FORG - Earnings call transcript Q3 2021

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Operator

Welcome to ForgeRock’s Third Quarter Earnings Conference Call.

As a reminder, this call is being recorded. I would like to turn the call over to Mark Kang, ForgeRock’s Head of Investor Relations. Please go ahead.

Mark Kang

Hello, everyone. XXXX QX ForgeRock’s to conference call. Welcome

call of ForgeRock the and of with Chief me CEO Rosch, EVP Operations. Fran are Global and Officer today Financial On John our Fernandez,

you we that statements Before the the of securities meaning like I’d to within our today includes begin, discussion forward-looking laws. federal remind

offerings the could to risk results these customer in Actual are some expected our results enhancements materially and XXXX including slides on SEC I Investor future we our indicated for include to in our referenced from final matters. in for and from offerings, press reconciled numbers encourage of the by hand All will other QX website. and factors current and filings, offerings our included actual cause September market release indicated the differ for IPO forward-looking Fran. statements for you to Relations could differ those Forward-looking our full statements over call our demand by have offerings that today’s to related those SEC our non-GAAP with to results year filed results, our to our statements. factors the We statements. review on the XX, forward-looking With prospectus XXXX call available that that,

Fran Rosch

Mark thanks public joining everyone our for company. first Thanks, and a earnings call as

our am the IPO I to next we employees, successful of growth. partners customers, and looking years. for excited completed our support would thank to I are get started, over like this September I Before and investors to stage in their forward a very have

in to third a achieved while $XXX the grew $XX public XX% quarter in grew We company. our first results year-over-year with quarter we are million. to ARR million, XX% as the Revenue pleased

customers. fourth SaaS deliver need more digital our continue safe seeing which and both be to see customers continues identity. is adoption see market recognize new that bolstering with our quarter, we Cloud, trends their the offering, to traction employees companies seamless to transformation large on the capitalize growing to as to our and are Identity Identity growing both positioned to continuing and existing productive. and ForgeRock We critical experiences keep confidence to engage enterprise-grade for We fiscal a these into well

I highlights the is our earnings quarter, excited Before more given ForgeRock, to third our elaborate ahead. I’d future our I’m about opportunity tell why on of like and this about first call, the you so

around, banking, are If name we changing. you world it’s health look digitally, is take that a how and now moment Activities happening retail, care in-person spot conduct to to the few. to to easy used a

using facial to recognition massive digital this has applications. We’re helping get transformation. ForgeRock power to on phones economy and drive And digital to new this access our

to been security unique help people the breaks ForgeRock experiences is digital a in global force enhanced with and and the in intuitive consumer, IoT environment. identity, for workforce trust access quo too connected a that compromise far technology that status has provide our leader zero long. We world

the to simple our This to purpose-built enhance so or consumers for in Our to mission enterprise-grade, unified happen: to the for have secure, the as a Identity people initiative full strategic and and create serve driving deliver work, that log recedes at suite personalized the modern of seamless enterprises pressure ever-increasing and and digital is are at again. two are with and differentiated experiences focus to competitive identity pressure is loyalty go Identity productivity competitive background on employees. users home enterprise experiences. to who needs under provide omni-channel to experiences We that identity platform completely; increase on never into things key

acquisitions enterprise resulting presents opportunity from pressure and saddled the decades our suite, at of faced challenges compliance applications our CIAM, who we estimate mergers be to and which accumulation consumer, by IoT our by fastest-growing business part why enterprises, heterogeneous $XX the customers a increasing identity regulatory technology or and globally. and additional market reason as services. of of workforce, are information massive access market. $XX myriad However, of communications because and billion current homegrown across referred using with we and environments driven of management, legacy billion, opportunity consumer consumer infrastructures makeup operate estimate be systems, enterprises IT, choice. we complex win for a evolving enterprises power of the IT our and bottoms-up ForgeRock. give and product analysis These customers, our to mandates Based the on the believe a big to we are We Also, identity opportunity focused spend. often the as be on of And or we to majority decentralization is

through how to environments, cloud Our public or our Identity Cloud, the heterogeneous offering, their environments in of including as customers both. our software a choose and and private they want SaaS combination deploy such ForgeRock environments self-managed

has with minutes. identity flexible they they give journeys developers reasons leveraging drag-and-drop that love why our tree our quickly building comprehensive customer identity intention blazingly challenge. environments We here Their market, most that to to ForgeRock with this security a and enterprise ForgeRock, by solution, power built of purpose digital experiences had for approach identities to selected into with integrate that complex performance. identity embedded hybrid of allows the our in the a capability platform easily customers solving them identity the always Identity XXXX we identity fast full-suite When are provide provide that build launched in asked can key capabilities. the the customers us. all differentiated the kinds We in are simple, create

is consumers, unified workforce, sign-on identity Identity Governance MFA platform the Administration. including for IoT and kinds identities, cycle, Management, purpose-built of services across Access Management, all and and Our including life single

comprehensive platform avoid operating like more expense a to multiple ForgeRock. related and Our point together want want to they customers What the is cobbling solutions. complexity and

unique choose approach Our because cloud. of customers ForgeRock our the to

modern data with global companies public customers enables performance experiences create ensure who our platform our manage customers more data and private, aggregate is to performance. reliability. over our their complex organizations to and with to the identity important into billion in high X scale This architecture and The architecture, our identity hybrid world sophisticated data cloud environments SaaS respective face to identities. and choice their to requirements leverage in differentiated so More sovereignty. ForgeRock control keep platform their the integrate countries provides and ForgeRock than around offers X,XXX to over between

capable of per of HSBC managing like is carrier Indonesia. for in hundreds is millions second particularly access per This transactions of largest identities or BBC, platform Telkomsel, customer. Our the of customers important XX,XXX over and the have tens millions user-based wireless who

technology over and tested of risk always network Our trust up allows identity quickly are customers proofing and and to integrate partners of with identity our These biometrics, across to prebuilt, date. analysis. ForgeRock integrations platform are our network XXX the part

of and Lastly, areas our offering. appreciate track our such SaaS important our customers authentication, innovation governance, record across AI as passwordless

rapid it provides their more to We ForgeRock modern data Identity drive future taken and is of isolation expect where resides. architecture, customers our control multi-tenant complete enterprise a We’ve growth. approach tenant Cloud, over with SaaS with our innovation how our pace our stored to the

the around important While all to revenue many from this privacy. U.S. particularly these is maintain generated information as data companies ForgeRock data requirements outside face value of And to customers is and XX% sovereignty our increased of customers control, this located

media offer service usage or to not customer as enterprises, also Monday which rate-limiting architecture such Cyber by modern the Cup critical Royal especially for can large reliability throttling maximize Our customers individual World spikes our or events performance environments, Wedding. or be and during like

down issues so click companies something neighbor customer’s and to trends our will digital to traffic protect collect not curbside We holiday to due that large be afford unique one spikes, ever. more With than customer is expected at noisy like also performance. affect businesses architecture their The usage against door the another of prevents. retail front growing, cannot from season be shut

I previously, it SaaS. to our to power customers self-managed software, provide consume the As be how we whether want mentioned our or they choose with

Identity customers self-managed chose cloud IT For in for global need Cloud. our offering XX% and XX% a many strong on-premise our their for hybrid is offering Demand enterprises of environment. self-managed and new our combination because the chose ForgeRock deployment QX,

continues to customers in XX% coming ARR QX from new SaaS. with its launch from growth offering of rapid SaaS Our since experience

some the recent discuss highlights product let’s on Now, of the front.

the for of view identity We enhanced It Cloud as that Cloud of of have and companies continued the This design that for buyer’s every a personal innovation recently and all brands our us especially digital personalized ensure manage UI to experiences is developers to a channels deliver can biggest called mobile and identities ForgeRock channels, and Identity effortless. for useful across journeys to experience. quickly multiple released Identity been have feels variety and offers the across brands to platform a areas drive web so have configure easily point along and consumer single customer want for AI. and a invest journey in We CIAM capabilities they personalized their ForgeRock out-of-the-box options focus the recognize like Theming. well in touch as to

customers transformation of Our their us part journey. are telling digital go to that want passwordless they as

user passwords a adding evaluate more experience hybrid authentication maintaining the on-prem that passwords the authentication forced while a But challenge. just-in-time will greater users. must maximize bad these other resets, we To significant approach cloud cloud many a operations a security is for and creates organizations, customers, new sensitive while to released means or move help best IT For moving which the to Teams migration. preserving often pass-through features two password experience.

without erode move passwords even Now to loyalty. customer to the and Cloud causing the enterprises managing can that cloud inconveniences ForgeRock Identity headaches empowers of brand more

certifications to records to Cloud continue important that prime CIOs. to Healthcare provide targets are for more by obtaining We the ForgeRock buy attackers. who Identity are customers CISOs and benefits

safe quarter, HIPAA health information. electronic to we way and the health give to customers secure a During achieved care protect compliance

the the additional validation certification. availability, security, customer completed also data Cloud. industry third-party and SOC enterprise-grade Identity confirms for by X provides confidentiality privacy X This managed ForgeRock Type ForgeRock We

their new for identities changes workshop to access rely We our be for the crown AI our SaaS uses chose can market-first superior jewel AI Customers role offering, a from used believe identity a wins to RBAC capability govern establish and our released to investments our access. is and for which new Cloud notable DIRECTV am quarter. give automate structure and benefit seamlessly ForgeRock log up quickly experience The roles optimal environment of traditional ForgeRock to ML capability, will the us This a and services helping by the actions this the password customers enterprise. DIRECTV users. like to who can’t single recommend subscribers company that Autonomous agile to the unified the commonly several keep an is across that of reduce workforce. platform devices, known Our we retain on the superior to excited better share Identity and customer customer. Ultimately, ability will millions with AI-driven to to are lead their DIRECTV many I access RBAC in CIAM companies continue product often cost. control, our role-based subscribers to provisioning Identity to for and in resets costly while analyze a as more. manage administer to

example and identity more their next enterprise and Our expanded has and transformation workforce for XX for and relationship unify customer in the online us This that and using platform. and digital a over U.S. identity shoppers customer years to chose ForgeRock vendors significantly been top retail. moving use access ForgeRock QX, by partners as sole to both were past cases. They with their employees, is consumer authentication management X retailer customers, driven looking

capabilities online, Identity omni-channel On customers while ForgeRock, the platform able to ForgeRock Affairs the improve of the purchase also the helping In better curbside consumer leverage and cases. Home use their for pickup same-day the were consumer were to delivery. provide workforce as they experience country’s Australian Department reopen across user Australia, side, in-store, same security we’re and a boosting seeking borders. they experience the Through their

to to Australia Our mobile digital replace identity Travelers minutes be to able travel is complete process computer. from declaration declaration will in enabling the physical or digital passenger cards platform passenger device documentation. their

new unified with partnership compliance a offer potential on end streamline immense to its ForgeRock, digital through identity costs. this in company for BXB used global experiencing industry-leading Accenture will we digital and that on massive to ForgeRock to saw with the growth, chose company experiences, in its products, get and initiative be customer for XXX-degree extensive particularly users reduce and scale transportation provide. flexibility, growth its ForgeRock a business, embarking view identity. based This due strategy of enable platform new is and The selected personalized quarter. customers, the An

leadership, third-party ForgeRock our industry to multiple recognized be by market analysts. to continues Moving

again once Magic Quadrant leader a has ForgeRock Management. Gartner XXXX fact, for In in named been the Access

receive in to recognition back-to-back years. We’re pleased leadership

identity Access continue Gartner Management provider a and recall We coverage and by for to be the as Forrester only for recognized leader CIAM.

During as our the Senior the to new Cisco, Tschudy and us joined Communities new Officer. and She President Chief served joined strategies. overseeing team. People of People as impressive talent development we added leadership quarter, recruiting ForgeRock she Smith talent, where from rewards, Vice

to million also CMO $XXX for was companies. developing instrumental appointed online Johanna Officer and the career in in Fortune and to two security Chief new infrastructures the Information million innovative grow leading our CrowdStrike’s as ARR. served $XX Flower. We first and helping company Rinki XXX currently nearly from Security Directors, Johanna at and Rinki of members is built Board Twitter Sethi her

are detail. our in We positioned the engage over through productive. growing fourth team well safe on that, am transformation momentum both that With the exceeds our to to opportunity people these Tschudy, and bolstering continuing are Johanna John business. I walk to turn seamless results into very the market customers our employees and need identity. financial I’ll critical see We capitalize welcome experiences that large recognize companies a XXX to ForgeRock trends across deliver seeing to keep pleased we be more Overall, pleased Identity we to with quarter, are enterprise-grade and for the to to our as more digital continues now to worldwide. their and John? Rinki call confidence

John Fernandez

Thank you, you joining for Fran, us. everyone thank and to

primarily our I key the measure want Customers offering. business. SaaS that the model or of platform, Before our our license get quarter, to quick results for into licenses the look and from subscription at I metrics software business overview provide we our a through self-managed to

growth revenue impacted of revenue believe ARR metric ASC Due that our business subscription for by is and the this. revenue to performance. from recognized business it’s our We Our XXX, its believe includes We licenses, run best SaaS, maintenance We the is ratably. growth which our versus focus measure term numbers recurring and revenue support. our ARR. recognized normalize on upfront to amount

As of of the was XX% end $XXX million, year-over-year. ARR up QX,

identities, sustainability in on our and more use targeted qualification existing we growth was customer cases, have expansion by and product improvement new continuous ARR confidence our base Our through driven growth. more lead of more customer process wins modules in of within generation, Based in pipeline our more of rates, the deployments. leads and conversion

customers to a We who customers have of ended over base identities. customers We QX our QX the We includes XXX with software that strong leading world’s brands. billion over very greater. globally ended with customer or manage with as leverage X X,XXX large defined of ARR many $XXX,XXX

XX% QX. customer year-over-year, customers represented large of large end Our our base grew of our the ARR and total as of XX%

XXX%. QX was Our net rate for retention

new customers. from the increase demonstrating due QX to the in year-over-year. ARR an of quarters, tend Also, new acquisition of on land Total existing lower past new we that from million an larger customers ARR logo ARR, in increase $XX.X relative XX% slightly $XXX,XXX with few was Our new a revenue customers basis. of over average to was again exceeded mix

our of revenue. the and a nearly We to transitioned subscription over XX% QX X.X years past subscription was XXX% model have revenue

growth within Our existing multiyear revenue in driven licenses by and SaaS expansion our primarily subscription customers, growth the was customer revenue. base,

be I impairment restructuring to results going Non-GAAP out expense compensation would forward. charges. that items, stock-based to exclude non-GAAP turning Before I will like only and and and discussing results profitability point

QX contains was was and gross million, Our profit GAAP to our our XX%. and reconciliations non-GAAP margin $XX gross press results. results release

in offering, hosting we scale higher As we SaaS costs. will and see increasing to continue our investment infrastructure cloud incur

organizations. services Our continue gross gross margin as in and to our our is through success subscription strong offset of further support customers supporting professional our by we customer margin invest build-out

to remain year. an additional total year. QX was We represents for for XX% compared XX% to market The discussed QX last QX the in large focused to improvement $XX.X primarily Sales Fran revenue driven This increase marketing Turning growth in sales earlier. million and QX now that million last in percent expense compared of expenses. of on by operating productivity. to of in $XX.X opportunity was share for investing capture revenue

continue $X.X last we last QX year. million QX we of expand represents QX XX% to compared XX% in million our As of and R&D to see QX This our business, year. versus to continue footprint operating will scale $XX.X leverage. believe in revenue for we total in was expense

we advancing compromising workforce capabilities are learning on customers in continue that and the machine in to AI and journeys identity cases, identity create cement as our to in of last demand our offering, consumer without our was versus areas our last compared quarter innovation Given strong XX% SaaS trees will experience security. customer empower use such revenue was enterprise for we revenue focused in products $X.X orchestration our continued G&A for seeing our XX% expense and third invest great quarter to investment our million $X.X leadership the in We G&A believe Identity. market million product year. the differentiation year. of the further

in absolute expenses company G&A year. this due in new Our QX dollars increased revenue to of as percentage public of and a expenses

growth a back business our loss was strong office loss of with scale. XX% top We negative year versus percentage a as we increase However, our optimize see absolute in a over and our are operating costs of revenue a leverage year we in expense XX% million Operating off, QX we paying expect $X.X growth our growth expenses, we time, decrease negative million year-over-year that indicator ago. Operating trend dollars line to margin we continue. the growth expect in as investments expenses. our as this revenue in the an ago. outpacing $X.X operating G&A as in operating to versus was in Despite view to continue our

Turning quarter equivalents the to with marketable the balance sheet, second securities. cash, ended cash and $XXX.X million we in

of of Total net to to of revenue share $XX.X operating quarter $X Turning $X.XX million. the of Total XXXX, weighted expect average non-GAAP to outstanding million, guidance, approximately loss $XXX assuming representing ARR $XXX million. fourth million Non-GAAP $XX.X million, of and XX.X for per we million growth. now year-over-year $X.XX, loss to shares $X of XX% to million

the For total net to $XX.X to and $X.XX the of per remarks. for weighted non-GAAP of $XXX.X $XXX.X of to full operating million million, That XXXX, closing million, average million call And concludes year loss we outstanding back I’ll turn now QX. my remarks $X.XX, shares XX.X million. expect $XX.X of revenue assuming share loss for non-GAAP to Fran approximately

Fran Rosch

both Thanks being our John. with pleased consumer business. with massive now you, our and just identity the are we Thank to that on across very workforce today. for positioned everyone is the market open And this call capitalize may well on And momentum and for ForgeRock am the The call the growing. I Operator, to beginning. questions. us opportunity. we you seeing believe is is for

Operator

you. [Operator Thank Instructions] Morgan Stanley. today take with question from And we first Fodderwala will our Hamza

Hamza Fodderwala

afternoon. questions. you Hey, Thank my Good guys. taking for

the to recently differentiates I itself HIPAA sort of able handle more more a mean does if it’s first was obviously, ForgeRock competitors. for achieving little complexity question Cloud you and could being that over on for some Just elaborate of What Fran. wondering compliance. ForgeRock And you? Identity bit

the strategy opportunity penetrated the healthcare vertical, see how the you And within do what’s going how is? forward? think curious it there you I’m So

Fran Rosch

think grow you. good you hear much important Hamza, continues really healthcare us. be so I to and thank form the and Great. Yes, vertical to to

led is I looking And transformation in doing and also and key to that a around are and meet to of digital that through security. has And people with more our of come move telemedicine Identity talk of part they to for look lot is and a their a of access how and is easy that compete think it lot there a is to and is healthcare everyone patients online. that get uses driven differentiate. lot But when that. healthcare much for online. all of whole I COVID, to markets – requirements data with and of in And customers, and enroll and doctors privacy lot ease

healthcare continue is ForgeRock HIPAA so for So been growing is expect made a to it the really companies. us drives to important it get vertical sense which it’s what grow, does and really why to toward And certification really as that really different well. that’s we to many

Hamza Fodderwala

think I new to Got SaaS customers it. point maybe a SaaS XX% – I I the buying mentioned the remember follow-up customers half John, a correctly, were solution, just I think new getting who you And of close if of were think bought for you solution. where to

I’m offering? expect color Does it little have a there it why maybe QX see stronger you comes do seasonality? would helpful. with So curious to QX. Any lower you a to Do summer that to was bit SaaS when us be in give can

John Fernandez

Yes. Sure, Hamza.

In shared XX% that So that’s XX%. SaaS, that QX, we had bought now of new right. was our and customers

new a of the was showed was XX% which XX% that, ARR. new also actually We that metric

so a self-manage, bit XX% offering enterprise in that this important them because can from And our seeing period to when are we And quite we was the think serve that’s in and period. which of SaaS, choice. period, XX% with that really chose with we because bought remember uniquely variability great little

at total SaaS. will we as to to provide look segmentation Then will some forward of full we what year, we detail into look obviously, plan. is actually ‘XX, revenue and ending additional intended As forward we we ARR, to this is our look as look next the around go

color So of little bit additional that’s you for on a that.

Hamza Fodderwala

you. Thank

Fran Rosch

Next question.

Operator

Certainly.

will JPMorgan. We Sterling from with hear Auty

Sterling Auty

Yes, thanks. Hi, guys.

for think you you’re for of can the looking pull can common curious SaaS kind about will areas there give is SaaS deployment use of when that either that the any terms those adoption look trend at through that look that a I’m the in with you questions. just on at is, you and or what thread you SaaS chose size be? carry bigger at case And Let’s customers of line the you what cases, use

Fran Rosch

Yes.

opportunity as be have because in SaaS all seeing seeing is – of science we’re we what we’re we a of lot traction have as their the to really mentioned, SaaS, it think think options But covered. there glad at self-managed, I space. when is, really and for look well out market John both we’re able as I to kind good

I think that a they retail expanding, whether run and in companies, infrastructure. want lot they be services are want they they move and digital of how or don’t to fast, to financial

CIAM cases, SaaS, we’re seeing the growth the So our really that use one that’s driving and new most from customers. of especially

course, well. going focus continue to workforce that as we’re of So we cross-sell on business, CIAM that. have to the then, and And opportunity upsell once get we to

services example ready their get CIAM SaaS solution deals were to enroll for I manage of that seeing. our the really the can of a business. seeing the fast. easy they some we’re type move driver lot kind CIAM and greenfield, to go and and subscribers was of it have opportunity bigger, the is that’s we’re And So can an And of easy we’re big a so trend more their is deals. so homegrown, DIRECTV think to of seeing that make them they for accounts. That’s to key they point, CIAM SaaS to important cloud

Sterling Auty

greenfield that business SiteMinder like into look actually was in give old some the you sense that follow-up, That the when of makes at new you legacy versus can the the much projects perhaps of that sense. displacement then quarter, on one of solutions us place? of how were put being brought you And a

Fran Rosch

on because something generally, they to already and So enterprise tend typically these large have place there is because have we in employees, customers. enterprise, and customers today already focus

typically displacing So we’re something.

three and a their finding, need on can’t people of not to performance space, be they need. mix they are groups. they put a to solutions especially they the giving is we they fair it amount grade is kind try scale are into CIAM think or journeys them I homegrown, own where identity the and build There in of just flexibility, build

homegrown. kind that’s one is So of

as pipeline legacy. done and and the replacements is I definitely a Second is some at there this see in going additional to SiteMinder definitely amount – a opportunity the our past pipeline. Oracle We’ve fair we CA third med, looking forward. big that are continue enterprises group And was a consider maybe quarter, one that’s one still the of for a and looking the lot for comprehensive to put call looking mobile kind place in have over of consolidate and is They of just enterprises, point for kind large of solutions. center. solutions. then for They one recently, years,

that’s we So way of displacing. we’re kind the at what look

said, we’re always As I something. displacing typically

Sterling Auty

Understood. Thank you.

Fran Rosch

you. Thank

Operator

will with we hear from Deutsche Next, Bank. Colville Patrick

Patrick Colville

on my Hey, quarter so a and taking your for question thank much you first congrats guys as company. public

my guess, months this XX pandemic. of ago, So market mix time question kind is the the about, the more I the broadly, doing of

most interesting process? you is the us exiting I probably And of see demand bit guess kind X Can just that throughout hopefully what or over the did months? are last we’re you the pandemic. Now help what understand of guys the you how shifted seeing then environment kind has

Fran Rosch

different I what this, almost Yes. and we we phases at of I of tailwinds. look call kind John say would that when see of kind COVID COVID,

or months shift companies year, trying the do wasn’t to safe I go just a react X lot a very quickly to digital think first respond to to it as out of the and were business in in-person. to

had today, and had and scale mostly it to up work. something make So they in it just we place

really are people today? they old give become reliable be of ways, we I talked adopt. this scale really going our had we lot And to has door of primary of able stay have with to perform? business, experiences go Because the digital okay, the back, customers, aren’t scale to really our to one and a then banking it’s customers security place a kind in back and depth digital digital. not going That be is it just they traffic they going Is up your about of What for in as is when to to front it went to say, that So there. our XXX% going channel. people that’s and had do us realize think the identity a need, to a increase is successfully. We transformation to

they are to labor we’re our a to in shopping, talked on people people more the one they see to holidays got of wave of board, customers as kind we’ve to for move that coming especially less so the So seeing they going in-person the and more And us about something. with second And a shortages some opportunity coming are retailer. of have expand. U.S. is digital, we saying, quarter know

pipeline, seen workforce FPs, acceleration we’ve particularly as past but So CIAM, in in well. the bigger months, X more

Patrick Colville

the as Great. then number XXX the help kind quarter, pretty us of the I fourth guidance, big just you fiscal guess That’s of a – can sort think understand about helpful. And ARR I in analysis around puts kind growth. ARR and of doing reason And much how I is, kind and sequential I the quarter-on-quarter guess adds that dollar is ask conservatism takes there? of number?

John Fernandez

Yes.

that we cycles, our growth. represents quarter. year-over-year does be lot does buying number that XX% So confidence of to a have largest QX And of in for enterprise range. tend in and it And that us, because

point we’re and a a lot numbers. of that’s think quarter we in the the into fits pipeline. lot confidence of in as So well, well, again, in historically out those pattern visibility important very I our and so And the the obviously, range have

Fran Rosch

our puts both takes upsell into contributing cross-sell ARR to opportunities of Patrick, and just, are the ForgeRock, lot logos our invested SaaS, CIAM at third on we help customers in a coming to customers well more to look as professional our customer in of gross brand about talk success, services, on our longer. and workforce and when CIAM our And put and base, workforce, move that seeing software new our us our we’re with And puts we and and to to cloud. to take customers. which buying And we’ve you takes, ability have stick new those as that more is, as retention

we very in as puts contributing So company takes confidence on guidance. our are and that those focused a and to

Patrick Colville

and once Thank job the on Great. you IPO. again nice

Fran Rosch

you. Thank

Operator

next question. has with our Moskowitz Gregg Mizuho

Gregg Moskowitz

it’s why then been afternoon, for tell IGA has also wondering what guys. speak for to Thank Okay. offering? Identity Good there? if Autonomous you important taking the early to the could out feedback And solutions Fran, like your us maybe ForgeRock questions. you

Fran Rosch

Thank It’s Yes. Fran, you. Gregg.

are kind they to our competing the And access be able the access. is, about job. kind helping So, manage enterprise has we to customers. employees get customers have. do of of frame and They and there services all just Identity what two productive, be employees understand they One their everyone their and need Autonomous our who of applications our the let to problem access IGA that customers want is hear me priorities right. course, that to And to want to all product from what of is to

people is idea least lends need, that only And what just have access kind “Well, this it they it the all let’s because whole access to of access.” inappropriate goal But that say, is them flip up so to of and get have manage risk. privilege, open kind get to So they side reduces risk where have of to from have people don’t someone. you the

only ID capability auto and do exactly our priorities. to be these able have competing automatically So, what jobs risk. ensure while don’t able of be are to to recognize to to that if both the we And they the for AI that their users workers and that brings access at to jobs does the employees get our managing that groupings is they can need of their don’t they what is which and of get need. their look productivity way really we customers, And they kind what need they deliver approved access to

and are auto about XXXX. pipeline it for we growth great all will and of in seen big and and what differentiation see ID a IGA. us we a forward, be focus that’s year, to continue great some have going a So, big with we this kind And

Gregg Moskowitz

would support Thanks not basis. Okay. is any be John, saw line that, expect item, And I probably that, then, item, good and subscription That’s driver, your maintenance SaaS helpful. helpful. of Fran. very acceleration more that a year-over-year revenue if within driver quarter the the color there on this predominant SaaS line some would sole

John Fernandez

sure. Yes,

So, that SaaS contributed really nice certainly we SaaS support a see that around ongoing XX% again, and is did the subscription just yes, in meaningfully do part to we that And continuing for that, and of product first have. increase really, that maintenance. focus, that but ratable And the time. the SaaS it’s

Gregg Moskowitz

Thanks very much. Perfect.

Fran Rosch

Thanks Gregg.

Operator

with Gray from question BTIG. next Powell comes Our

Gray Powell

for and Thanks question on congratulations Great. taking the the quarter.

Fran Rosch

Gray. Thanks,

Gray Powell

Yes. Absolutely.

earlier So, I to on question. want follow-up

at XX% here, growing the kind high-teens the XX% just if So, in retentions are last building blocks the of base in to I quarters. look the mean, I few you customer net range the

quarters? current have growth You pace further there any reason a improve few XX% why off gaining would next new SaaS of not product the over Is that’s this ARR momentum.

John Fernandez

Yes.

XX% confident guidance feel we and QX, very to think I that. our we again, So, with respect for about forecasted

growth focus I we in upside think we that our of a lot on. have levers

installed I big a is think base our one.

moving SaaS. things customer the about statement our of from in One base And to self-managed was some of opportunity remains to throughout we process that unleash the true. the the multiple talked over IPO

We – it. we that, to are able put early of continue innings to to the be in so

a a really I obviously, focused retention overall, net so upside. think opportunity huge that’s on, ARR And core just for that not but as remains And also metric.

buy aside base I And installed opportunity. that so that’s see not migrate into, one SaaS a sell to of usage into have to attract our product. verticals new that basis, from as additional more and installed think remains that opportunity are access that we to attract a that to prone on the an are those Again, standalone huge in customers SaaS new really with to customers we to even now base

for different variety provide we upside in believe vectors the there future. a that So, of us strong

Gray Powell

other just then And one Thanks. helpful. really That’s Understood. one.

How So the number? that range the business ballpark in should XX% ARR of I business we be yes, relatively it sort the year, end exit SaaS just to still we XXXX? mean expecting think as Are of by kind new. of a of is SaaS I know you the about

John Fernandez

the – the the have disclose we at ‘XX as segmentation anticipate that plan and into revenue changed and same, remain then do from then intended expectations end we ’XX, correct. that mentioned that and number that expectations in So, perspective, not provide I is to and to our of as QX

Fran Rosch

consume a have going we resonating are really are really a more very to in we market. to customers would able company and And and to that focused on to the just architecture unique say, And as that’s I want SaaS be that get cloud the market. identity that’s quickly. way going more think We

service this and ability reliability to ensure So, scalability the to have it’s really isolation the that of resonating. tenant the

we John offering. are really growth not So, comfortable focusing are guidance we have SaaS success – of But that on that and I the we as we think that. a that, past feel in said, the as on given in the company,

Gray Powell

Perfect.

Okay. very Thank you much.

Operator

Owens hear Rob Sandler. from Piper with will we Next,

John Fernandez

Good Rob. Hi afternoon.

Rob Owens

for side trends that if are question. little alliances the deck know I bit towards a the in could and lend Maybe you taking the year? Thanks guys. the XXXX, was Hi you workforce that slide side? this throughout my touch but and just And does partners CIAM on it to more seeing or relative

John Fernandez

of will this John. is thanks, Rob, I the that. take first part

the a that’s partner level As point as for talked that And sourced relates that significant for S-X was were had to about the a of of for XX% – folks, XX%, and of network. our company. we leverage XXXX, it were closed that and XX% XXXX, XXXX reminder respectively, what we opportunities the out

end XX%. we are above As of here of those now levels we XXXX the are today sitting at QX,

So, for strong remains consistent, a point along lines. that the company those leverage I think

Fran Rosch

teams partners, got they great right. the itself are And are bit transformation in. with They bringing and identity we great I a security they larger that with does public would little when workforce initiatives digital And which lean working because Rob. go separate and have your customers ForgeRock we the But retail Yes. for forging more their business, digital look security engaging to those are from are on with they incredibly our digital to huge have team and that at with to help our within in they say connections are accelerators them and question, transformation, GSIs that practices. sectors new their identity got do both we governments, initiatives the engaging transformations through with that their relationships companies,

bringing So, are partners. we new on types of

So, different of as segments, that that Workforce are and really critically both many of at in means these as are ensure and important add looking also understanding different. different messaging partners have opportunities and critically And the CIAM large, we two to to possible. and that we but we are types

Rob Owens

Great. aggressively you up it the some development. And where the given company touch little And on in product focusing I bit? the in mean be $X was think leaning I on you of bit I guess and year-over-year. the might a a scale on more little little OpEx million R&D quarter. Could efficiency a it’s bit of

think we should going forward? line how this So, about item

John Fernandez

Yes.

right. lot efficiencies, a seeing of are we think I

single-code I base, reasons think of is all single – platform platform, for variety organic our right. a

an the across able functionality, it enterprise where So, SaaS be we think lot in provide be always to have of have and been, base. and I both that to do we that single ability do a code self-managed

this are a for you period-over-period. innovation really out that. market what releasing still And we I think is that’s that core reason are seeing incredible the to

will levels a reasonable time model variability perspective shared any believe So, the hold in or we in I I of we that that And without to. think that long-term the trend don’t over will question either will IPO think mid-term. during go short We down show. we see levels to road is see from we what that

Fran Rosch

that that to Product asked But I Barker Peter question. Chief would say, Rob, Officer, is you our love going

talked it, as asking. about of John percent revenue. So, thanks as for a And that

going real So invest go year-on-year dollars, on up it’s to obviously, continuing a to bit. in innovation. engineering to continue And talent bring continue to in are quite new we to

scaling will will it just So, top scaling. our It slower than be be slightly line.

will improving right now. hiring But a we see the our we engineers and we are So, productivity. technology heart, at are company more

you over. know them send if anybody So,

Rob Owens

It guys. good. Thanks sounds

Fran Rosch

Thanks Rob.

Operator

with from Joel Truist. hear Fishbein will we Next,

Joel Fishbein

competitive if dynamics DIRECTV evening that guys. and about deal, a was competitive Good around Fran, Hi. you talk can bake-off? it the

Fran Rosch

that the with at identities. a bake-off. then Governance, And to win never four that they platform feel their The architecture. full of it in and MFA especially One are to and when – data the and we Authentication, almost Yes, our really about comes people like main ability have absolutely single competition. a our ability the I there scalability the identity huge. cover isolation that size down really the these felt others. Management, we win have uniqueness multi-tenant is we that’s Identity we cloud, kind we customers them competition. deals. a opportunity And type gives ability is, a experience over as to just our think the appreciate to across of reasons confidence many look platform we looking tenant privacy better think I companies single at Sure. and the to to why And of I have great alternatives see in DIRECTV it think performance, the ability that. ForgeRock And was is competitive every And are out really, choosing And have of all

Joel Fishbein

you just a pipeline? about a large have can uptick become since the company? talk an And public you you seen have follow-up, deal as then And

Fran Rosch

sure. So, our pipeline is absolutely increasing for

us Sometimes tag it’s because it’s recognizes the it for. public, growing we our to is we hard exactly the MQ sales came leader again, – as rate out, went deliver it that team growth what uptick Is because for the we got on pipeline seen an in have and and our go-to-market But engine. have we definitely to confident company. pipeline feel the Gartner here the the

Joel Fishbein

Thank Great. you.

Fran Rosch

Thank you.

Operator

with Blair. will Jonathan hear Ho from William We now

Jonathan Ho

start Any in, more Thanks. you color are on with to seeing color to little productivity? in bit driving we I the productivity helpful. terms that expand? gains referenced. sales would productivity be understand me echo What what’s I a and let just my just out that maybe want good of congratulations. of to inning Hi, some afternoon that wanted

Fran Rosch

seeing. the technology, are of our just Sure. of are a And progress of say those inning, is is, productivity. the lots One advancement go. fifth really more really sales are in improvements proud of are handful maybe the behind or we sales see productivity we driving the to would we right. fourth there And things we inning, And but us, I inning

Our products better. are getting

things features, more to sell. have more got We

us. that’s up more for So, opening opportunity

I market think awareness ForgeRock growing. the is is, Second of

to IPO help to going is think question, certainly, getting We more well. Joel’s And are the that that as just at in here. I

So, execute continued our creating has and digital-first a on approach, marketing team more opportunities. to more leads

and our opportunities So, increased morning wake have one in goal these leads my be to these to the is to and able to sales great. they And reps that continue be coming them to efficient. of that’s have can pipeline. work up leading to That’s to

but It’s work in seeing work we do. got always have a improvements Now we there. progress, are to

especially So, that’s resulting sales acceleration, SaaS. with in

bit seeing cycles right. uniquely to versus that. leverage, self-managed, regional partners shorter a partner world help about their is of of as as These with are well are around talked little We kind the for positioned SaaS which GSIs identity we sales We be recognize helping dozens that customers successful.

So, these us opportunities. bringing they are really into

things like of lot that it’s again, a many is are it. things. So There driving

years We have the in made that on great progress focus months continue ahead. going and and are to we to

Jonathan Ho

RBAC why Got bit the is game-changer? this potentially in that you customer traditional on a the And bit important, replacing about it. little a about just talked capabilities. then understanding detail little Thank a more of you terms sort differentiator a is the of and Can role-based why for you. And talk this capabilities reception that? maybe

Fran Rosch

Sure.

coming for I identity, workflow a going, and manage this ability think jobs for we productive, but the what, critically understand really able be to have be very system, challenges and the always has also right, are changing – the have to to People keep companies risk talked that reasons important have business. who great people can difficult. about, organizations company to that access to to are administration And because really but is fluid dynamic. it governance,

by of to kind history always the what can really these which looking We organizational not access leverage what structure. at get understanding to. and is but you not of change based reflection So, structure to an and develop we of necessary on this a people do, going a role-based groups role-based chart, have our algorithms of

really the off us base, needs it jobs very automatically over-provisioning a helps employee can do the company. their for driving So, for access access accurately particular true they without do and so and risk

of are dealing approvals, rules-based So, years. a we kind way been dealt, some with grail a I them holy just challenges of it. manual or companies that think They for have doing of maybe and new is kind bringing of of this have

identity by opens access, AI platform positive us opportunity management, for across So, really of governance, are full that reception. that platform. we getting lot workforce a we think And this powered to up identity have that really

continue a to big as are we that on make see going it’s ‘XX. to of to continue and So, investments deal. into driver And growth a

Jonathan Ho

you. Thank Great.

Fran Rosch

Thank you.

Operator

will with Eyal & Our Shaul come last from question Company. Cowen

Fran Rosch

Hello Shaul.

Shaul Eyal

guys. is the a a Hey I everybody? first call. was company. on Congrats quarter late Thank public little as How you. to the

far? plan already apologies, Fran along But how so if your and coming So versus plan the was anything addressed. is hiring maybe, John, internal

Fran Rosch

at it’s been What a for would say, Yes. recruit I Shaul, talent to better never time ForgeRock.

People or Tschudy and attracting group, a professional engineering, great talent new our new are across great We sales, on the marketing, we support job did really announced great services, whole Chief by Officer Smith board. doing bringing

there on we in meet that need out power for plans new to talent is But doing clearly And we to about continue that and a focused we hear are hiring talent. our our And So, are bringing war to we on. business. there, track we And people we talent, of kind a investing great stay attrition. talent development how so are look we to important that. who it a job there we some we and attracting out can’t It’s outgrown. big all that can because the as great might at At know about is – retain but of cost might time, and our have teams, same managing there. stop developing it’s

looking approach an management end-to-end as So, we at company. talent a are really

Shaul Eyal

my… And Understood.

Fran Rosch

also in would just recognized that kind I helps of certainly transformation. digital mean, identity, everybody say of And The the got, that. I we importance visibility identity

attract ForgeRock. talent to So, it’s a at new great time

Shaul Eyal

you question, Got it. Thank that. pricing. follow-up or maybe on And my Fran, then John, for

supply to pricing do healthy you have or to or overall just increased late planned taking a chain, near-term? companies number pricing we of looming so Have issues of account seen up So, trends. for either demand as

John Fernandez

Yes.

that been really, able through value think our we to than at, pricing are have continue But more some think mechanisms helping annual re-bundling resistance. think there I we how we there lift to to come I met that be two And with that strategic customers. different not and is looked giving the significant I of have price raise looked to they is to just done that’s really at and been some have margins. as going us uptick to bundle. and to are. is able prices there that do techniques we with And effectuate find that And real improve on. and think we One the I I are elements there still are increases think some reasonable things we

we ‘XX. additional do that the continue are on in some focus to put of will with So, going things that we to

Shaul Eyal

I Understood. Thank so much. am sorry. you

John Fernandez

Thank you, Shaul. No. It’s okay.

Just wanted thank to you, say Shaul.

Shaul Eyal

Got it. Thank you everybody.

Fran Rosch

We today to And Thank great we engaging you. with really do. and look earnings the thanks which in to you to of days all you ahead really weeks attending ForgeRock, about to the talk all of and questions. for our for love forward call

conclude remarks. the call, we I to few like a final make Before would just

those opportunity growing and Our that on bolstering capitalize on to really that and And identity, enterprise-grade company. for ForgeRock for platform dynamics four will demand large four team our were are target dynamics are sustainable focusing enterprise ARR identity a full-suite business confidence across our key durable positioned growth a well this and IoT. is that the and workforce rate market for CIAM, unified

the have SaaS, the we customers is leader that available fact approach our self-manage then to position architecture where that and gives really unique to a we either seeing have are fastest SaaS, The performance unique in full market Our and we our in that ForgeRock that growth company. confidence science, or can security. makes choice, in

very the future. we So, about are excited

And time to dialogue today. forward look for ahead. days in months your again thanks the So, further and we

to back you, operator. So,

Operator

This participation. Thank your today’s concludes you. call. Thank for you

disconnect. now may You

ForgeRock (FORG) 11 Nov 212021 Q3 Earnings call transcript