation expense was $0.9 million for the three months ended March 31, 2022 and March 31, 2021. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations | |
Business Combinations | 7. Business Combinations Singular Key, Inc. Acquisition On September 27, 2021, the Company acquired 100% of the voting equity interest in Singular Key, Inc. (“Singular Key”). Singular Key is a provider of no-code identity and security orchestration. Singular Key streamlines the integration of identity services, providing a no-code method of creating workflows across multiple identity platforms, including identity verification, fraud, risk, access management, privileged access and identity governance into a unified identity fabric. The purpose of this acquisition was to accelerate the Company’s entry into the identity orchestration arena. The total purchase price was $73.2 million, net of cash acquired, which consisted of the following: Fair Value (in thousands) Cash, net of cash acquired $ 40,314 Common stock issued 32,871 Total $ 73,185 The fair value of the 1,260,885 common shares issued as consideration was determined based on the lowest trading price of a Ping Identity common share on the New York Stock Exchange on the acquisition date of September 27, 2021. The following table summarizes the allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date: September 27, 2021 Useful Life (in thousands) Fair value of net assets acquired Developed technology $ 21,480 4 years Goodwill 56,864 Indefinite Other assets 75 Total assets acquired 78,419 Other liabilities (39) Deferred tax liability (5,195) Total liabilities assumed (5,234) Net assets acquired $ 73,185 Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating Singular Key into the PingOne Cloud Platform. The integration of Singular Key capabilities is expected to enable customers to improve deployment speed, accelerate cloud migration, reduce costs and lower the risk associated with vendor lock-in. None of the goodwill is deductible for tax purposes. SecuredTouch, Inc. Acquisition On June 20, 2021, the Company acquired 100% of the voting equity interest in SecuredTouch, Inc. (“SecuredTouch”). SecuredTouch is a leader in fraud and bot detection and mitigation, which leverages behavioral biometrics, artificial intelligence, machine learning, and deep learning to provide identity, risk, and fraud teams early visibility into potential malicious activity happening across digital properties. The purpose of this acquisition was to accelerate the Company’s cloud-delivered intelligent-identity solutions that combat malicious behavior such as bots, emulators, and account takeover. The total purchase price was $39.7 million, net of cash acquired and a $0.2 million post-closing purchase price adjustment. The purchase price required to be paid by Ping Identity was reduced by $0.2 million as a result of changes to SecuredTouch’s originally estimated working capital balances. The following table summarizes the allocation of the purchase price based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date: June 20, 2021 Useful Life (in thousands) Fair value of net assets acquired Developed technology $ 8,300 4 years Goodwill 30,804 Indefinite Deferred tax asset 1,216 Other assets 157 Total assets acquired 40,477 Deferred revenue (337) Other liabilities (483) Total liabilities assumed (820) Net assets acquired $ 39,657 Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating SecuredTouch into the Ping Intelligent Identity Platform to provide customers a more comprehensive offering that extends past traditional workforce use case and accelerates Ping’s cloud-delivered intelligent identity solutions that combat malicious behavior. None of the goodwill is deductible for tax purposes. Additional Acquisition Related Information The operating results of Singular Key and SecuredTouch are included in the Company’s condensed consolidated statements of operations from their respective dates of acquisition. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 8. Goodwill and Intangible Assets The changes in the carrying amount of the Company’s goodwill balance from December 31, 2021 to March 31, 2022 were as follows (in thousands): Beginning balance $ 528,548 Foreign currency translation adjustment (615) Ending balance $ 527,933 March 31, 2022 Gross Accumulated Net Carrying Amount Amortization Value (in thousands) Developed technology $ 145,939 $ (75,102) $ 70,837 Customer relationships 95,124 (43,223) 51,901 Trade names 56,793 (32,512) 24,281 Product backlog 617 (338) 279 Capitalized internal-use software 54,836 (19,624) 35,212 Other intangible assets 1,535 (756) 779 Total intangible assets $ 354,844 $ (171,555) $ 183,289 The Company’s intangible assets as of December 31, 2021 were as follows: December 31, 2021 Gross Accumulated Net Carrying Amount Amortization Value (in thousands) Developed technology $ 146,142 $ (69,802) $ 76,340 Customer relationships 95,131 (41,326) 53,805 Trade names 56,778 (31,093) 25,685 Product backlog 634 (287) 347 Capitalized internal-use software 50,934 (17,760) 33,174 Other intangible assets 1,481 (755) 726 Total intangible assets $ 351,100 $ (161,023) $ 190,077 The Company capitalized $5.2 million and $4.2 million of internal-use software costs during the three months ended March 31, 2022 and 2021, respectively, which included $0.3 million and $0.2 million of stock-based compensation costs, respectively. Amortization expense for the three months ended March 31, 2022 and 2021 was $12.0 million and $9.3 million, respectively. As of March 31, 2022, expected amortization expense for intangible assets subject to amortization for the next five years is as follows: Year Ending December 31, March 31, 2022 (in thousands) 2022 (remaining nine months) $ 36,129 2023 45,885 2024 42,376 2025 30,020 2026 11,601 Thereafter 17,278 Total $ 183,289 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt | |
Debt | 9. Debt 2019 Credit Agreement In December 2019, Roaring Fork Intermediate, LLC and Ping Identity Corporation, each a wholly-owned subsidiary of Ping Identity Holding Corp, and certain of their subsidiaries (together, the “Credit Parties”) entered into a credit agreement (the “2019 Credit Agreement”) with the financial institutions identified therein as lenders, including Bank of America, N.A., as administrative agent, and BofA Securities, Inc. and RBC Capital Markets as joint lead arrangers. Borrower and Holdings are wholly-owned indirect subsidiaries of the Company. The 2019 Credit Agreement provided for a senior revolving line of credit in a principal committed amount of $150.0 million (the “2019 Revolving Credit Facility”), with the option to request incremental term loan facilities in a minimum amount of $10 million for each facility if certain conditions are met. The 2019 Revolving Credit Facility had a maturity date of December 12, 2024. Obligations under the 2019 Credit Agreement were secured by substantially all of the assets of the Credit Parties. The 2019 Revolving Credit Facility bore interest at the option of the Borrower at a rate per annum equal to either (i) a base rate, which is equal to the greater of (a) the prime rate, (b) the federal funds effective rate plus 0.5% and (c) the adjusted LIBO rate for a one month interest period plus 1%, or (ii) the adjusted LIBO rate equal to the LIBO rate for the interest period multiplied by the statutory reserve rate, plus in the case of each of clauses (i) and (ii), the Applicable Rate (as defined in the 2019 Credit Agreement), which ranges from (i) 0.25% to 1.0% per annum for base rate loans and (ii) 1.25% to 2.0% per annum for LIBO rate loans, in each case, depending on the senior secured net leverage ratio. The Borrower also paid a commitment fee during the term of the 2019 Credit Agreement ranging from 0.20% to 0.35% of the average daily amount of the available amount to be borrowed under the 2019 Credit Agreement per annum, based on the senior secured net leverage ratio. 2021 Credit Agreement On November 23, 2021 (the “Closing Date”), the Credit Parties entered into a credit agreement (the “2021 Credit Agreement”) with the financial institutions party thereto as lenders and Bank of America, N.A., as administrative agent. Borrower and Holdings are wholly-owned indirect subsidiaries of the Company. The 2021 Credit Agreement provides for (a) a new term loan B facility with an aggregate principal amount of $300 million (the “2021 Term Loan Facility” and the loans thereunder, the “2021 Term Loans”) and (b) a new revolving line of credit facility in an aggregate principal amount of $150 million (the “2021 Revolving Facility” and together with the 2021 Term Loan Facility, the “2021 Credit Facilities”). Proceeds from the 2021 Term Loan Facility were used to repay in full paid all remaining balances under the 2019 Revolving Credit Facility. The 2021 Revolving Facility was undrawn at the Closing Date. Following the repayment of the 2019 Revolving Credit Facility, any remaining and future proceeds from the 2021 Credit Facilities will be used for working capital purposes and general corporate purposes. The 2021 Credit Facilities are secured by substantially all of the assets of the Credit Parties. The 2021 Term Loans mature on November 23, 2028. Amortization payments on the 2021 Term Loans are equal to 0.25% of the initial aggregate principal amount of the 2021 Term Loans, payable at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2022. The 2021 Term Loans bear interest at Term SOFR (as defined in the 2021 Credit Agreement and subject to a floor of 0.50%), plus the applicable SOFR Adjustment (as defined in the 2021 Credit Agreement), plus an applicable margin of 3.75%, or a base rate plus an applicable margin of 2.75%. The interest rate on the 2021 Term Loans was 4.25% as of March 31, 2022. The 2021 Revolving Facility matures on November 23, 2026. Amounts drawn under the 2021 Revolving Facility denominated in U.S. dollars will bear interest at Term SOFR, subject to a floor of 0.00%, plus the applicable SOFR Adjustment, plus an applicable margin ranging from 1.25% to 2.00%, depending on the senior secured net leverage ratio (as calculated pursuant to the 2021 Credit Agreement) or (ii) a base rate plus an applicable margin ranging from 0.25% to 1.00%, depending on the senior secured net leverage ratio. Amounts drawn under the 2021 Revolving Facility denominated in available non-U.S. dollar currencies will bear interest at the applicable rate for such non-U.S. dollar currencies plus the applicable rate adjustment (if any) plus an applicable margin ranging from 1.25% to 2.00%, depending on the senior secured net leverage ratio. There were no amounts drawn under the 2021 Revolving Facility as of March 31, 2022. Additionally, the Borrower will also pay a commitment fee ranging from 0.20% to 0.35% per annum on the actual daily unused amount of the 2021 Revolving Facility, based on the senior secured net leverage ratio, payable quarterly in arrears the last business day of each March, June, September and December. Any prepayment of the 2021 Term Loans in connection with a repricing transaction occurring prior to six months after the effective date of the 2021 Credit Agreement, subject to exceptions set forth in the 2021 Credit Agreement, will be subject to a prepayment premium equal to 1.00% of the principal amount of any 2021 Term Loans being prepaid. After May 23, 2022, any borrowing under the 2021 Term Loans may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs. Amounts drawn under the 2021 Revolving Facility may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs, and, subject to the terms, conditions and limitations set forth in the 2021 Credit Agreement, any amounts repaid may be reborrowed. Additionally, the 2021 Credit Agreement contains customary mandatory prepayment provisions. The 2021 Credit Agreement contains customary events of default (including an event of default upon a change of control), customary representations and warranties and affirmative and negative covenants, including customary restrictions on the ability of the Credit Parties and their restricted subsidiaries to, among other things, incur indebtedness, make investments, make dividends and incur liens. Under the terms of the 2021 Credit Agreement, Holdings and its restricted subsidiaries are required to maintain a total net leverage ratio (as calculated pursuant to the 2021 Credit Agreement) (i) commencing with the fiscal quarter ending June 30, 2022 and through and including the fiscal quarter ending March 31, 2024, of no more than 5.00:1.00 and (ii) commencing with the fiscal quarter ending June 30, 2024 and each fiscal quarter thereafter, of no more than 4.00:1.00. As of March 31, 2022, the Credit Parties were in compliance with all financial covenants. Under the 2021 Credit Agreement, Holdings, the Borrower and the Borrower’s restricted subsidiaries are limited in their ability to declare or pay a dividend or return any equity capital to its equity holders (including any direct or indirect parent company of Holdings) or to authorize or make any other distribution, payment or delivery of property to such equity holders (each such dividend, return, distribution, payment or delivery, as applicable, a “Dividend”), subject to certain exceptions, including, without limitation, (1) stock repurchases from current or former employees, officers or directors in an amount not to exceed the greater of $16,750,000 and 30% of consolidated EBITDA (as calculated pursuant to the 2021 Credit Agreement) for the most recently ended four quarters; (2) other Dividends in an aggregate amount not to exceed the greater of $22,000,000 and 40% of consolidated EBITDA for the most recently ended four quarters; (3) unlimited additional Dividends provided that on the day of declaration of such Dividend there is no specified event of default (as defined in the 2021 Credit Agreement) and on a pro forma basis, the total net leverage ratio of Holdings and its restricted subsidiaries for the most recently ended four quarters is not greater than 3.50 to 1.00; (4) payment of certain overhead costs and expenses of Holdings or any direct or indirect parent of Holdings (including any direct or indirect parent company of Holdings) and (5) customary tax distributions. The Company recognized $3.3 million and $0.3 million in interest expense related to the respective debt facilities during the three months ended March 31, 2022 and 2021. As of March 31, 2022 the Company’s outstanding long-term debt balance was $290.7 million and the current portion of long-term debt was $1.9 million. These balances were net of debt issuance costs of $6.3 million and $1.1 million, respectively. As of December 31, 2021 the Company’s outstanding long-term debt balance was $291.2 million and the current portion of long-term debt was $1.1 million. These balances were net of debt issuance costs of $6.6 million and $1.1 million, respectively. The debt issuance costs are a direct deduction from the long-term debt liability and are amortized into interest expense over the contractual term of the borrowings using the effective interest method. Costs associated with the 2021 Revolving Facility were capitalized to other assets in the condensed consolidated balance sheet and will be amortized into interest expense on a straight-line basis over the contractual term of the 2021 Revolving Facility. As of March 31, 2022 and December 31, 2021, deferred costs associated with the 2021 Revolving Facility were $0.8 million. During the three months ended March 31, 2022 and 2021, the Company amortized $0.3 million and $0.1 million of debt issuance costs, respectively. Future principal payments on outstanding borrowings as of March 31, 2022 are as follows: Year Ending December 31, March 31, 2022 (in thousands) 2022 (remaining nine months) $ 2,250 2023 3,000 2024 3,000 2025 3,000 2026 3,000 Thereafter 285,750 Total $ 300,000 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Taxes | |
Income Taxes | 10 . Income Taxes For the three months ended March 31, 2022 and 2021, the Company recorded $0.2 million and $3.3 million as its benefit for income taxes, respectively. The Company’s calculation of its benefit for income taxes is dependent in part on forecasts of full-year results and key components of the Company’s benefit for income taxes primarily consist of state and federal income taxes, foreign income taxes and research and development (“R&D”) credits. The Company’s quarterly tax benefit calculation is also subject to variation due to several factors, including variability in loss before income taxes, the mix of jurisdictions to which such loss relates, changes in how the Company conducts business and tax law developments. The decrease in the tax benefit for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 primarily relates to a valuation allowance recorded against our deferred tax assets in the three months ended March 31, 2022. This decrease was offset by a larger expected pre-tax loss in 2022 as compared to 2021, along with an increase in R&D and other credits recorded in the three months ended March 31, 2022. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 11. Stockholders’ Equity Common stock The Company’s Third Amended and Restated Certificate of Incorporation, which the Board of Directors approved on September 18, 2019 and the stockholders approved on September 23, 2019, authorizes issuance of up to 500,000,000 shares of common stock with a par value of $0.001 per share. The common stock confers upon its holders the right to vote on all matters to be voted on by the stockholders of the Company (with each share representing one vote) and to ratably participate in any distribution of dividends or payments in the event of liquidation or dissolution on a per share basis. The rights of the holders of common stock are subject to, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in the future. Preferred stock The Company’s Third Amended and Restated Certificate of Incorporation authorizes, without stockholder approval but subject to any limitations prescribed by law, the issuance of up to an aggregate of 50,000,000 shares of preferred stock (in one or more series or classes), to create additional series or classes of preferred stock and to establish the number of shares to be included in such series or class. The Board of Directors is also authorized to increase or decrease the number of shares of any series or class subsequent to the issuance of shares of that series or class. Each series will have such rights, preferences and limitations, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences as determined by the Board of Directors. As of March 31, 2022 and December 31, 2021, the Company did not have any shares of preferred stock outstanding and currently has no plans to issue shares of preferred stock. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 12. Stock-Based Compensation On June 30, 2016, the Company established the 2016 Stock Option Plan (the ‘‘2016 Plan’’). The 2016 Plan provides for grants of restricted stock units and stock options to executives, directors, consultants, advisors and key employees which allow option holders to hold or purchase stock in Ping Identity Holding Corp. The Company has 6,800,000 shares of common stock reserved for issuance under the 2016 Plan. Following the Company’s initial public offering (“IPO”), no additional awards are granted under the 2016 Plan. On September 23, 2019, the Company adopted the Ping Identity Holding Corp. Omnibus Incentive Plan (the “2019 Omnibus Incentive Plan”). The 2019 Omnibus Incentive Plan provides for grants of (i) stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) performance awards, (v) other share-based awards and (vi) other cash-based awards to eligible employees, non-employee directors and consultants of the Company. At March 31, 2022, the maximum number of shares of common stock available for issuance under the 2019 Omnibus Incentive Plan was 18,319,271 shares. Stock-based compensation expense for all equity arrangements for the three months ended March 31, 2022 and 2021 was as follows: Three Months Ended March 31, 2022 2021 Subscription cost of revenue $ 467 $ 535 Professional services and other cost of revenue 281 591 Sales and marketing 2,180 4,198 Research and development 3,226 8,512 General and administrative 1,974 3,103 Total $ 8,128 $ 16,939 Stock-based compensation expense recorded to research and development in the condensed consolidated statements of operations excludes amounts that were capitalized in relation to internal-use software. Refer to Note 8 for additional details. Long-Term Incentive Plan In conjunction with the IPO, the Company amended its long-term incentive plan (“LTIP”) which provided for cash compensation to certain employees upon vesting of the related awards, and thus, these awards were liability-classified. Grants under the plan were expected to vest following both (i) an IPO and registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista Equity Partners (“Vista”) realized cash return on its investment in the Company equaling or exceeding $1.491 billion. In the first quarter of 2021, the Company offered employees with LTIP grants the opportunity to convert those awards into restricted stock units (“RSUs”) under the 2019 Omnibus Incentive Plan. Upon conversion, approximately half of the RSUs would solely be subject to time-based restrictions and would vest on April 1, 2021 and the remainder would be subject to performance and market conditions consistent with those of the LTIP grants outlined above. All employees elected to convert their outstanding LTIP grants to RSUs, resulting in grants totaling 948,250 shares. The conversion of the previously outstanding LTIP grants into time-based vesting RSUs resulted in the recognition of $12.4 million of stock-based compensation expense during the quarter ended March 31, 2021. Expense recognized related to the RSUs subject to performance and market conditions is discussed in more detail below. Other Liability-Classified Awards In conjunction with the Company’s acquisition of Symphonic Software Limited in October 2020, the Company issued liability-classified awards to certain individuals with a stated value of $0.4 million and $0.6 million that vest on December 31, 2021 and December 31, 2022, respectively. Half of these awards are subject to continuous service conditions and half are subject to continuous service and other performance conditions. The liability-classified awards will be settled with a variable number of shares of the Company’s common stock at each vesting date based on the satisfaction of such conditions. On December 31, 2021, the Company settled $0.3 million of the first tranche of these liability-classified awards, net of $0.1 million of forfeitures due to employee terminations, resulting in the issuance of 14,664 shares. Upon issuance, the associated $0.3 million liability was reclassified from accrued compensation to additional paid-in capital and common stock on the condensed consolidated balance sheets. As of March 31, 2022, $0.5 million of the second tranche of these liability-classified awards, net of $0.1 million of forfeitures due to employee terminations, remains. Additionally, in conjunction with the Company’s acquisition of ShoCard, Inc. in March of 2020, the Company issued liability-classified awards to certain individuals with a stated value of $3.1 million and $2.5 million that vest on the first and second anniversary of the acquisition, respectively, and are subject to continuous service and other conditions. The liability-classified awards were to be settled with a variable number of shares of the Company’s common stock at each anniversary date based on the satisfaction of such conditions. On March 2, 2021 and 2022, the Company settled the first and second tranche of these liability-classified awards, resulting in the grant and vest of 123,192 and 119,836 shares, respectively, within the periods. Upon issuance, the associated $3.1 million and $2.5 million liabilities were reclassified from accrued compensation to common stock and additional paid-in capital on the condensed consolidated balance sheets. During the three months ended March 31, 2022 and 2021, the Company recognized $0.7 million and $0.8 million of stock-based compensation expense, respectively, related to these awards. Restricted Stock Units The Company grants RSUs that generally vest over one period of 2.7 years using the straight-line method. A summary of the status of the Company’s unvested RSUs and activity for the three months ended March 31, 2022 is as follows: Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2021 3,950,122 $ 21.81 Granted 1,801,743 19.87 Forfeited/canceled (269,285) 21.49 Vested (144,684) 21.29 Unvested as of March 31, 2022 5,337,896 $ 21.18 Performance Stock Units (“PSUs”) Awards Subject to Performance and Market Conditions As previously discussed, during the first quarter of 2021, the Company granted 948,250 restricted stock units in connection with the conversion of previously outstanding LTIP grants, with 474,155 of these restricted stock units subject to performance and market conditions. These market-based PSUs were expected to vest following both (i) registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista’s realized cash return on its investment in the Company equaling or exceeding $1.491 billion. These awards were valued at the date of grant at $19.94 per share using a Monte Carlo simulation. In the second quarter of 2021, these market-based PSUs were determined to be probable of vesting, and the Company began recognizing the associated expense. In the first quarter of 2022, the market condition associated with these awards was modified such that the awards were deemed earned and fully vested as of March 31, 2022. This modification did not have a material impact on the Company’s condensed consolidated financial statements. Awards Subject to Performance Conditions Additionally during the second quarter of 2021, the Company granted 208,806 PSUs under the 2019 Omnibus Incentive Plan, which will be earned only if the Company meets specific internal performance targets within a two-year period. The number of awards that ultimately vest could be 0% if the minimum hurdle is not achieved, or 50% or 100% of shares granted, depending on the Company’s achievement of internal performance targets. The grant-date fair value of these PSUs was $21.93. As of March 31, 2022, there was $0.5 million of total unamortized compensation associated with these awards, which is expected to be recognized over the remaining estimated weighted-average vesting period of 0.5 years. During the first quarter of 2022, the Company granted 207,164 PSUs under the 2019 Omnibus Incentive Plan to certain employees, which will be earned only if those individuals meet specific internal performance goals. The number of awards that ultimately vest could be 0% if the minimum hurdle is not achieved, or approximately 59% or 100% of shares granted, depending on the individual’s achievement of internal performance targets. The grant-date fair value of these PSUs was $20.79. As of March 31, 2022, there was $2.4 million of total estimated unamortized compensation associated with these awards, which is expected to be recognized over the remaining estimated weighted-average vesting period of 2.9 years. The total intrinsic value of the PSUs that vested during the quarter ended March 31, 2022 was $11.7 million. No PSUs vested during the quarter ended March 31, 2021. A summary of the status of the Company’s unvested PSUs and activity for the quarter ended March 31, 2022 is as follows: Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2021 611,685 $ 20.52 Granted 207,164 20.79 Forfeited/canceled (14,164) 21.18 Vested (428,318) 19.94 Unvested as of March 31, 2022 376,367 $ 21.30 Stock Options No options were granted during the three months ended March 31, 2022 or 2021. A summary of the Company’s stock option activity and related information for the three months ended March 31, 2022 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value (in years) (in thousands) Outstanding as of December 31, 2021 3,331,782 $ 9.57 5.5 $ 44,355 Granted — — Forfeited/canceled — — Exercised (143,267) 8.26 2,558 Outstanding as of March 31, 2022 3,188,515 $ 9.63 4.7 $ 56,767 As of March 31, 2022: Vested and exercisable 3,188,515 $ 9.63 4.7 $ 56,767 Time-based options were to vest over four years with 25% vesting one year after grant and the remainder vesting ratably on a quarterly basis thereafter. In conjunction with the IPO, the Company modified the vesting conditions of these awards to provide for the options to vest and become exercisable following both (i) an IPO and registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista realizing a cash return on its investment in the Company equaling or exceeding $1.491 billion. In the second quarter of 2021, achievement of these conditions was determined to be probable. In the first quarter of 2022, the acceleration clause associated with these options was modified such that the options were deemed earned and fully vested as of March 31, 2022. This modification did not have a material impact on the Company’s condensed consolidated financial statements. The vesting conditions of the options subject to performance and market conditions provided for the options to vest and become exercisable following both (i) an IPO and registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista’s realized cash return on its investment in the Company equaling or exceeding $1.491 billion. In the second quarter of 2021, these awards were determined to be probable of vesting, and the Company began recognizing the associated expense. In the first quarter of 2022, the market condition associated with these options was modified such that the options were deemed earned and fully vested as of March 31, 2022. This modification did not have a material impact on the Company’s condensed consolidated financial statements. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions | |
Related Party Transactions | 13. Related Party Transactions Vista is a U.S.-based investment firm that controlled the funds which previously owned a majority of the Company. During the year ended December 31, 2020, Vista sold a portion of its investment in the Company such that its funds no longer owned a majority of the Company as of December 31, 2020. However, Vista is deemed a related party in accordance with ASC 850 as it continues to be a principal owner of the Company. As discussed in Note 9, on November 23, 2021, the Company entered into the 2021 Term Loan Facility with a consortium of lenders for a principal amount of $300.0 million. As of March 31, 2022 and December 31, 2021, Vista held $6.5 million of the Company’s outstanding term loan debt. There were no other material transactions with Vista, or any other related party, during the three months ended March 31, 2022 and 2021. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14. Commitments and Contingencies Letters of Credit As of March 31, 2022 and December 31, 2021, the Company had outstanding letters of credit under office lease agreements that totaled $0.3 million, which primarily guaranteed early termination fees in the event of default. The Company collateralizes the letters of credit with restricted cash balances which were classified in other noncurrent assets at March 31, 2022 and December 31, 2021. Purchase Commitments In the ordinary course of business, the Company enters into various purchase commitments primarily related to third-party cloud hosting and data services, IT operations and marketing events. Total noncancelable purchase commitments as of March 31, 2022 were approximately $178.0 million for periods through 2026. Employee Benefit Plans The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”) in which full-time U.S. employees are eligible to participate on the first day of the subsequent month of his or her date of employment. The 401(k) Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a percentage of their annual compensation as defined in the 401(k) Plan. Employees in the United Kingdom and Canada are covered by defined contribution savings arrangements that are administered based upon the legislative and tax requirements of the respective countries. The Company made contributions to its employee benefit plans of $1.3 million and $0.9 million during the three months ended March 31, 2022 and 2021, respectively. Litigation From time to time, the Company may be subject to various claims, charges and litigation. The Company records a liability when it is both probable that a liability will be incurred and the amount of the loss can be reasonably estimated. The Company maintains insurance to cover certain actions and believes that resolution of such claims, charges, or litigation will not have a material impact on the Company’s financial position, results of operations, or liquidity. The Company has evaluated all pending litigation and determined that the probability of loss is remote, therefore no liabilities have been accrued. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Net Loss Per Share | |
Net Loss Per Share | 15. Net Loss Per Share The following table provides a reconciliation of the numerator and denominator used in the Company’s calculation of basic and diluted net loss per share: Three Months Ended March 31, 2022 2021 Numerator: Net loss $ (20,258) $ (15,934) Denominator: Weighted-average common stock outstanding - basic and diluted 83,822 81,339 Net loss per share: Basic and diluted $ (0.24) $ (0.20) The following shares were excluded from the computation of diluted net loss per share for the periods presented, as their effect would have been antidilutive: Three Months Ended March 31, 2022 2021 RSUs 5,338 2,912 Stock options 3,189 2,123 Other awards 9 128 Total antidilutive shares 8,536 5,163 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events Employee Stock Purchase Plan (“ESPP”) On May 3, 2022, following approval of the Company’s shareholders at the Annual Meeting, the Company adopted the 2022 Employee Stock Purchase Plan (the “2022 ESPP”). 5,000,000 of the Company’s previously authorized shares of common stock were allocated for issuance under the 2022 ESPP. The 2022 ESPP provides for six month offering periods beginning July 1 and January 1 of each year, with the initial offering period beginning on July 1, 2022. |
Overview and Basis of Present_2
Overview and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All amounts are reported in U.S. dollars. Certain amounts for the three months ended March 31, 2021 have been reclassified to conform with current period presentation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, determining the fair values of assets acquired and liabilities assumed in business combinations, valuing stock-based compensation awards and assessing the probability of the awards meeting vesting conditions, recognizing revenue, establishing allowances for expected credit losses based on expected credit losses and the collectability of financial assets, determining useful lives for finite-lived assets, assessing the recoverability of long-lived assets, determining the value of right-of-use assets and lease liabilities, accounting for income taxes and related valuation allowances against deferred tax assets, determining the amortization period for deferred commissions and assessing the accounting treatment for commitments and contingencies. Management evaluates these estimates and assumptions on an ongoing basis and makes estimates based on historical experience and various other assumptions that are believed to be reasonable. Actual results may differ from these estimates due to risks and uncertainties, including those related to the novel Coronavirus Disease 2019 (“COVID-19”) pandemic. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU No. 2021-08"). ASU No. 2021-08 will require companies to apply the definition of a performance obligation under ASC Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a business combination. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. ASU No. 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its condensed consolidated financial statements. The impact is dependent on the size and frequency of future acquisitions and does not affect contract assets or contract liabilities related to acquisitions completed in a year prior to the adoption date. |
Revenue Recognition and Defer_2
Revenue Recognition and Deferred Commissions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue Recognition and Deferred Commissions | |
Schedule of revenue by category | Three Months Ended March 31, 2022 2021 Subscription term-based licenses: Multi-year subscription term-based licenses $ 32,782 $ 23,838 1-year subscription term-based licenses 11,528 17,344 Total subscription term-based licenses 44,310 41,182 Subscription SaaS 20,181 11,986 Maintenance and support 15,709 11,048 Total subscription revenue 80,200 64,216 Professional services and other 4,491 4,728 Total revenue $ 84,691 $ 68,944 |
Schedule of revenue by geographic region | Three Months Ended March 31, 2022 2021 United States $ 65,763 $ 53,871 International 18,928 15,073 Total revenue $ 84,691 $ 68,944 |
Schedule of contract assets | Three Months Ended March 31, 2022 2021 Beginning balance $ 70,997 $ 73,791 Ending balance 67,033 69,681 Change $ (3,964) $ (4,110) |
Schedule of contract liabilities | Three Months Ended March 31, 2022 2021 Beginning balance $ 77,541 $ 52,398 Ending balance 74,744 49,352 Change $ (2,797) $ (3,046) |
Schedule of deferred revenue recognized as revenue | Three Months Ended March 31, 2022 2021 Deferred revenue recognized as revenue $ 37,769 $ 25,935 |
Schedule of deferred commission | Three Months Ended March 31, 2022 2021 Beginning balance $ 29,840 $ 15,929 Additions to deferred commissions 3,716 2,934 Amortization of deferred commissions (3,316) (2,329) Ending balance $ 30,240 $ 16,534 Deferred commissions, current $ 10,829 $ 6,819 Deferred commissions, noncurrent 19,411 9,715 Total deferred commissions $ 30,240 $ 16,534 |
Allowances for Expected Credi_2
Allowances for Expected Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Allowances for Expected Credit Losses | |
Schedule of allowance for expected credit losses | Accounts Receivable Contract Assets Three Months Ended March 31, 2022 (in thousands) Beginning balance $ 610 $ 156 Provision for credit losses, net of recoveries 138 (42) Write-offs (222) — Ending balance $ 526 $ 114 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value of Financial Instruments | |
Schedule of fair value of financial instruments | March 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents: Money market funds $ 166,030 $ — $ — $ 166,030 December 31, 2021 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents: Money market funds $ 181,009 $ — $ — $ 181,009 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property and Equipment | |
Schedule of property and equipment | March 31, December 31, 2022 2021 (in thousands) Computer equipment $ 8,202 $ 8,117 Furniture and fixtures 4,381 4,331 Purchased computer software 785 785 Leasehold improvements 8,870 8,670 Other 448 448 Property and equipment, gross 22,686 22,351 Less: Accumulated depreciation (13,731) (12,955) Property and equipment, net $ 8,955 $ 9,396 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Singular Key, Inc. Acquisition | |
Business Combinations | |
Schedule of purchase consideration | Fair Value (in thousands) Cash, net of cash acquired $ 40,314 Common stock issued 32,871 Total $ 73,185 |
Schedule of allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date | September 27, 2021 Useful Life (in thousands) Fair value of net assets acquired Developed technology $ 21,480 4 years Goodwill 56,864 Indefinite Other assets 75 Total assets acquired 78,419 Other liabilities (39) Deferred tax liability (5,195) Total liabilities assumed (5,234) Net assets acquired $ 73,185 |
SecuredTouch, Inc | |
Business Combinations | |
Schedule of allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date | June 20, 2021 Useful Life (in thousands) Fair value of net assets acquired Developed technology $ 8,300 4 years Goodwill 30,804 Indefinite Deferred tax asset 1,216 Other assets 157 Total assets acquired 40,477 Deferred revenue (337) Other liabilities (483) Total liabilities assumed (820) Net assets acquired $ 39,657 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets | |
Summary of changes in the carrying amount of goodwill balance | The changes in the carrying amount of the Company’s goodwill balance from December 31, 2021 to March 31, 2022 were as follows (in thousands): Beginning balance $ 528,548 Foreign currency translation adjustment (615) Ending balance $ 527,933 |
Summary of intangible assets | March 31, 2022 Gross Accumulated Net Carrying Amount Amortization Value (in thousands) Developed technology $ 145,939 $ (75,102) $ 70,837 Customer relationships 95,124 (43,223) 51,901 Trade names 56,793 (32,512) 24,281 Product backlog 617 (338) 279 Capitalized internal-use software 54,836 (19,624) 35,212 Other intangible assets 1,535 (756) 779 Total intangible assets $ 354,844 $ (171,555) $ 183,289 The Company’s intangible assets as of December 31, 2021 were as follows: December 31, 2021 Gross Accumulated Net Carrying Amount Amortization Value (in thousands) Developed technology $ 146,142 $ (69,802) $ 76,340 Customer relationships 95,131 (41,326) 53,805 Trade names 56,778 (31,093) 25,685 Product backlog 634 (287) 347 Capitalized internal-use software 50,934 (17,760) 33,174 Other intangible assets 1,481 (755) 726 Total intangible assets $ 351,100 $ (161,023) $ 190,077 |
Summary of expected amortization expense for intangible assets subject to amortization for the next five years | Year Ending December 31, March 31, 2022 (in thousands) 2022 (remaining nine months) $ 36,129 2023 45,885 2024 42,376 2025 30,020 2026 11,601 Thereafter 17,278 Total $ 183,289 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt | |
Summary of future principal payments on outstanding borrowings | Future principal payments on outstanding borrowings as of March 31, 2022 are as follows: Year Ending December 31, March 31, 2022 (in thousands) 2022 (remaining nine months) $ 2,250 2023 3,000 2024 3,000 2025 3,000 2026 3,000 Thereafter 285,750 Total $ 300,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stock-Based Compensation | |
Summary of stock-based compensation expense | Three Months Ended March 31, 2022 2021 Subscription cost of revenue $ 467 $ 535 Professional services and other cost of revenue 281 591 Sales and marketing 2,180 4,198 Research and development 3,226 8,512 General and administrative 1,974 3,103 Total $ 8,128 $ 16,939 |
Summary of the status of the Company's unvested RSUs and activity | Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2021 3,950,122 $ 21.81 Granted 1,801,743 19.87 Forfeited/canceled (269,285) 21.49 Vested (144,684) 21.29 Unvested as of March 31, 2022 5,337,896 $ 21.18 |
Summary of the status of the Company's unvested PSUs and activity | Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2021 611,685 $ 20.52 Granted 207,164 20.79 Forfeited/canceled (14,164) 21.18 Vested (428,318) 19.94 Unvested as of March 31, 2022 376,367 $ 21.30 |
Summary of stock option activity and related information | Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value (in years) (in thousands) Outstanding as of December 31, 2021 3,331,782 $ 9.57 5.5 $ 44,355 Granted — — Forfeited/canceled — — Exercised (143,267) 8.26 2,558 Outstanding as of March 31, 2022 3,188,515 $ 9.63 4.7 $ 56,767 As of March 31, 2022: Vested and exercisable 3,188,515 $ 9.63 4.7 $ 56,767 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Net Loss Per Share | |
Summary of reconciliation of the numerator and denominator used in the Company's calculation of basic and diluted net loss per share | Three Months Ended March 31, 2022 2021 Numerator: Net loss $ (20,258) $ (15,934) Denominator: Weighted-average common stock outstanding - basic and diluted 83,822 81,339 Net loss per share: Basic and diluted $ (0.24) $ (0.20) |
Summary of shares excluded from the computation of diluted net loss per share for the periods presented, as their effect would have been antidilutive | Three Months Ended March 31, 2022 2021 RSUs 5,338 2,912 Stock options 3,189 2,123 Other awards 9 128 Total antidilutive shares 8,536 5,163 |
Revenue Recognition and Defer_3
Revenue Recognition and Deferred Commissions - Revenue by category (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue | ||
Total revenue | $ 84,691 | $ 68,944 |
Subscription term-based licenses | ||
Disaggregation of Revenue | ||
Total revenue | 44,310 | 41,182 |
Multi-year subscription term-based licenses | ||
Disaggregation of Revenue | ||
Total revenue | 32,782 | 23,838 |
1-year subscription term-based licenses | ||
Disaggregation of Revenue | ||
Total revenue | 11,528 | 17,344 |
Subscription revenue | ||
Disaggregation of Revenue | ||
Total revenue | 80,200 | 64,216 |
Subscription SaaS | ||
Disaggregation of Revenue | ||
Total revenue | 20,181 | 11,986 |
Maintenance and support | ||
Disaggregation of Revenue | ||
Total revenue | 15,709 | 11,048 |
Professional services and other | ||
Disaggregation of Revenue | ||
Total revenue | $ 4,491 | $ 4,728 |
Revenue Recognition and Defer_4
Revenue Recognition and Deferred Commissions - Revenue by geographic area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue | ||
Total revenue | $ 84,691 | $ 68,944 |
United States | ||
Disaggregation of Revenue | ||
Total revenue | 65,763 | 53,871 |
International. | ||
Disaggregation of Revenue | ||
Total revenue | $ 18,928 | $ 15,073 |
Revenue Recognition and Defer_5
Revenue Recognition and Deferred Commissions - Contract assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Contract assets | ||
Beginning balance | $ 70,997 | $ 73,791 |
Ending balance | 67,033 | 69,681 |
Change | $ (3,964) | $ (4,110) |
Revenue Recognition and Defer_6
Revenue Recognition and Deferred Commissions - Contract liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Contract liabilities | ||
Beginning balance | $ 77,541 | $ 52,398 |
Ending balance | 74,744 | 49,352 |
Change | $ (2,797) | $ (3,046) |
Revenue Recognition and Defer_7
Revenue Recognition and Deferred Commissions - Deferred revenue recognized as revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Deferred revenue recognized as revenue | ||
Deferred revenue recognized as revenue | $ 37,769 | $ 25,935 |
Revenue Recognition and Defer_8
Revenue Recognition and Deferred Commissions - Remaining performance obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 $ in Millions | Mar. 31, 2022USD ($) |
Remaining Performance Obligations | |
Transaction price allocated to remaining performance obligations | $ 294.8 |
Percentage expected to be recognized as revenue | 81.00% |
Expected to be recognized as revenue, period | 24 months |
Revenue Recognition and Defer_9
Revenue Recognition and Deferred Commissions - Deferred commissions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue Recognition and Deferred Commissions | |||
Beginning balance | $ 29,840 | $ 15,929 | |
Additions to deferred commissions | 3,716 | 2,934 | |
Amortization of deferred commissions | (3,316) | (2,329) | |
Ending balance | 30,240 | 16,534 | |
Deferred commissions, current | 10,829 | 6,819 | $ 10,460 |
Deferred commissions, noncurrent | 19,411 | 9,715 | 19,380 |
Total deferred commissions | $ 30,240 | $ 16,534 | $ 29,840 |
Allowances for Expected Credi_3
Allowances for Expected Credit Losses (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Accounts Receivable | |
Beginning balance | $ 610 |
Provision for credit losses, net of recoveries | 138 |
Write-offs | (222) |
Ending balance | 526 |
Contract Assets | |
Beginning balance | 156 |
Provision for credit losses, net of recoveries | (42) |
Ending balance | $ 114 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Recurring - Money market funds - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value of Financial Instruments | ||
Cash and cash equivalents | $ 166,030 | $ 181,009 |
Level 1 | ||
Fair Value of Financial Instruments | ||
Cash and cash equivalents | $ 166,030 | $ 181,009 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property and Equipment | |||
Property and equipment, gross | $ 22,686 | $ 22,351 | |
Less: Accumulated depreciation | (13,731) | (12,955) | |
Property and equipment, net | 8,955 | 9,396 | |
Depreciation expense | 900 | $ 900 | |
Computer equipment | |||
Property and Equipment | |||
Property and equipment, gross | 8,202 | 8,117 | |
Furniture and fixtures | |||
Property and Equipment | |||
Property and equipment, gross | 4,381 | 4,331 | |
Purchased computer software | |||
Property and Equipment | |||
Property and equipment, gross | 785 | 785 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, gross | 8,870 | 8,670 | |
Other | |||
Property and Equipment | |||
Property and equipment, gross | $ 448 | $ 448 |
Business Combinations - Conside
Business Combinations - Consideration (Details) - Singular Key, Inc. Acquisition $ in Thousands | Sep. 27, 2021USD ($) |
Business Combinations | |
Cash, net of cash acquired | $ 40,314 |
Common stock issued | 32,871 |
Total purchase price | $ 73,185 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | Sep. 27, 2021 | Jun. 20, 2021 |
Singular Key, Inc. Acquisition | ||
Business Combinations | ||
Percentage of voting equity interest acquired | 100.00% | |
Total purchase price | $ 73,185 | |
Common shares issued | 1,260,885 | |
SecuredTouch, Inc | ||
Business Combinations | ||
Percentage of voting equity interest acquired | 100.00% | |
Total purchase price | $ 39,700 | |
Purchase price adjustment | $ 200 |
Business Combinations - Fair va
Business Combinations - Fair value of assets acquired and liabilities (Details) - USD ($) $ in Thousands | Sep. 27, 2021 | Jun. 20, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Fair value of net assets acquired | ||||
Goodwill | $ 527,933 | $ 528,548 | ||
Singular Key, Inc. Acquisition | ||||
Fair value of net assets acquired | ||||
Goodwill | $ 56,864 | |||
Other assets | 75 | |||
Total assets acquired | 78,419 | |||
Other liabilities | (39) | |||
Deferred tax liability | (5,195) | |||
Total liabilities assumed | (5,234) | |||
Net assets acquired | 73,185 | |||
Goodwill deductible for tax purposes | 0 | |||
Singular Key, Inc. Acquisition | Developed technology | ||||
Fair value of net assets acquired | ||||
Finite-lived intangible assets | $ 21,480 | |||
Useful life | 4 years | |||
SecuredTouch, Inc | ||||
Fair value of net assets acquired | ||||
Goodwill | $ 30,804 | |||
Deferred tax asset | 1,216 | |||
Other assets | 157 | |||
Total assets acquired | 40,477 | |||
Deferred revenue | (337) | |||
Other liabilities | (483) | |||
Total liabilities assumed | (820) | |||
Net assets acquired | 39,657 | |||
Goodwill deductible for tax purposes | 0 | |||
SecuredTouch, Inc | Developed technology | ||||
Fair value of net assets acquired | ||||
Finite-lived intangible assets | $ 8,300 | |||
Useful life | 4 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Changes in the carrying amount of the Company's goodwill balance | |
Beginning balance | $ 528,548 |
Foreign currency translation adjustment | (615) |
Ending balance | $ 527,933 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Total intangible assets subject to amortization | |||
Gross Amount | $ 354,844 | $ 351,100 | |
Accumulated Amortization | (171,555) | (161,023) | |
Net Carrying Value | 183,289 | 190,077 | |
Amortization expense | 12,000 | $ 9,300 | |
Stock-based compensation expense | 8,128 | 16,939 | |
Developed technology | |||
Total intangible assets subject to amortization | |||
Gross Amount | 145,939 | 146,142 | |
Accumulated Amortization | (75,102) | (69,802) | |
Net Carrying Value | 70,837 | 76,340 | |
Customer relationships | |||
Total intangible assets subject to amortization | |||
Gross Amount | 95,124 | 95,131 | |
Accumulated Amortization | (43,223) | (41,326) | |
Net Carrying Value | 51,901 | 53,805 | |
Trade names | |||
Total intangible assets subject to amortization | |||
Gross Amount | 56,793 | 56,778 | |
Accumulated Amortization | (32,512) | (31,093) | |
Net Carrying Value | 24,281 | 25,685 | |
Product backlog | |||
Total intangible assets subject to amortization | |||
Gross Amount | 617 | 634 | |
Accumulated Amortization | (338) | (287) | |
Net Carrying Value | 279 | 347 | |
Capitalized internal-use software | |||
Total intangible assets subject to amortization | |||
Gross Amount | 54,836 | 50,934 | |
Accumulated Amortization | (19,624) | (17,760) | |
Net Carrying Value | 35,212 | 33,174 | |
Amount capitalized | 5,200 | 4,200 | |
Stock-based compensation expense | 300 | $ 200 | |
Other intangible assets | |||
Total intangible assets subject to amortization | |||
Gross Amount | 1,535 | 1,481 | |
Accumulated Amortization | (756) | (755) | |
Net Carrying Value | $ 779 | $ 726 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization expense for intangible assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Expected amortization expense for intangible assets subject to amortization | ||
2022 (remaining nine months) | $ 36,129 | |
2023 | 45,885 | |
2024 | 42,376 | |
2025 | 30,020 | |
2026 | 11,601 | |
Thereafter | 17,278 | |
Total | $ 183,289 | $ 190,077 |
Debt (Details)
Debt (Details) | Nov. 23, 2021USD ($)item | Dec. 31, 2019USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) |
Debt | |||||
Interest expense | $ 3,300,000 | $ 300,000 | |||
Long-term debt (net of issuance costs) | 290,680,000 | $ 291,154,000 | |||
Current portion of long-term debt (net of issuance costs) | 1,882,000 | 1,132,000 | |||
Amortization of debt issuance costs | 318,000 | $ 62,000 | |||
2019 Credit Agreement | |||||
Debt | |||||
Principal amount of debt | $ 150,000,000 | ||||
2019 Credit Agreement | Minimum | |||||
Debt | |||||
Commitment fee percentage | 0.20% | ||||
Principal amount of debt | $ 10,000,000 | ||||
2019 Credit Agreement | Maximum | |||||
Debt | |||||
Commitment fee percentage | 0.35% | ||||
2019 Credit Agreement | Federal funds rate | |||||
Debt | |||||
Variable rate spread (as a percent) | 0.50% | ||||
2019 Credit Agreement | Adjusted one month LIBOR | |||||
Debt | |||||
Variable rate spread (as a percent) | 1.00% | ||||
2019 Credit Agreement | Adjusted one month LIBOR | Minimum | |||||
Debt | |||||
Variable rate spread (as a percent) | 1.25% | ||||
2019 Credit Agreement | Adjusted one month LIBOR | Maximum | |||||
Debt | |||||
Variable rate spread (as a percent) | 2.00% | ||||
2019 Credit Agreement | Base rate | Minimum | |||||
Debt | |||||
Variable rate spread (as a percent) | 0.25% | ||||
2019 Credit Agreement | Base rate | Maximum | |||||
Debt | |||||
Variable rate spread (as a percent) | 1.00% | ||||
2021 Credit Agreement | |||||
Debt | |||||
Threshold stock repurchases | $ 16,750,000 | ||||
Threshold percentage of consolidated EBITDA | 30.00% | ||||
Number of quarters | item | 4 | ||||
Aggregate amount of dividends | $ 22,000,000 | ||||
Consolidated percentage of EBITDA | 40.00% | ||||
2021 Credit Agreement | Maximum | |||||
Debt | |||||
Total leverage ratio as exceptions | 3.50 | ||||
2021 Credit Agreement | Period Commencing, Fiscal Quarter Ending June 30, 2022 and Through and Including Fiscal Quarter Ending March 31, 2024 | |||||
Debt | |||||
Net leverage ratio | 5.00% | ||||
2021 Credit Agreement | Period commencing, Fiscal Quarter Ending June 30, 2024 and Each Fiscal Quarter Thereafter | |||||
Debt | |||||
Net leverage ratio | 4.00% | ||||
2021 Term Loan Facility | |||||
Debt | |||||
Deferred debt issuance cost | $ 6,300,000 | 6,600,000 | |||
Principal amount of debt | $ 300,000,000 | ||||
Percentage of principal amount payable quarterly | 0.25% | ||||
Floor rate (as a percent) | 0.50% | ||||
Interest rate (as a percent) | 4.25% | ||||
Subject to prepayment premium percentage | 1.00% | ||||
Net of debt issuance costs | $ 1,100,000 | 1,100,000 | |||
2021 Term Loan Facility | Base rate | |||||
Debt | |||||
Variable rate spread (as a percent) | 2.75% | ||||
2021 Term Loan Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Debt | |||||
Variable rate spread (as a percent) | 3.75% | ||||
2021 Revolving Facility | |||||
Debt | |||||
Principal committed amount | $ 150,000,000 | ||||
Proceeds from line of credit | 0 | ||||
Deferred debt issuance costs | $ 800,000 | $ 800,000 | |||
2021 Revolving Facility | Minimum | |||||
Debt | |||||
Commitment fee percentage | 0.20% | ||||
Variable rate spread (as a percent) | 1.25% | ||||
2021 Revolving Facility | Maximum | |||||
Debt | |||||
Commitment fee percentage | 0.35% | ||||
Variable rate spread (as a percent) | 2.00% | ||||
2021 Revolving Facility | Base rate | Minimum | |||||
Debt | |||||
Variable rate spread (as a percent) | 0.25% | ||||
2021 Revolving Facility | Base rate | Maximum | |||||
Debt | |||||
Variable rate spread (as a percent) | 1.00% | ||||
2021 Revolving Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Debt | |||||
Floor rate (as a percent) | 0.00% | ||||
2021 Revolving Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | |||||
Debt | |||||
Variable rate spread (as a percent) | 1.25% | ||||
2021 Revolving Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | |||||
Debt | |||||
Variable rate spread (as a percent) | 2.00% |
Debt - Future principal payment
Debt - Future principal payments (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Future principal payments on outstanding borrowings | |
2022 (remaining nine months) | $ 2,250 |
2023 | 3,000 |
2024 | 3,000 |
2025 | 3,000 |
2026 | 3,000 |
Thereafter | 285,750 |
Total | $ 300,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Taxes | ||
Benefit for income taxes | $ (181) | $ (3,267) |
Stockholders' Equity - Common s
Stockholders' Equity - Common stock and Preferred stock (Details) | 3 Months Ended | ||
Mar. 31, 2022Vote$ / sharesshares | Dec. 31, 2021$ / sharesshares | Sep. 23, 2019$ / sharesshares | |
Common stock | |||
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 |
Number of votes per share | Vote | 1 | ||
Preferred stock | |||
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 | |
Preferred stock, outstanding (in shares) | 0 | 0 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 30 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2016 | |
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 8,128 | $ 16,939 | ||
2016 Plan | ||||
Stock-Based Compensation | ||||
Common stock reserved for future issuance | 6,800,000 | |||
Options granted (in shares) | 0 | |||
2019 Omnibus Incentive Plan | ||||
Stock-Based Compensation | ||||
Maximum number of shares available for issuance | 18,319,271 | 18,319,271 | ||
Subscription cost of revenue | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 467 | 535 | ||
Professional services and other cost of revenue | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | 281 | 591 | ||
Sales and marketing | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | 2,180 | 4,198 | ||
Research and development | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | 3,226 | 8,512 | ||
General and administrative | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 1,974 | $ 3,103 |
Stock-Based Compensation - Long
Stock-Based Compensation - Long-term Incentive plan (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Long-term incentive plan | IPO | ||
Stock Based Compensation | ||
Minimum cash return on investments | $ 1,491 | |
RSUs | ||
Stock Based Compensation | ||
RSUs granted | 1,801,743 | |
RSUs | Long-term incentive plan | ||
Stock Based Compensation | ||
RSUs granted | 948,250 | |
RSUs | 2019 Omnibus Incentive Plan | ||
Stock Based Compensation | ||
RSUs granted | 948,250 | |
RSUs subject to performance and market conditions | ||
Stock Based Compensation | ||
Stock-based compensation expense from conversion | $ 12.4 |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other Liability-Classified Awards (Details) - USD ($) $ in Thousands | Mar. 02, 2022 | Dec. 31, 2021 | Mar. 02, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Oct. 31, 2020 | Mar. 31, 2020 |
Stock Based Compensation | |||||||
Stock-based compensation expense | $ 8,128 | $ 16,939 | |||||
Liability-Classified Awards | Tranche One | |||||||
Stock Based Compensation | |||||||
Liability classified awards settled | $ 300 | ||||||
forfeiture of contingent consideration-liability classified awards | 100 | ||||||
Amount of adjustments to additional paid in capital due to reclassification of liability-classified awards upon settlement | $ 300 | ||||||
Shares issued | 14,664 | ||||||
Reclassification of liability-classified awards upon settlement | $ 300 | ||||||
Liability-Classified Awards | Tranche Two | |||||||
Stock Based Compensation | |||||||
forfeiture of contingent consideration-liability classified awards | 100 | ||||||
Contingent consideration-liability classified awards outstanding | 500 | ||||||
ShoCard, Inc | |||||||
Stock Based Compensation | |||||||
Contingent compensation payable on the first anniversary of acquisition | $ 3,100 | ||||||
Contingent compensation payable on the second anniversary of acquisition | $ 2,500 | ||||||
ShoCard, Inc | Liability-Classified Awards | |||||||
Stock Based Compensation | |||||||
Liability classified awards settled | $ 2,500 | $ 3,100 | |||||
Shares issued | 119,836 | 123,192 | |||||
Stock-based compensation expense | $ 700 | $ 800 | |||||
Symphonic | |||||||
Stock Based Compensation | |||||||
Contingent consideration payable in common stock in year one | $ 400 | ||||||
Contingent consideration payable in common stock in year two | $ 600 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - RSUs - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock Based Compensation | ||
Weighted-average grant-date fair value | $ 19.87 | $ 26.66 |
Total intrinsic value | $ 3.2 | $ 3.5 |
Total unrecognized compensation | $ 91.7 | |
Unrecognized compensation, recognition period | 2 years 8 months 12 days | |
Shares | ||
Unvested as of December 31, 2021 | 3,950,122 | |
Granted | 1,801,743 | |
Forfeited/canceled | (269,285) | |
Vested | (144,684) | |
Unvested as of March 31, 2022 | 5,337,896 | |
Weighted Average Grant Date Fair Value | ||
Unvested as of December 31, 2021 | $ 21.81 | |
Granted | 19.87 | |
Forfeited/canceled | 21.49 | |
Vested | 21.29 | |
Unvested as of March 31, 2022 | $ 21.18 | |
Minimum | ||
Stock Based Compensation | ||
Vesting period | 1 year | |
Maximum | ||
Stock Based Compensation | ||
Vesting period | 4 years |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | |
Stock Based Compensation | |||
Stock-based compensation expense | $ 8,128 | $ 16,939 | |
Long-term incentive plan | IPO | |||
Stock Based Compensation | |||
Minimum cash return on investments | $ 1,491,000 | ||
RSUs | |||
Stock Based Compensation | |||
Weighted-average grant-date fair value | $ 19.87 | $ 26.66 | |
Vested | 144,684 | ||
Total unrecognized compensation | $ 91,700 | ||
Unrecognized compensation, recognition period | 2 years 8 months 12 days | ||
Shares | |||
Unvested as of December 31, 2021 | 3,950,122 | ||
Granted | 1,801,743 | ||
Forfeited/canceled | (269,285) | ||
Vested | (144,684) | ||
Unvested as of March 31, 2022 | 5,337,896 | ||
Weighted Average Grant Date Fair Value | |||
Unvested as of December 31, 2021 | $ 21.81 | ||
Granted | 19.87 | $ 26.66 | |
Granted | 19.87 | ||
Forfeited/canceled | 21.49 | ||
Vested | 21.29 | ||
Unvested as of March 31, 2022 | 21.18 | ||
RSUs | Long-term incentive plan | |||
Shares | |||
Granted | 948,250 | ||
RSUs | 2019 Omnibus Incentive Plan | |||
Shares | |||
Granted | 948,250 | ||
PSUs | |||
Stock Based Compensation | |||
Weighted-average grant-date fair value | $ 20.79 | ||
Vested | 428,318 | 0 | |
Total intrinsic value | $ 11,700 | ||
Shares | |||
Unvested as of December 31, 2021 | 611,685 | ||
Granted | 207,164 | ||
Forfeited/canceled | (14,164) | ||
Vested | (428,318) | 0 | |
Unvested as of March 31, 2022 | 376,367 | ||
Weighted Average Grant Date Fair Value | |||
Unvested as of December 31, 2021 | $ 20.52 | ||
Granted | 20.79 | ||
Forfeited/canceled | 21.18 | ||
Vested | 19.94 | ||
Unvested as of March 31, 2022 | 21.30 | ||
Performance and market conditions PSUs | Long-term incentive plan | |||
Stock Based Compensation | |||
Minimum cash return on investments | $ 1,491,000 | ||
Weighted-average grant-date fair value | $ 19.94 | ||
Weighted Average Grant Date Fair Value | |||
Granted | $ 19.94 | ||
Performance and market conditions PSUs | 2019 Omnibus Incentive Plan | |||
Stock Based Compensation | |||
Vesting period | 2 years | ||
Weighted-average grant-date fair value | $ 20.79 | $ 21.93 | |
Shares | |||
Granted | 207,164 | 208,806 | 474,155 |
Weighted Average Grant Date Fair Value | |||
Granted | $ 20.79 | $ 21.93 | |
Performance and market conditions PSUs | 2019 Omnibus Incentive Plan | Tranche One | |||
Stock Based Compensation | |||
Vesting percentage | 0.00% | 0.00% | |
Performance and market conditions PSUs | 2019 Omnibus Incentive Plan | Tranche Two | |||
Stock Based Compensation | |||
Vesting percentage | 59.00% | 50.00% | |
Performance and market conditions PSUs | 2019 Omnibus Incentive Plan | Tranche Three | |||
Stock Based Compensation | |||
Vesting percentage | 100.00% | 100.00% | |
Performance and market conditions PSUs | 2019 Omnibus Incentive Plan | Grant Period One | |||
Stock Based Compensation | |||
Total unrecognized compensation | $ 500 | ||
Unrecognized compensation, recognition period | 6 months | ||
Performance and market conditions PSUs | 2019 Omnibus Incentive Plan | Grant Period Two | |||
Stock Based Compensation | |||
Total unrecognized compensation | $ 2,400 | ||
Unrecognized compensation, recognition period | 2 years 10 months 24 days |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock Based Compensation | ||
Stock-based compensation expense | $ 8,128 | $ 16,939 |
Stock Options | ||
Stock Based Compensation | ||
Granted | 0 | 0 |
Time-based options | ||
Stock Based Compensation | ||
Vesting period | 1 year | |
Vesting percentage | 25.00% | |
Contractual life | 4 years | |
Time-based options | IPO | Tranche One | ||
Stock Based Compensation | ||
Minimum cash return on investments | $ 1,491,000 | |
Performance and market conditions options | ||
Stock Based Compensation | ||
Minimum cash return on investments | $ 1,491,000 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Company's Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Options | |||
Outstanding as of December 31, 2021 | 3,331,782 | ||
Granted | 0 | 0 | |
Exercised | (143,267) | ||
Outstanding as of March 31, 2022 | 3,188,515 | 3,331,782 | |
Vested and exercisable | 3,188,515 | ||
Weighted Average Exercise Price | |||
Outstanding as of December 31, 2021 | $ 9.57 | ||
Exercised | 8.26 | ||
Outstanding as of March 31, 2022 | 9.63 | $ 9.57 | |
Vested and exercisable | $ 9.63 | ||
Weighted Average Remaining Contractual Term (in years) | |||
Outstanding | 4 years 8 months 12 days | 5 years 6 months | |
Vested and exercisable | 4 years 8 months 12 days | ||
Aggregate Intrinsic Value | |||
Outstanding as of December 31, 2021 (in dollars) | $ 44,355 | ||
Exercised (in dollars) | 2,558 | ||
Outstanding as of March 31, 2022 (in dollars) | 56,767 | $ 44,355 | |
Vested and exercisable (in dollars) | $ 56,767 |
Related Party Transactions (Det
Related Party Transactions (Details) - Vista Equity Partners - 2021 Term Loan Facility - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | Nov. 23, 2021 | |
Related Party Transactions | |||
Amount drawn | $ 6.5 | $ 6.5 | |
Principal committed amount | $ 300 |
Commitments and Contingencies -
Commitments and Contingencies - Letter of Credit (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Letters of Credit | ||
Letters of credit under an office lease agreement which primarily guaranteed early termination fees in the event of default | $ 0.3 | $ 0.3 |
Commitments and Contingencies_2
Commitments and Contingencies - Purchase Commitments (Details) $ in Millions | Mar. 31, 2022USD ($) |
Purchase Commitments | |
Noncancelable purchase commitments | $ 178 |
Commitments and Contingencies_3
Commitments and Contingencies - Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Employee Benefit Plans | ||
Contributions to employee benefit plan | $ 1.3 | $ 0.9 |
Net Loss Per Share - Reconcilia
Net Loss Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator | ||
Net loss | $ (20,258) | $ (15,934) |
Denominator | ||
Weighted-average common stock outstanding - basic (in shares) | 83,822 | 81,339 |
Weighted-average common stock outstanding - diluted (in shares) | 83,822 | 81,339 |
Net loss per share: | ||
Basic (in dollars per share) | $ (0.24) | $ (0.20) |
Diluted (in dollars per share) | $ (0.24) | $ (0.20) |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of diluted net loss per share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Shares excluded from the computation of diluted net loss per share | ||
Total antidilutive shares | 8,536 | 5,163 |
RSUs | ||
Shares excluded from the computation of diluted net loss per share | ||
Total antidilutive shares | 5,338 | 2,912 |
Stock Options | ||
Shares excluded from the computation of diluted net loss per share | ||
Total antidilutive shares | 3,189 | 2,123 |
Other awards | ||
Shares excluded from the computation of diluted net loss per share | ||
Total antidilutive shares | 9 | 128 |
Subsequent Events (Details)
Subsequent Events (Details) | May 03, 2022shares |
Subsequent Event | Employee Stock Purchase Plan | |
Subsequent Events | |
Maximum number of shares available for issuance | 5,000,000 |