Company Quick10K Filing
Ping Identity
10-Q 2021-03-31 Filed 2021-05-05
10-K 2020-12-31 Filed 2021-02-24
10-Q 2020-09-30 Filed 2020-11-04
S-1 2020-07-06 Public Filing
10-Q 2020-06-30 Filed 2020-08-12
S-1 2020-05-11 Public Filing
10-Q 2020-03-31 Filed 2020-05-06
10-K 2019-12-31 Filed 2020-03-04
10-Q 2019-09-30 Filed 2019-11-13
S-1 2019-08-23 Public Filing
8-K 2020-11-26
8-K 2020-11-04
8-K 2020-08-12
8-K 2020-07-06
8-K 2020-05-06
8-K 2020-05-06
8-K 2020-04-20
8-K 2020-03-24
8-K 2020-03-04
8-K 2019-12-12
8-K 2019-11-13
8-K 2019-10-18
8-K 2019-09-18

PING 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosure
Item 5. Other Information
Item 6. Exhibits
EX-10.1 ping-20210331xex10d1.htm
EX-31.1 ping-20210331xex31d1.htm
EX-31.2 ping-20210331xex31d2.htm
EX-32.1 ping-20210331xex32d1.htm
EX-32.2 ping-20210331xex32d2.htm

Ping Identity Earnings 2021-03-31

Balance SheetIncome StatementCash Flow

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________

FORM 10-Q

_____________________________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-39056

_____________________________________________________________________________________________________________________________________

Graphic

PING IDENTITY HOLDING CORP.

(Exact Name of Registrant as Specified in Its Charter)

_____________________________________________________________________________________________________________________________________

Delaware

81-2933383

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification Number)

1001 17th Street, Suite 100

Denver, Colorado 80202

(Address of Principal executive offices, including zip code)

(303) 468-2900

(Registrant’s telephone number, including area code)

_______________________________________________________________________________________________________________________________________

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol(s):

Name of each exchange on which registered:

Common Stock, $0.001 par value per share

PING

New York Stock Exchange

__________________________________________________________________________________________________________________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)   Yes   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes   No  

On April 30, 2021, the Registrant had 82,031,979 shares of common stock, $0.001 par value, outstanding.

Table of Contents

PING IDENTITY HOLDING CORP.

FORM 10-Q

For the Quarter Ended March 31, 2021

TABLE OF CONTENTS

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited)

3

Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020

3

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020

4

Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020

5

Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2021 and 2020

6

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020

7

Notes to Condensed Consolidated Financial Statements

8

Forward-Looking Statements

23

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

26

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

42

Item 4.

Controls and Procedures

43

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

44

Item 1A.

Risk Factors

44

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

44

Item 3.

Defaults Upon Senior Securities

44

Item 4.

Mine Safety Disclosures

44

Item 5.

Other Information

44

Item 6.

Exhibits

44

Signatures

46

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(unaudited)

March 31, 

December 31, 

    

2021

    

2020

Assets

Current assets:

Cash and cash equivalents

$

55,003

$

145,733

Accounts receivable, net of allowances of $652 and $828 at March 31, 2021 and December 31, 2020, respectively

 

65,702

 

82,335

Contract assets, current (net of allowance)

61,562

62,503

Deferred commissions, current

6,819

6,604

Prepaid expenses

15,250

17,608

Other current assets

 

1,840

 

1,940

Total current assets

 

206,176

 

316,723

Noncurrent assets:

Property and equipment, net

 

9,134

 

9,446

Goodwill

 

441,352

 

441,150

Intangible assets, net

 

175,502

 

180,422

Contract assets, noncurrent (net of allowance)

8,119

11,288

Deferred commissions, noncurrent

9,715

9,325

Deferred income taxes, net

 

3,997

 

3,962

Operating lease right-of-use assets

14,808

15,619

Other noncurrent assets

 

3,327

 

2,516

Total noncurrent assets

 

665,954

 

673,728

Total assets

$

872,130

$

990,451

Liabilities and stockholders' equity

 

  

 

Current liabilities:

 

  

 

Accounts payable

$

571

$

2,795

Accrued expenses and other current liabilities

 

8,026

 

7,339

Accrued compensation

 

12,948

 

17,170

Deferred revenue, current

45,993

49,203

Operating lease liabilities, current

4,065

3,979

Total current liabilities

 

71,603

 

80,486

Noncurrent liabilities:

 

  

 

Deferred revenue, noncurrent

 

3,359

 

3,195

Long-term debt

 

39,076

 

149,014

Deferred income taxes, net

 

14,334

 

17,867

Operating lease liabilities, noncurrent

16,173

17,213

Other liabilities, noncurrent

 

1,565

 

1,566

Total noncurrent liabilities

 

74,507

 

188,855

Total liabilities

 

146,110

 

269,341

Commitments and contingencies (Note 14)

 

  

 

Stockholders' equity:

 

  

 

Preferred stock; $0.001 par value; 50,000,000 shares authorized at March 31, 2021 and December 31, 2020; no shares issued or outstanding at March 31, 2021 or December 31, 2020

Common stock; $0.001 par value; 500,000,000 shares authorized at March 31, 2021 and December 31, 2020; 81,475,176 and 81,163,896 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

81

81

Additional paid-in capital

 

759,645

 

739,051

Accumulated other comprehensive income

 

1,623

 

1,373

Accumulated deficit

 

(35,329)

 

(19,395)

Total stockholders' equity

 

726,020

 

721,110

Total liabilities and stockholders' equity

$

872,130

$

990,451

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Table of Contents

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

Three Months Ended
March 31, 

    

2021

    

2020

Revenue:

 

  

Subscription

$

64,216

$

56,818

Professional services and other

 

4,728

 

4,594

Total revenue

 

68,944

 

61,412

Cost of revenue:

Subscription (exclusive of amortization shown below)

9,414

7,109

Professional services and other (exclusive of amortization shown below)

 

5,583

 

4,013

Amortization expense

 

5,809

 

4,602

Total cost of revenue

20,806

15,724

Gross profit

 

48,138

 

45,688

Operating expenses:

 

  

 

  

Sales and marketing

 

25,549

 

22,190

Research and development

 

21,702

 

12,214

General and administrative

 

14,455

 

11,515

Depreciation and amortization

 

4,365

 

4,249

Total operating expenses

 

66,071

 

50,168

Loss from operations

 

(17,933)

 

(4,480)

Other income (expense):

 

  

 

  

Interest expense

 

(396)

 

(506)

Other income (expense), net

 

(872)

 

(1,250)

Total other income (expense)

 

(1,268)

 

(1,756)

Loss before income taxes

 

(19,201)

 

(6,236)

Benefit for income taxes

 

3,267

 

1,944

Net loss

$

(15,934)

$

(4,292)

Net loss per share:

Basic and diluted

$

(0.20)

$

(0.05)

Weighted-average shares used in computing net loss per share:

Basic and diluted

 

81,339

 

79,743

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Table of Contents

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(unaudited)

Three Months Ended
March 31, 

2021

2020

Net loss

$

(15,934)

$

(4,292)

Other comprehensive income (loss), net of tax:

 

  

 

  

Foreign currency translation adjustments

 

250

 

(1,015)

Total other comprehensive income (loss)

 

250

 

(1,015)

Comprehensive loss

$

(15,684)

$

(5,307)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Table of Contents

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(unaudited)

Three Months Ended March 31, 2021:

Accumulated

Retained

Additional

Other

Earnings

Total

Common Stock

Paid-in

Comprehensive

(Accumulated

Stockholders'

    

Shares

    

Amount

    

Capital

    

Income

    

Deficit)

    

Equity

Balances at December 31, 2020

81,163,896

$

81

$

739,051

$

1,373

$

(19,395)

$

721,110

Net loss

(15,934)

(15,934)

Stock-based compensation

 

 

16,300

 

 

 

16,300

Reclassification of liability-classified awards upon settlement

3,089

3,089

Exercise of stock options, net of tax withholding

198,105

1,770

1,770

Vesting of restricted stock, net of tax withholding

113,175

 

 

(565)

 

 

 

(565)

Foreign currency translation adjustments, net of tax

 

 

 

250

 

 

250

Balances at March 31, 2021

81,475,176

$

81

$

759,645

$

1,623

$

(35,329)

$

726,020

Three Months Ended March 31, 2020:

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Comprehensive

Accumulated

Stockholders'

    

Shares

    

Amount

    

Capital

    

Loss

    

Deficit

    

Equity

Balances at December 31, 2019

79,632,500

$

80

$

718,446

$

(399)

$

(7,656)

$

710,471

Cumulative-effect adjustment for adoption of ASU 2016-13

152

152

Net loss

(4,292)

(4,292)

Stock-based compensation

2,600

2,600

Exercise of stock options, net of tax withholding

273,444

 

 

135

 

 

 

135

Vesting of restricted stock

17,170

 

 

 

 

 

Foreign currency translation adjustments, net of tax

 

 

 

(1,015)

 

 

(1,015)

Balances at March 31, 2020

79,923,114

$

80

$

721,181

$

(1,414)

$

(11,796)

$

708,051

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

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PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

Three Months Ended
March 31, 

    

2021

2020

Cash flows from operating activities

 

  

  

Net loss

$

(15,934)

$

(4,292)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

Depreciation and amortization

 

10,174

 

8,851

Stock-based compensation expense

 

16,939

 

2,857

Amortization of deferred commissions

2,329

2,102

Amortization of deferred debt issuance costs

62

62

Operating leases, net

(142)

59

Deferred taxes

 

(3,546)

 

(2,050)

Other

 

(10)

 

282

Changes in operating assets and liabilities:

 

 

Accounts receivable

 

16,640

 

13,030

Contract assets

 

4,128

 

797

Deferred commissions

 

(2,934)

 

(1,536)

Prepaid expenses and other current assets

 

2,466

 

4,822

Other assets

 

(820)

 

49

Accounts payable

 

(2,013)

 

2,734

Accrued compensation

(1,865)

(6,222)

Accrued expenses and other

 

1,659

 

1,104

Deferred revenue

 

(3,046)

 

(9,164)

Net cash provided by operating activities

 

24,087

 

13,485

Cash flows from investing activities

 

  

 

  

Purchases of property and equipment and other

 

(953)

 

(1,094)

Capitalized software development costs

 

(3,974)

 

(3,299)

Payments for business acquisitions, net of cash acquired

(4,703)

Net cash used in investing activities

 

(4,927)

 

(9,096)

Cash flows from financing activities

 

  

 

  

Payment of Symphonic and ShoCard holdbacks

 

(993)

 

Payment of offering costs

 

 

(295)

Proceeds from stock option exercises

 

1,770

 

1,309

Payment for tax withholding on equity awards

(565)

(1,205)

Proceeds from long-term debt

 

 

97,823

Payment of long-term debt

 

(110,000)

 

Net cash provided by (used in) financing activities

 

(109,788)

 

97,632

Effect of exchange rates on cash and cash equivalents and restricted cash

 

(111)

 

(645)

Net increase (decrease) in cash and cash equivalents and restricted cash

 

(90,739)

 

101,376

Cash and cash equivalents and restricted cash

 

  

 

  

Beginning of period

 

146,499

 

68,386

End of period

$

55,760

$

169,762

Supplemental disclosures of cash flow information:

 

  

 

  

Cash paid for interest

$

339

$

514

Cash paid for taxes

 

215

 

157

Noncash activities:

 

  

 

  

Purchases of property and equipment, accrued but not yet paid

$

42

$

107

Reclassification of liability-classified awards upon settlement

3,089

Acquisition-related accruals

 

 

226

Lease liabilities arising from right-of-use assets

 

 

794

Reconciliation of cash and cash equivalents and restricted cash within the consolidated balance sheets to the amounts shown in the statements of cash flows above:

Cash and cash equivalents

$

55,003

$

169,022

Restricted cash included in other noncurrent assets

 

757

 

740

Total cash and cash equivalents and restricted cash

$

55,760

$

169,762

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.       Overview and Basis of Presentation

Organization and Description of Business

Ping Identity Holding Corp. and its wholly owned subsidiaries, referred to herein as the “Company,” is headquartered in Denver, Colorado with international locations principally in Canada, the United Kingdom, France, Australia, Israel and India. The Company, doing business as Ping Identity Corporation (“Ping Identity”), provides customers, employees and partners with secure access to any service, application or application programming interface (“API”), while also managing identity and profile data at scale.

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All amounts are reported in U.S. dollars.

Unaudited Interim Condensed Consolidated Financial Information

The accompanying interim condensed consolidated balance sheet as of March 31, 2021, the condensed consolidated statements of operations, of comprehensive loss, of cash flows and of stockholders’ equity for the three months ended March 31, 2021 and 2020 and the related footnote disclosures are unaudited. The condensed consolidated balance sheet data as of December 31, 2020 was derived from audited financial statements, but does not include all disclosures required by GAAP. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary to state fairly the consolidated financial position of the Company as of March 31, 2021, the results of operations for the three months ended March 31, 2021 and 2020 and cash flows for the three months ended March 31, 2021 and 2020. The results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future period.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, determining the fair values of assets acquired and liabilities assumed in business combinations, valuing stock option awards and assessing the probability of the awards meeting vesting conditions, recognizing revenue, establishing allowances for expected credit losses based on expected credit losses and the collectability of financial assets, determining useful lives for finite-lived assets, assessing the recoverability of long-lived assets, determining the value of right-of-use assets and lease liabilities, accounting for income taxes and related valuation allowances against deferred tax assets, determining the amortization period for deferred commissions and assessing the accounting treatment for commitments and contingencies. Management evaluates these estimates and assumptions on an ongoing basis and makes estimates based on historical experience and various other assumptions

8

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

that are believed to be reasonable. Actual results may differ from these estimates due to risks and uncertainties, including the continued uncertainty surrounding rapidly changing market and economic conditions due to the novel Coronavirus Disease 2019 (“COVID-19”) pandemic.

2.       Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Note 2 — Summary of Significant Accounting Policies” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. There have been no significant changes to these policies that have had a material impact on the Company’s condensed consolidated financial statements and related notes for the three months ended March 31, 2021. The following describes the impact of certain policies.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. Effective January 1, 2021, the Company adopted ASU 2019-12. The adoption did not have a material impact on its condensed consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”), which provides companies with temporary optional financial reporting alternatives to ease the potential burden in accounting for reference rate reform and includes a provision that allows companies to account for a modified contract as a continuation of an existing contract. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. Adoption of ASU 2020-04 did not have a material impact on the Company’s condensed consolidated financial statements.

3.       Revenue Recognition and Deferred Commissions

The Company recognizes revenue under Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.

Disaggregation of Revenue

The following table presents revenue by category:

Three Months Ended
March 31, 

2021

2020

Subscription term-based licenses:

Multi-year subscription term-based licenses

$

23,838

$

23,988

1-year subscription term-based licenses

17,344

14,149

Total subscription term-based licenses

41,182

38,137

Subscription SaaS and support and maintenance

23,034

18,681

Professional services and other

 

4,728

 

4,594

Total revenue

$

68,944

$

61,412

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The following table presents revenue by geographic region, which is based on the delivery address of the customer, and is summarized by geographic area:

Three Months Ended
March 31, 

2021

2020

United States

$

53,871

$

43,029

International

 

15,073

 

18,383

Total revenue

$

68,944

$

61,412

Other than the United States, no other individual country exceeded 10% of total revenue for the three months ended March 31, 2021 or 2020.

Contract Balances

Contract assets represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for contracts that have not yet been invoiced to customers where there is a remaining performance obligation, typically for multi-year arrangements. In multi-year agreements, the Company generally invoices customers on an annual basis on each anniversary of the contract start date. Amounts anticipated to be billed within one year of the balance sheet date are recorded as contract assets, current; the remaining portion is recorded as contract assets, noncurrent in the condensed consolidated balance sheets. The change in the total contract asset balance relates to entering into new multi-year contracts and billing on existing contracts. The opening and closing balances of contract assets were as follows:

Three Months Ended
March 31, 

2021

2020

Beginning balance

$

73,791

$

86,010

Ending balance

69,681

85,150

Change

$

(4,110)

$

(860)

Contract liabilities consist of customer billings in advance of revenue being recognized. The Company primarily invoices its customers for subscription arrangements annually in advance, though certain contracts require invoicing for the entire subscription in advance. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current; the remaining portion is recorded as deferred revenue, noncurrent in the condensed consolidated balance sheets. The opening and closing balances of contract liabilities included in deferred revenue were as follows:

Three Months Ended
March 31, 

2021

2020

    

Beginning balance

$

52,398

$

47,507

Ending balance

49,352

38,343

Change

$

(3,046)

$

(9,164)

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The change in deferred revenue relates primarily to invoicing customers and recognizing revenue in conjunction with the satisfaction of performance obligations. Revenue recognized during the three months ended March 31, 2021 and 2020 that was included in the deferred revenue balances at the beginning of the respective periods was as follows:

Three Months Ended
March 31, 

    

2021

2020

Deferred revenue recognized as revenue

$

25,935

$

22,968

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and noncancelable amounts to be invoiced. As of March 31, 2021, the Company had $175.5 million of transaction price allocated to remaining performance obligations, of which 83% is expected to be recognized as revenue over the next 24 months, with the remainder to be recognized thereafter.

Deferred Commissions

The following table summarizes the account activity of deferred commissions for the three months ended March 31, 2021 and 2020:

Three Months Ended
March 31, 

2021

2020

Beginning balance

$

15,929

$

13,670

Additions to deferred commissions

2,934

1,536

Amortization of deferred commissions

 

(2,329)

 

(2,102)

Ending balance

$

16,534

$

13,104

Deferred commissions, current

$

6,819

$

5,303

Deferred commissions, noncurrent

9,715

7,801

Total deferred commissions

$

16,534

$

13,104

4. Allowances for Expected Credit Losses

The following table presents the changes in allowance for expected credit losses for financial assets measured at amortized cost:

    

Accounts
Receivable

    

Contract
Assets

Three Months Ended March 31, 2021

(in thousands)

Beginning balance

$

828

$

87

Provision for credit losses, net of recoveries

 

(21)

 

(7)

Write-offs

 

(155)

 

Ending balance

$

652

$

80

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

5.       Fair Value of Financial Instruments

For financial assets and liabilities that are measured at fair value on a recurring basis at each reporting period, the Company uses a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The Company invests primarily in money market funds, which are measured and recorded at fair value on a recurring basis and are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The fair value of these financial instruments were as follows:

March 31, 2021

    

Level 1

    

Level 2

    

Level 3

    

Total

(in thousands)

Cash and cash equivalents:

Money market funds

$

5,000

$

$

$

5,000

December 31, 2020

    

Level 1

    

Level 2

    

Level 3

    

Total

(in thousands)

Cash and cash equivalents:

Money market funds

$

113,083

$

$

$

113,083

The carrying amounts of the Company’s accounts receivable, accounts payable and other current liabilities approximate their fair values due to their short maturities. The carrying value of the Company’s long-term debt approximates its fair value based on Level 2 inputs as the principal amounts outstanding are subject to variable interest rates that are based on market rates (see Note 9).

6.       Property and Equipment

Property and equipment consisted of the following:

March 31, 

December 31, 

2021

    

2020

    

(in thousands)

Computer equipment

$

7,163

$

6,581

Furniture and fixtures

3,885

3,887

Purchased computer software

785

785

Leasehold improvements

7,866

7,818

Other

448

448

Property and equipment, gross

20,147

19,519

Less: Accumulated depreciation

(11,013)

(10,073)

Property and equipment, net

$

9,134

$

9,446

Depreciation expense was $0.9 million for each of the three months ended March 31, 2021 and 2020.

7.       Business Combinations

Symphonic Software Limited Acquisition

On October 31, 2020, the Company acquired 100% of the voting equity interest in Symphonic Software Limited (“Symphonic”). Symphonic is a leader in dynamic authorization for protecting APIs, data, apps

12

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

and resources through identity. The purpose of this acquisition was to accelerate dynamic and intelligent authorization for enterprises pursuing Zero Trust identity-defined security.

The total purchase price was $28.8 million, net of cash acquired. An additional $0.4 million and $0.6 million is payable in common stock of the Company on December 31, 2021 and December 31, 2022, respectively, contingent on individuals remaining employed as of those dates and meeting certain performance conditions. As these payments are subject to the continued employment of those individuals, they will be recognized through compensation expense as incurred. See Note 12 for additional details.

The following table summarizes the preliminary allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:

    

October 31, 2020

    

Useful Life

(in thousands)

Fair value of net assets acquired

 

  

 

  

Developed technology

$

6,999

 

6 years

Product backlog

609

3 years

Customer relationships

246

3 years

Goodwill

 

21,341

 

Indefinite

Contract asset

1,387

Other assets

 

373

 

  

Total assets acquired

 

30,955

 

  

Deferred tax liability

(1,881)

Other liabilities

 

(253)

 

  

Total liabilities assumed

 

(2,134)

 

  

Net assets acquired, excluding cash

$

28,821

 

  

Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating Symphonic into the Ping Intelligent Identity Platform so enterprise customers can cover advanced authorization scenarios that go beyond typical user roles and entitlements. None of the goodwill is deductible for tax purposes.

Additional information around the Symphonic acquisition, such as that related to income tax and other contingencies existing as of the acquisition date but unknown to the Company, may become known during the remainder of the measurement period, not to exceed one year from the acquisition date, which may result in changes to the amounts and allocations recorded.

ShoCard, Inc. Acquisition

On March 2, 2020, the Company acquired 100% of the voting equity interest in ShoCard, Inc., a Delaware Corporation (“ShoCard”). ShoCard is a cloud-based mobile identity solution that offers identity services for verified claims. The purpose of this acquisition was to expand the Company’s identity proofing solutions.

The total purchase price was $5.5 million. An additional $3.1 million and $2.3 million of contingent compensation was payable in common stock of the Company on the first and second anniversary of the acquisition, respectively, contingent on certain individuals remaining employed as of those dates and other service conditions. As these payments are subject to the continued employment of those individuals, they will be recognized through compensation expense as incurred. On March 2, 2021, the Company settled the first portion of contingent compensation payable. See Note 12 for additional details.

13

Table of Contents

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The following table summarizes the allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:

    

March 2, 2020

    

Useful Life

(in thousands)

Fair value of net assets acquired

 

  

 

  

Developed technology

$

3,550

 

7 years

Goodwill

 

964

 

Indefinite

Deferred tax asset

1,005

Other assets

 

11

 

  

Total assets acquired

 

5,530

 

  

Other liabilities

 

(2)

 

  

Total liabilities assumed

 

(2)

 

  

Net assets acquired

$

5,528

 

  

Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating ShoCard’s identity solution with the Company’s existing identity solutions. None of the goodwill is deductible for tax purposes. The Company incurred $0.5 million of acquisition-related expenses in conjunction with the ShoCard acquisition, which are included in general and administrative expenses on the condensed consolidated statement of operations for the three months ended March 31, 2020.

Additional Acquisition Related Information

The operating results of Symphonic and ShoCard are included in the Company’s condensed consolidated statements of operations from their respective dates of acquisition. Revenue and earnings of Symphonic and ShoCard since their respective dates of acquisition and pro forma results of operations have not been prepared because the effect of the acquisitions were not material to the condensed consolidated statements of operations.

8.       Goodwill and Intangible Assets

The changes in the carrying amount of the Company’s goodwill balance from December 31, 2020 to March 31, 2021 were as follows (in thousands):

Beginning balance

$

441,150

Foreign currency translation adjustment

202

Ending balance

$

441,352

The Company’s intangible assets as of March 31, 2021 were as follows:

March 31, 2021

Gross

Accumulated

Net Carrying

    

Amount

    

Amortization

    

Value

(in thousands)

Developed technology

 

$

119,516

 

$

(59,508)

 

$

60,008

Customer relationships

 

 

95,137

 

 

(35,625)

 

 

59,512

Trade names

 

 

56,734

 

 

(26,842)

 

 

29,892

Product backlog

648

(105)

543

Capitalized internal-use software

 

39,974

 

 

(15,056)

 

 

24,918

Other intangible assets

 

 

1,290

 

 

(661)

 

 

629

Total intangible assets

 

$

313,299

 

$

(137,797)

 

$

175,502

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Table of Contents

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company’s intangible assets as of December 31, 2020 were as follows: