PING - Earnings call transcript Q3 2019 | Ping Identity Holding Corp

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Ping Identity Third Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Hugo Doetsch, VP of Finance and Corporate Development. Please go ahead.

Hugo Doetsch

quarter in Identity us will conference results the dialing to and discuss for XXXX. for Ping year the call third everyone and today joining welcome our Thanks fiscal of where we I am Finance Development Dani, our with and our Durand, President CFO. today Andre and and is Corporate me CEO Doetsch, Hugo Vice of Raj

XXXX our measures that Before cause and during you talking dated materially that forward-looking statements. include also today’s discussion we performance. Identity’s factors begin, may of Securities discussion perspective the about I with to will I to offering would refer results like company’s the filed differ call a like Ping final to and these would in to December where public statements. XX, remind you could that Commission non-GAAP initial the Please Exchange we you actual will remind from some discuss see

those measures our quarterly the a find to nearest measures can perspective. final statement GAAP comparable financial reconciliation You XXXX our and of in in

the ask questions one number and you one to limit your follow-up. initial Given analysts, that of we sheer

will I that, please Officer ahead. to Andre, call Ping the and Chief with And Executive Andre Durand, of go Identity. over Founder turn

Andre Durand

to joining afternoon, to the security like traded growth and Thanks, important thank Hugo. customers identity Identity programs. their as critically of a dedication their their our thanking and they Ping for and for start partnership and the everyone first my as you by company. Good call for to trust, earnings would and manage publicly I colleagues loyalty Ping at success

of identity inspired are We future and the them are them. honored and serve define to security with to

and ARR experienced performance quarter results. our in million. third I ARR year-over-year a with that, to with am XX% top total revenue line $XX.X With of in of million We culminating strong $XXX.X the quarter pleased growth share

and is our later, will growth the the that evaluate best the we use of measure Given and of Raj the which metric XXX, top we to representation impacts detail believe business. ASC line is ARR key

like is the to Conference, and this Since matter and would and moments few reasons why I Ping why Industry of as exist we well some a explain take founded I solutions Identity why provide the Identiverse. call, our first as share the earnings we

identity the question identity the value future. not of new, starters, identity For the authenticity has precedes our and never critical to more assurance are transaction verify been need of and of to every

unprecedented. With the volume transactions sheer requiring is of digital authentication

integrity the businesses of mobility, both have the between interactions advent increase people, cloud and digital exponential and exists creating an With do? of are and you what opportunity you and questions seen all simple identity interactions and These speed Fundamental that interactions we things. and to the giving volume in for for lies the the are access now are management rise authorized Ping. for two to questions, precede need the these who the that of digital exciting

investment, a identity dissolving within experiencing our seamless they IT and of being users firewalls, of must applications their infrastructures relentless present exists transaction outside world, than both required require IT, past, it challenge digital how perimeter has both in a and innovation. change reside physical and more the the the While secure to and acute every companies identity, where enterprise Despite need secure to the make understanding technology digital in and identity and and that networks become nowhere the concept, now are and future through time authorize simple and perimeters. real across secure authenticate significant and world

enterprises, experience was for security. where compromise one security a identity to solve access Ping user desire of frictionless for the created help based the not large does challenge need the for

security, solutions can deployed and for control, integration a enterprise the the requires, cloud, security secure enterprise requirements. deployment chosen math a on-premise the as that that based strengths company our ability we need upon platform be DNA secure opportunity, hybrid the market, infrastructures cloud, require end-to-end. Only our offers identity private the hybrid this solution wherever to and direct they enterprise at cannot for capabilities solutions match and and require granular and solving scale, flexibility of Ping where the performance, hybrid problems. intelligent cloud heart advanced control cloud customization hybrid only to our have enterprises Given the These

deployed have X,XXX problems. solving identity of companies our most We than challenging some the more solutions at

Ping a has identity result, As the become enterprises globally. large for standard

over down largest banks, of hybrid retailers opportunities. enterprises, scale can for larger and the X with X ping X of XXX, largest the the many security. deployment the X and solutions, point, chosen of U.S. XX The of XX including our plans have To of into world’s this Fortune $XX ease of advanced of the of two X broken all proven cloud flexibility healthcare of underscore of the to biopharmaceuticals, XX% ability U.S. leading market largest serve billion we be integration, approximately largest

directory away were of identity as providers. the a are legacy unable are modern data result Ping’s first standards today’s solutions of take a single The replacement governance from modern positioned not for world solutions enterprise incumbent shift this and for share is requirements. open advantage the of architected well sing-on to access that and legacy hybrid market to cloud security, meet

second such the API identity and opportunity a multifactor The Greenfield the things technologies identity, adoption expansion authentication, of as and customer security. of cases is use by new driven

business opportunities serve. see to our will on allow under-penetrated entire the large to and us in across us market we create demand for future continue the robust capitalize solutions that and believe of suite for and the investment We our will

other in multifactor with API Ping concert cloud, is customer, can be primary customer’s increasingly or open datacenter. access platform comprised IoT. six single Each employee, directory, governance, authentication, or for of and solutions all on identity is solution intelligent solutions, sign-on, standalone partner their Ping’s securing and standards use cases built security, the in cloud data deployed intelligence our in and

users gain allows IT across solution once on applications and sign-on hybrid single to sign to of access all their Our landscape. their

list superior experience. adaptive password multifactor with Our authentication user provides solution a authentication

provides access and APIs solutions modern Our as control management replacement as Access access access security both to web a SiteMinder to Manager. and was such and legacy designed web solution Oracle

solution store secure data and deployed for cases identities directory in provides in the and a use is employees IoT Our some customer, the of world. largest

our million For customers of example, one XXX our manage over to leverages directory users.

identity governance provides data data driven This protection product GDPR and identity released solution recently privacy as is new such exposed being of that to CCPA. or regulations often sensitive Our regulated is third-parties. advanced by

spending The protect machine learning and API monitor artificial QX, hackers. APIs new anomalies intelligence is intelligence expanded provides all more deal solution weeks. totaled solution our greater leverages than in who cyber security Lastly, in $X advanced Ping than traffic, a customer block detect XXX to with In secure by deployed and API services we ARR Fortune ARR in adding new million Ping Intelligence X to attacks. XXX,XXX to from and financial APIs. This already was their better

whole, and for as Identity And Intelligent together a these engagement the provided powerful Ping security. of comprise six the customer foundation transformation solutions workforce Taken platform. digital leveraged when

their improving their deployment continue invest and into with cloud hybrid integration enterprise. the We in the to simplifying

intelligence, reduced Ping launched teams, we the quarter owners example, costs platform self that of with service the For IT integration providing new app at a to simplifies application integration and this for capability speed environment, with of solutions deployment the unmatched primary platform. flexibility turnkey cloud all hybrid These an address cases ability are through integration hundreds identity same with differentiated and use one time. to

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pre-built leverage and open connect customers our on-premise to of to standards integrations applications. All our connected cloud leverage applications

our flexibility enterprise hybrid the unmatched Taken and as wherever and deploy to unique. whole, Ping is a advanced ability chooses are solutions

the and tickets more stronger example, in multimillion is to and of replace early entertainment platform per leverages homegrown that company Ping with in a part ticketing establish hybrid service. deployed solution tens purchased relationship pursuing that and our The to expected performing in dollar in AWS. was of global cloud Ping is solution transactions recently a while go an of its The also a was security chose as to initiative live personalized access. a improving around deployment large their digital As The company customers, cloud thousands a scale unique also digital project mandate QX. authentication transformation second the event strong the and

in have we always we our customer excel to combination unique of the case, employees While and strong trusted and both and their are performance also been partners at secure largest given by enterprises use we capabilities. the

recently mobile state costs first secured and for the and driver’s a government. of better for platform. For experience Ping by security example, convenience the was provides of one digital issue license The Colorado lower and to the powered citizens

we differentiator a are For revenue and XX% intelligence use our strong hybrid tools in customer the further partners offerings, the unmatched be cases, cloud year and and subscription which to XX, investing in market. from driver our XXXX, In and are our derived the to was enhancement ended competitive XXXX, offerings. making December of continues developer channel growth

will begin All multiyear beyond. of deliver XXXX investments are value and in these that to

year-to-date hybrid customers are from such the a have rating and who Gartner we on by further research our CRM, The conversations have ever. to a and importance a our Gartner, Recent priority recognition access market. trust the cloud with recognized customers and as Recommend many Insights zero results. third-party Ping as we proud validated and reconfirmed leader that the recent closing, our spend. fact enterprise of security need that success have been reports growing XX% more Peer than management firms by the for in research This In as Willingness received identity, advisory of validated cite InfoSec of top KuppingerCole, is enterprises has solutions CISO identity

detail. call like over to of to turn Dani, Identity quarter through Ping the now would walk the more CFO Raj to results in Raj? I

Raj Dani

I the results then fiscal begin, of joining overview third everyone and guidance our would finally, To I XXXX. fourth business provide so that call. like Andre fundamentals and full of Thanks, for will quarter will quarter an for model, financial understands the our our detail and provide and everyone year in to financial discuss today’s Ping, I

customers to, contract term are average billed subscription basis, subscription advance. years. offered our contract platform alluded Intelligent of almost Andre is contracts primarily an in of Ping’s on with the annually multiyear a all As X Identity term, under of Regardless

the ARR Our our customers address within cloud identities subscription our choose two. and the across Ping ability customer ways, to use on Fortune our or identities licensed of in strategy, and XXX land-and-expand increasing undergoing land-and-expand $XXX,XXX. with pricing new by ADFS, platform modern of customer, use and expansion use to base and of architecture CA a number and and to quarter, platform is to SiteMinder. simply employee, expanding retailers expand our transformation chose license. solutions. solution The solutions primary to a act We under brings solutions, by combination one initiative authentication to digital IT IoT. hybrid Ping and allows Solutions Large into deploy and multi-generational gravitate Core the partner central grow Ping’s based to revenues. our and the hybrid utilize model retailer reality. the flexibility additional as three cases replacing consolidation We tend enterprises some given ARR sell in Homegrown cloud in was customer’s model on-premise and we case, our quickly authority vendor global expand over of this to to their the selling The a can Ping’s cases

in recognized phenomenon solutions and multiple in employee In and $XXX,XXX Australia cases. ASC of chose with directory a cases. manner at partner a new significant use deployed MFA, employee purchase. of represents customer of for Ping’s upfront term multiple one Thus and seeing expansion XXX, retrospective FFO, This largest adopted total, historical approximately contract XXX opportunities is secure subscription and revenue to with and all XXX subscription partner total in In buying security and hybrid solutions our QX, are banks access be the reporting identities. be based given cases over support model across we hybrid the ARR an remember cloud over figures the based are subscription helping nature tens will revenues financial their initial Under the We duration. growing customers ASC dynamic a ratably use fill have forward We term. in This use our early with of deployment thousands also the to SEC our impacted uniformly in which associated applied. application. to of can recognized revenue important filings license is recognized term. our ratably by SaaS ASC going continues maintenance and

and ASC under result, it makes a performance. of annualized ARR and our period by flow un-levered this, XXX are XXX, of the on growth more high As operational in ASC which quarterly value revenue are to focusing assessing contract cash normalize relevant we period. from or our degree help variability believe Ping’s To unaffected a that for both subscription

million, We was growth XX%. ended represents quarter This use increased deal with by $XXX.X driven turn will of healthy results. the mix a across to year-over-year strong I cases. quarter ARR ARR growth volume and our solutions which third Now, and of

XX% Third third quarter, based representing of past quarters. million basis. continuing greater trend total was dollar revenue Subscription based revenue the or than was rate revenue of subscription a XX-month a calculated net quarter million the our XX% XXX% over was total trailing on revenue In XX% $XX.X eight retention $XX.X growth. year-over-year

period at dollar-based we have least rates achieved eight quarters. While can very past fiscal over of from the this strong period, to net XXX% vary rate consistently retention

of remainder non-GAAP P&L, the I to For will the refer metrics.

nature growth Gross release. and business our a the profitability metrics margins reflect XX%. for was strength quarter sacrificing to subscription enable our enterprise gross flow. solutions third in the of hybrid Strong We and further customers. a of us reconciliation find XX% margin for innovation customer and these was the press mission-critical and to can non-GAAP of our GAAP invest accompanying margin to numbers You gross believe our of continue cloud cash without in the

and our drive growth. is revenue established Our proven leverage well significant of in terms business with model operating ability to

Total as We have QX focused and our capitalize sales activities. on million we operating hybrid primarily innovation expenses consciously cloud our leaned as by research to into offerings and in go-to-market growth development opportunity. and as market our investments year-over-year make well on XXXX growing both investments marketing in in were $XX.X especially large in driven ‘XX in incremental

due business. fourth flow strong realize a in Un-levered expected the third and now XX% third representing increased to million as granted negative the we our anticipation cash in for collections includes teams timing to expect also investment further and despite Part quarter quarter RSU of years. the $X.X out a of third better of our million approximately margin EBITDA million vesting quarter was ended built the period that company. in infrastructure CapEx, shares public free We the primarily to X global initiation investments this footprint our the quarter. during $XX.X of in Adjusted was support than an with X/XX, we and growth of the X.X operating of we program cash employees. After

earlier, growth profitability. despite our operating invest and continued our As business to and efficiencies to allow model in mentioned innovation, maintain us commitment

strong Our on balance sheet end third with $XX.X at of the hand million remains the quarter. of cash

term balance the loan date $XX million September Our XXXX at XX, XXXX. maturity of was January with

Pro BX count profile, corporate exercise B+. and million our our and option, was to option down result forma our strong to to financial rating basic the over-allotment XX,XXX,XXX. of and for proceeds BX diluted immediately exercised subsequent their pay of common credit from share underwriters October, X.XXX of B- corporate shares the from were Moody’s October, used stock debt. in over-allotment the of rating credit in upgraded a As our upgraded Also S&P

that to software reinvest business. will opportunity We capitalization to our existing are to confident this allow be taking and a us successful growth are structure in company we profits the use

to Turning the ASC impact variability deployment XXX from to tend on hybrid to reiterate adjusted our of to important model. that due quarterly to guidance, our degree and of high it period is revenue cloud a exhibit EBITDA period overall

contributing of revenue. the of do proportion we largest the enterprise fourth purchasing experience given seasonality with quarter to Additionally, nature annual cycles,

For assessing time. this relies performance million. a ARR XXXX reason, we line $XXX.X million At to million We top projected for precise $XX.X over heavily revenue KPI as $XX.X QX XX, ARR with between to be further on more free million and anticipate un-levered $XXX.X much cash be $XX.X December between negative flow and between negative be and $XX.X million. to Ping million

believe and our identity into opportunity that market flow Speaking expectations invest opportunity continue cash security. that lean growth advantageous and such we to within specifically, our tremendous it’s free to the to is un-levered

we perspective, new to customers. and signs demonstrate customer our are everything have success, the new and enablement, board, see training These the as success support development. innovation investing to from R&D services, that sales starting investments market been professional investments, people, positive So we across from solution channel from and

the $XXX.X million and For between $X.X anticipate contingent revenue year free full $X.X million of and the XXXX, negative $XXX.X un-levered $X.X in million inclusive amount flow million. consideration cash deal negative between million of with we

with large are underpinning security digital in first is market partner, of results view an as that are key disruption in company’s across three quarters innings leadership market. customer, enterprise of management year. through The gaining security believe and strong pleased to IoT increasingly a identities we securing We the identity transformation employee, our enterprise opportunity. enormous the the our and access and early We within position the momentum and

as forward enterprises achieving intelligent to and to pursue vision and growing premier digital continue Ping way. and positioned in security this the opportunity. along the large in their to industry large embark choice aggressively reporting on invest our we As transformation is they for look our market on global we journeys be uniquely identity will progress leading our such, platform and

I will operator With to your it turn questions. that, the for over

Operator

Your question Heather Sachs. from Goldman go of Please comes ahead. the first with line Bellini

Your line is open.

Heather Bellini

and the for Great. IPO. Thank much question guys the on you congrats so taking

growth had you about quick were into ARR just I investments translating the two spending a sales ones, just you is Raj could accelerated be as then talking Just there? that was if and if question us to you. revenue there any be Is seeing any if thinking in walk that how you making we through are and give you look Thank could talk And was could increased us into my you competitive you about we what there follow-up changes? second to about bit are little color wondering just about going environment related and should XXXX? marketing

Andre Durand

Raj, why the first don’t second. that take will the you part question? of I take

Raj Dani

sure. Heather. Yes, Hi,

investment, considerable in our So, with operating operating demonstrated growth the a basically past. model the revenue into of already we lot and built in terms have increased has of it efficiency leverage

saw that of lot So opportunity reinvest, great go especially ahead in time we business, when to us at reinvest to a confidence gave the right. a and

land and enable and Our logos for us in the our into we land driver is enterprise. high expand us new velocity – the key will to sales quickly

thought so, just comes the XXXX invest. enterprise this we timing the innings we anticipate that past and and invested of we now but early in beyond. standpoint, and bee since the – in we just from will have that And platform to we when together to do see from – our product time it seemed all probably will an a right time continue it the benefits adoption are to on standpoint in given So the in to that is the

Andre Durand

competitive in market Heather, for will macro market winner There takes market. Andre There I all. multiple There some proven the large you market. too and multiple environment, a dynamic as are speak are and large to The historically growing is has will segments. identity multiple speaking. winners. this know, of lanes this just slim be I is mean, environment. too the

our think I well management and is access and IGA, identity we strategy that privileged to from continue access understood it’s is do where management partner. to that. distinct That

not view, use significantly. I would case. the competitive competitive changed landscape overarching has from think varies say I a competition of point by

The an customer especially modernization the with it inertia believe we quo use situation competing in in legacy solutions, example, large status or For nothing, modernization, for often not. of us, most efforts. is homegrown recent do frankly, case, are and

tends see smaller we essentially more to to We against are would vendors little be say competing modernize it in as and be use against to incumbent, that when an what entire their infrastructure. refer it case up in where we segment. workforce tends tends the enterprise cloud-only the it would bit run we I a

Heather Bellini

Okay, great. you very Thank much.

Operator

go next comes with Your ahead. from Liani question Tal Bank Please America. of

Your line is open.

Tal Liani

see the it the given margins. I positives EPS and guys. comes have I few mind of roughly just quarter. it comes end from the you ago I the don’t half that change to over better model strong on am – into met Go Thanks. the for very for the was revenues the next sources what quarters? that your few to where the quarters. about question Great want understand you half you that was strong roots Hi, next change, look just of I positives. understand better few trying unexpected and over if at a and conservatism we your a real expected of carry how it weeks go from change you sources and can did positive or I

Raj Dani

the Certainly, Thanks unexpected was a primary source revenue. the Sure, Tal. for Raj. of This question. from is

about And deals impact, so and top the you had this largely EPS really you big a line the quarter and revenue the that that’s disaggregated think growth were we in will slowdown multiyear. from see if a software from footnote

great clients There internally, inception, our from just – but a more driving at at but shift the impetus see coming to to continuing the renewal. shift contracts, are we with also some not So our is some multiyear clients. largely

years. X seeing So, turning renewals a historically X of we are lot year into

impact. seeing largely timing the down. impacts that’s are has expense lines certainly, operating to slowing we revenue minor on the impact, that beat adding some revenue And but more the that’s then So much

Tal Liani

it. Got

Raj Dani

continue because internal to a of and drives that’s compensation do only is add, that plans talked etcetera. the that’s focus of the will where what The internally on it metric as about, thing lot Tal, the variability we I I key that ARR we

Tal Liani

stability you provide Got short ones. we about have additional us do quarter EPS know for I we help with Two guidance, how but can you expectations? next or can think so to it. EPS OpEx don’t have

Raj Dani

we to me to guide necessarily but OpEx, Tal. you don’t that, come that Well, guide don’t because back to let on we

Tal Liani

seasonality the investment Right. when any for following numbers I getting for planning meaning the even What are puts quarter, look the takes the or puts and the and OpEx at are sequentially to what the in expenses? takes without

Raj Dani

the you I so the some seasonality of guidance. QX is to mean, on line the that head. our expect Well, always hit from continue nail largest can quarter see we and you top as

continuing been have We sales and in are marketing. to invest and

I think that continue trend So will you direction. in see that to move

full been As the even those in investing to and in marketing R&D quarter so impact see QX in QX little a with settle largely as less we sales through G&A probably sort run-rate – of and start have or in.

Tal Liani

understand I Got one at on R&D am with am marketing down, rather it. table working computer, in If a so was correctly Thanks. am Maybe wrong, a was have the my sequential a looking so OpEx. was my only Excel problem was I the ones down, I that G&A I I up because Spreadsheet. basis,

I does how it correctly, are these if what So you the investments about said marketing? greater at table a to sales in again, and trends, if connect look

Raj Dani

is higher big generally marketing, hiring of racks quarter. because and sales of will and we on have usually but it Well, QX to commissions continue open mean, I we honest. timing I it’s to fill be is part Tal, those, think

there. QX a lighter that little is in for approval is the seasonally. So, bit

So that’s impacting it.

our Identiverse QX. have industry large We in also conference

that So some spend that marketing in drives QX. of

see. So that’s that the spike you

increase you but would expect sequentially, where that slight trending, a up look QX you you is that, when focus based just on at So see our internally. the normalize I if all will tick QX for of from

Tal Liani

question great just about to last weak is quarter, a you once ask And connected environment, great not Cisco it. company. guidance, Got want the just your not I results, had again guidance. my even numbers, first This the and weak it’s to

and in had get it’s these or reporting your have know the cycles it’s to just seen other to don’t results contract FireEye great some sales them I of that this your have guidance, And you noticed customers you ForceCount or whether of area, difficult are but companies close that many deals. any and We you on with something issues see? is now great more difficulty

Andre Durand

take I Look, if I call of anything and to is don’t truly, feel piece the proof. to it something this, first add recession will think chime in. free bullet have Raj, you

is especially observed the that security have resilient, enterprise We in market.

solutions are they very critical at evidenced as and hard Our take to times. treated how as incumbents mission by out is us sticky for it are

contract strong a great flow is obviously have balance X and We average Our cash years. duration sheet now.

size market, mean, that? or Raj, a market of anything have something think heard on into I in So general observed I a think to indicate as the Maybe might ability Cisco turndown. commentary far would the anything our we add and a specific Brexit even that which have the to to few Tal, obviously of particular, around our see what you extend England. bought had in got it but seen we the to business we anecdotally project, indicators companies, to we not When other, have slowdown. beyond do compare they you early warning have

Raj Dani

No.

think I it. that’s

Operator

from Hedberg comes Matt question go with next Capital. RBC Your Please ahead.

open. is line Your

Matt Hedberg

multiple wondering for guys. am talked customers a I intelligence Hi, and have XX% existing about of words, questions. the know today Thanks remarks, so you lot newer deals of more taking churning, in S-X, on your MFA How multi-product these products so three you or or little API the you initial know and quarter. bit for more more there. attach your products my customers, some contracts? in adopted a I success if believe Congrats other about prepared I In our of been that’s products. some talk up could these of with customer on signing up-selling

Andre Durand

purchasing into than experienced say absolutely a see include around more We do of capability largest We do the high it’s also will more have attach one of I in solutions date. deals. sell a the sell attach. start We lot cloud our the terms that way. but We new success, rate customers of MFA that largest do at that multiple been our of capabilities.

capability have larger we so experienced, generally And multi deals, X. speaking, from day

it’s to we a deals pursue of our much both introduction, strong adjacencies terms have new new the In deals. where as near as a large expansion well product very strategy deals, Many foothold. of

we That expanded XXX both and expansion. of replacement for was a in signed retailer that into north this that Directory. partner. Access was workforce So, the and flexibility. with for we it of modernization workforce Raj example, That time, for a landed Australia. They At ARR we largest hybrid was over bank Fortune MFA just new the SSO there chose partner, SiteMinder $XXX,XXX and $XXX,XXX to our announced ARR same a in mentioned legacy a customer

Matt Hedberg

the this sort is year. guys, about That’s about subscription you opportunity the yes, great. that the of think opportunity was revenue question How case, size last of I enterprise And a I of strong XX% to for use think it guess opportunity? I then on should relative know we core identity

Andre Durand

I will Raj. that, take

trying are and revenue of of the a is generating a We are So most where case are we driven of digital of times is solutions scenario, customer digital Many customer Oftentimes, homegrown overall that been one better number These systems. Ping looking also disparate, business. shooting legacy business top been almost larger time going to by has they in think in transformation large a that lines they generating have a Many use out largest siloed initiatives. our win to experiences. create are customer they all and deals you are enterprise they number solutions, of combination transformation cloud for of line know budget now suited case. all And consolidate in for line a ideally what the as same business. systems to now market services, been all there opportunity. that of mobile a that believe revenue of and identity the is use have and

our it. some so customer we our of use to that for legacy these is We largely has modernization know, systems think in the the As you are leaning customer suited time. been now case comprised into business solution well just

number the because to the market believe So customer of larger employment. is tied in not identities that we the use associated also is case

managed customer by more we that identities many identities. employment enterprises than have have large do these be to We

Operator

Walter go ahead. Your Please Citi. from comes next question Pritchard with

open. Your line is

Walter Pritchard

based think game, your Hi, recently am few on quarters thanks. know not your market? competitiveness only that your in I have or SaaS following that’s side, is the improved largest competitor you, that for solution, I offering, released that curious how customer is customer up SaaS last public Andre, changed wondering know the I you am question I I

Andre Durand

customer. adjacent market opportunity our we a are towards solution new IDAS focusing So, pursuing and the actually slightly for

that their now have whereas and line targets developers existing modernization IT a their targets our traditional in solution business, and of We of solution replacement systems.

systems. and are you time market to is of new to and kind tends companies from a ease a years requirement. deploy think see speed customer customer of when of this activity where So looking significantly as legacy solution net modernization can primary we use of That facing of and to the XX differ

experiencing nice to a you after it – new are when use actually there to to both our that cloud to customer say, suffice case, are a go in that towards. cater the modernized. really targeting that to that need customer applications we get systems That’s But mind, understand. what buyer. new are ourselves new we we need existing buying solution are new interest segment now So are right we with of beginning a new center from There

Walter Pritchard

wasn’t think as spending. on, here. for a there and huge Yes, great. Raj, It And is on then uptick noted marketing the we some like sales you incremental you year? will you think do we well continue we and and this XXXX sales into as see in there going marketing deployed But the investments of have firepower and that additional timing earlier or go questions sounds deploying into sort you ramp that about forward, also it,

Raj Dani

ahead call, guidance will sort go and some we of time the sales investments ramp directionally, Walter, of next And in expect and to why and Yes. on for our marketing quarters take drive and also as the but the ‘XX just year over we will returns beyond. that’s that gestate continue sort investment of usually next for to to that and we update next signaled due couple and up results.

Operator

Barclays go Saket comes question with Capital. from next Your ahead. Please Kalia

open. is line Your

Saket Kalia

as public for Hey, taking a here first and your questions company. guys. Thanks in quarter congrats my

Andre Durand

Thanks, Saket.

Raj Dani

Thanks, Saket.

Saket Kalia

that seeing remind Hey, maybe about of perhaps trends you on-premise? you what to impacts terms with talk opting And start sort the anecdotally deployments versus have? just us are in can revenue Raj, just customers you, just for any other can cloud and ARR of one versus

Raj Dani

Sure.

default, So enterprises maintained right. we sort hybrid great of question, have as all so by are

right all third-party but lot control and have their is the seeing they we have will to require but software these cloud on-premise that Ping what security on-premise to cloud Saket lot a can in and requirements, the mandate, lately enterprise across choice. apps mandates we a that made opt of you integrate customers, deploy is cloud more beauty and who of easy. are we customization solution the And having of guys have Ping cloud the very software, a of So

basically deploy are in they us while as datacenter. they if Ping could we their deploy the the private agnostic how public us in So us cloud deploy in in customers to software deploy could their our cloud, cloud, or they could

AWS And sell datacenter right. a that their so to of a choice that when they Ping, like and to what term is in third-party we deploy license cloud is in happens our software considered revenue or customer

same for And solutions could and is contract and of we be ratably in nature are continues over deal the SaaS SaaS If software we hybrid largely or to we the that most where the the hybrid typically given so rev/rec. customers sell and that term. part the solution are selling the upfront rev/rec selling

back duration realize contract, regardless ARR to why all go-to for type of and important always really a for this deployment normalizes is we ARR of come that’s metric being thing to that. one of is So the

Saket Kalia

Andre, Maybe saw other about sense. you any the like competitive for for love my question of terms couple and SiteMinder would the I was Makes in helpful. there during the heard displacement for follow-up earlier you, what landscape, to opportunities That’s for mentioned tools you SiteMinder of quarter? of times, a a legacy vendors IAM

Andre Durand

deal. two sure, kind legacy MFA, CA, the Oracle, who in there, with thousands mentioned specifically we that there SiteMinder vendors this been like well. FFO, of don’t has is large by have Typically, CA deal, share announced And directory, we on these which not in but three ticketing Likewise, large so the bank that solution. retailer multi-year have we by exactly there and largest there seen CA IBM. retailer of access are substantial involve smattering and vendors SiteMinder, Fortune Well, pretty us also expanded two a replacement, Broadcom them, least deal market legacy XXX or me legacy as quarter, well, applications. displacing. I of X-figure of are large, I a that hybrid it vender unquestionably, we in am replaced Novel Australia, of front we in we This And just recently that a are if cloud

the refer selected This will AWS. part We and solution deployed as Ping to initiative. of and by was digital had They cloud in platform a solution Amazon. all homegrown transformation a they the

well or the the $X.X systems So, that we in order we million, is see a some mentioned. legacy typically of replacing I north large deals as in say homegrown of are these combination there

Operator

with ahead. Zelnick from Suisse. go question Credit Brad Please next comes Your

Your line open. is

Brad Zelnick

I question congrats and much Raj. a success so follow-up for first Thanks the and all have Andre got on for Great. guys. Thanks.

embracing and you analogy, the demand baseball management talk seeing Andre, shifts approach time. a would say for you which in some world are trends as network fundamentally think has about in is what been perimeter to you you happening about for the dissolving So, we security? as identity the trust maybe solutions, enterprises its say to to driver the I architecture talked inning zero fair old Can are

Andre Durand

We much are very innings. in early

would defined vendors a actively moniker, trust sense. a have piece zero who of of if enterprise the being the matter a As I by if of participants kind that fact, and zero enabling makes perimeter you say will, is

to network anywhere, devices data or that secure the if which devices need do the really zero that center anytime, We that defined through about know underlying is from corporate entire workforce, we defined in personal in gain private resource architecture, the place, secure are resides of of resource be notion a their what identity devices perimeters. will. on and corporate describe enterprise of public where cloud, we whether independent firewall, you device, and any resources, is mobility the of so its And corporate dissolving company about how the in anywhere is any the they work these cloud, irrespective issue any perimeter. is, definition accessing, corporate identities the where to is what into not they access that What is by trust the connecting

I it. think we defining I innings, still think we are early extremely are

the sit deploy that being trust We understood. to zero enable think know identity every I primers zero underneath for have construct companies MFA to now what is trust. and of

Brad Zelnick

XXX% lot and context if a just going might impact dollar about non-regrettable how follow-up makes what That the any think in your the churn sense. And a Raj, have rate quarter, Excellent. renewal of forward? of based for in strong on retention that we net that Raj, metric should

Raj Dani

is customer nature, our their don’t and customers count, to they grown have us ARR you just dollar of ideal referred you of kind churn ARR non-regrettable them. the very aren’t them profiles, So, having with can right? while associated much to sort everybody By low of calibrate that’s with tropically accumulate

any of to of overall much impact growth any the net impact see the snowball rate forward there really continued retention ARR don’t general. the or going in I So attrition dollar-based of just

Operator

Your next go Fargo. question Wells with ahead. Winslow comes from Phil Please

Your is line open.

Phil Winslow

first over taking ARR. deal is of that congrats two the Hey, the my out for the I press great to I just release called box. the guess signed in a thanks of in history Ping things guys questions largest APIs, want in the and in just you you $XXX,XXX question for quarter Intelligence on on out focus here. one

us the to new going with – the solution for who of sort can this, the product fits you you give market just into commentary how also new it are new just sort newer the obviously this how obviously, portfolio? And of is not kind just solution guys, then like First but a if Ping, wondering market. you a just sold of it and the to is into

security? for CISO’s API of in, the need are call where the understanding it So we

Andre Durand

of about of our and I that, pioneering services interest definitely where way and we are getting transformation API that users the it, so at main sits digital experiences tell APIs will attended on In that cloud are the and back the has now their have companies you really underlying digital pillars, they light systems the in of are most security. transformation, for highest interest. conferences, innovate the of will our step can say we transformation one, API this I center deliberate API the faster. sessions and Of security kind that three

with what the API respects, doing So to secure users the of them our help identity. chord But we fast current many the that defined our is much to is way and clearly, we want Ping important single market infrastructure. standards growingly market growingly early their and are understand Ping current in to sign-on hitting buyers in a defining in the

we like leadership thought that our like position. We and So investment.

We our have money spend we a lot of about where conviction innovation. on

API to everything do underneath future. the to will the have called to ability convicted And gain APIs APIs We to and traffic bring companywide learning to in provide in hackers. detect to sit stop step forward keys our provide have to machine than visibility then protect and and been simply access anomalies is that all this OWASP AI giant we more what’s the and so

Operator

Please James. next go Your Raymond with Michael question Turits comes from ahead.

line is Your open.

Michael Turits

for the evening. Hi, out good Raj, and deal and for everybody, of product on Andre, Andre Good gate. quarter Congratulations, of the questions Two on first question course a and Hugo one guys. Raj.

new up help talked that and with each be thing they legacy those could to which have two put because then they about coming, plays that Ping starting private on should an still cloud, impact, for that products are into want who cloud, Andre, PingCentral, and especially of to you tendency So, control. on-boarding, really in like Are but both helpful? products the keep seem people this

Andre Durand

IAM Michael, by me let for, have the PingCentral interest vast the but very say both new, I who was and do to driven a that of application of at customers themselves have done portal so IT, Those large with will these of PingCentral, start interest existing vast a consuming PingCentral our to provide many many legacy. as from development off enterprises. in entire What products deployed are the Ping from prior deployed is teams professionals the on-boarding that Ping application put developers application thousands consume number they then organization. identity needed of the self-service. It of for Ping services of central reduces through of speeds it and is could are The to they migration to have measured and identity to – IT developers centrally identity services applications new array workload the drastically

collaborated are is So rolled our managing to or we product solution testing minutes. PingCentral. that Ping in that customers lot footprint. cloud-first customers just those the capabilities early all of the many, our of mandate, platform for have solution running of a advanced stand What their did, Ping up We or out we followed our hosting business now we with infrastructure. of of of large a be matter and of many requirements most we of customers Ping in that for or cloud in want innings not have enterprises the the really do a can enterprise the the now

with advanced large where customers they targeting requirements got Ping And can have that a they also first met from platform where so mandate. really the be that the have is cloud, cloud a

Michael Turits

comes expect it do that footnote, the it’s about multiyear revenue? higher Andre. should you the if would look quarters? total looks And portion Raj if how it or that or same as really benefit we been the in you an of it’s couple then see of Great. Is decrease helpful, That’s that increase multiyear last percentage in on churn, mixture revenue of the at like

Raj Dani

Yes.

that this to we multiyear it be tended think will have I quarter Michael. mean, just gradual, contracts. more I

I is I customers are the our it’s that earlier think like said direction taking.

I much recognition and software revenue. while pretty had a part, choice customers the is and earlier the in for transformation that’s that historically. a license of from a customer their it it standpoint or cloud more deploying has mind are in it Keep cloud term most mentioned software that revenue like think for – what been us looks in I third-party looks stay more will Ping the range also like

that mix bit little see where but part, that, major towards the historically. So have most for impact from I given changes the we a may don’t software, been

Operator

Your next question go comes ahead. Please Moskowitz with from Mizuho. Gregg

open. line is Your

Gregg Moskowitz

list are a rising on you getting you have I password years a of about that’s seeing, congratulations demand one to very thank Okay, since those and as been are ask base? you assuming question the initially that, very of know ago? guys recently, particularly talk good that I and question start can ask enterprises given time. Andre, relates just many are what on installed hearing how on for public solutions you capitalizing MFA-oriented consistent And More as we or your I it will deployed about company. much customers, we Ping just those had with many short

Andre Durand

where be enough and intelligence critical way much and going we no list MFA Our list password password anything needs large less our cloud place password strengthening that I services. everything. put lot on user of is experience list this are our expect that are deployed we It for market PingID. are in said at the be demonstrated the much through time longer month we to solution users to interest enable There better solution. is a MFA conference, Passwords at is product a but and our same to We it a it secure IDENTIFY, infrastructure. a I risk a ago. security, is today, alone

we one the recognizes see So that I the that is that. think of market drivers

customers Our it single everything solution. they solution our are coupling MFA putting with our sign-on on and are

Ping then applications. to all the once. authenticate the users So And sign-on single provides to platform, Ping

user by We be are just many do isn’t are making why this is time. list going the I long-lived list Password to the the is our we MFA accomplish theme. way to more ways password is it. improving think to There theme. one long-lived which and intelligent There are way all a a experience

to We will list. support all the password ways that support enterprises want

Operator

from Jonathan Please comes go with question next ahead. Your Ho Blair. William

open. is line Your

Jonathan Ho

Hi, good afternoon.

Let and me as myself I echo one to limit congratulations question. my well will

wanted to digital enabling more bit and get lift AWS, shift transformation you. where are and color inside of some you at used You opportunities gave to that maybe being a Thank about little and that looking shifting just to DevOps of to how customers you of that how a solution? looking or examples I your go are are few

Andre Durand

Yes.

this of accelerate cloud containerization allow in deploy will invested to last the efforts minutes. the to matter heavily We and have efforts in the – year any platform a and essentially on our

have customers Many of couple our better largest the this in doing Our been years. of of for the deployments last part deployed are Amazon.

the in We simplifying Azure that are are scale. And containerization for both the see collaborating technologies a platform. but customers is deploy and around now underway and in of public lot like often, hearing Docker significant they is deployed many of our speaking they significant and In effort have actually here cases, being generally That deployed our at demand and that it. we now already way with it Kubernetes it tenant. more upgrade the automating in infrastructure being into customer’s which cloud

Operator

Talpaz Gur ahead. Please comes go question Stifel. next from Your with

Your line is open.

Gur Talpaz

terms play about flexibility elaborate for seeing results think I And differentiator question keep you I think thanks have as Okay, and a bit and one hybrid more as of broadly, Andre, differentiation my could that? was and go how do competitive as you a in hoping you talked a on deployments on also IPO. Are successful you you taking factor your bake-offs? about question lot the I my in forward? a to the that echo will well. I congratulations a as it here

Andre Durand

two clouds in in you, IT, hybrid is the I’d managing There hybrid. cloud, thank dimensions which Gur. Yes, datacenter in IT both is the is the say there is multiple probably. of in notion infrastructure

to that going for are a all irrespective deploy where to they want, the reside. want or of we where consistent so And enterprises are users applications they security identity experience create accessing

applications end be all have a access wall security, on-prem accommodate large you incumbent wall the end sign-on enterprise to portion general to apps. to So or for of to for to

or apps You to the to for has Ping that you years. the and in just cloud doing public the been SaaS deployed need protect the have cloud. accommodate in consumed apps to

hard, standards allow We all are of they legacy to have that to because are the us develop Those We times proprietary. to many the integrations the the all on-prem. cloud. connect

So entire on-prem is part IT a we cloud across What which now have really better and different. little has of the hybrid been for connecting existence. our emerged bit

versus infrastructure, level are hybrid their that this they level about the notion talk Xs identity hybrid of and in we cloud companies some are the that when cloud IT customization, control in looking So the for, deploying cases is where customer of architecting use five now that for matters. are in they zero with of these regulation all of up looking data where residency a cases deploy their controls tier for matters they sudden many identity popping privacy now

their are into We deploy Ping cloud. companies seeing

So point. hybrid that stand across speaks Ping the applications cloud enterprise, notion cloud of really all to the and on-prem first can the

is point Second in customer control want, they customization security that base how they and that case. deploy level growing use of in is they want, it is identity especially can customer our where their and growing

Operator

Your next question go Oppenheimer. Shaul ahead. comes Please with from Eyal

open. is line Your

Shaul Eyal

or international count during debut can maybe third on and you. domestic quarter? us customers quarter to give prospective, the metric I during or Thank Andre, take Thank were the just even closely business versus Raj know just a many maybe strong not a quarter. Good added customer guys. color you. how recent tell watch, Andre afternoon from is you but Congrats the

Raj Dani

Shaul. a Thanks Raj is here. hey, lot. Yes, This

you annually the you years few be base. pretty will on look have past the can is much I So focusing will comprehensive our tell but the a give customer been data, that what in next in call, directionally, we and we expanding

a We in lot have product. invested

dollar had rate really we sell we to from able great platform. rate net have you We our And have been our our developed see expansion success as retention base. – that have into can

targeting new with logo and customers momentum of to in lean of so of sales a we Now seeing positive year this are generation. are we terms in, marketing, lot new this and speak,

comprehensive tuned international So will next continue look as there an and you that of for stay get see well. lot quarter. we a more to momentum From standpoint, we

the and customers lot That’s there you of We on is you APAC, data solutions. will and a our in privacy. QX of the our As and about EMEA purchasing were tailwind been Q total. focus Ping in us XX% engaging did see with know, international for revenues as a in really data security to

So international pleased we there. with exposure are really our

Operator

to questions the are at will There back no closing I remarks. call management this further time. for turn

Andre Durand

want commitment We believe grade security, enterprise pervasive supporting the of mission are are today’s and to we for reiterate grateful our will investors. thank helping excited everyone intelligent Thank support need forward. I to So questions that customers joining strongly innovative digital we continue time, for call. we earnings appreciate identity. of our the solutions, ahead. We and market continue just the And the for the forward thoughtful you. are tailwinds to journey securing looking Ping’s how to world our I the want to through

Operator

and This you may concludes disconnect. today’s conference call. joining now Thank you for

Ping Identity Holding (PING) 14 Nov 192019 Q3 Earnings call transcript