UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________

FORM 10-Q

_____________________________________

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

For the quarterly period ended March 31, 2022

☐ 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

_____________________________________________________________________________________________________________________________________

Logo

Description automatically generated with medium confidence

PING IDENTITY HOLDING CORP.

(Exact Name of Registrant as Specified in Its Charter)

_____________________________________________________________________________________________________________________________________


Delaware	81-2933383
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

1001 17th Street, Suite 100

Denver, Colorado 80202

(Address of Principal executive offices, including zip code)

(303) 468-2900

(Registrant’s telephone number, including area code)

_______________________________________________________________________________________________________________________________________

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


Title of each class:	Trading Symbol(s):	Name of each exchange on which registered:
Common Stock, $0.001 par value per share	PING	New York Stock Exchange

__________________________________________________________________________________________________________________________________________________________________________

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

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

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


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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

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

On April 29, 2022, the Registrant had 85,285,543 shares of common stock, $0.001 par value, outstanding.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(unaudited)


	March 31,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	213,286	$	220,607
Accounts receivable, net of allowances of $526 and $610 at March 31, 2022 and December 31, 2021, respectively		74,265		82,969
Contract assets, current (net of allowance)		61,468		67,540
Deferred commissions, current		10,829		10,460
Prepaid expenses		21,084		16,654
Other current assets		2,055		2,914
Total current assets		382,987		401,144
Noncurrent assets:
Property and equipment, net		8,955		9,396
Goodwill		527,933		528,548
Intangible assets, net		183,289		190,077
Contract assets, noncurrent (net of allowance)		5,565		3,457
Deferred commissions, noncurrent		19,411		19,380
Deferred income taxes, net		3,089		6,201
Operating lease right-of-use assets		12,937		13,709
Other noncurrent assets		8,962		6,121
Total noncurrent assets		770,141		776,889
Total assets	$	1,153,128	$	1,178,033
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	9,665	$	4,528
Accrued expenses and other current liabilities		9,822		10,305
Accrued compensation		16,796		29,258
Deferred revenue, current		70,446		71,957
Operating lease liabilities, current		4,372		4,330
Current portion of long-term debt (net of issuance costs)		1,882		1,132
Total current liabilities		112,983		121,510
Noncurrent liabilities:
Deferred revenue, noncurrent		4,298		5,584
Long-term debt (net of issuance costs)		290,680		291,154
Deferred income taxes, net		777		4,240
Operating lease liabilities, noncurrent		13,077		14,140
Total noncurrent liabilities		308,832		315,118
Total liabilities		421,815		436,628
Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred stock; $0.001 par value; 50,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued or outstanding at March 31, 2022 or December 31, 2021		—		—
Common stock; $0.001 par value; 500,000,000 shares authorized at March 31, 2022 and December 31, 2021; 84,016,147 and 83,754,449 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		84		84
Additional paid-in capital		835,454		824,455
Accumulated other comprehensive income (loss)		(181)		652
Accumulated deficit		(104,044)		(83,786)
Total stockholders' equity		731,313		741,405
Total liabilities and stockholders' equity	$	1,153,128	$	1,178,033

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

PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)


	Three Months Ended March 31,
	2022		2021
Revenue:
Subscription	$	80,200	$	64,216
Professional services and other		4,491		4,728
Total revenue		84,691		68,944
Cost of revenue:
Subscription (exclusive of amortization shown below)		13,388		9,414
Professional services and other (exclusive of amortization shown below)		6,759		5,583
Amortization expense		8,516		5,809
Total cost of revenue		28,663		20,806
Gross profit		56,028		48,138
Operating expenses:
Sales and marketing		30,941		25,549
Research and development		20,467		21,702
General and administrative		16,231		14,455
Depreciation and amortization		4,388		4,365
Total operating expenses		72,027		66,071
Loss from operations		(15,999)		(17,933)
Other expense:
Interest expense		(3,636)		(396)
Other expense, net		(804)		(872)
Total other expense		(4,440)		(1,268)
Loss before income taxes		(20,439)		(19,201)
Benefit for income taxes		181		3,267
Net loss	$	(20,258)	$	(15,934)
Net loss per share:
Basic and diluted	$	(0.24)	$	(0.20)
Weighted-average shares used in computing net loss per share:
Basic and diluted		83,822		81,339

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

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PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(unaudited)

Three Months Ended March 31, 2022:


							Accumulated
					Additional		Other				Total
	Common Stock				Paid-in		Comprehensive		Accumulated		Stockholders'
	Shares		Amount		Capital		Income (Loss)		Deficit		Equity
Balances at December 31, 2021		83,754,449	$	84	$	824,455	$	652	$	(83,786)	$	741,405
Net loss		—		—		—		—		(20,258)		(20,258)
Stock-based compensation		—		—		7,701		—		—		7,701
Reclassification of liability-classified awards upon settlement		—		—		2,541						2,541
Exercise of stock options, net of tax withholding		106,434		—		838		—		—		838
Vesting of restricted stock, net of tax withholding		155,264		—		(81)		—		—		(81)
Foreign currency translation adjustments, net of tax		—		—		—		(833)		—		(833)
Balances at March 31, 2022		84,016,147	$	84	$	835,454	$	(181)	$	(104,044)	$	731,313

Three Months Ended March 31, 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		—		—		—		—		(15,934)		(15,934)
Stock-based compensation		—		—		16,300		—		—		16,300
Reclassification of liability-classified awards upon settlement		—		—		3,089						3,089
Exercise of stock options, net of tax withholding		198,105		—		1,770		—		—		1,770
Vesting of restricted stock, net of tax withholding		113,175		—		(565)		—		—		(565)
Foreign currency translation adjustments, net of tax		—		—		—		250		—		250
Balances at March 31, 2021		81,475,176	$	81	$	759,645	$	1,623	$	(35,329)	$	726,020

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

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PING IDENTITY HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities
Net loss	$	(20,258)	$	(15,934)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		12,904		10,174
Stock-based compensation expense		8,128		16,939
Amortization of deferred commissions		3,316		2,329
Amortization of deferred debt issuance costs		318		62
Operating leases, net		(249)		(142)
Deferred taxes		(286)		(3,546)
Other		96		(10)
Changes in operating assets and liabilities:
Accounts receivable		8,574		16,640
Contract assets		4,006		4,128
Deferred commissions		(3,716)		(2,934)
Prepaid expenses and other current assets		(3,891)		2,466
Other assets		(3,707)		(820)
Accounts payable		5,274		(2,013)
Accrued compensation		(10,583)		(1,865)
Accrued expenses and other		(413)		1,659
Deferred revenue		(2,797)		(3,046)
Net cash provided by (used in) operating activities		(3,284)		24,087
Cash flows from investing activities
Payments for business acquisitions, net of cash acquired		(4)		—
Purchases of property and equipment and other		(809)		(953)
Capitalized software development costs		(4,908)		(3,974)
Net cash used in investing activities		(5,721)		(4,927)
Cash flows from financing activities
Payment of acquisition-related holdbacks		—		(993)
Proceeds from stock option exercises		1,093		1,770
Payment for tax withholding on equity awards		(81)		(565)
Payment of long-term debt		—		(110,000)
Net cash provided by (used in) financing activities		1,012		(109,788)
Effect of exchange rates on cash and cash equivalents and restricted cash		717		(111)
Net decrease in cash and cash equivalents and restricted cash		(7,276)		(90,739)
Cash and cash equivalents and restricted cash
Beginning of period		220,889		146,499
End of period	$	213,613	$	55,760
Supplemental disclosures of cash flow information:
Cash paid for interest	$	3,320	$	339
Cash paid for taxes		554		215
Noncash activities:
Purchases of property and equipment, accrued but not yet paid	$	210	$	42
Reclassification of liability-classified awards upon settlement		2,541		3,089
Lease liabilities arising from right-of-use assets		134		—
Reconciliation of cash and cash equivalents and restricted cash within the consolidated balance sheets to the amounts shown in the statements of cash flows above:
Cash and cash equivalents	$	213,286	$	55,003
Restricted cash included in other noncurrent assets		327		757
Total cash and cash equivalents and restricted cash	$	213,613	$	55,760

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

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

accounting treatment for commitments and contingencies. Management evaluates these estimates and assumptions on an ongoing basis and makes estimates based on historical experience and various other assumptions that are believed to be reasonable. Actual results may differ from these estimates due to risks and uncertainties, including those related to the novel Coronavirus Disease 2019 (“COVID-19”) pandemic.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Note 2 — Summary of Significant Accounting Policies” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes to these policies that have had a material impact on the Company’s condensed consolidated financial statements and related notes for the three months ended March 31, 2022. The following describes the impact of certain policies.

Recent Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU No. 2021-08"). ASU No. 2021-08 will require companies to apply the definition of a performance obligation under ASC Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a business combination. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. ASU No. 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its condensed consolidated financial statements. The impact is dependent on the size and frequency of future acquisitions and does not affect contract assets or contract liabilities related to acquisitions completed in a year prior to the adoption date.

3. Revenue Recognition and Deferred Commissions

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

Disaggregation of Revenue

The following table presents revenue by category:


	Three Months Ended March 31,
	2022		2021

Subscription term-based licenses:
Multi-year subscription term-based licenses	$	32,782	$	23,838
1-year subscription term-based licenses		11,528		17,344
Total subscription term-based licenses		44,310		41,182
Subscription SaaS		20,181		11,986
Maintenance and support		15,709		11,048
Total subscription revenue		80,200		64,216
Professional services and other		4,491		4,728
Total revenue	$	84,691	$	68,944

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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


	Three Months Ended March 31,
	2022		2021

United States	$	65,763	$	53,871
International		18,928		15,073
Total revenue	$	84,691	$	68,944

Other than the United States, no other individual country exceeded 10% of total revenue for the three months ended March 31, 2022 or 2021.

Contract Balances

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


	Three Months Ended March 31,
	2022		2021

Beginning balance	$	70,997	$	73,791
Ending balance		67,033		69,681
Change	$	(3,964)	$	(4,110)

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


	Three Months Ended March 31,
	2022		2021

Beginning balance	$	77,541	$	52,398
Ending balance		74,744		49,352
Change	$	(2,797)	$	(3,046)

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The change in deferred revenue relates primarily to invoicing customers and recognizing revenue in conjunction with the satisfaction of performance obligations. Revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the deferred revenue balances at the beginning of the respective periods was as follows:

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and noncancelable amounts to be invoiced. As of March 31, 2022, the Company had $294.8 million of transaction price allocated to remaining performance obligations, of which 81% is expected to be recognized as revenue over the next 24 months, with the remainder to be recognized thereafter.

Deferred Commissions

The following table summarizes the account activity of deferred commissions for the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
	2022		2021

Beginning balance	$	29,840	$	15,929
Additions to deferred commissions		3,716		2,934
Amortization of deferred commissions		(3,316)		(2,329)
Ending balance	$	30,240	$	16,534

Deferred commissions, current	$	10,829	$	6,819
Deferred commissions, noncurrent		19,411		9,715
Total deferred commissions	$	30,240	$	16,534

4. Allowances for Expected Credit Losses

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


	Accounts Receivable		Contract Assets

	Three Months Ended March 31, 2022
	(in thousands)
Beginning balance	$	610	$	156
Provision for credit losses, net of recoveries		138		(42)
Write-offs		(222)		—
Ending balance	$	526	$	114

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

5. Fair Value of Financial Instruments

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

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


	March 31, 2022
	Level 1		Level 2		Level 3		Total

	(in thousands)
Cash and cash equivalents:
Money market funds	$	166,030	$	—	$	—	$	166,030


	December 31, 2021
	Level 1		Level 2		Level 3		Total

	(in thousands)
Cash and cash equivalents:
Money market funds	$	181,009	$	—	$	—	$	181,009

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

6. Property and Equipment

Property and equipment consisted of the following:


	March 31,		December 31,
	2022		2021

	(in thousands)
Computer equipment	$	8,202	$	8,117
Furniture and fixtures		4,381		4,331
Purchased computer software		785		785
Leasehold improvements		8,870		8,670
Other		448		448
Property and equipment, gross		22,686		22,351
Less: Accumulated depreciation		(13,731)		(12,955)
Property and equipment, net	$	8,955	$	9,396

Depreciation expense was $0.9 million for the three months ended March 31, 2022 and March 31, 2021.

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

7. Business Combinations

Singular Key, Inc. Acquisition

On September 27, 2021, the Company acquired 100% of the voting equity interest in Singular Key, Inc. (“Singular Key”). Singular Key is a provider of no-code identity and security orchestration. Singular Key streamlines the integration of identity services, providing a no-code method of creating workflows across multiple identity platforms, including identity verification, fraud, risk, access management, privileged access and identity governance into a unified identity fabric. The purpose of this acquisition was to accelerate the Company’s entry into the identity orchestration arena.

The total purchase price was $73.2 million, net of cash acquired, which consisted of the following:


	Fair Value
	(in thousands)
Cash, net of cash acquired	$	40,314
Common stock issued		32,871
Total	$	73,185

The fair value of the 1,260,885 common shares issued as consideration was determined based on the lowest trading price of a Ping Identity common share on the New York Stock Exchange on the acquisition date of September 27, 2021.

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


	September 27, 2021		Useful Life
	(in thousands)
Fair value of net assets acquired
Developed technology	$	21,480	4 years
Goodwill		56,864	Indefinite
Other assets		75
Total assets acquired		78,419
Other liabilities		(39)
Deferred tax liability		(5,195)
Total liabilities assumed		(5,234)
Net assets acquired	$	73,185

Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating Singular Key into the PingOne Cloud Platform. The integration of Singular Key capabilities is expected to enable customers to improve deployment speed, accelerate cloud migration, reduce costs and lower the risk associated with vendor lock-in. None of the goodwill is deductible for tax purposes.

SecuredTouch, Inc. Acquisition

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

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The total purchase price was $39.7 million, net of cash acquired and a $0.2 million post-closing purchase price adjustment. The purchase price required to be paid by Ping Identity was reduced by $0.2 million as a result of changes to SecuredTouch’s originally estimated working capital balances.

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


	June 20, 2021		Useful Life
	(in thousands)
Fair value of net assets acquired
Developed technology	$	8,300	4 years
Goodwill		30,804	Indefinite
Deferred tax asset		1,216
Other assets		157
Total assets acquired		40,477
Deferred revenue		(337)
Other liabilities		(483)
Total liabilities assumed		(820)
Net assets acquired	$	39,657

Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating SecuredTouch into the Ping Intelligent Identity Platform to provide customers a more comprehensive offering that extends past traditional workforce use case and accelerates Ping’s cloud-delivered intelligent identity solutions that combat malicious behavior. None of the goodwill is deductible for tax purposes.

Additional Acquisition Related Information

The operating results of Singular Key and SecuredTouch are included in the Company’s condensed consolidated statements of operations from their respective dates of acquisition.

8. Goodwill and Intangible Assets

The changes in the carrying amount of the Company’s goodwill balance from December 31, 2021 to March 31, 2022 were as follows (in thousands):


Beginning balance	$	528,548
Foreign currency translation adjustment		(615)
Ending balance	$	527,933

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company’s intangible assets as of March 31, 2022 were as follows:


	March 31, 2022
	Gross		Accumulated		Net Carrying
	Amount		Amortization		Value

	(in thousands)
Developed technology	$	145,939	$	(75,102)	$	70,837
Customer relationships		95,124		(43,223)		51,901
Trade names		56,793		(32,512)		24,281
Product backlog		617		(338)		279
Capitalized internal-use software		54,836		(19,624)		35,212
Other intangible assets		1,535		(756)		779
Total intangible assets	$	354,844	$	(171,555)	$	183,289

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


	December 31, 2021
	Gross		Accumulated		Net Carrying
	Amount		Amortization		Value

	(in thousands)
Developed technology	$	146,142	$	(69,802)	$	76,340
Customer relationships		95,131		(41,326)		53,805
Trade names		56,778		(31,093)		25,685
Product backlog		634		(287)		347
Capitalized internal-use software		50,934		(17,760)		33,174
Other intangible assets		1,481		(755)		726
Total intangible assets	$	351,100	$	(161,023)	$	190,077

The Company capitalized $5.2 million and $4.2 million of internal-use software costs during the three months ended March 31, 2022 and 2021, respectively, which included $0.3 million and $0.2 million of stock-based compensation costs, respectively.

Amortization expense for the three months ended March 31, 2022 and 2021 was $12.0 million and $9.3 million, respectively.

As of March 31, 2022, expected amortization expense for intangible assets subject to amortization for the next five years is as follows:


Year Ending December 31,	March 31, 2022
	(in thousands)
2022 (remaining nine months)	$	36,129
2023		45,885
2024		42,376
2025		30,020
2026		11,601
Thereafter		17,278
Total	$	183,289

9. Debt

2019 Credit Agreement

In December 2019, Roaring Fork Intermediate, LLC and Ping Identity Corporation, each a wholly-owned subsidiary of Ping Identity Holding Corp, and certain of their subsidiaries (together, the “Credit Parties”)

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PING IDENTITY HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

entered into a credit agreement (the “2019 Credit Agreement”) with the financial institutions identified therein as lenders, including Bank of America, N.A., as administrative agent, and BofA Securities, Inc. and RBC Capital Markets as joint lead arrangers. Borrower and Holdings are wholly-owned indirect subsidiaries of the Company. The 2019 Credit Agreement provided for a senior revolving line of credit in a principal committed amount of $150.0 million (the “2019 Revolving Credit Facility”), with the option to request incremental term loan facilities in a minimum amount of $10 million for each facility if certain conditions are met. The 2019 Revolving Credit Facility had a maturity date of December 12, 2024. Obligations under the 2019 Credit Agreement were secured by substantially all of the assets of the Credit Parties.

The 2019 Revolving Credit Facility bore interest at the option of the Borrower at a rate per annum equal to either (i) a base rate, which is equal to the greater of (a) the prime rate, (b) the federal funds effective rate plus 0.5% and (c) the adjusted LIBO rate for a one month interest period plus 1%, or (ii) the adjusted LIBO rate equal to the LIBO rate for the interest period multiplied by the statutory reserve rate, plus in the case of each of clauses (i) and (ii), the Applicable Rate (as defined in the 2019 Credit Agreement), which ranges from (i) 0.25% to 1.0% per annum for base rate loans and (ii) 1.25% to 2.0% per annum for LIBO rate loans, in each case, depending on the senior secured net leverage ratio. The Borrower also paid a commitment fee during the term of the 2019 Credit Agreement ranging from 0.20% to 0.35% of the average daily amount of the available amount to be borrowed under the 2019 Credit Agreement per annum, based on the senior secured net leverage ratio.

2021 Credit Agreement

On November 23, 2021 (the “Closing Date”), the Credit Parties entered into a credit agreement (the “2021 Credit Agreement”) with the financial institutions party thereto as lenders and Bank of America, N.A., as administrative agent. Borrower and Holdings are wholly-owned indirect subsidiaries of the Company. The 2021 Credit Agreement provides for (a) a new term loan B facility with an aggregate principal amount of $300 million (the “2021 Term Loan Facility” and the loans thereunder, the “2021 Term Loans”) and (b) a new revolving line of credit facility in an aggregate principal amount of $150 million (the “2021 Revolving Facility” and together with the 2021 Term Loan Facility, the “2021 Credit Facilities”). Proceeds from the 2021 Term Loan Facility were used to repay in full paid all remaining balances under the 2019 Revolving Credit Facility. The 2021 Revolving Facility was undrawn at the Closing Date. Following the repayment of the 2019 Revolving Credit Facility, any remaining and future proceeds from the 2021 Credit Facilities will be used for working capital purposes and general corporate purposes. The 2021 Credit Facilities are secured by substantially all of the assets of the Credit Parties.

The 2021 Term Loans mature on November 23, 2028. Amortization payments on the 2021 Term Loans are equal to 0.25% of the initial aggregate principal amount of the 2021 Term Loans, payable at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2022. The 2021 Term Loans bear interest at Term SOFR (as defined in the 2021 Credit Agreement and subject to a floor of 0.50%), plus the applicable SOFR Adjustment (as defined in the 2021 Credit Agreement), plus an applicable margin of 3.75%, or a base rate plus an applicable margin of 2.75%. The interest rate on the 2021 Term Loans was 4.25% as of March 31, 2022.

The 2021 Revolving Facility matures on November 23, 2026. Amounts drawn under the 2021 Revolving Facility denominated in U.S. dollars will bear interest at Term SOFR, subject to a floor of 0.00%, plus the applicable SOFR Adjustment, plus an applicable margin ranging from 1.25% to 2.00%, depending on the senior secured net leverage ratio (as calculated pursuant to the 2021 Credit Agreement) or (ii) a base rate plus an applicable margin ranging from 0.25% to 1.00%, depending on the senior secured net leverage ratio. Amounts drawn under the 2021 Revolving Facility denominated in available non-U.S. dollar currencies will bear interest at the applicable rate for such non-U.S. dollar currencies plus the applicable rate adjustment (if any) plus an applicable margin ranging from 1.25% to 2.00%, depending


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PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	3

	Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	3

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021	4

	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2022 and 2021	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021	6

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	7

	Notes to Condensed Consolidated Financial Statements	8

Forward-Looking Statements		25

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	43

Item 4.	Controls and Procedures	44

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	45

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	45

	Signatures	47

Three Months Ended
March 31,

Deferred revenue recognized as revenue