10-Q

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 June 30, 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

_____________________________________________________________________________________________________________________________________

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)	(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 July 30, 2021, the Registrant had 82,088,438 shares of common stock, $0.001 par value, outstanding.

PING IDENTITY HOLDING CORP.

FORM 10-Q

For the Quarter Ended June 30, 2021

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	3
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2021 and 2020	5
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	8
	Notes to Condensed Consolidated Financial Statements	9
Forward-Looking Statements		27
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48
Item 4.	Controls and Procedures	49
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	50
	Signatures	52

2

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)

	June 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	104,342	$	145,733
Accounts receivable, net of allowances of $645 and $828 at June 30, 2021 and December 31, 2020, respectively		64,720		82,335
Contract assets, current (net of allowance)		62,955		62,503
Deferred commissions, current		7,711		6,604
Prepaid expenses		14,061		17,608
Other current assets		2,239		1,940
Total current assets		256,028		316,723
Noncurrent assets:
Property and equipment, net		8,753		9,446
Goodwill		473,697		441,150
Intangible assets, net		179,324		180,422
Contract assets, noncurrent (net of allowance)		5,159		11,288
Deferred commissions, noncurrent		11,753		9,325
Deferred income taxes, net		3,370		3,962
Operating lease right-of-use assets		14,085		15,619
Other noncurrent assets		2,944		2,516
Total noncurrent assets		699,085		673,728
Total assets	$	955,113	$	990,451
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	2,944	$	2,795
Accrued expenses and other current liabilities		7,730		7,339
Accrued compensation		20,165		17,170
Deferred revenue, current		43,431		49,203
Operating lease liabilities, current		4,097		3,979
Total current liabilities		78,367		80,486
Noncurrent liabilities:
Deferred revenue, noncurrent		4,288		3,195
Long-term debt		119,138		149,014
Deferred income taxes, net		9,603		17,867
Operating lease liabilities, noncurrent		15,216		17,213
Other liabilities, noncurrent		1,565		1,566
Total noncurrent liabilities		149,810		188,855
Total liabilities		228,177		269,341
Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred stock; $0.001 par value; 50,000,000 shares authorized at June 30, 2021 and December 31, 2020; no shares issued or outstanding at June 30, 2021 or December 31, 2020		—		—
Common stock; $0.001 par value; 500,000,000 shares authorized at June 30, 2021 and December 31, 2020; 82,086,665 and 81,163,896 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		82		81
Additional paid-in capital		771,332		739,051
Accumulated other comprehensive income		1,830		1,373
Accumulated deficit		(46,308)		(19,395)
Total stockholders' equity		726,936		721,110
Total liabilities and stockholders' equity	$	955,113	$	990,451

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

3

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue:
Subscription	$	73,151	$	54,268	$	137,367	$	111,086
Professional services and other		5,753		4,713		10,481		9,307
Total revenue		78,904		58,981		147,848		120,393
Cost of revenue:
Subscription (exclusive of amortization shown below)		10,185		7,509		19,599		14,618
Professional services and other (exclusive of amortization shown below)		6,142		4,226		11,725		8,239
Amortization expense		6,077		4,944		11,886		9,546
Total cost of revenue		22,404		16,679		43,210		32,403
Gross profit		56,500		42,302		104,638		87,990
Operating expenses:
Sales and marketing		29,082		20,751		54,631		42,941
Research and development		18,692		11,411		40,394		23,625
General and administrative		19,545		12,082		34,000		23,597
Depreciation and amortization		4,327		4,233		8,692		8,482
Total operating expenses		71,646		48,477		137,717		98,645
Loss from operations		(15,146)		(6,175)		(33,079)		(10,655)
Other income (expense):
Interest expense		(310)		(724)		(706)		(1,230)
Other income (expense), net		430		695		(442)		(555)
Total other income (expense)		120		(29)		(1,148)		(1,785)
Loss before income taxes		(15,026)		(6,204)		(34,227)		(12,440)
Benefit for income taxes		4,047		2,932		7,314		4,876
Net loss	$	(10,979)	$	(3,272)	$	(26,913)	$	(7,564)
Net loss per share:
Basic and diluted	$	(0.13)	$	(0.04)	$	(0.33)	$	(0.09)
Weighted-average shares used in computing net loss per share:
Basic and diluted		82,025		80,169		81,684		79,956

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

4

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net loss	$	(10,979)	$	(3,272)	$	(26,913)	$	(7,564)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		207		351		457		(664)
Total other comprehensive income (loss)		207		351		457		(664)
Comprehensive loss	$	(10,772)	$	(2,921)	$	(26,456)	$	(8,228)

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

5

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(unaudited)

Three Months Ended June 30, 2021:

							Accumulated
					Additional		Other				Total
	Common Stock				Paid-in		Comprehensive		Accumulated		Stockholders'
	Shares		Amount		Capital		Income		Deficit		Equity
Balances at March 31, 2021		81,475,176	$	81	$	759,645	$	1,623	$	(35,329)	$	726,020
Net loss		—		—		—		—		(10,979)		(10,979)
Stock-based compensation		—		—		17,167		—		—		17,167
Exercise of stock options, net of tax withholding		22,377		—		30		—		—		30
Vesting of restricted stock units, net of tax withholding		589,112		1		(5,510)		—		—		(5,509)
Foreign currency translation adjustments, net of tax		—		—		—		207		—		207
Balances at June 30, 2021		82,086,665	$	82	$	771,332	$	1,830	$	(46,308)	$	726,936

Three Months Ended June 30, 2020:

							Accumulated
					Additional		Other				Total
	Common Stock				Paid-in		Comprehensive		Accumulated		Stockholders'
	Shares		Amount		Capital		Income (Loss)		Deficit		Equity
Balances at March 31, 2020		79,923,114	$	80	$	721,181	$	(1,414)	$	(11,796)	$	708,051
Net loss		—		—		—		—		(3,272)		(3,272)
Stock-based compensation		—		—		4,164		—		—		4,164
Exercise of stock options, net of tax withholding		512,219		—		4,257		—		—		4,257
Vesting of restricted stock units		9,174		—		—		—		—		—
Foreign currency translation adjustments, net of tax		—		—		—		351		—		351
Balances at June 30, 2020		80,444,507	$	80	$	729,602	$	(1,063)	$	(15,068)	$	713,551

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

6

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(unaudited)

Six Months Ended June 30, 2021:

							Accumulated
					Additional		Other				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		—		—		—		—		(26,913)		(26,913)
Stock-based compensation		—		—		33,467		—		—		33,467
Reclassification of liability-classified awards upon settlement		—		—		3,089						3,089
Exercise of stock options, net of tax withholding		220,482		—		1,801		—		—		1,801
Vesting of restricted stock units, net of tax withholding		702,287		1		(6,076)		—		—		(6,075)
Foreign currency translation adjustments, net of tax		—		—		—		457		—		457
Balances at June 30, 2021		82,086,665	$	82	$	771,332	$	1,830	$	(46,308)	$	726,936

Six Months Ended June 30, 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		—		—		—		—		(7,564)		(7,564)
Stock-based compensation		—		—		6,764		—		—		6,764
Exercise of stock options, net of tax withholding		785,663		—		4,392		—		—		4,392
Vesting of restricted stock units		26,344		—		—		—		—		—
Foreign currency translation adjustments, net of tax		—		—		—		(664)		—		(664)
Balances at June 30, 2020		80,444,507	$	80	$	729,602	$	(1,063)	$	(15,068)	$	713,551

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

7

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Six Months Ended June 30,
	2021		2020
Cash flows from operating activities
Net loss	$	(26,913)	$	(7,564)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		20,578		18,028
Stock-based compensation expense		34,415		7,402
Amortization of deferred commissions		4,674		3,761
Amortization of deferred debt issuance costs		124		124
Operating leases, net		(346)		(21)
Deferred taxes		(7,624)		(5,280)
Other		63		668
Changes in operating assets and liabilities:
Accounts receivable		17,621		8,727
Contract assets		5,653		1,309
Deferred commissions		(8,209)		(3,186)
Prepaid expenses and other current assets		3,405		7,186
Other assets		(426)		220
Accounts payable		348		3,894
Accrued compensation		4,280		(8,724)
Accrued expenses and other		1,338		2,243
Deferred revenue		(5,016)		(7,543)
Net cash provided by operating activities		43,965		21,244
Cash flows from investing activities
Payments for business acquisitions, net of cash acquired		(39,875)		(4,703)
Purchases of property and equipment and other		(1,502)		(1,420)
Capitalized software development costs		(8,582)		(6,749)
Net cash used in investing activities		(49,959)		(12,872)
Cash flows from financing activities
Payment of Symphonic and ShoCard holdbacks		(993)		—
Payment of Elastic Beam consideration and holdbacks		—		(424)
Payment of offering costs		—		(295)
Proceeds from stock option exercises		1,900		6,046
Payment for tax withholding on equity awards		(6,174)		(1,653)
Proceeds from long-term debt		80,000		97,823
Payment of long-term debt		(110,000)		—
Net cash provided by (used in) financing activities		(35,267)		101,497
Effect of exchange rates on cash and cash equivalents and restricted cash		(130)		(406)
Net increase (decrease) in cash and cash equivalents and restricted cash		(41,391)		109,463
Cash and cash equivalents and restricted cash
Beginning of period		146,499		68,386
End of period	$	105,108	$	177,849
Supplemental disclosures of cash flow information:
Cash paid for interest	$	584	$	1,186
Cash paid for taxes		283		423
Noncash activities:
Purchases of property and equipment, accrued but not yet paid	$	40	$	202
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	$	104,342	$	177,102
Restricted cash included in other noncurrent assets		766		747
Total cash and cash equivalents and restricted cash	$	105,108	$	177,849

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

8

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. Certain amounts for the three and six months ended June 30, 2020 have been reclassified to conform with current period presentation.

Unaudited Interim Condensed Consolidated Financial Information

The accompanying interim condensed consolidated balance sheet as of June 30, 2021, the condensed consolidated statements of operations, of comprehensive income (loss) and of stockholders’ equity for the three and six months ended June 30, 2021 and 2020, the condensed consolidated statements of cash flows for the six months ended June 30, 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 June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020 and cash flows for the six months ended June 30, 2021 and 2020. The results for the three and six months ended June 30, 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

9

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

assets, determining the amortization period for deferred commissions and assessing the accounting treatment for commitments and contingencies. Management evaluates these estimates and assumptions on an ongoing basis and makes estimates based on historical experience and various other assumptions that are believed to be reasonable. Actual results may differ from these estimates due to risks and uncertainties, including 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 and six months ended June 30, 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.

10

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Disaggregation of Revenue

The following table presents revenue by category:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Subscription term-based licenses:
Multi-year subscription term-based licenses	$	32,391	$	21,141	$	56,229	$	45,129
1-year subscription term-based licenses		15,464		14,183		32,808		28,332
Total subscription term-based licenses		47,855		35,324		89,037		73,461
Subscription SaaS		13,425		8,890		25,411		17,416
Maintenance and support		11,871		10,054		22,919		20,209
Total subscription revenue		73,151		54,268		137,367		111,086
Professional services and other		5,753		4,713		10,481		9,307
Total revenue	$	78,904	$	58,981	$	147,848	$	120,393

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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
United States	$	56,934	$	44,626	$	110,805	$	87,655
International		21,970		14,355		37,043		32,738
Total revenue	$	78,904	$	58,981	$	147,848	$	120,393

Other than the United States, no other individual country exceeded 10% of total revenue for the three months ended June 30, 2021 and 2020 or the six months ended June 30, 2021 and 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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Beginning balance	$	69,681	$	85,150	$	73,791	$	86,010
Ending balance		68,114		84,640		68,114		84,640
Change	$	(1,567)	$	(510)	$	(5,677)	$	(1,370)

11

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Beginning balance	$	49,352	$	38,343	$	52,398	$	47,507
Ending balance		47,719		39,964		47,719		39,964
Change	$	(1,633)	$	1,621	$	(4,679)	$	(7,543)

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 and six months ended June 30, 2021 and 2020 that was included in the deferred revenue balances at the beginning of the respective periods was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Deferred revenue recognized as revenue	$	12,101	$	12,247	$	38,036	$	35,215

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 June 30, 2021, the Company had $185.1 million of transaction price allocated to remaining performance obligations, of which 82% 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 and six months ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Beginning balance	$	16,534	$	13,104	$	15,929	$	13,670
Additions to deferred commissions		5,275		1,650		8,209		3,186
Amortization of deferred commissions		(2,345)		(1,659)		(4,674)		(3,761)
Ending balance	$	19,464	$	13,095	$	19,464	$	13,095
Deferred commissions, current	$	7,711	$	5,355	$	7,711	$	5,355
Deferred commissions, noncurrent		11,753		7,740		11,753		7,740
Total deferred commissions	$	19,464	$	13,095	$	19,464	$	13,095

12

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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		Accounts Receivable		Contract Assets
	Three Months Ended June 30, 2021				Six Months Ended June 30, 2021
	(in thousands)
Beginning balance	$	652	$	80	$	828	$	87
Provision for credit losses, net of recoveries		28		45		7		38
Write-offs		(35)		(37)		(190)		(37)
Ending balance	$	645	$	88	$	645	$	88

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:

	June 30, 2021
	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash and cash equivalents:
Money market funds	$	45,001	$	—	$	—	$	45,001

	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).

13

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

6.   Property and Equipment

Property and equipment consisted of the following:

	June 30,		December 31,
	2021		2020
	(in thousands)
Computer equipment	$	7,639	$	6,581
Furniture and fixtures		3,893		3,887
Purchased computer software		785		785
Leasehold improvements		7,899		7,818
Other		448		448
Property and equipment, gross		20,664		19,519
Less: Accumulated depreciation		(11,911)		(10,073)
Property and equipment, net	$	8,753	$	9,446

Depreciation expense was $0.9 million for each of the three months ended June 30, 2021 and 2020. Depreciation expense for the six months ended June 30, 2021 and 2020 was $1.8 million and $1.9 million, respectively.

The Company’s long-lived assets are composed of property and equipment, net and operating lease right-of-use assets, and are summarized by geographic area as follows:

	June 30,		December 31,
	2021		2020
	(in thousands)
United States	$	16,642	$	18,367
United Kingdom		2,319		2,410
International		3,877		4,288
Total long-lived assets	$	22,838	$	25,065

7.   Business Combinations

SecuredTouch, Inc. Acquisition

On June 20, 2021 the Company acquired 100% of the voting equity interest in SecuredTouch, Inc. (“SecuredTouch”). SecuredTouch is a leader in fraud and bot detection and mitigation, which leverages behavioral biometrics, artificial intelligence, machine learning, and deep learning to provide identity, risk, and fraud teams early visibility into potential malicious activity happening across digital properties. The purpose of this acquisition was to accelerate the Company’s cloud-delivered intelligent-identity solutions that combat malicious behavior such as bots, emulators, and account takeover.

14

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The total purchase price was $39.9 million, net of cash acquired. 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:

	June 20, 2021		Useful Life
	(in thousands)
Fair value of net assets acquired
Developed technology	$	8,300	4 years
Goodwill		32,257	Indefinite
Other assets		167
Total assets acquired		40,724
Deferred revenue		(337)
Other liabilities		(512)
Total liabilities assumed		(849)
Net assets acquired, excluding cash	$	39,875

Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating SecuredTouch into the Ping Intelligent Identity Platform to provide customers a more comprehensive offering that extends past traditional workforce use case and accelerates Ping’s cloud-delivered intelligent identity solutions that combat malicious behavior. None of the goodwill is deductible for tax purposes. The Company incurred $0.4 million of acquisition-related expenses, which are included in general and administrative expenses on the condensed consolidated statement of operations for the three and six months ended June 30, 2021.

Additional information relating to the SecuredTouch 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.

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, 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.

15

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 relating to 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.

16

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 $0.1 million and $0.6 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 and six months ended June 30, 2020, respectively.

Additional Acquisition Related Information

The operating results of SecuredTouch, Symphonic and ShoCard are included in the Company’s condensed consolidated statements of operations from their respective dates of acquisition. Revenue and earnings of SecuredTouch, 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 June 30, 2021 were as follows (in thousands):

Beginning balance	$	441,150
Additions to goodwill related to SecuredTouch acquisition		32,257
Foreign currency translation adjustment		290
Ending balance	$	473,697

17

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company’s intangible assets as of June 30, 2021 were as follows:

	June 30, 2021
	Gross		Accumulated		Net Carrying
	Amount		Amortization		Value
	(in thousands)
Developed technology	$	127,844	$	(63,248)	$	64,596
Customer relationships		95,138		(37,527)		57,611
Trade names		56,734		(28,260)		28,474
Product backlog		650		(168)		482
Capitalized internal-use software		44,932		(17,392)		27,540
Other intangible assets		1,347		(726)		621
Total intangible assets	$	326,645	$	(147,321)	$	179,324

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

	December 31, 2020
	Gross		Accumulated		Net Carrying
	Amount		Amortization		Value
	(in thousands)
Developed technology	$	119,450	$	(55,826)	$	63,624
Customer relationships		95,135		(33,724)		61,411
Trade names		56,718		(25,424)		31,294
Product backlog		642		(42)		600
Capitalized internal-use software		35,841		(12,949)		22,892
Other intangible assets		1,199		(598)		601
Total intangible assets	$	308,985	$	(128,563)	$	180,422

The Company capitalized $4.9 million and $3.8 million of internal-use software costs during the three months ended June 30, 2021 and 2020, respectively, which included $0.3 million and $0.4 million of stock-based compensation costs, respectively. The Company capitalized $9.1 million and $7.1 million of internal-use software costs during the six months ended June 30, 2021 and 2020, respectively, which included $0.5 million and $0.4 million of stock-based compensation costs, respectively.

Amortization expense for the three months ended June 30, 2021 and 2020 was $9.5 million and $8.3 million, respectively. Amortization expense for the six months ended June 30, 2021 and 2020 was $18.8 million and $16.2 million, respectively.

As of June 30, 2021, expected amortization expense for intangible assets subject to amortization for the next five years is as follows:

Year Ending December 31,	June 30, 2021
	(in thousands)
2021 (remaining six months)	$	20,212
2022		38,971
2023		36,425
2024		32,906
2025		22,301
Thereafter		28,509
Total	$	179,324

18

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

9.       Debt

In December 2019, Roaring Fork Intermediate, LLC and Ping Identity Corporation, each a wholly-owned subsidiary of Ping Identity Holding Corp., and certain of their subsidiaries, entered into a credit agreement (the “Credit Agreement”) with the financial institutions identified therein as lenders, including Bank of America, N.A., as administrative agent, and BofA Securities, Inc. and RBC Capital Markets as joint lead arrangers. The Credit Agreement provides for a senior revolving line of credit in a principal committed amount of $150.0 million (the “Revolving Credit Facility”), with the option to request term loan facilities in a minimum amount of $10 million for each facility if certain conditions are met. The Company’s obligations under the Credit Agreement are secured by substantially all of the assets of the Company, and borrowings under the Revolving Credit Facility may be used for working capital and other general corporate purposes, including for acquisitions permitted under the Credit Agreement.

The Credit Agreement contains certain customary events of default and customary representations and warranties and affirmative and negative covenants, including certain restrictions on the ability of the Company to incur additional indebtedness or guarantee indebtedness of others, to create liens on properties or assets, and to enter into certain asset and stock-based transactions. In addition, under the terms of the Credit Agreement, the Company must adhere to certain financial covenants, including (i) a senior secured net leverage ratio, which shall not be more than 3.50 to 1.00, provided that the maximum ratio shall be increased to 4.00 to 1.00 during a fiscal year in which a Material Acquisition (as defined in the Credit Agreement) has been consummated, and (ii) a consolidated interest coverage ratio, which shall not be less than 3.50 to 1.00. As of June 30, 2021, the Company was in compliance with all financial covenants.

The wholly owned indirect subsidiary, Ping Identity Corporation, as borrower under the Credit Agreement, is limited in its ability to declare dividends or make any payment on account of its capital stock to, directly or indirectly, fund a dividend or other distribution to Ping Identity Holding Corp. (as the Parent), subject to limited exceptions, including (1) stock repurchases from current or former employees, officers or directors in an amount not to exceed $5 million, (2) unlimited amounts subject to compliance with its financial covenants for the most recently ended four quarters as well as a 6.00 to 1.00 total net leverage ratio for the most recently ended four quarters, both after giving pro forma effect to any distribution, (3) amounts up to the greater of $19.5 million in the aggregate or 15% of EBITDA for the most recently ended four quarters and (4) payment of certain of the Parent's overhead expenses.

The Revolving Credit Facility matures on December 12, 2024 and bears interest at the option of the Company at a rate per annum equal to either (i) a base rate, which is equal to the greater of (a) the prime rate, (b) the federal funds effective rate plus 0.5% and (c) the adjusted LIBO rate for a one month interest period plus 1%, or (ii) the adjusted LIBO rate equal to the LIBO rate for the interest period multiplied by the statutory reserve rate, plus in the case of each of clauses (i) and (ii), the Applicable Rate (as defined in the Credit Agreement), which ranges from (i) 0.25% to 1.0% per annum for base rate loans and (ii) 1.25% to 2.0% per annum for LIBO rate loans, in each case, depending on the senior secured net leverage ratio. The interest rate as of June 30, 2021 was 1.34%. The Company will also pay a commitment fee during the term of the Credit Agreement ranging from 0.20% to 0.35% of the average daily amount of the available amount to be borrowed under the Credit Agreement per annum, based on the senior secured net leverage ratio.

Any borrowing under the Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs, and any amounts repaid may be re-borrowed. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed the aggregate commitment of all lenders.

19

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company recognized $0.3 million and $0.7 million in interest expense for the three months ended June 30, 2021 and 2020, respectively. For the six months ended June 30, 2021 and 2020, the Company recognized $0.6 million and $1.1 million in interest expense, respectively.

As of June 30, 2021 and December 31, 2020, the Company’s outstanding long-term debt balance representing borrowings under the Credit Agreement was $119.1 million and $149.0 million, respectively (net of debt issuance costs of $0.9 million and $1.0 million, respectively). Debt issuance costs are a direct deduction from the long-term debt liability and are amortized into interest expense over the contractual term of the borrowings using the effective interest method. During each of the three and six months ended June 30, 2021 and 2020, the Company amortized $0.1 million of debt issuance costs.

Future principal payments on outstanding borrowings as of June 30, 2021 are as follows:

Year Ending December 31,	June 30, 2021
	(in thousands)
2021 (remaining six months)	$	—
2022		—
2023		—
2024		120,000
2025		—
Thereafter		—
Total	$	120,000

10.   Income Taxes

For the three months ended June 30, 2021 and 2020, the Company recorded $4.0 million and $2.9 million as its benefit for income taxes, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded $7.3 million and $4.9 million as its benefit for income taxes, respectively. The Company’s calculation of its benefit for income taxes is dependent in part on forecasts of full-year results and key components of the Company’s benefit for income taxes primarily consist of state and federal income taxes, foreign income taxes and research and development (“R&D”) credits. The Company’s quarterly tax benefit calculation is also subject to variation due to several factors, including variability in loss before income taxes, the mix of jurisdictions to which such loss relates, changes in how the Company conducts business and tax law developments. The increase in the tax benefit for the three and six months ended June 30, 2021 as compared to the three and six months ended June 30, 2020 primarily relates to a larger expected pre-tax loss in 2021 as compared to 2020, the release of a foreign valuation allowance, and an increase in R&D and other credits recorded in the three and six months ended June 30, 2021. The increase in tax benefit for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 was partially offset by a valuation allowance recorded against our U.S. deferred tax assets during the first quarter of 2021.

11.       Stockholders’ Equity

Common stock

The Company’s Third Amended and Restated Certificate of Incorporation, which the Board of Directors approved on September 18, 2019 and the stockholders approved on September 23, 2019, authorizes issuance of up to 500,000,000 shares of common stock with a par value of $0.001 per share. The common stock confers upon its holders the right to vote on all matters to be voted on by the stockholders of the Company (with each share representing one vote) and to ratably participate in any distribution of dividends or payments in the event of liquidation or dissolution on a per share basis. The rights of the holders of common stock are subject to, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in the future.

20

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Preferred stock

The Company’s Third Amended and Restated Certificate of Incorporation authorizes, without stockholder approval but subject to any limitations prescribed by law, the issuance of up to an aggregate of 50,000,000 shares of preferred stock (in one or more series or classes), to create additional series or classes of preferred stock and to establish the number of shares to be included in such series or class. The Board of Directors is also authorized to increase or decrease the number of shares of any series or class subsequent to the issuance of shares of that series or class. Each series will have such rights, preferences and limitations, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences as determined by the Board of Directors. As of June 30, 2021 and December 31, 2020, the Company did not have any shares of preferred stock outstanding and currently has no plans to issue shares of preferred stock.

12.   Stock-Based Compensation

On June 30, 2016, the Company established the 2016 Stock Option Plan (the ‘‘2016 Plan’’). The 2016 Plan provides for grants of restricted stock units and stock options to executives, directors, consultants, advisors and key employees which allow option holders to hold or purchase stock in Ping Identity Holding Corp. The Company has 6,800,000 shares of common stock reserved for issuance under the 2016 Plan. Following the Company’s initial public offering (“IPO”), no additional awards are granted under the 2016 Plan.

On September 23, 2019, the Company adopted the Ping Identity Holding Corp. Omnibus Incentive Plan (the “2019 Omnibus Incentive Plan”). The 2019 Omnibus Incentive Plan provides for grants of (i) stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) performance awards, (v) other share-based awards and (vi) other cash-based awards to eligible employees, non-employee directors and consultants of the Company. At June 30, 2021, the maximum number of shares of common stock available for issuance under the 2019 Omnibus Incentive Plan was 14,131,549 shares.

Stock-based compensation expense for all equity arrangements for the three and six months ended June 30, 2021 and 2020 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Subscription cost of revenue	$	513	$	174	$	1,048	$	320
Professional services and other cost of revenue		429		99		1,020		183
Sales and marketing		4,843		1,243		9,041		2,040
Research and development		4,647		1,298		13,159		2,186
General and administrative		7,044		1,731		10,147		2,673
Total	$	17,476	$	4,545	$	34,415	$	7,402

Stock-based compensation expense recorded to research and development in the condensed consolidated statements of operations excludes amounts that were capitalized in relation to internal-use software. Refer to Note 8 for additional details.

Long-Term Incentive Plan

In conjunction with the Company’s IPO, the Company amended its long-term incentive plan (“LTIP”) which provided for cash compensation to certain employees upon vesting of the related awards, and thus, these awards were liability-classified. Grants under the plan were expected to vest following both (i) the IPO and registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista Equity Partner’s (“Vista”) realized cash return on its investment in the Company equaling or exceeding $1.491

21

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

billion. In the first quarter of 2021, the Company offered employees with LTIP grants the opportunity to convert those awards into restricted stock units (“RSUs”) under the 2019 Omnibus Incentive Plan. Upon conversion, approximately half of the RSUs would solely be subject to time-based restrictions and would vest on April 1, 2021 and the remainder would be subject to performance and market conditions consistent with those of the LTIP grants outlined above. All employees elected to convert their outstanding LTIP grants to RSUs, resulting in grants totaling 948,250 shares.

The conversion of the previously outstanding LTIP grants into time-based vesting RSUs resulted in the recognition of $0.4 million and $12.8 million of stock-based compensation expense during the three and six months ended June 30, 2021, respectively. Expense recognized related to the RSUs subject to performance and market conditions is discussed in more detail below.

Other Liability-Classified Awards

In conjunction with the Symphonic acquisition (Note 7), the Company issued liability-classified awards to certain individuals with a stated value of $0.4 million and $0.6 million that vest on December 31, 2021 and December 31, 2022, respectively, and are subject to continuous service and other performance conditions. The liability-classified awards will be settled with a variable number of shares of the Company’s common stock at each vesting date based on the satisfaction of such conditions. 

Additionally, in conjunction with the ShoCard acquisition (Note 7), the Company issued liability-classified awards to certain individuals with a stated value of $3.1 million and $2.3 million that vest on the first and second anniversary of the acquisition, respectively, and are subject to continuous service and other conditions. The liability-classified awards will be settled with a variable number of shares of the Company’s common stock at each anniversary date based on the satisfaction of such conditions. On March 2, 2021, the Company settled the first $3.1 million of these liability-classified awards, resulting in the issuance of 123,192 shares. Upon issuance, the associated $3.1 million liability was reclassified from accrued compensation to common stock and additional paid-in capital on the condensed consolidated balance sheets.

During the three months ended June 30, 2021 and 2020, the Company recognized $0.7 million and $0.8 million of stock-based compensation expense, respectively, related to these awards. During the six months ended June 30, 2021, the Company recognized $1.5 million and $1.0 million of stock-based compensation expense, respectively, related to these awards.

Restricted Stock Units

The Company grants RSUs that generally vest over one to four years. Additionally, the Company granted time-based vesting RSUs converted from the previously outstanding cash-based LTIP grants and those issued in connection with the ShoCard acquisition. The weighted-average grant-date fair value of RSUs granted during the three months ended June 30, 2021 and 2020, was $22.24 and $20.50, respectively. The weighted-average grant-date fair value of RSUs granted during the six months ended June 30, 2021 and 2020 was $23.45 and $20.63, respectively. The total intrinsic value of RSUs that vested during the three months ended June 30, 2021 and 2020 was $18.5 million and $0.2 million, respectively. The total intrinsic value of RSUs that vested during the six months ended June 30, 2021 and 2020 was $22.0 million and $0.6 million, respectively. As of June 30, 2021, there was $65.0 million of total unamortized compensation, which will be recognized over the remaining weighted-average vesting period of 3.3 years

22

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

using the straight-line method. A summary of the status of the Company’s unvested RSUs and activity for the six months ended June 30, 2021 is as follows:

		Weighted
		Average
		Grant Date
	Shares	Fair Value
Unvested as of December 31, 2020	2,504,148	$	19.84
Granted	1,715,867		22.46
Converted from LTIP grant	474,095		27.06
Forfeited/canceled	(186,423)		19.46
Vested	(974,599)		24.49
Unvested as of June 30, 2021	3,533,088	$	20.81

Performance Stock Units

As previously discussed, during the six months ended June 30, 2021, the Company granted 948,250 restricted stock units in connection with the conversion of previously outstanding LTIP grants, with 474,155 of these restricted stock units subject to performance and market conditions (“PSUs”). These PSUs are expected to vest following both (i) registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista’s realized cash return on its investment in the Company equaling or exceeding $1.491 billion. These awards were valued at the date of grant at $19.94 per share using a Monte Carlo simulation. In the second quarter of 2021, these PSUs were determined to be probable of vesting, resulting in the recognition of $4.0 million in stock-based compensation during the three and six months ended June 30, 2021. As of June 30, 2021, there was $5.0 million of total unamortized compensation associated with these awards, which is expected to be recognized over the remaining estimated vesting period of 0.4 years.

Additionally, on April 1, 2021, the Company granted 208,806 PSUs under the 2019 Omnibus Incentive Plan, which will be earned only if the Company meets specific internal performance targets within a two-year period. The number of awards that ultimately vest could be 0% if the minimum hurdle is not achieved, or 50% or 100% of total shares granted, depending on the Company’s achievement of internal performance targets. The grant-date fair value of these PSUs was $21.93. As of June 30, 2021, there was $2.9 million of total unamortized compensation associated with these awards, which is expected to be recognized over the remaining estimated weighted-average vesting period of 0.5 years.

No PSUs vested during the six months ended June 30, 2021.

A summary of the status of the Company’s unvested PSUs and activity for the six months ended June 30, 2021 is as follows:

		Weighted
		Average
		Grant Date
	Shares	Fair Value
Unvested as of December 31, 2020	—	$	—
Granted	682,961		20.55
Forfeited/canceled	(29,983)		20.52
Unvested as of June 30, 2021	652,978	$	20.55

23

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Stock Options

No stock options were granted during the three or six months ended June 30, 2021 or 2020. A summary of the Company’s stock option activity and related information for the six months ended June 30, 2021 is as follows:

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Options	Price		Term	Value
				(in years)	(in thousands)
Outstanding as of December 31, 2020	4,044,616	$	9.49	6.5	$	77,454
Granted	—		—
Forfeited/canceled	(218,420)		8.24
Exercised	(232,833)		9.00			5,170
Outstanding as of June 30, 2021	3,593,363	$	9.60	6.0	$	47,800
As of June 30, 2021:
Vested and expected to vest	3,593,363	$	9.60	6.0	$	47,800
Vested and exercisable	1,680,980	$	8.94	5.7	$	23,473

Time-based options vest over four years with 25% vesting one year after grant and the remainder vesting ratably on a quarterly basis thereafter. Vesting of the time-based options accelerates and the stock options become exercisable following both (i) an IPO and registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista realizing a cash return on its investment in the Company equaling or exceeding $1.491 billion. In the second quarter of 2021, achievement of these conditions was determined to be probable. As of June 30, 2021, total unamortized compensation related to the time-based awards was $1.7 million. This expense will be recognized over the shorter of (i) the remaining explicit service term or (ii) the estimated period over which the performance condition is expected to be satisfied, with a remaining weighted-average vesting period of 0.4 years.

The vesting conditions of the options subject to performance and market conditions provide for the options to vest and become exercisable following both (i) an IPO and registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista’s realized cash return on its investment in the Company equaling or exceeding $1.491 billion. In the second quarter of 2021, these awards were determined to be probable of vesting, resulting in the recognition of $5.4 million in stock-based compensation expense during the three and six months ended June 30, 2021. The remaining $1.3 million of total unamortized compensation expense is expected to be recognized over the remaining estimated vesting period of approximately 0.4 years.

13.     Related Party Transactions

Vista is a U.S.-based investment firm that controlled the funds which previously owned a majority of the Company. During the year ended December 31, 2020, Vista sold a portion of its investment in the Company such that its funds no longer owned a majority of the Company as of December 31, 2020. However, Vista is deemed a related party in accordance with ASC 850 as it continues to be a principal owner of the Company. There were no material transactions with Vista during the three and six months ended June 30, 2021 and 2020.

24

PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

14.   Commitments and Contingencies

Letters of Credit

As of June 30, 2021 and December 31, 2020, the Company had outstanding letters of credit under an office lease agreement that totaled $0.8 million, which primarily guaranteed early termination fees in the event of default. The Company collateralizes the letters of credit with restricted cash balances which were classified in other noncurrent assets at June 30, 2021 and December 31, 2020.

Purchase Commitments

In the ordinary course of business, the Company enters into various purchase commitments primarily related to third-party cloud hosting and data services, IT operations and marketing events. Total noncancelable purchase commitments as of June 30, 2021 were approximately $11.0 million for periods through 2025.

Employee Benefit Plans

The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”) in which full-time U.S. employees are eligible to participate on the first day of the subsequent month of his or her date of employment. The 401(k) Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a percentage of their annual compensation as defined in the 401(k) Plan. Employees in the United Kingdom and Canada are covered by defined contribution savings arrangements that are administered based upon the legislative and tax requirements of the respective countries.

The Company made contributions to its employee benefit plans of $1.0 million and $0.8 million during the three months ended June 30, 2021 and 2020, respectively. The Company made contributions to its employee benefit plans of $1.9 million and $1.6 million during the six months ended June 30, 2021 and 2020, respectively.

Litigation

From time to time, the Company may be subject to various claims, charges and litigation. The Company records a liability when it is both probable that a liability will be incurred and the amount of the loss can be reasonably estimated. The Company maintains insurance to cover certain actions and believes that resolution of such claims, charges, or litigation will not have a material impact on the Company’s financial position, results of operations, or liquidity.

15.     Net Loss Per Share

The following table provides a reconciliation of the numerator and denominator used in the Company’s calculation of basic and diluted net loss per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands, except per share amounts)
Numerator:
Net loss	$	(10,979)	$	(3,272)	$	(26,913)	$	(7,564)
Denominator:
Weighted-average common stock outstanding - basic and diluted		82,025		80,169		81,684		79,956
Net loss per share:
Basic and diluted	$	(0.13)	$	(0.04)	$	(0.33)	$	(0.09)

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The following shares were excluded from the computation of diluted net loss per share for the periods presented, as their effect would have been antidilutive:

	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
	(in thousands)
RSUs	3,533	2,773	3,533	2,773
Stock options	2,074	2,862	2,074	2,862
Other awards	123	168	123	168
Total antidilutive shares	5,730	5,803	5,730	5,803

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Forward-Looking Statements

In addition to historical consolidated financial information, this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are forward-looking statements. These statements may include words such as ‘‘anticipate’’, ‘‘estimate’’, ‘‘expect’’, ‘‘project’’, ‘‘plan’’, ‘‘intend’’, ‘‘believe’’, ‘‘may’’, ‘‘will’’, ‘‘should’’, ‘‘can have’’, ‘‘likely’’ and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results or our plans and objectives for future operations, growth initiatives, or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected. Specific factors that could cause such a difference include, but are not limited to, those set forth under Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K and other important factors disclosed in our other filings with the Securities and Exchange Commission (“SEC”) which include, but are not limited to:

● our ability to adapt to rapid technological change, evolving industry standards and changing customer needs, requirements or preferences;

● our ability to enhance and deploy our cloud-based offerings while continuing to effectively offer our on-premise offerings;

● our ability to maintain or improve our competitive position;

● the impact of the COVID-19 pandemic;

● the impact on our business of a network or data security incident or unauthorized access to our network or data or our customers’ data;

● the effects on our business if we are unable to acquire new customers, if our customers do not renew their arrangements with us, or if we are unable to expand sales to our existing customers or develop new solutions or solution packages that achieve market acceptance;

● our ability to manage our growth effectively, execute our business plan, maintain high levels of service and customer satisfaction or adequately address competitive challenges;

● our dependence on our senior management team and other key employees;

● our ability to enhance and expand our sales and marketing capabilities;

● our ability to attract and retain highly qualified personnel to execute our growth plan;

● the risks associated with interruptions or performance problems of our technology, infrastructure and service providers;

● our dependence on Amazon Web Services cloud infrastructure services;

● the impact of data privacy concerns, evolving regulations of cloud computing, cross-border data transfer restrictions and other domestic and foreign laws and regulations;

● the impact of volatility in quarterly operating results;

● the risks associated with our revenue recognition policy and other factors may distort our financial results in any given period;

● the effects on our customer base and business if we are unable to enhance our brand cost-effectively;

● our ability to comply with anti-corruption, anti-bribery and similar laws;

● our ability to comply with governmental export and import controls and economic sanctions laws;

● our ability to comply with the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”);

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● the potential adverse impact of legal proceedings;

● the impact of our frequently long and unpredictable sales cycle;

● our ability to identify suitable acquisition targets or otherwise successfully implement our growth strategy;

● the impact of a change in our pricing model;

● our ability to meet service level commitments under our customer contracts;

● the impact on our business and reputation if we are unable to provide high-quality customer support;

● our dependence on strategic relationships with third parties;

● the impact of adverse general and industry-specific economic and market conditions and reductions in IT and identity spending;

● the ability of our platform, solutions and solution packages to interoperate with our customers’ existing or future IT infrastructures;

● our dependence on adequate research and development resources and our ability to successfully complete acquisitions;

● our dependence on the integrity and scalability of our systems and infrastructures;

● our reliance on software and services from other parties;

● the impact of real or perceived errors, failures, vulnerabilities or bugs in our solutions;

● our ability to protect our proprietary rights;

● the impact on our business if we are subject to infringement claim or a claim that results in a significant damage award;

● the risks associated with our use of open source software in our solutions, solution packages and subscriptions;

● our reliance on software as a service (“SaaS”) vendors to operate certain functions of our business;

● the risks associated with indemnity provisions in our agreements;

● the risks associated with liability claims if we breach our contracts;

● the impact of the failure by our customers to pay us in accordance with the terms of their agreements;

● our ability to expand the sales of our solutions and solution packages to customers located outside of the United States;

● the risks associated with exposure to foreign currency fluctuations;

● the impact of Brexit;

● the impact of potentially adverse tax consequences associated with our international operations;

● the impact of changes in tax laws or regulations;

● the impact of the Tax Cuts and Jobs Act;

● our ability to maintain our corporate culture;

● our ability to develop and maintain proper and effective internal control over financial reporting;

● our management team’s limited experience managing a public company;

● the risks associated with having operations and employees located in Israel;

● the risks associated with doing business with governmental entities;

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● the impact of catastrophic events on our business; and

● other factors disclosed in the section entitled ‘‘Risk Factors’’ in our most recent Annual Report on Form 10-K.

Given these factors, as well as other variables that may affect our operating results, you should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, or use historical trends to anticipate results or trends in future periods. The forward-looking statements included in this Quarterly Report on Form 10-Q relate only to events as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context requires otherwise, references in this report to "Ping Identity," the “Company,” “we,” “us” and “our” refer to Ping Identity Holding Corp. and its consolidated subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Overview

Ping Identity is the Intelligent Identity solution for the enterprise. We enable companies to achieve Zero Trust identity-defined security and more personalized, streamlined user experiences. The Ping Intelligent Identity Platform provides customers, workforce and partners with secure, convenient access to their applications whether they are SaaS, mobile, in the cloud or on-premise. We leverage artificial intelligence (“AI”) and machine learning (“ML”) to analyze device, network, application and user behavior data to make real-time authentication and security control decisions, enhancing the user experience. Our platform is designed to detect anomalies and automatically insert additional security measures, such as multi-factor authentication, only when necessary. We built our platform to meet the requirements of the most demanding enterprises, including over 60% of the Fortune 100. Our cloud-based platform has differentiated deployment flexibility to support multi-cloud and on-premise infrastructures to meet the diverse and demanding requirements of large enterprise customers. Our platform offers a comprehensive suite of turnkey integrations, and is able to scale to millions of identities and thousands of cloud and on-premise applications in a single deployment.

The Ping Intelligent Identity Platform can secure all primary use cases, including customer, workforce, partner and the Internet of Things (“IoT”). For example, enterprises can use our platform to enhance their customers’ user experience by creating a single ID and login across web and mobile properties. Enterprises can also use our platform to provide their employees and commercial partners with secure, seamless access from any device to the applications, data and APIs they need to be productive.

The Ping Intelligent Identity Platform is comprised of multiple solutions that can be purchased individually or  integrated as a more complete set of solutions for the customer, workforce, partner or IoT use case:

● secure single sign-on (“SSO”);

● adaptive multi-factor authentication (“MFA”);

● security control for applications and APIs (“Access Security”);

● personalized and unified profile directories (“Directory”);

● centralized, fine-grained control over access to sensitive identity and device data;

● risk signal capture and analysis to make more intelligent authentication and authorization decisions;

● identity verification services to prove an individual’s identity with facial biometrics and government issued IDs; and

● AI and ML powered API security (“API Intelligence”).

Our offerings are predominately priced based on the solution, use case and number of identities. We sell our platform through subscription-based contracts, and substantially all of our customers pay annually in advance. We sell our solutions primarily through direct sales, which are enhanced by collaboration with our channel partners, resellers, system integrators and technology partners. This includes sourcing new leads, aiding in pre-sale processes (such as proof of concepts, demos or requests for proposals) and reselling our solutions to customers. We also leverage a number of our channel partners and system integrators to provide the implementation services for some of our larger and more complex deployments, significantly increasing the time-to-value for our customers and maximizing the efficiency of our go-to-market efforts.

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Impact of COVID-19

COVID-19 continues to disrupt the business of our customers and partners and we expect that it will continue to impact our business and consolidated results of operations and financial condition in the next quarters. The worldwide spread of the COVID-19 outbreak has resulted in a global slowdown of economic activity with a corresponding decrease in demand for certain goods and services, including from our own customers, while also disrupting sales channels, marketing activities and supply chains for an unknown period of time. To add to the continued uncertainty, it is unclear what an economic recovery will look like after this unprecedented economic shutdown. We have endeavored to follow recommended actions of government and health authorities to protect our employees worldwide. For example, as of July 30, 2021, the majority of our employees continue working remotely. While we have not incurred significant disruptions in providing our services from the COVID-19 pandemic, we are unable to predict the long-term extent of the impact on our business due to numerous uncertainties, including but not limited to, vaccination programs, virus variants, actions taken by governmental authorities, the continued impact to our customers and partners and other factors as described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020. Specifically, during the first half of 2021, we continued to experience overall strong engagement with enterprise customers as continued work-from-home and increased virtual customer engagement highlighted the need for modernization of their identity security infrastructure.

While we continued to see limited effects of the COVID-19 pandemic on our results of operations and overall financial performance for the three and six months ended June 30, 2021, the total effect of the COVID-19 pandemic will not be fully reflected in our results of operations and overall financial performance until future periods and such effect is uncertain. COVID-19 restrictions were lifted in many parts of the U.S. during the three and six months ended June 30, 2021, which had a positive impact on our financial performance during that period, but we cannot predict the effect that variants of COVID-19, and any new restrictions related to such variants, will have on our business and our financial performance. In addition, our condensed consolidated financial statements reflect estimates and assumptions made by management 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 our condensed consolidated financial statements include, but are not limited to, establishing valuation allowances 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 fair values of assets acquired and liabilities assumed in business combinations, determining the value of right-of-use assets and lease liabilities, accounting for income taxes and related valuation allowances against deferred tax assets, valuing stock option awards and assessing the probability of the awards meeting vesting conditions, recognizing revenue, determining the amortization period for deferred commissions and assessing the accounting treatment for commitments and contingencies. Management evaluates these estimates and assumptions on an ongoing basis and makes estimates based on historical experience and various other assumptions that are believed to be reasonable. Actual results may differ from these estimates, including as a result of the COVID-19 pandemic. We will continue to evaluate the nature and extent of the impact to our business and our condensed consolidated results of operations and financial condition.

Key Factors Affecting our Performance

We believe that our future performance will depend on many factors, including the following:

Generation of Additional Sales to Existing Customers

As part of our land and expand strategy, a customer journey often begins with the purchase of one of our solutions for one use case. Once customers realize the value of that solution, their spending with us expands by (i) adopting another identity use case, (ii) deploying additional solutions and solution packages and/or (iii) adding more identities over time.

Our future revenue growth is dependent upon our ability to continue to expand our customers’ use of our platform. Our ability to increase sales to existing customers will depend on a number of factors, including

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satisfaction or dissatisfaction with our solutions, competition, pricing, economic conditions and spending by customers on our solutions. We have adopted a customer success strategy and implemented processes across our customer base to drive revenue retention and expansion.

Increasing the Size of our Customer Base

We believe there is significant opportunity to increase market adoption of our platform by new customers. Our SSO, Access Security and Directory solutions often replace legacy and homegrown systems. We also have significant greenfield opportunities with our MFA, Data Governance, API Intelligence solutions and the IoT use case. To increase our customer base, we plan to expand our sales force and channel partner network, both domestically and internationally, enhance our marketing efforts and target new buyers. For example, we have extended our cloud-based offering to target developers, who represent a new potential buyer for us. Over time, we believe sales to developers could increase the size of our customer base.

Maintaining our Technology Differentiation and Product Leadership

The Ping Intelligent Identity Platform is designed for large enterprises with complex, hybrid IT requirements. We have spent over a decade building a standards-based platform with turnkey integrations designed to ensure that large enterprises can easily and rapidly deploy our platform within their complex infrastructures. We intend to continue making investments in research and development to extend our platform and technology capabilities while also expanding our solutions to address new use cases.

Investing for Growth

We believe Identity and Access Management represents a large market opportunity, and we plan to invest in order to support further growth. During 2018, we accelerated investments in our business to expand our footprint within this large and growing market. Specifically, we invested in new cloud-based offerings to broaden the Ping Intelligent Identity Platform and the scope of our solutions to cover new identity security threats, such as APIs. We also invested in deploying our platform as a single tenant cloud-based offering, managed by us, to help extend the reach of our solutions within our customers’ infrastructures, while providing them with the level of control and configuration they require. Since 2018, we have seen progress with these investments and expect to continue to invest in these areas. Additionally, we plan to invest in increased marketing efforts, expanding our sales force, and growing our network of channel partners, resellers, system integrators and technology partners. However, we are not expecting these investments to provide our business with meaningful increases to annual recurring revenue (“ARR”) growth in the immediate term as we expect natural purchasing cycles will affect the speed of market adoption.

Seasonality

Given the purchasing patterns of our enterprise customers, we typically experience seasonality in terms of when we receive orders from our customers. Our customers often time their purchases and renewals of our solutions to coincide with their fiscal year end, which is typically June 30 or December 31. Because of these purchasing patterns, a greater percentage of our annual subscription revenue from term-based licenses, the revenue from which is recognized up front at the later of delivery or commencement of the license term, has come from our second and fourth quarters, rather than from other quarters. However, due to the economic environment resulting from COVID-19, we did not see our historical trends in seasonality for the year ended December 31, 2020, where 24% and 26% of our annual revenue was in our second and fourth quarter, respectively. Our historical trends in seasonality may continue to be disrupted during the year ending December 31, 2021 due to the impact of COVID-19.

Key Business Metrics

In addition to our GAAP financial information, we review a number of operating and financial metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.

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Annual Recurring Revenue

ARR represents the annualized value of all subscription contracts as of the end of the period. ARR neutralizes fluctuations due to seasonality, contract term and the sales mix of subscriptions for term-based licenses and SaaS. ARR only includes the annualized value of subscription contracts. ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

The table below sets forth our ARR as of the end of June 30, 2021 and 2020, respectively.

	June 30,				Change
	2021		2020		$		%
	(dollars in thousands)
ARR	$	279,630	$	235,232	$	44,398	19	%

Dollar-Based Net Retention Rate

To further illustrate the land and expand economics of our customer relationships, we examine the rate at which our customers increase their subscriptions for our solutions. Our dollar-based net retention rate measures our ability to increase revenue across our existing customer base through expanded use of our platform, offset by customers whose subscription contracts with us are not renewed or renew at a lower amount.

We calculate our dollar-based net retention rate as of the end of a reporting period as follows:

● Numerator.  We measure ending ARR for the current reporting period from customers with associated ending ARR for the same period last year.

● Denominator.  We measure ending ARR for the same period last year.

The quotient obtained from this calculation is our dollar-based net retention rate. Our dollar-based net retention rate was 111% at June 30, 2021. We believe our ability to cross-sell our new solutions to our installed base, particularly MFA and API Intelligence, will continue to support our high dollar-based net retention rate.

Large Customers

We believe that our ability to increase the number of customers on our platform, particularly the number of customers with ARR greater than $250,000, demonstrates our focus on the large enterprise market and our penetration within those enterprises. Historically, increasing awareness of our platform, further developing our sales and marketing expertise and channel partner ecosystem, and continuing to build solutions that address the unique identity needs of large enterprises have increased our number of large customers across industries. We believe there are significant upsell and cross-sell opportunities within our customer base by expanding the number of use cases, adding additional identities and selling new solutions.

Our customers with ARR over $250,000 increased from 242 at June 30, 2020 to 279 at June 30, 2021, representing a year-over-year growth rate of 15%.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operating performance. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information

33

presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

Free Cash Flow

Free Cash Flow is a supplemental measure of liquidity that is not made under GAAP and that does not represent, and should not be considered as, an alternative to cash flow from operations, as determined by GAAP. We define Free Cash Flow as net cash provided by (used in) operating activities less cash used for purchases of property and equipment and capitalized software development costs.

We use Free Cash Flow as one measure of the liquidity of our business. We believe that Free Cash Flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after the purchases of property and equipment and capitalized software development costs, can be used for strategic initiatives, including investing in our business and selectively pursuing acquisitions and strategic investments. We further believe that historical and future trends in Free Cash Flow, even if negative, provide useful information about the amount of cash generated (or consumed) by our operating activities that is available (or is not available) to be used for strategic initiatives. For example, if Free Cash Flow is negative, we may need to access cash reserves or other sources of capital to invest in strategic initiatives. We also believe that the use of Free Cash Flow enables us to more effectively evaluate our liquidity period-over-period and relative to our competitors.

A reconciliation of Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP measure, is as follows:

	Six Months Ended June 30,
	2021		2020
	(in thousands)
Net cash provided by operating activities	$	43,965	$	21,244
Less:
Purchases of property and equipment		(1,502)		(1,420)
Capitalized software development costs		(8,582)		(6,749)
Free Cash Flow	$	33,881	$	13,075
Net cash used in investing activities	$	(49,959)	$	(12,872)
Net cash provided by (used in) financing activities	$	(35,267)	$	101,497
Cash paid for interest	$	584	$	1,186

Free Cash Flow has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. For example, Free Cash Flow does not represent the total increase or decrease in our cash balance for a given period. Because of these limitations, Free Cash Flow should not be considered as a replacement for cash flow from operations, as determined by GAAP, or as a measure of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes.

Non-GAAP Gross Profit

Non-GAAP Gross Profit is a supplemental measure of operating performance that is not made under GAAP and that does not represent, and should not be considered as, an alternative to gross profit, as determined by GAAP. We define Non-GAAP Gross Profit as gross profit, adjusted for stock-based compensation expense and certain amortization expense of acquired intangible assets and software developed for internal use.

We use Non-GAAP Gross Profit to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short-term and long-term operating plans. We believe

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that Non-GAAP Gross Profit is a useful measure to us and to our investors because it provides consistency and comparability with our past financial performance and between fiscal periods, as the metric generally eliminates the effects of the variability of amortization of acquired intangibles and internal-use software and stock-based compensation expense from period to period, which may fluctuate for reasons unrelated to overall operating performance. We believe that the use of this measure enables us to more effectively evaluate our performance period-over-period and relative to our competitors.

A reconciliation of Non-GAAP Gross Profit to gross profit, the most directly comparable GAAP measure, is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Gross profit	$	56,500	$	42,302	$	104,638	$	87,990
Amortization expense		6,077		4,944		11,886		9,546
Stock-based compensation expense		942		273		2,068		503
Non-GAAP Gross Profit	$	63,519	$	47,519	$	118,592	$	98,039

Non-GAAP Gross Profit has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, Non-GAAP Gross Profit should not be considered as a replacement for gross profit, as determined by GAAP, or as a measure of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes.

Components of Results of Operations

Revenue

We recognize revenue under ASC 606. Under ASC 606, we recognize revenue when our customer obtains control of goods or services in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

We derive revenue primarily from sales of subscriptions for our solutions to new and existing customers and, to a lesser extent, sales of professional services.

Subscription.   Subscription revenue includes subscription term-based license revenue for solutions deployed on-premise within the customer’s IT infrastructure or in a third-party cloud of their choice, subscription support and maintenance revenue from such deployments, and SaaS subscriptions, which give customers the right to access our cloud-hosted software solutions. We typically invoice subscription fees annually in advance. Subscription term-based license revenue is recognized upon transfer of control of the software, which occurs at delivery or when the license term commences, if later. All of our support and maintenance revenue and revenue from SaaS subscriptions is recognized ratably over the term of the applicable agreement.

For the three months ended June 30, 2021 and 2020, 61% and 60%, respectively, of our revenue was from subscription term-based licenses. For the six months ended June 30, 2021 and 2020, 60% and 61%, respectively, of our revenue was from subscription term-based licenses. We expect that a majority of our revenue will be from subscription term-based licenses for the foreseeable future. Changes in period-over-period subscription revenue growth are primarily impacted by the following factors:

● the type of new and renewed subscriptions (i.e., term-based or SaaS); and

● the duration of new and renewed term-based subscriptions.

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While the number of new and increased subscriptions during a period impacts our subscription revenue growth, the type and duration of those subscriptions has a significantly greater impact on the amount and timing of revenue recognized in a period. Subscription revenue from term-based licenses is recognized at the beginning of the subscription term, while subscription revenue from SaaS and support and maintenance is recognized ratably over the subscription term. As a result, our revenue may fluctuate due to the timing of term-based licensing transactions. In addition, keeping other factors constant, when the percentage of subscription term-based licenses to total subscriptions sold or renewed in a period increases relative to the prior period, revenue growth will increase. Conversely, when the percentage of subscription SaaS and support and maintenance to total subscriptions sold or renewed in a period increases, revenue growth will generally decrease. Additionally, a multi-year subscription term-based license will generally result in greater revenue recognition up-front relative to a one-year subscription term-based license. Therefore, keeping other factors constant, revenue growth will also trend higher in a period where the percentage of multi-year subscription term-based licenses to total subscription term-based licenses increases. In the three and six months ended June 30, 2021, as customers elected longer contract durations in response to the strengthening economic outlook and easing of COVID-19 restrictions, multi-year subscription term-based license revenue increased as a percentage of total subscription term-based license revenue, which resulted in higher revenue growth. There is no guarantee that our customers will continue electing contracts with longer durations in future periods even if economic conditions continue to improve.

Professional Services and Other.   Professional services and other revenue consists primarily of fees from professional services provided to our customers and partners to configure and optimize the use of our solutions, as well as training services related to the configuration and operation of our solutions. Our professional services are generally priced on a time and materials basis, which is generally invoiced monthly and for which revenue is recognized as the services are performed. Revenue from our training services and sponsorship fees is recognized on the date the services are complete. Over time, we expect our professional services revenue to remain relatively stable as a percentage of total revenue.

Cost of Revenue

Subscription.   Subscription cost of revenue consists primarily of employee compensation costs for employees associated with supporting our subscription arrangements and certain third-party expenses. Employee compensation and related costs include cash compensation and benefits to employees, stock-based compensation, costs of third-party contractors and associated overhead costs. Third-party expenses consist of cloud infrastructure costs and other expenses directly associated with our customer support. We expect our subscription cost of revenue to increase in absolute dollars to the extent our subscription revenue increases.

Professional Services and Other.   Professional services and other cost of revenue consists primarily of employee compensation costs directly associated with delivery of professional services and training, including stock-based compensation, costs of third-party contractors, facility rental charges and other associated overhead costs. We expect our professional services and other cost of revenue to increase in absolute dollars relative to the growth of our business.

Amortization Expense.   Amortization expense consists of amortization of developed technology and internal-use software.

Operating Expenses

Our operating expenses consist of sales and marketing, research and development and general and administrative expenses as well as depreciation and amortization. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, payroll taxes and stock-based compensation expense.

Sales and Marketing.  Sales and marketing expenses consist primarily of employee compensation costs including stock-based compensation, sales commissions, costs of general marketing and promotional activities, travel-related expenses and allocated overhead. Certain sales commissions earned by our sales force on

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subscription contracts are deferred and amortized over the period of benefit, which is generally four years. We expect to continue to invest in our sales force domestically and internationally, as well as in our channel relationships. We expect our sales and marketing expenses to increase on an absolute dollar basis and continue to be our largest operating expense category for the foreseeable future.

Research and Development.   Research and development expenses consist primarily of employee compensation costs including stock-based compensation, allocated overhead and software and maintenance expenses. We will continue to invest in innovation and offer our customers new solutions to enhance our existing platform and expect such investment to increase on an absolute dollar basis as our business grows.

General and Administrative.   General and administrative expenses consist primarily of employee compensation costs including stock-based compensation, for corporate personnel, such as those in our executive, human resource, legal, facilities, accounting and finance, information security and information technology departments. In addition, general and administrative expenses include third-party professional fees, as well as all other supporting corporate expenses not allocated to other departments. General and administrative expense also includes acquisition-related expenses, which primarily consist of third-party expenses related to business acquisitions, such as professional services and legal fees.

We expect our general and administrative expenses to increase on an absolute dollar basis as our business grows. Also, we expect to incur additional general and administrative expenses as a result of continuing to operate as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, and increased expenses for insurance, investor relations and professional services.

Depreciation and Amortization.   Depreciation and amortization expense consists primarily of depreciation of our fixed assets and amortization of finite-lived acquired intangible assets such as customer relationships, trade names and non-compete agreements.

Other Income (Expense)

Interest Expense.  Interest expense consists primarily of interest payments on our outstanding borrowings under our credit facilities as well as the amortization of associated deferred financing costs. See “— Liquidity and Capital Resources — Senior Secured Credit Facilities.”

Other Income (Expense), Net.   Other income (expense), net primarily consists of gains and losses from transactions denominated in a currency other than the functional currency, interest income and other income (expense). As we have expanded our international operations, our exposure to fluctuations in foreign currencies has increased, and we expect this to continue.

Benefit (Provision) for Income Taxes

Benefit (Provision) for income taxes consists primarily of income taxes related to U.S. federal and state income taxes and income taxes in foreign jurisdictions in which we conduct business.

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Results of Operations

The following table sets forth our condensed consolidated statements of operations data for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Revenue:
Subscription	$	73,151	$	54,268	$	137,367	$	111,086
Professional services and other		5,753		4,713		10,481		9,307
Total revenue		78,904		58,981		147,848		120,393
Cost of revenue:
Subscription (exclusive of amortization shown below)(1)		10,185		7,509		19,599		14,618
Professional services and other (exclusive of amortization shown below)(1)		6,142		4,226		11,725		8,239
Amortization expense		6,077		4,944		11,886		9,546
Total cost of revenue		22,404		16,679		43,210		32,403
Gross profit		56,500		42,302		104,638		87,990
Operating expenses:
Sales and marketing(1)		29,082		20,751		54,631		42,941
Research and development(1)		18,692		11,411		40,394		23,625
General and administrative(1)		19,545		12,082		34,000		23,597
Depreciation and amortization		4,327		4,233		8,692		8,482
Total operating expenses		71,646		48,477		137,717		98,645
Loss from operations		(15,146)		(6,175)		(33,079)		(10,655)
Other income (expense):
Interest expense		(310)		(724)		(706)		(1,230)
Other income (expense), net		430		695		(442)		(555)
Total other income (expense)		120		(29)		(1,148)		(1,785)
Loss before income taxes		(15,026)		(6,204)		(34,227)		(12,440)
Benefit for income taxes		4,047		2,932		7,314		4,876
Net loss	$	(10,979)	$	(3,272)	$	(26,913)	$	(7,564)

(1) Includes stock-based compensation as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Subscription cost of revenue	$	513	$	174	$	1,048	$	320
Professional services and other cost of revenue		429		99		1,020		183
Sales and marketing		4,843		1,243		9,041		2,040
Research and development		4,647		1,298		13,159		2,186
General and administrative		7,044		1,731		10,147		2,673
Total	$	17,476	$	4,545	$	34,415	$	7,402

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The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of total revenue for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue:
Subscription	93	%	92	%	93	%	92	%
Professional services and other	7		8		7		8
Total revenue	100		100		100		100
Cost of revenue:
Subscription (exclusive of amortization shown below)	13		13		13		12
Professional services and other (exclusive of amortization shown below)	8		7		8		7
Amortization expense	7		8		8		8
Total cost of revenue	28		28		29		27
Gross profit	72		72		71		73
Operating expenses:
Sales and marketing	37		36		37		36
Research and development	24		19		27		20
General and administrative	25		20		23		19
Depreciation and amortization	5		7		6		7
Total operating expenses	91		82		93		82
Loss from operations	(19)		(10)		(22)		(9)
Other income (expense):
Interest expense	—		(1)		(1)		(1)
Other income (expense), net	—		1		—		—
Total other income (expense)	—		—		(1)		(1)
Loss before income taxes	(19)		(10)		(23)		(10)
Benefit for income taxes	5		5		5		4
Net loss	(14)	%	(5)	%	(18)	%	(6)	%

Comparison of the Three and Six Months Ended June 30, 2021 and 2020

Revenue

	Three Months Ended								Six Months Ended
	June 30,				Change				June 30,				Change
	2021		2020		$		%		2021		2020		$		%
	(dollars in thousands)
Revenue:
Subscription	$	73,151	$	54,268	$	18,883	35	%	$	137,367	$	111,086	$	26,281	24	%
Professional services and other		5,753		4,713		1,040	22			10,481		9,307		1,174	13
Total revenue	$	78,904	$	58,981	$	19,923	34	%	$	147,848	$	120,393	$	27,455	23	%

Total revenue increased by $19.9 million, or 34%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. 95% of the revenue growth was attributable to an increase in subscription revenue of $18.9 million, discussed further below. The remaining growth was attributable to an increase in professional services and other revenue of $1.0 million primarily due to an increase of $1.1 million in event sponsorship revenue from our live Identiverse conference which was conducted virtually in the prior year period as a result of COVID-19.

Total revenue increased by $27.5 million, or 23%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. 96% of the revenue growth was attributable to an increase in subscription

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revenue of $26.3 million, discussed further below. The remaining growth was attributable to an increase in professional services and other revenue of $1.2 million primarily due to an increase of $1.1 million in event sponsorship revenue from our live Identiverse conference as described above.

The table below sets forth the components of subscription revenue for the three and six months ended June 30, 2021 and 2020.

	Three Months Ended								Six Months Ended
	June 30,				Change				June 30,				Change
	2021		2020		$		%		2021		2020		$		%
	(dollars in thousands)
Subscription:
Multi-year subscription term-based licenses	$	32,391	$	21,141	$	11,250	53	%	$	56,229	$	45,129	$	11,100	25	%
1-year subscription term-based licenses		15,464		14,183		1,281	9			32,808		28,332		4,476	16
Subscription term-based licenses		47,855		35,324		12,531	35			89,037		73,461		15,576	21
Subscription SaaS		13,425		8,890		4,535	51			25,411		17,416		7,995	46
Maintenance and support		11,871		10,054		1,817	18			22,919		20,209		2,710	13
Total subscription revenue	$	73,151	$	54,268	$	18,883	35	%	$	137,367	$	111,086	$	26,281	24	%

Subscription revenue increased by 35%, or $18.9 million, and 24%, or $26.3 million, in the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020, respectively. Total subscription revenue increased as a result of a greater amount of new and renewing subscriptions in the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020. Remaining changes to subscription revenue were primarily due to the following:

Change in subscription type.    The following table sets forth the components of subscription revenue expressed as a percentage of total subscription revenue:

	Three Months Ended						Six Months Ended
	June 30,				Change		June 30,				Change
	2021		2020		%		2021		2020		%
Subscription term-based licenses	65	%	65	%	—	%	65	%	66	%	(1)	%
Subscription SaaS	18		16		2		18		16		2
Maintenance and support	17		19		(2)		17		18		(1)
Total subscription revenue	100	%	100	%			100	%	100	%

Subscription term-based license revenue as a percentage of subscription revenue remained consistent at 65% for the three months ended June 30, 2021 and 2020 and decreased from 66% in the six months ended June 30, 2020 to 65% in the six months ended June 30, 2021. Subscription SaaS as a percentage of total subscription revenue increased from 16% in each of the three and six months ended June 30, 2020 to 18% in the three and six months ended June 30, 2021. Maintenance and support as a percentage of total subscription revenue decreased from 19% and 18% for the three and six months ended June 30, 2020, respectively, to 17% for each of the three and six months ended June 30, 2021.

Additionally, subscription SaaS revenue increased by 51%, or $4.5 million, and 46%, or $8.0 million, in the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020. The increase in subscription SaaS revenue overall, and as a percentage of total subscription revenue, was primarily driven by the increased adoption of our SaaS solutions. This resulted in greater deferral of revenue from subscriptions entered into or renewed during the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020. We expect subscription SaaS to continue to gradually increase as a percentage of total subscription revenue in future periods, resulting in greater deferral of revenue in the period in which the subscription is contracted.

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Change in term-based subscription duration.   The following table sets forth the components of subscription term-based licenses expressed as a percentage of total subscription term-based licensed revenue:

	Three Months Ended						Six Months Ended
	June 30,				Change		June 30,				Change
	2021		2020		%		2021		2020		%
Multi-year subscription term-based licenses	68	%	60	%	8	%	63	%	61	%	2	%
1-year subscription term-based licenses	32		40		(8)		37		39		(2)
Total subscription term-based licenses	100	%	100	%			100	%	100	%

Multi-year subscription term-based license revenue as a percentage of total subscription term-based license revenue increased from 60% in the three months ended June 30, 2020 to 68% in the three months ended June 30, 2021. Multi-year subscription term-based license revenue as a percentage of total subscription term-based license revenue increased from 61% in the six months ended June 30, 2020 to 63% in the six months ended June 30, 2021. This resulted in more upfront revenue recognition from multi-year subscriptions entered into or renewed during the three and six months ended June 30, 2021 as compared to the three and six months ended June 30, 2020, as customers elected longer contract durations in response to the strengthening economic outlook and easing of COVID-19 restrictions during the three and six months ended June 30, 2021. There is no guarantee that our customers will continue electing contracts with longer durations in future periods even if economic conditions continue to improve.  

Cost of Revenue

	Three Months Ended								Six Months Ended
	June 30,				Change				June 30,				Change
	2021		2020		$		%		2021		2020		$		%
	(dollars in thousands)
Cost of revenue:
Subscription (exclusive of amortization shown below)	$	10,185	$	7,509	$	2,676	36	%	$	19,599	$	14,618	$	4,981	34	%
Professional services and other (exclusive of amortization shown below)		6,142		4,226		1,916	45			11,725		8,239		3,486	42
Amortization expense		6,077		4,944		1,133	23			11,886		9,546		2,340	25
Total cost of revenue	$	22,404	$	16,679	$	5,725	34	%	$	43,210	$	32,403	$	10,807	33	%

Subscription cost of revenue increased by $2.7 million, or 36%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. $1.6 million of the increase was attributable to an increase in cloud-based hosting and management costs largely associated with the increased adoption of our solutions.  $0.7 million of the increase was primarily attributable to an increase in headcount to support the growth of our subscription SaaS offerings and ongoing maintenance for our expanding customer base. $0.3 million of the increase was attributable to an increase in stock-based compensation.

Subscription cost of revenue increased by $5.0 million, or 34%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. $2.5 million of the increase was attributable to an increase in cloud-based hosting and management costs largely associated with the increased adoption of our solutions. $1.7 million of the increase was primarily attributable to an increase in headcount to support the growth of our subscription SaaS offerings and ongoing maintenance for our expanding customer base. $0.7 million of the increase was attributable to an increase in stock-based compensation.

Professional services and other cost of revenue increased $1.9 million, or 45%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. $1.6 million of the increase was primarily attributable to an increase in headcount and an increase in partner-related costs to support the growth in our business. $0.3 million of the increase was attributable to an increase in stock-based compensation.

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Professional services and other cost of revenue increased by $3.5 million, or 42%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. $2.7 million of the increase was primarily attributable to an increase in headcount and an increase in partner-related costs to support the growth in our business, as well as a $0.8 million increase in stock-based compensation.

Amortization expense increased by $1.1 million, or 23%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Amortization expense increased by $2.3 million, or 25%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase was attributable primarily to an increase in the amortization of our capitalized software as well as an increase in the amortization of developed technology resulting from our acquisitions of ShoCard and Symphonic in March and October 2020, respectively, as further described in Note 7 of our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Operating Expenses

	Three Months Ended								Six Months Ended
	June 30,				Change				June 30,				Change
	2021		2020		$		%		2021		2020		$		%
	(dollars in thousands)
Sales and marketing	$	29,082	$	20,751	$	8,331	40	%	$	54,631	$	42,941	$	11,690	27	%
Research and development		18,692		11,411		7,281	64			40,394		23,625		16,769	71
General and administrative		19,545		12,082		7,463	62			34,000		23,597		10,403	44
Depreciation and amortization		4,327		4,233		94	2			8,692		8,482		210	2
Total operating expenses	$	71,646	$	48,477	$	23,169	48	%	$	137,717	$	98,645	$	39,072	40	%

Sales and Marketing.     Sales and marketing expenses increased by $8.3 million, or 40%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. $3.6 million of the increase was attributable to an increase in stock-based compensation expense. This increase was primarily related to expense recognized for awards granted in the second quarter of 2021 and expense recognized for the options and restricted stock units subject to performance and market conditions determined to be probable of vesting in the second quarter of 2021 (“market-based options” and “market-based PSUs”), as further described in Note 12 of our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. $2.7 million of the increase was primarily attributable to an increase in headcount related to the expansion of our sales force and our marketing department. Additionally, promotional and partner and consulting expenses increased by $1.8 million primarily due to expenses incurred related to the live Identiverse conference held in the second quarter of 2021 and additional spend around branding and awareness campaigns. The remaining increase was primarily related to an increase in travel as COVID-19 restrictions eased during the second quarter.

Sales and marketing expenses increased by $11.7 million, or 27%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. $7.0 million of the increase was attributable to an increase in stock-based compensation expense primarily related to market-based PSUs and options, and awards granted in the second quarter of 2021. $3.9 million of the increase was primarily attributable to an increase in headcount related to the expansion of our sales force and our marketing department. Additionally, promotional and partner and consulting expenses increased by $2.4 million primarily due to the live Identiverse conference held in the second quarter of 2021 and additional spend around branding and awareness campaigns. These increases were offset by a decrease in travel and other event-related costs of $1.4 million due to COVID-19 restrictions in the first quarter of 2021.

Research and Development.    Research and development expenses increased by $7.3 million, or 64%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. $4.2 million of the increase was primarily attributable to an increase in headcount to enhance and expand our solutions. $3.3 million of the increase was attributable to an increase in stock-based compensation expense, primarily related to market-based PSUs and awards granted in the second quarter of 2021. Partner and consulting costs increased $1.1 million primarily to support the design and expansion of our SaaS offerings. The increase in research and development expense was offset by an increase of $1.7 million related to employee costs that

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were capitalized as software development costs in the three months ended June 30, 2021 as compared to June 30, 2020.

Research and development expenses increased by $16.8 million, or 71%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. $11.0 million of the increase was attributable to an increase in stock-based compensation expense primarily related to the conversion of previously outstanding LTIP awards into time-based vesting RSUs in the first quarter of 2021, along with expense recognized for market-based PSUs and awards granted in the second quarter of 2021. $7.3 million of the increase was primarily attributable to an increase in headcount to enhance and expand our solutions. Partner and consulting costs increased $1.7 million primarily to support the design and growth of our SaaS offerings. The increase in research and development expense was offset by an increase of $3.0 million related to employee costs that were capitalized as software development costs in the six months ended June 30, 2021 as compared to June 30, 2020.

General and Administrative.     General and administrative expenses increased by $7.5 million, or 62%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. $5.3 million of the increase was attributable to an increase in stock-based compensation expense primarily related to the market-based PSUs and options, and expense recognized for awards granted in the second quarter of 2021. $1.4 million of the increase was primarily attributable to an increase in headcount to support growth in our business, and $0.4 million of the increase was related to expenses incurred in connection with the acquisition of SecuredTouch, Inc. The remaining increase was primarily related to an increase in allocated overhead.

General and administrative expenses increased by $10.4 million, or 44%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. $7.5 million of the increase was attributable to an increase in stock-based compensation expense primarily related to market-based PSUs and options, and awards granted in the second quarter of 2021. $1.9 million of the increase was primarily attributable to an increase in headcount to support growth in our business. Consulting costs increased by $0.9 million, primarily due to expenses incurred related to strategic planning.

Depreciation and Amortization.     Depreciation and amortization expense remained substantially the same during the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020.

Other Income (Expense)

	Three Months Ended								Six Months Ended
	June 30,				Change				June 30,				Change
	2021		2020		$		%		2021		2020		$		%
	(dollars in thousands)
Interest expense	$	(310)	$	(724)	$	414	(57)	%	$	(706)	$	(1,230)	$	524	(43)	%
Other income (expense), net		430		695		(265)	(38)			(442)		(555)		113	(20)
Total other income (expense)	$	120	$	(29)	$	149	(514)	%	$	(1,148)	$	(1,785)	$	637	(36)	%

Interest Expense.     Interest expense decreased by $0.4 million, or 57%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. The decrease was attributable primarily to the reduction in our average debt outstanding during the second quarter of 2021 as compared to 2020. A decrease in the weighted average interest rate, from 1.8% for the three months ended June 30, 2020 to 1.4% for the three months ended June 30, 2021, also contributed to the decrease in interest during the period.

Interest expense decreased by $0.5 million, or 43%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The decrease was attributable primarily to the reduction in our average debt outstanding during the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. A decrease in the weighted average interest rate, from 2.2% for the six months ended June 30, 2020 to 1.4% for the six months ended June 30, 2021, also contributed to the decrease in interest during the period.

Other Income (Expense), Net.     Other income (expense), net decreased by $0.3 million, or 38%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. The decrease was

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attributable primarily to a change in the amount of foreign currency gains and losses, from a gain of $0.6 million in the three months ended June 30, 2020 to a gain of $0.4 million in the three months ended June 30, 2021, along with a decrease in interest income recognized in the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Other income (expense), net decreased by $0.1 million, or 20%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The decrease was attributable primarily to a change in the amount of foreign currency gains and losses, from a loss of $0.8 million in the six months ended June 30, 2020 compared to a loss of $0.5 million in the six months ended June 30, 2021. This was partially offset by a decrease in interest income recognized in the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Benefit for Income Taxes

	Three Months Ended								Six Months Ended
	June 30,				Change				June 30,				Change
	2021		2020		$		%		2021		2020		$		%
	(dollars in thousands)
Benefit for income taxes	$	4,047	$	2,932	$	1,115	38	%	$	7,314	$	4,876	$	2,438	50	%

Our benefit for income taxes was $4.0 million and $2.9 million for the three months ended June 30, 2021 and 2020, respectively. For the six months ended June 30, 2021 and 2020, our benefit for income taxes was $7.3 million and $4.9 million, respectively. The increase in the tax benefit for the three and six months ended June 30, 2021 as compared to the three and six months ended June 30, 2020 primarily relates to a larger expected pre-tax loss in 2021 as compared to 2020, the release of a foreign valuation allowance, and an increase in R&D and other credits recorded in the three and six months ended June 30, 2021. The increase in tax benefit for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 was partially offset by a valuation allowance recorded against our U.S. deferred tax assets during the first quarter of 2021.

Liquidity and Capital Resources

General

As of June 30, 2021, our principal sources of liquidity were cash and cash equivalents totaling $104.3 million, which were held for working capital purposes, and borrowing availability under our Revolving Credit Facility as described below. As of June 30, 2021, our cash equivalents were comprised of money market funds. During the six months ended June 30, 2021 and 2020, our positive cash flows from operations have enabled us to make continued investments in supporting the growth of our business. We expect that our operating cash flows, in addition to our cash and cash equivalents, will enable us to continue to make such investments in the future.

We have financed our operations primarily through cash received from operations and proceeds from our debt and equity financings. On March 30, 2020, we drew down on the remaining $97.8 million available for borrowing under our Revolving Credit Facility (described further below). Given the uncertainty in the global economy as result of the COVID-19 pandemic and out of an abundance of caution, we elected to draw down the remaining available balance to further strengthen our cash position and maintain flexibility. In February 2021, we repaid $110.0 million of the balance drawn on our Revolving Credit Facility, and in June 2021, we drew down an additional $80.0 million for the acquisition of SecuredTouch, Inc., and for general working capital purposes. As of June 30, 2021, there was $120.0 million outstanding under our Revolving Credit Facility. We believe our existing cash and cash equivalents, our Revolving Credit Facility and cash provided by sales of our solutions and services will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements will depend on several factors, including but not limited to our obligation to repay any amounts outstanding under our Credit Agreement, our subscription growth rate, subscription renewal activity, billing frequency, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced solutions, the continuing market adoption of our platform, and the continuing effects of the COVID-19 pandemic, including potential reductions in revenue and delays in payments from our customers and partners. In the future, we may

44

enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights.

We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our results of operations.

A majority of our customers pay in advance for annual subscriptions, a portion of which is recorded as deferred revenue. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is later recognized as revenue in accordance with our revenue recognition policy. As of June 30, 2021, we had deferred revenue of $47.7 million, of which $43.4 million was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

Senior Secured Credit Facilities

On December 12, 2019, we entered into the Credit Agreement providing for the Revolving Credit Facility with an initial $150.0 million in commitments for revolving loans, which amount may be increased or decreased under specific circumstances, with a $15.0 million letter of credit sublimit and a $50.0 million alternative currency sublimit. In addition, the Credit Agreement provides for the ability of Ping Identity Corporation to request term loan facilities, in a minimum amount of $10 million for each facility, if, among other things, the Senior Secured Net Leverage Ratio (as defined in the Credit Agreement), calculated giving pro forma effect to the requested term loan facility, is no greater than 3.50 to 1.00.

The interest rates applicable to revolving borrowings under the Credit Agreement are, at the borrower’s option, either (i) a base rate, which is equal to the greater of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.5% and (c) the Adjusted LIBO Rate for a one month Interest Period (each term as defined in the Credit Agreement) plus 1%, or (ii) the Adjusted LIBO Rate equal to the LIBO Rate for the Interest Period multiplied by the Statutory Reserve Rate (each term as defined in the Credit Agreement), plus in the case of each of clauses (i) and (ii), the Applicable Rate. The Applicable Rate (i) for base rate loans ranges from 0.25% to 1.0% per annum and (i) for LIBO Rate loans ranges from 1.25% to 2.0% per annum, in each case, based on the Senior Secured Net Leverage Ratio (as defined in the Credit Agreement). The Adjusted LIBO Rate cannot be less than zero. Base rate borrowings may only be made in dollars. The interest rate as of June 30, 2021 was 1.34%. The Credit Agreement also includes a fallback provision, which, subject to certain terms and conditions, provides for a replacement of the LIBO Rate with (x) one or more SOFR-based rates or (y) any other alternative benchmark rates giving consideration to any evolving or then existing conventions for similar U.S. dollar denominated syndicated credit facilities. The borrower pays a commitment fee during the term of the Credit Agreement ranging from 0.20% to 0.35% of the available revolving commitments per annum based on the Senior Secured Net Leverage Ratio (as defined in the Credit Agreement).

Any borrowing under the Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs, and any amounts repaid may be reborrowed. No mandatory prepayments will be required other than when borrowings or letter of credit usage exceed the aggregate commitment of all lenders.

The Credit Agreement was amended on April 20, 2021 and effective as of March 31, 2021 (the “Credit Amendment”). The Credit Amendment, among other provisions, modified the definition of “EBITDA”, added additional language regarding recovery for erroneous payments and amended certain administrative agent processes.

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Cash Flows

The following table presents a summary of our condensed consolidated cash flows from operating, investing and financing activities for the periods indicated:

	Six Months Ended June 30,
	2021		2020
	(in thousands)
Net cash provided by operating activities	$	43,965	$	21,244
Net cash used in investing activities		(49,959)		(12,872)
Net cash provided by (used in) financing activities		(35,267)		101,497
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(130)		(406)
Net increase (decrease) in cash and cash equivalents and restricted cash	$	(41,391)	$	109,463
Cash and cash equivalents and restricted cash at beginning of period		146,499		68,386
Cash and cash equivalents and restricted cash at end of period	$	105,108	$	177,849

Operating Activities

Our largest source of operating cash is cash collections from our customers for subscriptions and professional services. Our primary uses of cash from operating activities are for employee-related expenditures, marketing expenses and third-party hosting costs.

For the six months ended June 30, 2021, net cash provided by operating activities was $44.0 million, reflecting our net loss of $26.9 million, adjusted for non-cash charges of $51.9 million and net cash inflows of $19.0 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of stock-based compensation, amortization of deferred commissions, depreciation and amortization of property and equipment and intangible assets and deferred income taxes. The primary drivers of the changes in operating assets and liabilities related to a $17.6 million decrease in accounts receivable due to the timing of collection of payment from our customers, a $5.7 million decrease in contract assets due to the issuance of invoices and timing of revenue recognition, a $4.3 million increase in accrued compensation due to the timing of cash disbursements to our employees, a $3.4 million decrease in prepaid expenses and other current assets, and an increase of $1.3 million in accrued expenses and other liabilities due to the timing of cash disbursements. These were partially offset by an $8.2 million increase in deferred commissions, and a $5.0 million decrease in deferred revenue driven by the timing of revenue recognition.

During the six months ended June 30, 2020 net cash provided by operating activities was $21.2 million due to our net loss of $7.6 million that was adjusted for non-cash charges of $24.7 million and net cash inflows of $4.1 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of stock-based compensation, amortization of deferred commissions, depreciation and amortization of property and equipment and intangible assets and deferred income taxes. The primary drivers of the changes in operating assets and liabilities related to an $8.7 million decrease in accounts receivable due to the timing of collection of payment from our customers, a $7.2 million decrease in prepaid expenses and other current assets, a $3.9 million increase in accounts payable, a $2.2 million increase in accrued expenses and other liabilities due to the timing of cash disbursements and a $1.3 million decrease in contract assets. These were partially offset by a $7.5 million decrease in deferred revenue driven by the timing of revenue recognition, a $3.2 million increase in deferred commissions and an $8.7 million decrease in accrued compensation related to the timing of cash disbursements to our employees.

Investing Activities

Net cash used in investing activities was $50.0 million and $12.9 million during the six months ended June 30, 2021 and 2020, respectively, representing an increase of $37.1 million. The net increase is primarily

46

attributable to the acquisition of SecuredTouch in June 2021 for $39.9 million as compared to the acquisition of ShoCard in the first quarter of 2020 for $4.7 million. The remaining increase was primarily related to an increase in the capitalization of internal-use software costs of $1.8 million in the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

Financing Activities

Net cash used in financing activities was $35.3 million during the six months ended June 30, 2021 whereas net cash provided by financing activities was $101.5 million during the six months ended June 30, 2020, representing a decrease of $136.8 million. During the six months ended June 30, 2021, we repaid $110.0 million and drew down $80.0 million on our Revolving Credit Facility, resulting in net cash outflows related to long-term debt of $30.0 million in the period. This compares to cash inflows related to long-term debt of $97.8 million during the six months ended June 30, 2020, due to the draw down of $97.8 million on our Revolving Credit Facility in March 2020. The remaining decrease relates to a decrease of $4.1 million in proceeds received from option exercises and an increase of $4.5 million in payments for tax withholding on equity awards for the six months ended June 30, 2021 as compared to June 30, 2020.

Indemnification Agreements

In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we previously entered into indemnification agreements with our directors and certain officers and employees that require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, or condensed consolidated statements of cash flows.

Off-Balance Sheet Arrangements

As of June 30, 2021, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structure finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent assets and liabilities at the date of our financial statements. We evaluate our estimates and assumptions on an ongoing basis. The estimates and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, impacting our reported results of operations and financial condition.

There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended December 31, 2020. For more information, please refer to “Note 2—Summary of Significant Accounting Policies” to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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Recent Accounting Pronouncements

For a description of our recently adopted accounting pronouncements and recently issued accounting standards not yet adopted, see “Note 2—Summary of Significant Accounting Policies—Recent Accounting Pronouncements” to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. As we have operations in the United States and internationally, our market risk exposure is primarily a result of exposure due to potential changes in inflation or interest rates. We do not hold financial instruments for trading purposes.

Foreign Currency Exchange Risk

Our revenues and expenses are primarily denominated in U.S. dollars. For the three months ended June 30, 2021 and 2020, we recorded a gain of $0.4 million and a gain of $0.6 million on foreign exchange transactions, respectively. For the six months ended June 30, 2021 and 2020, we recorded a loss of $0.5 million and a loss of $0.8 million on foreign exchange transactions, respectively. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, but we may do so in the future if our exposure to foreign currency should become more significant. For business conducted outside of the United States, we may have both revenue and costs incurred in the local currency of the subsidiary, creating a partial natural hedge. Changes to exchange rates therefore have not had a significant impact on the business to date. However, we will continue to reassess our foreign exchange exposure as we continue to grow our business globally. During the three and six months ended June 30, 2021 and 2020, a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our condensed consolidated financial statements.

Interest Rate Risk

Our primary market risk exposure is changing LIBO-based interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. The interest rates applicable to revolving borrowings under the Credit Agreement are, at the borrower’s option, either (i) a base rate, which is equal to the greater of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.5% and (c) the Adjusted LIBO Rate for a one month Interest Period (each term as defined in the Credit Agreement) plus 1%, or (ii) the Adjusted LIBO Rate equal to the LIBO Rate for the Interest Period multiplied by the Statutory Reserve Rate (each term as defined in the Credit Agreement), plus in the case of each of clauses (i) and (ii), the Applicable Rate. The Applicable Rate (i) for base rate loans ranges from 0.25% to 1.0% per annum and (i) for LIBO Rate loans ranges from 1.25% to 2.0% per annum, in each case, based on the Senior Secured Net Leverage Ratio (as defined in the Credit Agreement). The Adjusted LIBO Rate cannot be less than zero. Base rate borrowings may only be made in dollars. The Credit Agreement also includes a fallback provision, which, subject to certain terms and conditions, provides for a replacement of the LIBO Rate with (x) one or more SOFR-based rates or (y) any other alternative benchmark rate giving consideration to any evolving or then existing conventions for similar U.S. dollar denominated syndicated credit facilities.

At June 30, 2021, we had total outstanding debt of $120.0 million under our Revolving Credit Facility. Based on the amounts outstanding, a 100-basis point increase or decrease in market interest rates over a twelve-month period would result in a change to interest expense of $1.2 million.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a–15(e) and Rule 15d–15(e) under the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of June 30, 2021, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control

There have been no changes in internal control over financial reporting during the quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in various claims and legal actions that arise in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we do not believe that the ultimate resolution of these actions will have a material adverse effect on our financial position, results of operations, liquidity and capital resources.

Future litigation may be necessary to defend ourselves and our partners by determining the scope, enforceability and validity of third-party proprietary rights or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors disclosed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020. There have been no material changes to our risk factors from those included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

There were no unregistered sales of equity securities during the three months ended June 30, 2021.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

None.

Item 5. Other Information

None.

Item 6. Exhibits

We have filed the exhibits listed on the accompanying Exhibit Index, which is incorporated herein by reference.

50

Exhibit Index

Exhibit Number	Exhibit Description
31.1	Certification of the Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2	Certification of the Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1*	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.
32.2*	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, and 101.PRE).

*The certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

51

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

August 4, 2021	Ping Identity Holding Corp.
	/s/ Raj Dani
	Raj Dani
	Chief Financial Officer

52

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Andre Durand, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ping Identity Holding Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleading with respect to the period covered by thisreport;

3. Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinall material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in thisreport;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underoursupervision,toensurethatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries, ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythis report based on such evaluation;and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materiallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’sinternalcontroloverfinancialreporting;and

5. Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontrolover financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalentfunctions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhicharereasonablylikelytoadverselyaffecttheregistrant’sabilitytorecord,process,summarizeandreport financial information;and

b)   Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleinthe registrant’s internal control over financialreporting.

Date:     August 4, 2021	/s/Andre Durand
	Andre Durand Director and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Raj Dani, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Ping Identity Holding Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleading with respect to the period covered by thisreport;

3.Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinall material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in thisreport;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underoursupervision,toensurethatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries, ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythis report based on such evaluation;and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materiallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’sinternalcontroloverfinancialreporting;and

5. Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontrolover financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalentfunctions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhicharereasonablylikelytoadverselyaffecttheregistrant’sabilitytorecord,process,summarizeandreport financial information;and

b)   Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleinthe registrant’s internal control over financialreporting.

Date:    August 4, 2021	/s/Raj Dani
	Raj Dani Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of the Chief Executive Officer

Pursuant to Rule 18 U.S.C. Section 1350

In connection with the Quarterly Report on Form 10-Q of Ping Identity Holding Corp. (the “Company”) for the quarter ended June 30, 2021, as filed with the U.S. Securities and Exchange Commission (the “Report”), I, Andre Durand, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. TheReportfullycomplieswiththerequirementsofSection13(a)or15(d)oftheSecuritiesExchangeActof1934,as amended;and

2. TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsof operations of theCompany.

Date:    August 4, 2021	/s/Andre Durand
	Andre Durand Director and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of the Chief Financial Officer

Pursuant to Rule 18 U.S.C. Section 1350

In connection with the Quarterly Report on Form 10-Q of Ping Identity Holding Corp. (the “Company”) for the quarter ended June 30, 2021, as filed with the U.S. Securities and Exchange Commission (the “Report”), I, Raj Dani, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. TheReportfullycomplieswiththerequirementsofSection13(a)or15(d)oftheSecuritiesExchangeActof1934,as amended;and

2. TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsof operations of theCompany.

Date:     August 4, 2021	/s/ Raj Dani
	Raj Dani Chief Financial Officer

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	Jun. 30, 2021	Jul. 30, 2021
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2021
Entity File Number	001-39056
Entity Registrant Name	PING IDENTITY HOLDING CORP.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-2933383
Entity Address, Address Line One	1001 17th Street, Suite 100
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80202
City Area Code	303
Local Phone Number	468-2900
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	PING
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		82,088,438
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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 104,342	$ 145,733
Accounts receivable, net of allowances of $652 and $828 at March 31, 2021 and December 31, 2020, respectively	64,720	82,335
Contract assets, current (net of allowance)	62,955	62,503
Deferred commissions, current	7,711	6,604
Prepaid expenses	14,061	17,608
Other current assets	2,239	1,940
Total current assets	256,028	316,723
Noncurrent assets:
Property and equipment, net	8,753	9,446
Goodwill	473,697	441,150
Intangible assets, net	179,324	180,422
Contract assets, noncurrent (net of allowance)	5,159	11,288
Deferred commissions, noncurrent	11,753	9,325
Deferred income taxes, net	3,370	3,962
Operating lease right-of-use assets	14,085	15,619
Other noncurrent assets	2,944	2,516
Total noncurrent assets	699,085	673,728
Total assets	955,113	990,451
Current liabilities:
Accounts payable	2,944	2,795
Accrued expenses and other current liabilities	7,730	7,339
Accrued compensation	20,165	17,170
Deferred revenue, current	43,431	49,203
Operating lease liabilities, current	4,097	3,979
Total current liabilities	78,367	80,486
Noncurrent liabilities:
Deferred revenue, noncurrent	4,288	3,195
Long-term debt	119,138	149,014
Deferred income taxes, net	9,603	17,867
Operating lease liabilities, noncurrent	15,216	17,213
Other liabilities, noncurrent	1,565	1,566
Total noncurrent liabilities	149,810	188,855
Total liabilities	228,177	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	82	81
Additional paid-in capital	771,332	739,051
Accumulated other comprehensive income	1,830	1,373
Accumulated deficit	(46,308)	(19,395)
Total stockholders' equity	726,936	721,110
Total liabilities and stockholders' equity	$ 955,113	$ 990,451

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowances	$ 645	$ 828
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized (in shares)	50,000,000	50,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	500,000,000	500,000,000
Common stock, issued (in shares)	82,086,665	81,163,896
Common stock, outstanding (in shares)	82,086,665	81,163,896

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenue:
Total revenue	$ 78,904	$ 58,981	$ 147,848	$ 120,393
Cost of revenue:
Amortization expense	6,077	4,944	11,886	9,546
Total cost of revenue	22,404	16,679	43,210	32,403
Gross profit	56,500	42,302	104,638	87,990
Operating expenses:
Sales and marketing	29,082	20,751	54,631	42,941
Research and development	18,692	11,411	40,394	23,625
General and administrative	19,545	12,082	34,000	23,597
Depreciation and amortization	4,327	4,233	8,692	8,482
Total operating expenses	71,646	48,477	137,717	98,645
Loss from operations	(15,146)	(6,175)	(33,079)	(10,655)
Other income (expense):
Interest expense	(310)	(724)	(706)	(1,230)
Other income (expense), net	430	695	(442)	(555)
Total other income (expense)	120	(29)	(1,148)	(1,785)
Loss before income taxes	(15,026)	(6,204)	(34,227)	(12,440)
Benefit for income taxes	4,047	2,932	7,314	4,876
Net loss	$ (10,979)	$ (3,272)	$ (26,913)	$ (7,564)
Net loss per share:
Basic and diluted (in dollars per share)	$ (0.13)	$ (0.04)	$ (0.33)	$ (0.09)
Weighted-average shares used in computing net income (loss) per share:
Basic and diluted (in shares)	82,025	80,169	81,684	79,956
Subscription
Revenue:
Total revenue	$ 73,151	$ 54,268	$ 137,367	$ 111,086
Cost of revenue:
Cost of revenue (exclusive of amortization shown below)	10,185	7,509	19,599	14,618
Professional services and other
Revenue:
Total revenue	5,753	4,713	10,481	9,307
Cost of revenue:
Cost of revenue (exclusive of amortization shown below)	$ 6,142	$ 4,226	$ 11,725	$ 8,239

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (10,979)	$ (3,272)	$ (26,913)	$ (7,564)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	207	351	457	(664)
Total other comprehensive income (loss)	207	351	457	(664)
Comprehensive loss	$ (10,772)	$ (2,921)	$ (26,456)	$ (8,228)

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit Adjustment	Accumulated Deficit	Adjustment	Total
Balances at Dec. 31, 2019	$ 80	$ 718,446	$ (399)	$ 152	$ (7,656)	$ 152	$ 710,471
Balances (in shares) at Dec. 31, 2019	79,632,500
Increase (Decrease) in Stockholders' Equity
Net loss					(7,564)		(7,564)
Stock-based compensation		6,764					6,764
Exercise of stock options, net of tax withholding		4,392					4,392
Exercise of stock options, net of tax withholding (in shares)	785,663
Vesting of restricted stock, net of tax withholding (in shares)	26,344
Foreign currency translation adjustments, net of tax			(664)				(664)
Balances at Jun. 30, 2020	$ 80	729,602	(1,063)		(15,068)		713,551
Balances (in shares) at Jun. 30, 2020	80,444,507
Balances at Mar. 31, 2020	$ 80	721,181	(1,414)		(11,796)		708,051
Balances (in shares) at Mar. 31, 2020	79,923,114
Increase (Decrease) in Stockholders' Equity
Net loss					(3,272)		(3,272)
Stock-based compensation		4,164					4,164
Exercise of stock options, net of tax withholding		4,257					4,257
Exercise of stock options, net of tax withholding (in shares)	512,219
Vesting of restricted stock, net of tax withholding (in shares)	9,174
Foreign currency translation adjustments, net of tax			351				351
Balances at Jun. 30, 2020	$ 80	729,602	(1,063)		(15,068)		713,551
Balances (in shares) at Jun. 30, 2020	80,444,507
Balances at Dec. 31, 2020	$ 81	739,051	1,373		(19,395)		721,110
Balances (in shares) at Dec. 31, 2020	81,163,896
Increase (Decrease) in Stockholders' Equity
Net loss					(26,913)		(26,913)
Stock-based compensation		33,467					33,467
Reclassification of liability-classified awards upon settlement		3,089					3,089
Exercise of stock options, net of tax withholding		1,801					1,801
Exercise of stock options, net of tax withholding (in shares)	220,482
Vesting of restricted stock, net of tax withholding	$ 1	(6,076)					(6,075)
Vesting of restricted stock, net of tax withholding (in shares)	702,287
Foreign currency translation adjustments, net of tax			457				457
Balances at Jun. 30, 2021	$ 82	771,332	1,830		(46,308)		726,936
Balances (in shares) at Jun. 30, 2021	82,086,665
Balances at Mar. 31, 2021	$ 81	759,645	1,623		(35,329)		726,020
Balances (in shares) at Mar. 31, 2021	81,475,176
Increase (Decrease) in Stockholders' Equity
Net loss					(10,979)		(10,979)
Stock-based compensation		17,167					17,167
Exercise of stock options, net of tax withholding		30					30
Exercise of stock options, net of tax withholding (in shares)	22,377
Vesting of restricted stock, net of tax withholding	$ 1	(5,510)					(5,509)
Vesting of restricted stock, net of tax withholding (in shares)	589,112
Foreign currency translation adjustments, net of tax			207				207
Balances at Jun. 30, 2021	$ 82	$ 771,332	$ 1,830		$ (46,308)		$ 726,936
Balances (in shares) at Jun. 30, 2021	82,086,665

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities
Net loss	$ (26,913)	$ (7,564)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	20,578	18,028
Stock-based compensation expense	34,415	7,402
Amortization of deferred commissions	4,674	3,761
Amortization of deferred debt issuance costs	124	124
Operating leases, net	(346)	(21)
Deferred taxes	(7,624)	(5,280)
Other	63	668
Changes in operating assets and liabilities:
Accounts receivable	17,621	8,727
Contract assets	5,653	1,309
Deferred commissions	(8,209)	(3,186)
Prepaid expenses and other current assets	3,405	7,186
Other assets	(426)	220
Accounts payable	348	3,894
Accrued compensation	4,280	(8,724)
Accrued expenses and other	1,338	2,243
Deferred revenue	(5,016)	(7,543)
Net cash provided by operating activities	43,965	21,244
Cash flows from investing activities
Purchases of property and equipment and other	(1,502)	(1,420)
Capitalized software development costs	(8,582)	(6,749)
Payments for business acquisitions, net of cash acquired	(39,875)	(4,703)
Net cash used in investing activities	(49,959)	(12,872)
Cash flows from financing activities
Payment of consideration and holdbacks	(993)	(424)
Payment of offering costs		(295)
Proceeds from stock option exercises	1,900	6,046
Payment for tax withholding on equity awards	(6,174)	(1,653)
Proceeds from long-term debt	80,000	97,823
Payment of long-term debt	(110,000)
Net cash provided by (used in) financing activities	(35,267)	101,497
Effect of exchange rates on cash and cash equivalents and restricted cash	(130)	(406)
Net increase (decrease) in cash and cash equivalents and restricted cash	(41,391)	109,463
Cash and cash equivalents and restricted cash
Beginning of period	146,499	68,386
End of period	105,108	177,849
Supplemental disclosures of cash flow information:
Cash paid for interest	584	1,186
Cash paid for taxes	283	423
Noncash activities:
Purchases of property and equipment, accrued but not yet paid	40	202
Reclassification of liability-classified awards upon settlement	$ 3,089
Acquisition-related accruals		226
Lease liabilities arising from right-of-use assets		$ 794

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 30, 2020
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	$ 104,342	$ 177,102
Restricted cash included in other noncurrent assets	$ 766	$ 747
Financial position	us-gaap:OtherNoncurrentAssetsMember	us-gaap:OtherNoncurrentAssetsMember
Total cash and cash equivalents and restricted cash	$ 105,108	$ 177,849

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Overview and Basis of Presentation

6 Months Ended

Jun. 30, 2021

Overview and Basis of Presentation

Overview and Basis of Presentation

1.   Overview and Basis of Presentation

Organization and Description of Business

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

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All amounts are reported in U.S. dollars. Certain amounts for the three and six months ended June 30, 2020 have been reclassified to conform with current period presentation.

Unaudited Interim Condensed Consolidated Financial Information

The accompanying interim condensed consolidated balance sheet as of June 30, 2021, the condensed consolidated statements of operations, of comprehensive income (loss) and of stockholders’ equity for the three and six months ended June 30, 2021 and 2020, the condensed consolidated statements of cash flows for the six months ended June 30, 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 June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020 and cash flows for the six months ended June 30, 2021 and 2020. The results for the three and six months ended June 30, 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 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.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2.       Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Note 2 — Summary of Significant Accounting Policies” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 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 and six months ended June 30, 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.

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Revenue Recognition and Deferred Commissions

6 Months Ended

Jun. 30, 2021

Revenue Recognition and Deferred Commissions

Revenue Recognition and Deferred Commissions

3.       Revenue Recognition and Deferred Commissions

The Company recognizes revenue under Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers. 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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Subscription term-based licenses:
Multi-year subscription term-based licenses	$	32,391	$	21,141	$	56,229	$	45,129
1-year subscription term-based licenses		15,464		14,183		32,808		28,332
Total subscription term-based licenses		47,855		35,324		89,037		73,461
Subscription SaaS		13,425		8,890		25,411		17,416
Maintenance and support		11,871		10,054		22,919		20,209
Total subscription revenue		73,151		54,268		137,367		111,086
Professional services and other		5,753		4,713		10,481		9,307
Total revenue	$	78,904	$	58,981	$	147,848	$	120,393

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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
United States	$	56,934	$	44,626	$	110,805	$	87,655
International		21,970		14,355		37,043		32,738
Total revenue	$	78,904	$	58,981	$	147,848	$	120,393

Other than the United States, no other individual country exceeded 10% of total revenue for the three months ended June 30, 2021 and 2020 or the six months ended June 30, 2021 and 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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Beginning balance	$	69,681	$	85,150	$	73,791	$	86,010
Ending balance		68,114		84,640		68,114		84,640
Change	$	(1,567)	$	(510)	$	(5,677)	$	(1,370)

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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Beginning balance	$	49,352	$	38,343	$	52,398	$	47,507
Ending balance		47,719		39,964		47,719		39,964
Change	$	(1,633)	$	1,621	$	(4,679)	$	(7,543)

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 and six months ended June 30, 2021 and 2020 that was included in the deferred revenue balances at the beginning of the respective periods was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Deferred revenue recognized as revenue	$	12,101	$	12,247	$	38,036	$	35,215

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 June 30, 2021, the Company had $185.1 million of transaction price allocated to remaining performance obligations, of which 82% 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 and six months ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Beginning balance	$	16,534	$	13,104	$	15,929	$	13,670
Additions to deferred commissions		5,275		1,650		8,209		3,186
Amortization of deferred commissions		(2,345)		(1,659)		(4,674)		(3,761)
Ending balance	$	19,464	$	13,095	$	19,464	$	13,095
Deferred commissions, current	$	7,711	$	5,355	$	7,711	$	5,355
Deferred commissions, noncurrent		11,753		7,740		11,753		7,740
Total deferred commissions	$	19,464	$	13,095	$	19,464	$	13,095

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Allowances for Expected Credit Losses

6 Months Ended

Jun. 30, 2021

Allowances for Expected Credit Losses

Allowances for Expected Credit Losses

4.       Allowances for Expected Credit Losses

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

	Accounts Receivable		Contract Assets		Accounts Receivable		Contract Assets
	Three Months Ended June 30, 2021				Six Months Ended June 30, 2021
	(in thousands)
Beginning balance	$	652	$	80	$	828	$	87
Provision for credit losses, net of recoveries		28		45		7		38
Write-offs		(35)		(37)		(190)		(37)
Ending balance	$	645	$	88	$	645	$	88

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2021

Fair Value of Financial Instruments

Fair Value of Financial Instruments

5.   Fair Value of Financial Instruments

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

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

	June 30, 2021
	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash and cash equivalents:
Money market funds	$	45,001	$	—	$	—	$	45,001

	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).

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Property and Equipment

6 Months Ended

Jun. 30, 2021

Property and Equipment

Property and Equipment

6.   Property and Equipment

Property and equipment consisted of the following:

	June 30,		December 31,
	2021		2020
	(in thousands)
Computer equipment	$	7,639	$	6,581
Furniture and fixtures		3,893		3,887
Purchased computer software		785		785
Leasehold improvements		7,899		7,818
Other		448		448
Property and equipment, gross		20,664		19,519
Less: Accumulated depreciation		(11,911)		(10,073)
Property and equipment, net	$	8,753	$	9,446

Depreciation expense was $0.9 million for each of the three months ended June 30, 2021 and 2020. Depreciation expense for the six months ended June 30, 2021 and 2020 was $1.8 million and $1.9 million, respectively.

The Company’s long-lived assets are composed of property and equipment, net and operating lease right-of-use assets, and are summarized by geographic area as follows:

	June 30,		December 31,
	2021		2020
	(in thousands)
United States	$	16,642	$	18,367
United Kingdom		2,319		2,410
International		3,877		4,288
Total long-lived assets	$	22,838	$	25,065

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Business Combinations

6 Months Ended

Jun. 30, 2021

Business Combinations

Business Combinations

7.   Business Combinations

SecuredTouch, Inc. Acquisition

On June 20, 2021 the Company acquired 100% of the voting equity interest in SecuredTouch, Inc. (“SecuredTouch”). SecuredTouch is a leader in fraud and bot detection and mitigation, which leverages behavioral biometrics, artificial intelligence, machine learning, and deep learning to provide identity, risk, and fraud teams early visibility into potential malicious activity happening across digital properties. The purpose of this acquisition was to accelerate the Company’s cloud-delivered intelligent-identity solutions that combat malicious behavior such as bots, emulators, and account takeover.

The total purchase price was $39.9 million, net of cash acquired. 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:

	June 20, 2021		Useful Life
	(in thousands)
Fair value of net assets acquired
Developed technology	$	8,300	4 years
Goodwill		32,257	Indefinite
Other assets		167
Total assets acquired		40,724
Deferred revenue		(337)
Other liabilities		(512)
Total liabilities assumed		(849)
Net assets acquired, excluding cash	$	39,875

Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating SecuredTouch into the Ping Intelligent Identity Platform to provide customers a more comprehensive offering that extends past traditional workforce use case and accelerates Ping’s cloud-delivered intelligent identity solutions that combat malicious behavior. None of the goodwill is deductible for tax purposes. The Company incurred $0.4 million of acquisition-related expenses, which are included in general and administrative expenses on the condensed consolidated statement of operations for the three and six months ended June 30, 2021.

Additional information relating to the SecuredTouch 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.

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, 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 relating to 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.

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 $0.1 million and $0.6 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 and six months ended June 30, 2020, respectively.

Additional Acquisition Related Information

The operating results of SecuredTouch, Symphonic and ShoCard are included in the Company’s condensed consolidated statements of operations from their respective dates of acquisition. Revenue and earnings of SecuredTouch, 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.

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets

Goodwill and Intangible Assets

8.       Goodwill and Intangible Assets

The changes in the carrying amount of the Company’s goodwill balance from December 31, 2020 to June 30, 2021 were as follows (in thousands):

Beginning balance	$	441,150
Additions to goodwill related to SecuredTouch acquisition		32,257
Foreign currency translation adjustment		290
Ending balance	$	473,697

The Company’s intangible assets as of June 30, 2021 were as follows:

	June 30, 2021
	Gross		Accumulated		Net Carrying
	Amount		Amortization		Value
	(in thousands)
Developed technology	$	127,844	$	(63,248)	$	64,596
Customer relationships		95,138		(37,527)		57,611
Trade names		56,734		(28,260)		28,474
Product backlog		650		(168)		482
Capitalized internal-use software		44,932		(17,392)		27,540
Other intangible assets		1,347		(726)		621
Total intangible assets	$	326,645	$	(147,321)	$	179,324

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

	December 31, 2020
	Gross		Accumulated		Net Carrying
	Amount		Amortization		Value
	(in thousands)
Developed technology	$	119,450	$	(55,826)	$	63,624
Customer relationships		95,135		(33,724)		61,411
Trade names		56,718		(25,424)		31,294
Product backlog		642		(42)		600
Capitalized internal-use software		35,841		(12,949)		22,892
Other intangible assets		1,199		(598)		601
Total intangible assets	$	308,985	$	(128,563)	$	180,422

The Company capitalized $4.9 million and $3.8 million of internal-use software costs during the three months ended June 30, 2021 and 2020, respectively, which included $0.3 million and $0.4 million of stock-based compensation costs, respectively. The Company capitalized $9.1 million and $7.1 million of internal-use software costs during the six months ended June 30, 2021 and 2020, respectively, which included $0.5 million and $0.4 million of stock-based compensation costs, respectively.

Amortization expense for the three months ended June 30, 2021 and 2020 was $9.5 million and $8.3 million, respectively. Amortization expense for the six months ended June 30, 2021 and 2020 was $18.8 million and $16.2 million, respectively.

As of June 30, 2021, expected amortization expense for intangible assets subject to amortization for the next five years is as follows:

Year Ending December 31,	June 30, 2021
	(in thousands)
2021 (remaining six months)	$	20,212
2022		38,971
2023		36,425
2024		32,906
2025		22,301
Thereafter		28,509
Total	$	179,324

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Debt

6 Months Ended

Jun. 30, 2021

Debt

Debt

9.       Debt

In December 2019, Roaring Fork Intermediate, LLC and Ping Identity Corporation, each a wholly-owned subsidiary of Ping Identity Holding Corp., and certain of their subsidiaries, entered into a credit agreement (the “Credit Agreement”) with the financial institutions identified therein as lenders, including Bank of America, N.A., as administrative agent, and BofA Securities, Inc. and RBC Capital Markets as joint lead arrangers. The Credit Agreement provides for a senior revolving line of credit in a principal committed amount of $150.0 million (the “Revolving Credit Facility”), with the option to request term loan facilities in a minimum amount of $10 million for each facility if certain conditions are met. The Company’s obligations under the Credit Agreement are secured by substantially all of the assets of the Company, and borrowings under the Revolving Credit Facility may be used for working capital and other general corporate purposes, including for acquisitions permitted under the Credit Agreement.

The Credit Agreement contains certain customary events of default and customary representations and warranties and affirmative and negative covenants, including certain restrictions on the ability of the Company to incur additional indebtedness or guarantee indebtedness of others, to create liens on properties or assets, and to enter into certain asset and stock-based transactions. In addition, under the terms of the Credit Agreement, the Company must adhere to certain financial covenants, including (i) a senior secured net leverage ratio, which shall not be more than 3.50 to 1.00, provided that the maximum ratio shall be increased to 4.00 to 1.00 during a fiscal year in which a Material Acquisition (as defined in the Credit Agreement) has been consummated, and (ii) a consolidated interest coverage ratio, which shall not be less than 3.50 to 1.00. As of June 30, 2021, the Company was in compliance with all financial covenants.

The wholly owned indirect subsidiary, Ping Identity Corporation, as borrower under the Credit Agreement, is limited in its ability to declare dividends or make any payment on account of its capital stock to, directly or indirectly, fund a dividend or other distribution to Ping Identity Holding Corp. (as the Parent), subject to limited exceptions, including (1) stock repurchases from current or former employees, officers or directors in an amount not to exceed $5 million, (2) unlimited amounts subject to compliance with its financial covenants for the most recently ended four quarters as well as a 6.00 to 1.00 total net leverage ratio for the most recently ended four quarters, both after giving pro forma effect to any distribution, (3) amounts up to the greater of $19.5 million in the aggregate or 15% of EBITDA for the most recently ended four quarters and (4) payment of certain of the Parent's overhead expenses.

The Revolving Credit Facility matures on December 12, 2024 and bears interest at the option of the Company at a rate per annum equal to either (i) a base rate, which is equal to the greater of (a) the prime rate, (b) the federal funds effective rate plus 0.5% and (c) the adjusted LIBO rate for a one month interest period plus 1%, or (ii) the adjusted LIBO rate equal to the LIBO rate for the interest period multiplied by the statutory reserve rate, plus in the case of each of clauses (i) and (ii), the Applicable Rate (as defined in the Credit Agreement), which ranges from (i) 0.25% to 1.0% per annum for base rate loans and (ii) 1.25% to 2.0% per annum for LIBO rate loans, in each case, depending on the senior secured net leverage ratio. The interest rate as of June 30, 2021 was 1.34%. The Company will also pay a commitment fee during the term of the Credit Agreement ranging from 0.20% to 0.35% of the average daily amount of the available amount to be borrowed under the Credit Agreement per annum, based on the senior secured net leverage ratio.

Any borrowing under the Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs, and any amounts repaid may be re-borrowed. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed the aggregate commitment of all lenders.

The Company recognized $0.3 million and $0.7 million in interest expense for the three months ended June 30, 2021 and 2020, respectively. For the six months ended June 30, 2021 and 2020, the Company recognized $0.6 million and $1.1 million in interest expense, respectively.

As of June 30, 2021 and December 31, 2020, the Company’s outstanding long-term debt balance representing borrowings under the Credit Agreement was $119.1 million and $149.0 million, respectively (net of debt issuance costs of $0.9 million and $1.0 million, respectively). Debt issuance costs are a direct deduction from the long-term debt liability and are amortized into interest expense over the contractual term of the borrowings using the effective interest method. During each of the three and six months ended June 30, 2021 and 2020, the Company amortized $0.1 million of debt issuance costs.

Future principal payments on outstanding borrowings as of June 30, 2021 are as follows:

Year Ending December 31,	June 30, 2021
	(in thousands)
2021 (remaining six months)	$	—
2022		—
2023		—
2024		120,000
2025		—
Thereafter		—
Total	$	120,000

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Income Taxes

6 Months Ended

Jun. 30, 2021

Income Taxes

Income Taxes

10.   Income Taxes

For the three months ended June 30, 2021 and 2020, the Company recorded $4.0 million and $2.9 million as its benefit for income taxes, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded $7.3 million and $4.9 million as its benefit for income taxes, respectively. The Company’s calculation of its benefit for income taxes is dependent in part on forecasts of full-year results and key components of the Company’s benefit for income taxes primarily consist of state and federal income taxes, foreign income taxes and research and development (“R&D”) credits. The Company’s quarterly tax benefit calculation is also subject to variation due to several factors, including variability in loss before income taxes, the mix of jurisdictions to which such loss relates, changes in how the Company conducts business and tax law developments. The increase in the tax benefit for the three and six months ended June 30, 2021 as compared to the three and six months ended June 30, 2020 primarily relates to a larger expected pre-tax loss in 2021 as compared to 2020, the release of a foreign valuation allowance, and an increase in R&D and other credits recorded in the three and six months ended June 30, 2021. The increase in tax benefit for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 was partially offset by a valuation allowance recorded against our U.S. deferred tax assets during the first quarter of 2021.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2021

Stockholders' Equity

Stockholders' Equity

11.       Stockholders’ Equity

Common stock

The Company’s Third Amended and Restated Certificate of Incorporation, which the Board of Directors approved on September 18, 2019 and the stockholders approved on September 23, 2019, authorizes issuance of up to 500,000,000 shares of common stock with a par value of $0.001 per share. The common stock confers upon its holders the right to vote on all matters to be voted on by the stockholders of the Company (with each share representing one vote) and to ratably participate in any distribution of dividends or payments in the event of liquidation or dissolution on a per share basis. The rights of the holders of common stock are subject to, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in the future.

Preferred stock

The Company’s Third Amended and Restated Certificate of Incorporation authorizes, without stockholder approval but subject to any limitations prescribed by law, the issuance of up to an aggregate of 50,000,000 shares of preferred stock (in one or more series or classes), to create additional series or classes of preferred stock and to establish the number of shares to be included in such series or class. The Board of Directors is also authorized to increase or decrease the number of shares of any series or class subsequent to the issuance of shares of that series or class. Each series will have such rights, preferences and limitations, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences as determined by the Board of Directors. As of June 30, 2021 and December 31, 2020, the Company did not have any shares of preferred stock outstanding and currently has no plans to issue shares of preferred stock.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2021

Stock-Based Compensation

Stock-Based Compensation

12.   Stock-Based Compensation

On June 30, 2016, the Company established the 2016 Stock Option Plan (the ‘‘2016 Plan’’). The 2016 Plan provides for grants of restricted stock units and stock options to executives, directors, consultants, advisors and key employees which allow option holders to hold or purchase stock in Ping Identity Holding Corp. The Company has 6,800,000 shares of common stock reserved for issuance under the 2016 Plan. Following the Company’s initial public offering (“IPO”), no additional awards are granted under the 2016 Plan.

On September 23, 2019, the Company adopted the Ping Identity Holding Corp. Omnibus Incentive Plan (the “2019 Omnibus Incentive Plan”). The 2019 Omnibus Incentive Plan provides for grants of (i) stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) performance awards, (v) other share-based awards and (vi) other cash-based awards to eligible employees, non-employee directors and consultants of the Company. At June 30, 2021, the maximum number of shares of common stock available for issuance under the 2019 Omnibus Incentive Plan was 14,131,549 shares.

Stock-based compensation expense for all equity arrangements for the three and six months ended June 30, 2021 and 2020 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Subscription cost of revenue	$	513	$	174	$	1,048	$	320
Professional services and other cost of revenue		429		99		1,020		183
Sales and marketing		4,843		1,243		9,041		2,040
Research and development		4,647		1,298		13,159		2,186
General and administrative		7,044		1,731		10,147		2,673
Total	$	17,476	$	4,545	$	34,415	$	7,402

Stock-based compensation expense recorded to research and development in the condensed consolidated statements of operations excludes amounts that were capitalized in relation to internal-use software. Refer to Note 8 for additional details.

Long-Term Incentive Plan

In conjunction with the Company’s IPO, the Company amended its long-term incentive plan (“LTIP”) which provided for cash compensation to certain employees upon vesting of the related awards, and thus, these awards were liability-classified. Grants under the plan were expected to vest following both (i) the IPO and registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista Equity Partner’s (“Vista”) realized cash return on its investment in the Company equaling or exceeding $1.491

billion. In the first quarter of 2021, the Company offered employees with LTIP grants the opportunity to convert those awards into restricted stock units (“RSUs”) under the 2019 Omnibus Incentive Plan. Upon conversion, approximately half of the RSUs would solely be subject to time-based restrictions and would vest on April 1, 2021 and the remainder would be subject to performance and market conditions consistent with those of the LTIP grants outlined above. All employees elected to convert their outstanding LTIP grants to RSUs, resulting in grants totaling 948,250 shares.

The conversion of the previously outstanding LTIP grants into time-based vesting RSUs resulted in the recognition of $0.4 million and $12.8 million of stock-based compensation expense during the three and six months ended June 30, 2021, respectively. Expense recognized related to the RSUs subject to performance and market conditions is discussed in more detail below.

Other Liability-Classified Awards

In conjunction with the Symphonic acquisition (Note 7), the Company issued liability-classified awards to certain individuals with a stated value of $0.4 million and $0.6 million that vest on December 31, 2021 and December 31, 2022, respectively, and are subject to continuous service and other performance conditions. The liability-classified awards will be settled with a variable number of shares of the Company’s common stock at each vesting date based on the satisfaction of such conditions. 

Additionally, in conjunction with the ShoCard acquisition (Note 7), the Company issued liability-classified awards to certain individuals with a stated value of $3.1 million and $2.3 million that vest on the first and second anniversary of the acquisition, respectively, and are subject to continuous service and other conditions. The liability-classified awards will be settled with a variable number of shares of the Company’s common stock at each anniversary date based on the satisfaction of such conditions. On March 2, 2021, the Company settled the first $3.1 million of these liability-classified awards, resulting in the issuance of 123,192 shares. Upon issuance, the associated $3.1 million liability was reclassified from accrued compensation to common stock and additional paid-in capital on the condensed consolidated balance sheets.

During the three months ended June 30, 2021 and 2020, the Company recognized $0.7 million and $0.8 million of stock-based compensation expense, respectively, related to these awards. During the six months ended June 30, 2021, the Company recognized $1.5 million and $1.0 million of stock-based compensation expense, respectively, related to these awards.

Restricted Stock Units

The Company grants RSUs that generally vest over one to four years. Additionally, the Company granted time-based vesting RSUs converted from the previously outstanding cash-based LTIP grants and those issued in connection with the ShoCard acquisition. The weighted-average grant-date fair value of RSUs granted during the three months ended June 30, 2021 and 2020, was $22.24 and $20.50, respectively. The weighted-average grant-date fair value of RSUs granted during the six months ended June 30, 2021 and 2020 was $23.45 and $20.63, respectively. The total intrinsic value of RSUs that vested during the three months ended June 30, 2021 and 2020 was $18.5 million and $0.2 million, respectively. The total intrinsic value of RSUs that vested during the six months ended June 30, 2021 and 2020 was $22.0 million and $0.6 million, respectively. As of June 30, 2021, there was $65.0 million of total unamortized compensation, which will be recognized over the remaining weighted-average vesting period of 3.3 years

using the straight-line method. A summary of the status of the Company’s unvested RSUs and activity for the six months ended June 30, 2021 is as follows:

		Weighted
		Average
		Grant Date
	Shares	Fair Value
Unvested as of December 31, 2020	2,504,148	$	19.84
Granted	1,715,867		22.46
Converted from LTIP grant	474,095		27.06
Forfeited/canceled	(186,423)		19.46
Vested	(974,599)		24.49
Unvested as of June 30, 2021	3,533,088	$	20.81

Performance Stock Units

As previously discussed, during the six months ended June 30, 2021, the Company granted 948,250 restricted stock units in connection with the conversion of previously outstanding LTIP grants, with 474,155 of these restricted stock units subject to performance and market conditions (“PSUs”). These PSUs are expected to vest following both (i) registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista’s realized cash return on its investment in the Company equaling or exceeding $1.491 billion. These awards were valued at the date of grant at $19.94 per share using a Monte Carlo simulation. In the second quarter of 2021, these PSUs were determined to be probable of vesting, resulting in the recognition of $4.0 million in stock-based compensation during the three and six months ended June 30, 2021. As of June 30, 2021, there was $5.0 million of total unamortized compensation associated with these awards, which is expected to be recognized over the remaining estimated vesting period of 0.4 years.

Additionally, on April 1, 2021, the Company granted 208,806 PSUs under the 2019 Omnibus Incentive Plan, which will be earned only if the Company meets specific internal performance targets within a two-year period. The number of awards that ultimately vest could be 0% if the minimum hurdle is not achieved, or 50% or 100% of total shares granted, depending on the Company’s achievement of internal performance targets. The grant-date fair value of these PSUs was $21.93. As of June 30, 2021, there was $2.9 million of total unamortized compensation associated with these awards, which is expected to be recognized over the remaining estimated weighted-average vesting period of 0.5 years.

No PSUs vested during the six months ended June 30, 2021.

A summary of the status of the Company’s unvested PSUs and activity for the six months ended June 30, 2021 is as follows:

		Weighted
		Average
		Grant Date
	Shares	Fair Value
Unvested as of December 31, 2020	—	$	—
Granted	682,961		20.55
Forfeited/canceled	(29,983)		20.52
Unvested as of June 30, 2021	652,978	$	20.55

Stock Options

No stock options were granted during the three or six months ended June 30, 2021 or 2020. A summary of the Company’s stock option activity and related information for the six months ended June 30, 2021 is as follows:

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Options	Price		Term	Value
				(in years)	(in thousands)
Outstanding as of December 31, 2020	4,044,616	$	9.49	6.5	$	77,454
Granted	—		—
Forfeited/canceled	(218,420)		8.24
Exercised	(232,833)		9.00			5,170
Outstanding as of June 30, 2021	3,593,363	$	9.60	6.0	$	47,800
As of June 30, 2021:
Vested and expected to vest	3,593,363	$	9.60	6.0	$	47,800
Vested and exercisable	1,680,980	$	8.94	5.7	$	23,473

Time-based options vest over four years with 25% vesting one year after grant and the remainder vesting ratably on a quarterly basis thereafter. Vesting of the time-based options accelerates and the stock options become exercisable following both (i) an IPO and registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista realizing a cash return on its investment in the Company equaling or exceeding $1.491 billion. In the second quarter of 2021, achievement of these conditions was determined to be probable. As of June 30, 2021, total unamortized compensation related to the time-based awards was $1.7 million. This expense will be recognized over the shorter of (i) the remaining explicit service term or (ii) the estimated period over which the performance condition is expected to be satisfied, with a remaining weighted-average vesting period of 0.4 years.

The vesting conditions of the options subject to performance and market conditions provide for the options to vest and become exercisable following both (i) an IPO and registration of shares of common stock of Ping Identity Holding Corp. and (ii) Vista’s realized cash return on its investment in the Company equaling or exceeding $1.491 billion. In the second quarter of 2021, these awards were determined to be probable of vesting, resulting in the recognition of $5.4 million in stock-based compensation expense during the three and six months ended June 30, 2021. The remaining $1.3 million of total unamortized compensation expense is expected to be recognized over the remaining estimated vesting period of approximately 0.4 years.

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Related Party Transactions

6 Months Ended

Jun. 30, 2021

Related Party Transactions

Related Party Transactions

13.     Related Party Transactions

Vista is a U.S.-based investment firm that controlled the funds which previously owned a majority of the Company. During the year ended December 31, 2020, Vista sold a portion of its investment in the Company such that its funds no longer owned a majority of the Company as of December 31, 2020. However, Vista is deemed a related party in accordance with ASC 850 as it continues to be a principal owner of the Company. There were no material transactions with Vista during the three and six months ended June 30, 2021 and 2020.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies

Commitments and Contingencies

14.   Commitments and Contingencies

Letters of Credit

As of June 30, 2021 and December 31, 2020, the Company had outstanding letters of credit under an office lease agreement that totaled $0.8 million, which primarily guaranteed early termination fees in the event of default. The Company collateralizes the letters of credit with restricted cash balances which were classified in other noncurrent assets at June 30, 2021 and December 31, 2020.

Purchase Commitments

In the ordinary course of business, the Company enters into various purchase commitments primarily related to third-party cloud hosting and data services, IT operations and marketing events. Total noncancelable purchase commitments as of June 30, 2021 were approximately $11.0 million for periods through 2025.

Employee Benefit Plans

The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”) in which full-time U.S. employees are eligible to participate on the first day of the subsequent month of his or her date of employment. The 401(k) Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a percentage of their annual compensation as defined in the 401(k) Plan. Employees in the United Kingdom and Canada are covered by defined contribution savings arrangements that are administered based upon the legislative and tax requirements of the respective countries.

The Company made contributions to its employee benefit plans of $1.0 million and $0.8 million during the three months ended June 30, 2021 and 2020, respectively. The Company made contributions to its employee benefit plans of $1.9 million and $1.6 million during the six months ended June 30, 2021 and 2020, respectively.

Litigation

From time to time, the Company may be subject to various claims, charges and litigation. The Company records a liability when it is both probable that a liability will be incurred and the amount of the loss can be reasonably estimated. The Company maintains insurance to cover certain actions and believes that resolution of such claims, charges, or litigation will not have a material impact on the Company’s financial position, results of operations, or liquidity.

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Net Loss Per Share

6 Months Ended

Jun. 30, 2021

Net Loss Per Share

Net Loss Per Share

15.     Net Loss Per Share

The following table provides a reconciliation of the numerator and denominator used in the Company’s calculation of basic and diluted net loss per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands, except per share amounts)
Numerator:
Net loss	$	(10,979)	$	(3,272)	$	(26,913)	$	(7,564)
Denominator:
Weighted-average common stock outstanding - basic and diluted		82,025		80,169		81,684		79,956
Net loss per share:
Basic and diluted	$	(0.13)	$	(0.04)	$	(0.33)	$	(0.09)

The following shares were excluded from the computation of diluted net loss per share for the periods presented, as their effect would have been antidilutive:

	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
	(in thousands)
RSUs	3,533	2,773	3,533	2,773
Stock options	2,074	2,862	2,074	2,862
Other awards	123	168	123	168
Total antidilutive shares	5,730	5,803	5,730	5,803

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Overview and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All amounts are reported in U.S. dollars. Certain amounts for the three and six months ended June 30, 2020 have been reclassified to conform with current period presentation.

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, determining the fair values of assets acquired and liabilities assumed in business combinations, valuing stock 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 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.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Recent Accounting Pronouncements

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.

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Revenue Recognition and Deferred Commissions (Tables)

6 Months Ended

Jun. 30, 2021

Revenue Recognition and Deferred Commissions

Schedule of revenue by category

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Subscription term-based licenses:
Multi-year subscription term-based licenses	$	32,391	$	21,141	$	56,229	$	45,129
1-year subscription term-based licenses		15,464		14,183		32,808		28,332
Total subscription term-based licenses		47,855		35,324		89,037		73,461
Subscription SaaS		13,425		8,890		25,411		17,416
Maintenance and support		11,871		10,054		22,919		20,209
Total subscription revenue		73,151		54,268		137,367		111,086
Professional services and other		5,753		4,713		10,481		9,307
Total revenue	$	78,904	$	58,981	$	147,848	$	120,393

Schedule of revenue by geographic region

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
United States	$	56,934	$	44,626	$	110,805	$	87,655
International		21,970		14,355		37,043		32,738
Total revenue	$	78,904	$	58,981	$	147,848	$	120,393

Schedule of contract assets

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Beginning balance	$	69,681	$	85,150	$	73,791	$	86,010
Ending balance		68,114		84,640		68,114		84,640
Change	$	(1,567)	$	(510)	$	(5,677)	$	(1,370)

Schedule of contract liabilities

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Beginning balance	$	49,352	$	38,343	$	52,398	$	47,507
Ending balance		47,719		39,964		47,719		39,964
Change	$	(1,633)	$	1,621	$	(4,679)	$	(7,543)

Schedule of deferred revenue recognized as revenue

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Deferred revenue recognized as revenue	$	12,101	$	12,247	$	38,036	$	35,215

Schedule of deferred commission

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Beginning balance	$	16,534	$	13,104	$	15,929	$	13,670
Additions to deferred commissions		5,275		1,650		8,209		3,186
Amortization of deferred commissions		(2,345)		(1,659)		(4,674)		(3,761)
Ending balance	$	19,464	$	13,095	$	19,464	$	13,095
Deferred commissions, current	$	7,711	$	5,355	$	7,711	$	5,355
Deferred commissions, noncurrent		11,753		7,740		11,753		7,740
Total deferred commissions	$	19,464	$	13,095	$	19,464	$	13,095

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Allowances for Expected Credit Losses (Tables)

6 Months Ended

Jun. 30, 2021

Allowances for Expected Credit Losses

Allowances for Expected Credit Losses

	Accounts Receivable		Contract Assets		Accounts Receivable		Contract Assets
	Three Months Ended June 30, 2021				Six Months Ended June 30, 2021
	(in thousands)
Beginning balance	$	652	$	80	$	828	$	87
Provision for credit losses, net of recoveries		28		45		7		38
Write-offs		(35)		(37)		(190)		(37)
Ending balance	$	645	$	88	$	645	$	88

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value of Financial Instruments

Schedule of fair value of financial instruments

	June 30, 2021
	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash and cash equivalents:
Money market funds	$	45,001	$	—	$	—	$	45,001

	December 31, 2020
	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash and cash equivalents:
Money market funds	$	113,083	$	—	$	—	$	113,083

Schedule of property, plant and equipment summarized by geographical area

	June 30,		December 31,
	2021		2020
	(in thousands)
United States	$	16,642	$	18,367
United Kingdom		2,319		2,410
International		3,877		4,288
Total long-lived assets	$	22,838	$	25,065

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2021

Property and Equipment

Schedule of property and equipment

	June 30,		December 31,
	2021		2020
	(in thousands)
Computer equipment	$	7,639	$	6,581
Furniture and fixtures		3,893		3,887
Purchased computer software		785		785
Leasehold improvements		7,899		7,818
Other		448		448
Property and equipment, gross		20,664		19,519
Less: Accumulated depreciation		(11,911)		(10,073)
Property and equipment, net	$	8,753	$	9,446

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2021

SecuredTouch, Inc

Business Combinations

Schedule of allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date

	June 20, 2021		Useful Life
	(in thousands)
Fair value of net assets acquired
Developed technology	$	8,300	4 years
Goodwill		32,257	Indefinite
Other assets		167
Total assets acquired		40,724
Deferred revenue		(337)
Other liabilities		(512)
Total liabilities assumed		(849)
Net assets acquired, excluding cash	$	39,875

Symphonic

Business Combinations

Schedule of allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date

	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

ShoCard, Inc

Business Combinations

Schedule of allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date

	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

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets

Summary of changes in the carrying amount of goodwill balance

The changes in the carrying amount of the Company’s goodwill balance from December 31, 2020 to June 30, 2021 were as follows (in thousands):

Beginning balance	$	441,150
Additions to goodwill related to SecuredTouch acquisition		32,257
Foreign currency translation adjustment		290
Ending balance	$	473,697

Summary of intangible assets

The Company’s intangible assets as of June 30, 2021 were as follows:

	June 30, 2021
	Gross		Accumulated		Net Carrying
	Amount		Amortization		Value
	(in thousands)
Developed technology	$	127,844	$	(63,248)	$	64,596
Customer relationships		95,138		(37,527)		57,611
Trade names		56,734		(28,260)		28,474
Product backlog		650		(168)		482
Capitalized internal-use software		44,932		(17,392)		27,540
Other intangible assets		1,347		(726)		621
Total intangible assets	$	326,645	$	(147,321)	$	179,324

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

	December 31, 2020
	Gross		Accumulated		Net Carrying
	Amount		Amortization		Value
	(in thousands)
Developed technology	$	119,450	$	(55,826)	$	63,624
Customer relationships		95,135		(33,724)		61,411
Trade names		56,718		(25,424)		31,294
Product backlog		642		(42)		600
Capitalized internal-use software		35,841		(12,949)		22,892
Other intangible assets		1,199		(598)		601
Total intangible assets	$	308,985	$	(128,563)	$	180,422

Summary of expected amortization expense for intangible assets subject to amortization for the next five years

Year Ending December 31,	June 30, 2021
	(in thousands)
2021 (remaining six months)	$	20,212
2022		38,971
2023		36,425
2024		32,906
2025		22,301
Thereafter		28,509
Total	$	179,324

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Debt (Tables)

6 Months Ended

Jun. 30, 2021

Debt

Summary of future principal payments on outstanding borrowings

Future principal payments on outstanding borrowings as of June 30, 2021 are as follows:

Year Ending December 31,	June 30, 2021
	(in thousands)
2021 (remaining six months)	$	—
2022		—
2023		—
2024		120,000
2025		—
Thereafter		—
Total	$	120,000

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2021

Stock-Based Compensation

Summary of stock-based compensation expense

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Subscription cost of revenue	$	513	$	174	$	1,048	$	320
Professional services and other cost of revenue		429		99		1,020		183
Sales and marketing		4,843		1,243		9,041		2,040
Research and development		4,647		1,298		13,159		2,186
General and administrative		7,044		1,731		10,147		2,673
Total	$	17,476	$	4,545	$	34,415	$	7,402

Summary of the status of the Company's unvested RSUs and activity

		Weighted
		Average
		Grant Date
	Shares	Fair Value
Unvested as of December 31, 2020	2,504,148	$	19.84
Granted	1,715,867		22.46
Converted from LTIP grant	474,095		27.06
Forfeited/canceled	(186,423)		19.46
Vested	(974,599)		24.49
Unvested as of June 30, 2021	3,533,088	$	20.81

Summary of the status of the Company's unvested PSUs and activity

		Weighted
		Average
		Grant Date
	Shares	Fair Value
Unvested as of December 31, 2020	—	$	—
Granted	682,961		20.55
Forfeited/canceled	(29,983)		20.52
Unvested as of June 30, 2021	652,978	$	20.55

Summary of stock option activity and related information

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Options	Price		Term	Value
				(in years)	(in thousands)
Outstanding as of December 31, 2020	4,044,616	$	9.49	6.5	$	77,454
Granted	—		—
Forfeited/canceled	(218,420)		8.24
Exercised	(232,833)		9.00			5,170
Outstanding as of June 30, 2021	3,593,363	$	9.60	6.0	$	47,800
As of June 30, 2021:
Vested and expected to vest	3,593,363	$	9.60	6.0	$	47,800
Vested and exercisable	1,680,980	$	8.94	5.7	$	23,473

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Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Net Loss Per Share

Summary of reconciliation of the numerator and denominator used in the Company's calculation of basic and diluted net loss per share

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands, except per share amounts)
Numerator:
Net loss	$	(10,979)	$	(3,272)	$	(26,913)	$	(7,564)
Denominator:
Weighted-average common stock outstanding - basic and diluted		82,025		80,169		81,684		79,956
Net loss per share:
Basic and diluted	$	(0.13)	$	(0.04)	$	(0.33)	$	(0.09)

Summary of shares excluded from the computation of diluted net loss per share for the periods presented, as their effect would have been antidilutive

	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
	(in thousands)
RSUs	3,533	2,773	3,533	2,773
Stock options	2,074	2,862	2,074	2,862
Other awards	123	168	123	168
Total antidilutive shares	5,730	5,803	5,730	5,803

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Revenue Recognition and Deferred Commissions - Revenue by category (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue
Total revenue	$ 78,904	$ 58,981	$ 147,848	$ 120,393
Subscription term-based licenses
Disaggregation of Revenue
Total revenue	47,855	35,324	89,037	73,461
Multi-year subscription term-based licenses
Disaggregation of Revenue
Total revenue	32,391	21,141	56,229	45,129
1-year subscription term-based licenses
Disaggregation of Revenue
Total revenue	15,464	14,183	32,808	28,332
Subscription revenue
Disaggregation of Revenue
Total revenue	73,151	54,268	137,367	111,086
Subscription SaaS
Disaggregation of Revenue
Total revenue	13,425	8,890	25,411	17,416
Maintenance and support
Disaggregation of Revenue
Total revenue	11,871	10,054	22,919	20,209
Professional services and other
Disaggregation of Revenue
Total revenue	$ 5,753	$ 4,713	$ 10,481	$ 9,307

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Revenue Recognition and Deferred Commissions - Revenue by geographic area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue
Total revenue	$ 78,904	$ 58,981	$ 147,848	$ 120,393
United States
Disaggregation of Revenue
Total revenue	56,934	44,626	110,805	87,655
International
Disaggregation of Revenue
Total revenue	$ 21,970	$ 14,355	$ 37,043	$ 32,738

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Revenue Recognition and Deferred Commissions - Contract assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Contract assets
Beginning balance	$ 69,681	$ 85,150	$ 73,791	$ 86,010
Ending balance	68,114	84,640	68,114	84,640
Change	$ (1,567)	$ (510)	$ (5,677)	$ (1,370)

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Revenue Recognition and Deferred Commissions - Contract liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Contract liabilities
Beginning balance	$ 49,352	$ 38,343	$ 52,398	$ 47,507
Ending balance	47,719	39,964	47,719	39,964
Change	$ (1,633)	$ 1,621	$ (4,679)	$ (7,543)

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Revenue Recognition and Deferred Commissions - Deferred revenue recognized as revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Deferred revenue recognized as revenue
Deferred revenue recognized as revenue	$ 12,101	$ 12,247	$ 38,036	$ 35,215

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Revenue Recognition and Deferred Commissions - Remaining performance obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 $ in Millions	Jun. 30, 2021 USD ($)
Remaining Performance Obligations
Transaction price allocated to remaining performance obligations	$ 185.1
Percentage expected to be recognized as revenue	82.00%
Expected to be recognized as revenue, period	24 months

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Revenue Recognition and Deferred Commissions - Deferred commissions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Summary of Significant Accounting Policies
Beginning balance	$ 16,534	$ 13,104	$ 15,929	$ 13,670
Additions to deferred commissions	5,275	1,650	8,209	3,186
Amortization of deferred commissions	(2,345)	(1,659)	(4,674)	(3,761)
Ending balance	19,464	13,095	19,464	13,095
Deferred commissions, current	7,711	5,355	7,711	5,355	$ 6,604
Deferred commissions, noncurrent	11,753	7,740	11,753	7,740	9,325
Total deferred commissions	$ 19,464	$ 13,095	$ 19,464	$ 13,095	$ 15,929

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Allowances for Expected Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2021
Accounts Receivable
Beginning balance	$ 652	$ 828
Provision for credit losses, net of recoveries	28	7
Write-offs	(35)	(190)
Ending balance	645	645
Contract Assets
Beginning balance	80	87
Provision for credit losses, net of recoveries	45	38
Write-offs	(37)	(37)
Ending balance	$ 88	$ 88

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Fair Value of Financial Instruments (Details) - Recurring - Money market funds - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Fair Value of Financial Instruments
Cash and cash equivalents	$ 45,001	$ 113,083
Level 1
Fair Value of Financial Instruments
Cash and cash equivalents	$ 45,001	$ 113,083

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Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Property and Equipment
Property and equipment, gross	$ 20,664		$ 20,664		$ 19,519
Less: Accumulated depreciation	(11,911)		(11,911)		(10,073)
Property and equipment, net	8,753		8,753		9,446
Depreciation expense	900	$ 900	1,800	$ 1,900
Computer equipment
Property and Equipment
Property and equipment, gross	7,639		7,639		6,581
Furniture and fixtures
Property and Equipment
Property and equipment, gross	3,893		3,893		3,887
Purchased computer software
Property and Equipment
Property and equipment, gross	785		785		785
Leasehold improvements
Property and Equipment
Property and equipment, gross	7,899		7,899		7,818
Other
Property and Equipment
Property and equipment, gross	$ 448		$ 448		$ 448

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Property and Equipment - Summarized by Geographic Area (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Total long-lived assets	$ 22,838	$ 25,065
United States
Property, Plant and Equipment [Line Items]
Total long-lived assets	16,642	18,367
United Kingdom
Property, Plant and Equipment [Line Items]
Total long-lived assets	2,319	2,410
International
Property, Plant and Equipment [Line Items]
Total long-lived assets	$ 3,877	$ 4,288

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Business Combinations (Details) - USD ($) $ in Millions	Jun. 20, 2021	Oct. 31, 2020	Mar. 02, 2020
SecuredTouch, Inc
Business Combinations
Percentage of voting equity interest acquired	100.00%
Total purchase price	$ 39.9
Symphonic
Business Combinations
Percentage of voting equity interest acquired		100.00%
Total purchase price		$ 28.8
Contingent consideration payable in common stock in year one		0.4
Contingent consideration payable in common stock in year two		$ 0.6
ShoCard, Inc
Business Combinations
Percentage of voting equity interest acquired			100.00%
Total purchase price			$ 5.5
Contingent compensation payable on the first anniversary of acquisition			3.1
Contingent compensation payable on the second anniversary of acquisition			$ 2.3

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Business Combinations - Fair value of assets acquired and liabilities (Details) - USD ($) $ in Thousands				3 Months Ended		6 Months Ended
	Jun. 20, 2021	Oct. 31, 2020	Mar. 02, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Fair value of net assets acquired
Goodwill				$ 473,697		$ 473,697		$ 441,150
Developed technology
Fair value of net assets acquired
Useful life		6 years
Product backlog
Fair value of net assets acquired
Useful life		3 years
Customer relationships
Fair value of net assets acquired
Useful life		3 years
SecuredTouch, Inc
Fair value of net assets acquired
Goodwill	$ 32,257
Other assets	167
Total assets acquired	40,724
Deferred revenue	(337)
Deferred tax liability	(512)
Total liabilities assumed	(849)
Net assets acquired	39,875
Goodwill deductible for tax purposes	0
Acquisition related expenses				$ 400		$ 400
SecuredTouch, Inc | Developed technology
Fair value of net assets acquired
Finite-lived intangible assets	$ 8,300
Useful life	4 years
Symphonic
Fair value of net assets acquired
Goodwill		$ 21,341
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		28,821
Goodwill deductible for tax purposes		0
Symphonic | Developed technology
Fair value of net assets acquired
Finite-lived intangible assets		6,999
Symphonic | Product backlog
Fair value of net assets acquired
Finite-lived intangible assets		609
Symphonic | Customer relationships
Fair value of net assets acquired
Finite-lived intangible assets		$ 246
ShoCard, Inc
Fair value of net assets acquired
Goodwill			$ 964
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 deductible for tax purposes			0
ShoCard, Inc | General and administrative
Fair value of net assets acquired
Acquisition related expenses					$ 100		$ 600
ShoCard, Inc | Developed technology
Fair value of net assets acquired
Finite-lived intangible assets			$ 3,550
Useful life			7 years

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Goodwill and Intangible Assets (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($)
Changes in the carrying amount of the Company's goodwill balance
Beginning balance	$ 441,150
Additions to goodwill related to acquisitions	32,257
Foreign currency translation adjustment	290
Ending balance	$ 473,697

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Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Total intangible assets subject to amortization
Gross Amount					$ 308,985
Accumulated Amortization	$ (147,321)		$ (147,321)		(128,563)
Net Carrying Value	179,324		179,324		180,422
Total intangible assets not subject to amortization
Total intangible assets	326,645		326,645
Total intangible assets, net	179,324		179,324		180,422
Amortization expense	9,500	$ 8,300	18,800	$ 16,200
Stock-based compensation expense			34,415	7,402
Developed technology
Total intangible assets subject to amortization
Gross Amount	127,844		127,844		119,450
Accumulated Amortization	(63,248)		(63,248)		(55,826)
Net Carrying Value	64,596		64,596		63,624
Customer relationships
Total intangible assets subject to amortization
Gross Amount	95,138		95,138		95,135
Accumulated Amortization	(37,527)		(37,527)		(33,724)
Net Carrying Value	57,611		57,611		61,411
Trade names
Total intangible assets subject to amortization
Gross Amount	56,734		56,734		56,718
Accumulated Amortization	(28,260)		(28,260)		(25,424)
Net Carrying Value	28,474		28,474		31,294
Product backlog
Total intangible assets subject to amortization
Gross Amount	650		650		642
Accumulated Amortization	(168)		(168)		(42)
Net Carrying Value	482		482		600
Capitalized internal-use software
Total intangible assets subject to amortization
Gross Amount	44,932		44,932		35,841
Accumulated Amortization	(17,392)		(17,392)		(12,949)
Net Carrying Value	27,540		27,540		22,892
Total intangible assets not subject to amortization
Amount capitalized	4,900	3,800	9,100	7,100
Stock-based compensation expense	300	$ 400	500	$ 400
Other intangible assets
Total intangible assets subject to amortization
Gross Amount	1,347		1,347		1,199
Accumulated Amortization	(726)		(726)		(598)
Net Carrying Value	$ 621		$ 621		$ 601

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Goodwill and Intangible Assets - Amortization expense for intangible assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Expected amortization expense for intangible assets subject to amortization
2021 (remaining nine months)	$ 20,212
2022	38,971
2023	36,425
2024	32,906
2025	22,301
Thereafter	28,509
Total	$ 179,324	$ 180,422

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Debt (Details) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 31, 2019 USD ($) item	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Debt
Interest expense		$ 300	$ 700	$ 600	$ 1,100
Long-term debt		119,138		119,138		$ 149,014
Deferred debt issuance costs		900		900		$ 1,000
Amortization of debt issuance costs		$ 100	$ 100	$ 124	$ 124
2019 Credit Agreement
Debt
Principal amount of debt	$ 150,000
Consolidated interest coverage ratio	3.50
Threshold stock repurchases	$ 5,000
Number of quarters | item	4
Threshold unlimited amounts	$ 19,500
Threshold percentage of consolidated EBITDA	15.00%
Total leverage ratio as exceptions	6.00
Interest rate (as a percent)		1.34%		1.34%
2019 Credit Agreement | Minimum
Debt
Principal amount of debt	$ 10,000
Senior secured net leverage ratio	3.50
Commitment fee percentage	0.20%
2019 Credit Agreement | Maximum
Debt
Senior secured net leverage ratio	4.00
Commitment fee percentage	0.35%
2019 Credit Agreement | Federal funds rate
Debt
Variable rate spread (as a percent)	0.50%
2019 Credit Agreement | LIBO rate | Minimum
Debt
Variable rate spread (as a percent)	1.25%
2019 Credit Agreement | LIBO rate | Maximum
Debt
Variable rate spread (as a percent)	2.00%
2019 Credit Agreement | Adjusted one month LIBOR
Debt
Variable rate spread (as a percent)	1.00%
2019 Credit Agreement | Base rate | Minimum
Debt
Variable rate spread (as a percent)	0.25%
2019 Credit Agreement | Base rate | Maximum
Debt
Variable rate spread (as a percent)	1.00%

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Debt - Future principal payments (Details) $ in Thousands	Jun. 30, 2021 USD ($)
Future principal payments on outstanding borrowings
2024	$ 120,000
Total	$ 120,000

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Taxes
Benefit for income taxes	$ 4,047	$ 2,932	$ 7,314	$ 4,876

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Stockholders' Equity - Common stock and Preferred stock (Details)	6 Months Ended
	Jun. 30, 2021 Vote $ / shares shares	Dec. 31, 2020 $ / shares shares
Common stock
Common stock, authorized (in shares)	500,000,000	500,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001
Number of votes per share | Vote	1
Preferred stock
Preferred stock, authorized (in shares)	50,000,000	50,000,000
Preferred stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0

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Stock-Based Compensation - Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2016
Stock-Based Compensation
Stock-based compensation expense	$ 17,476	$ 4,545	$ 34,415	$ 7,402
2016 Plan
Stock-Based Compensation
Common stock reserved for future issuance					6,800,000
2019 Omnibus Incentive Plan
Stock-Based Compensation
Maximum number of shares available for issuance	14,131,549		14,131,549
Subscription cost of revenue
Stock-Based Compensation
Stock-based compensation expense	$ 513	174	$ 1,048	320
Professional services and other cost of revenue
Stock-Based Compensation
Stock-based compensation expense	429	99	1,020	183
Sales and marketing
Stock-Based Compensation
Stock-based compensation expense	4,843	1,243	9,041	2,040
Research and development
Stock-Based Compensation
Stock-based compensation expense	4,647	1,298	13,159	2,186
General and administrative
Stock-Based Compensation
Stock-based compensation expense	$ 7,044	$ 1,731	$ 10,147	$ 2,673

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Stock-Based Compensation - Long-term Incentive plan (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Stock Based Compensation
Stock-based compensation expense	$ 17,476	$ 4,545	$ 34,415	$ 7,402
Long-term incentive plan | IPO
Stock Based Compensation
Sharebased Arrangement Adjustments To Realize Minimum Cash Return On Investment	1,491,000		$ 1,491,000
RSUs
Stock Based Compensation
RSUs granted			1,715,867
RSUs | 2019 Omnibus Incentive Plan
Stock Based Compensation
RSUs granted			948,250
RSUs subject to performance and market conditions
Stock Based Compensation
Stock-based compensation expense from conversion	$ 400		$ 12,800

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Stock-Based Compensation - Other Liability-Classified Awards (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Mar. 02, 2021	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Oct. 31, 2020	Mar. 02, 2020
Stock Based Compensation
Stock-based compensation expense		$ 17,476	$ 4,545	$ 34,415	$ 7,402
ShoCard, Inc
Stock Based Compensation
Contingent compensation payable on the first anniversary of acquisition							$ 3,100
Contingent compensation payable on the second anniversary of acquisition							2,300
ShoCard, Inc | Liability-Classified Awards
Stock Based Compensation
Contingent compensation payable on the first anniversary of acquisition							3,100
Contingent compensation payable on the second anniversary of acquisition							$ 2,300
Liability classified awards settled	$ 3,100
Shares issued	123,192
Stock-based compensation expense		$ 700	$ 800	$ 1,500	$ 1,000
Symphonic
Stock Based Compensation
Contingent consideration payable in common stock in year one						$ 400
Contingent consideration payable in common stock in year two						600
Symphonic | Liability-Classified Awards
Stock Based Compensation
Contingent consideration payable in common stock in year one						400
Contingent consideration payable in common stock in year two						$ 600

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Stock-Based Compensation - Restricted Stock Units (Details) - RSUs - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Stock Based Compensation
Weighted-average grant-date fair value	$ 22.24	$ 20.50	$ 23.45	$ 20.63
Total intrinsic value	$ 18.5	$ 0.2	$ 22.0	$ 0.6
Total unrecognized compensation	$ 65.0		$ 65.0
Unrecognized compensation, recognition period			3 years 3 months 18 days
Shares
Unvested as of December 31, 2020			2,504,148
Granted			1,715,867
Converted from LTIP grant			474,095
Forfeited/canceled			(186,423)
Vested			(974,599)
Unvested as of June 30, 2021	3,533,088		3,533,088
Weighted Average Grant Date Fair Value
Unvested as of December 31, 2020			$ 19.84
Granted			22.46
Converted from LTIP grant			27.06
Forfeited/canceled			19.46
Vested			24.49
Unvested as of June 30, 2021	$ 20.81		$ 20.81
Minimum
Stock Based Compensation
Vesting period			1 year
Maximum
Stock Based Compensation
Vesting period			4 years

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Stock-Based Compensation - Performance Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
	Apr. 01, 2021	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Stock Based Compensation
Stock-based compensation expense		$ 17,476	$ 4,545	$ 34,415	$ 7,402
Long-term incentive plan | IPO
Stock Based Compensation
Sharebased Arrangement Adjustments To Realize Minimum Cash Return On Investment		$ 1,491,000		$ 1,491,000
RSUs
Stock Based Compensation
Granted				1,715,867
Weighted-average grant-date fair value		$ 22.24	$ 20.50	$ 23.45	$ 20.63
Vested				974,599
Total unrecognized compensation		$ 65,000		$ 65,000
Unrecognized compensation, recognition period				3 years 3 months 18 days
Shares
Unvested as of December 31, 2020				2,504,148
Granted				1,715,867
Converted from LTIP grant				474,095
Forfeited/canceled				(186,423)
Unvested as of June 30, 2021		3,533,088		3,533,088
Weighted Average Grant Date Fair Value
Unvested as of December 31, 2020				$ 19.84
Granted		$ 22.24	$ 20.50	23.45	$ 20.63
Granted				22.46
Converted from LTIP grant				27.06
Forfeited/canceled				19.46
Unvested as of June 30, 2021		$ 20.81		$ 20.81
RSUs | 2019 Omnibus Incentive Plan
Stock Based Compensation
Granted				948,250
Shares
Granted				948,250
PSUs
Stock Based Compensation
Granted				682,961
Weighted-average grant-date fair value				$ 20.55
Vested				0
Shares
Granted				682,961
Forfeited/canceled				(29,983)
Unvested as of June 30, 2021		652,978		652,978
Weighted Average Grant Date Fair Value
Granted				$ 20.55
Forfeited/canceled				20.52
Unvested as of June 30, 2021		$ 20.55		$ 20.55
Performance and market conditions PSUs | Long-term incentive plan
Stock Based Compensation
Granted				474,155
Sharebased Arrangement Adjustments To Realize Minimum Cash Return On Investment		$ 1,491,000		$ 1,491,000
Weighted-average grant-date fair value				$ 19.94
Stock-based compensation expense		4,000		$ 4,000
Total unrecognized compensation		5,000		$ 5,000
Unrecognized compensation, recognition period				4 months 24 days
Shares
Granted				474,155
Weighted Average Grant Date Fair Value
Granted				$ 19.94
Time based PSUs | 2019 Omnibus Incentive Plan
Stock Based Compensation
Granted	208,806
Vesting period				2 years
Weighted-average grant-date fair value				$ 21.93
Total unrecognized compensation		$ 2,900		$ 2,900
Unrecognized compensation, recognition period				6 months
Shares
Granted	208,806
Weighted Average Grant Date Fair Value
Granted				$ 21.93
Time based PSUs | 2019 Omnibus Incentive Plan | Tranche one
Stock Based Compensation
Vesting percentage				0.00%
Time based PSUs | 2019 Omnibus Incentive Plan | Tranche Two
Stock Based Compensation
Vesting percentage				50.00%
Time based PSUs | 2019 Omnibus Incentive Plan | Tranche Three
Stock Based Compensation
Vesting percentage				100.00%

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Stock-Based Compensation - Stock Options (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Stock Based Compensation
Stock-based compensation expense	$ 17,476	$ 4,545	$ 34,415	$ 7,402
Stock Options
Stock Based Compensation
Granted	0	0	0	0
Time-based options
Stock Based Compensation
Vesting period			1 year
Vesting percentage			25.00%
Contractual life			4 years
Unamortized stock-based compensation expense	$ 1,700		$ 1,700
Unrecognized compensation, recognition period			4 months 24 days
Time-based options | IPO
Stock Based Compensation
Sharebased Arrangement Adjustments To Realize Minimum Cash Return On Investment	1,491,000		$ 1,491,000
Performance and market conditions options
Stock Based Compensation
Stock-based compensation expense	5,400		5,400
Unamortized stock-based compensation expense	1,300		$ 1,300
Unrecognized compensation, recognition period			4 months 24 days
Performance and market conditions options | IPO
Stock Based Compensation
Sharebased Arrangement Adjustments To Realize Minimum Cash Return On Investment	$ 1,491,000		$ 1,491,000

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Stock-Based Compensation - Company's Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Options
Outstanding as of December 31, 2020			4,044,616
Granted	0	0	0	0
Forfeited/canceled			(218,420)
Exercised			(232,833)
Outstanding as of June 30, 2021	3,593,363		3,593,363		4,044,616
Vested and expected to vest	3,593,363		3,593,363
Vested and exercisable	1,680,980		1,680,980
Weighted Average Exercise Price
Outstanding as of December 31, 2020			$ 9.49
Forfeited/cancelled			8.24
Exercised			9.00
Outstanding as of June 30, 2021	$ 9.60		9.60		$ 9.49
Vested and expected to vest	9.60		9.60
Vested and exercisable	$ 8.94		$ 8.94
Weighted Average Remaining Contractual Term (in years)
Outstanding			6 years		6 years 6 months
Vested and expected to vest			6 years
Vested and exercisable			5 years 8 months 12 days
Aggregate Intrinsic Value
Outstanding as of December 31, 2020 (in dollars)			$ 77,454
Exercised (in dollars)			5,170
Outstanding as of June 30, 2021 (in dollars)	$ 47,800		47,800		$ 77,454
Vested and expected to vest (in dollars)	47,800		47,800
Vested and exercisable (in dollars)	$ 23,473		$ 23,473

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Commitments and Contingencies - Letter of Credit (Details) $ in Millions	Jun. 30, 2021 USD ($)
Letters of Credit
Letters of credit under an office lease agreement which primarily guaranteed early termination fees in the event of default	$ 0.8

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Commitments and Contingencies - Purchase Commitments (Details) $ in Millions	Jun. 30, 2021 USD ($)
Purchase Commitments
Noncancelable purchase commitments	$ 11.0

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Commitments and Contingencies - Employee Benefit Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Employee Benefit Plans
Contributions to employee benefit plan	$ 1.0	$ 0.8	$ 1.9	$ 1.6

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Net Loss Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Numerator
Net loss	$ (10,979)	$ (3,272)	$ (26,913)	$ (7,564)
Denominator
Weighted-average common stock outstanding - basic and diluted	82,025	80,169	81,684	79,956
Net loss per share:
Basic and diluted (in dollars per share)	$ (0.13)	$ (0.04)	$ (0.33)	$ (0.09)

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Net Loss Per Share - Computation of diluted net loss per share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Shares excluded from the computation of diluted net loss per share
Total antidilutive shares	5,730	5,803	5,730	5,803
RSUs
Shares excluded from the computation of diluted net loss per share
Total antidilutive shares	3,533	2,773	3,533	2,773
Stock Options
Shares excluded from the computation of diluted net loss per share
Total antidilutive shares	2,074	2,862	2,074	2,862
Other awards
Shares excluded from the computation of diluted net loss per share
Total antidilutive shares	123	168	123	168