Ping Identity

Prospectus Summary

PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before investing in our common stock. For a more complete understanding of us and this offering, you should read and carefully consider the entire prospectus, including the more detailed information set forth under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes. Some of the statements in this prospectus are forward-looking statements. See "Forward-Looking Statements".

Unless the context otherwise requires, the terms "Ping", the "Company", "our company", "we", "us" and "our" in this prospectus refer to Ping Identity Holding Corp. and, where appropriate, its consolidated subsidiaries. The term "Vista" or "our Sponsor" refers to Vista Equity Partners, our equity sponsor, and the term "Vista Funds" refers to Vista Equity Partners Fund VI, L.P., Vista Equity Partners Fund VI-A, L.P. and VEPF VI FAF, L.P.

Our Mission

Our mission is to secure the digital world through Intelligent Identity.

Overview

Ping is pioneering Intelligent Identity. We enable secure access to any service, application or API from any device. Our Intelligent Identity Platform can leverage artificial intelligence and machine learning 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. Our platform can be deployed across cloud, hybrid and on-premise infrastructures, 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. As of June 30, 2019, our platform secures over two billion identities globally across our customer base.

Enterprises are undergoing digital transformation as they seek to create new revenue streams, transition business models and increase customer engagement. Concurrently, enterprises are becoming more distributed as the adoption of cloud, mobile and the Internet of Things, or IoT, moves data, applications and access requirements beyond the traditional network perimeter. These enterprises must contend with an evolving cyber-threat landscape, new privacy directives and stringent regulatory requirements. As a result, enterprises require Intelligent Identity solutions that proactively ensure the right user has authorized access to resources at the appropriate time.

Our Intelligent Identity Platform can secure all primary use cases, including customer, employee, partner and 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. For the year ended December 31, 2018, 44% of our subscription revenue was derived from the customer use case. 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 application programming interfaces, or APIs, they need to be productive. Enterprises are increasingly using our platform to manage and authenticate IoT devices, such as connected vehicles and consumer devices.

Our Intelligent Identity Platform is comprised of six solutions that can be purchased individually or as a set of integrated offerings for the customer, employee, partner or IoT use case:

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secure single sign-on, or SSO;

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adaptive multi-factor authentication, or MFA;


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security control for applications and APIs, or Access Security;


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personalized and unified profile directories, or Directory;


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data governance to control access to identity data, or Data Governance; and


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artificial intelligence and machine learning powered API security, or API Intelligence.

We have spent over a decade building a comprehensive suite of turnkey integrations designed to ensure that enterprises can use our platform to secure their applications wall-to-wall, facilitating easier deployment and rapid time-to-value.

We sell our solutions via a subscription model through a direct sales force, with increasing influence from our channel partners. Our SSO, Access Security and Directory solutions typically replace legacy and homegrown systems. We also have significant greenfield opportunities with our MFA, Data Governance and API Intelligence solutions and, increasingly, the IoT use case.

Our "land and expand" strategy targets enterprises with a specific solution and use case and then seeks to grow our footprint with additional solutions, use cases and identities. The success of our strategy is validated by our strong dollar-based net retention rates and our growing number of large customers. Our dollar-based net retention rates were 123%, 116% and 115% at December 31, 2017 and 2018 and June 30, 2019, respectively, and our dollar-based net retention rates have exceeded 115% for each of the past eight fiscal quarters. Our customers with annual recurring revenue, or ARR, over $250,000 increased from 144 at December 31, 2017 to 202 at December 31, 2018, representing a growth rate of 40%. Our total customers increased from 1,264 at December 31, 2017 to 1,284 at December 31, 2018. The gross increase in total customers for the 2018 fiscal year was partially offset by customer churn, primarily consisting of low contract value churn of customers with ARR below $25,000. The increase of 58 net customers with ARR greater than $250,000 for the 2018 fiscal year is comprised of 16 new customers and 42 existing customers that had ARR grow to exceed $250,000 in 2018. Additionally, at December 31, 2018, we had 25 customers with greater than $1,000,000 in ARR. An increasing number of our customers are deploying a combination of our solutions across multiple business units, functions and use cases in their initial purchase. For definitions of ARR and dollar-based net retention rate and descriptions of how we calculate these metrics, see "Management's Discussion and Analysis of Financial Condition and Results of Operations".

Our customers include many of the world's largest enterprises, including over 50% of the Fortune 100. These customers are security-focused, and typically operate in regulated industries, have hybrid IT infrastructures, require turnkey integrations and have demanding scalability requirements. Our solutions secure 12 of the 12 largest U.S. banks (measured by assets), 8 of the 10 largest bio-pharmaceutical companies (measured by revenue), 4 of the 5 largest healthcare plans (measured by revenue) and 5 of the 7 largest U.S. retailers (measured by revenue).

Since our inception, we have been an innovator in identity. We pioneered the concept of Intelligent Identity, which leverages artificial intelligence, or AI, and machine learning, or ML, to analyze device, network, application and user behavior data to secure access and enhance the user experience. We contributed to or co-authored many of the open identity standards such as SAML, OAuth, SCIM and OpenID Connect, which form the foundation of our industry. We have consistently been recognized as a leader in the Identity and Access Management, or IAM, industry by Gartner and KuppingerCole.

We sell our solutions via a subscription model typically billed annually in advance. Our ARR was $147.0 million and $183.6 million at December 31, 2017 and 2018, respectively, representing year-over-year growth of 25%. Our ARR was $159.6 million and $198.0 million at June 30, 2018 and 2019, respectively, representing period-over-period growth of 24%. We have grown revenue from $172.5 million for the year ended December 31, 2017 to $201.6 million for the year ended December 31, 2018, representing year-over-year growth of 17%. We have grown revenue from $99.5 million for the six months ended June 30, 2018 to $112.9 million for the six months ended June 30, 2019, representing period-over-period growth of 14%. Our net income was $19.0 million for the year ended December 31, 2017. Our net loss was $13.4 million for the year ended December 31, 2018. We had net losses of $5.8 million and $3.1 million for the six months ended June 30, 2018 and 2019, respectively. Our cash provided by operations was $3.4 million and $22.9 million for the years ended December 31, 2017 and 2018, respectively. Our cash provided by operations was $13.0 million and $8.1 million for the six months ended June 30, 2018 and 2019, respectively. Our Free Cash Flow was $(2.5) million and $13.1 million for the years ended December 31, 2017 and 2018, respectively. Our Free Cash Flow was $8.9 million and $1.2 million for the six months ended June 30, 2018 and 2019, respectively. Free Cash Flow is a supplemental measure that is not calculated and presented in accordance with generally accepted accounting principles in the United States, or GAAP. See "Selected Consolidated Financial Data—Non-GAAP Financial Measures" for a definition of Free Cash Flow and a reconciliation to its most directly comparable GAAP financial measure.

Industry Background

IAM is the foundation for maximizing security and enhancing user experience in a distributed and highly-connected digital world, where the traditional network perimeter has dissolved and the attack surface has expanded. In this digital world, legacy IAM solutions are proving ill-suited to address cloud, mobile, IoT and API requirements. Similarly, cloud-only IAM vendors are unable to meet the requirements of large enterprises that have hybrid IT infrastructures.

Enterprises are Undergoing Digital Transformations and Embracing Technology Trends

Digital Transformation is Critical to Driving Competitive Differentiation. Enterprises are investing in technology to grow their digital presence, create new revenue streams, transition business models and increase customer engagement. In order to accomplish this, enterprises must engage with their customers across digital channels. As consumers have become accustomed to seamless access and high-quality experiences from companies such as Amazon, Google and Netflix, all enterprises are under pressure to meet rising expectations or risk being disrupted by competitors.

Enterprises are Embracing Cloud Computing, SaaS and Mobility. Enterprises are transitioning a portion of their IT budgets to invest in cloud computing to build new services, shorten time-to-value and drive cost efficiency. The adoption of Software-as-a-Service, or SaaS, applications and mobility is empowering business users and partners to increase productivity, facilitate collaboration, reengineer business processes and drive new opportunities for growth. The consumerization of IT and shift towards a distributed workforce has caused employees and partners to demand seamless access to cloud and on-premise applications from any device.

APIs and IoT Devices are Dramatically Expanding the Number of New Connections. APIs have become critical to software development and act as gateways to other digital services by facilitating the connection and data sharing between heterogeneous systems and applications. APIs have become the building blocks of the web and will help drive the future of software by powering new applications, enabling communications and automating business processes.

Enterprises are also deploying IoT devices embedded with software and sensors to connect with their customers, collect streaming data and analyze endpoint performance. According to IDC, the worldwide installed base of IoT devices is expected to grow from 23 billion in 2018 to more than 41 billion in 2025, representing a CAGR of 9%.

Digital Transformation Initiatives have Created Challenges and Complexity for Enterprises

Cloud, Mobile and IoT Have Expanded the Attack Surface. The rapid adoption of cloud-based offerings and the proliferation of mobile and IoT devices have expanded the attack surface for cyber threats, moving users, devices, applications and data outside the traditional network perimeter. As a result of this shift, identity has become the most common vulnerability that hackers seek to exploit. According to a 2017 Verizon report, 81% of hacking-related breaches leveraged stolen and/or weak passwords.

New Technology Adoption has Created Complex Hybrid and Multi-Cloud IT Challenges. Enterprises are increasingly reliant on both cloud and on-premise applications, which is creating complex hybrid IT infrastructures. According to IDC, public cloud spending is projected to grow from 33% of worldwide IT infrastructure spend in 2018 to 38% in 2023. A significant portion of IT budgets, however, will continue to be allocated to on-premise IT infrastructure. As a result, enterprises increasingly require solutions capable of spanning both cloud and on-premise infrastructures to support their hybrid realities. As the adoption of cloud matures, enterprises are focused on optimizing for performance, cost and security while also maintaining flexibility to operate across multiple clouds. IDC expects more than 90% of enterprise IT organizations will commit to multi-cloud architectures by 2020.

The Rise of APIs has Created New Security Vulnerabilities. The rapid proliferation of APIs has created new security vulnerabilities due to their connectivity with critical systems and access to data. Breaches associated with API gateways can remain undetected for extended periods of time because of a lack of visibility into API traffic and an inability to monitor anomalies or abuse.

The Identity Landscape is Large and Evolving

Identity is a vast landscape, comprised of three distinct established markets that each require different solutions. Our Intelligent Identity Platform focuses on the largest of these markets, IAM. We partner with leading companies in the adjacent markets, Privileged Access Management, or PAM, and Identity Governance and Administration, or IGA. The objectives, workflows and interfaces of these three markets remain distinct and have little overlap.

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Identity and Access Management. Solutions that store user information and enable the authentication of a user and the subsequent access management and security control of that user as the user attempts to access applications, data and APIs.

Within IAM, Customer Identity and Access Management, or CIAM, represents a large and growing opportunity and includes solutions that provide a consistent, modern, omni-channel customer experience through personalized access to all digital services.

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Privileged Access Management. Solutions that help organizations secure, control, manage and monitor privileged accounts or privileged rights.


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Identity Governance and Administration. Solutions designed to encapsulate the governance and policies that a company uses to meet its identity management related audit and compliance obligations.

Existing IAM Solutions are Limited

Legacy IAM solutions generally do not meet enterprises' evolving requirements because of these inherent limitations: not being designed for cloud environments, mobile and IoT devices or APIs; being cumbersome and expensive to deploy; having a tendency to experience stability problems; and being at or near end of life.

Cloud-only IAM solutions generally do not meet enterprises' evolving requirements because of these inherent limitations: lacking in-depth enterprise features and robust integrations across on-premise applications; primarily being focused on the employee use case; having an unproven ability to scale; and only meeting minimal security requirements.

Intelligent Identity is Needed Now More than Ever

Enterprises are under pressure to innovate faster, improve productivity and deliver exceptional user experiences through digitalization, all while maximizing security. The question "Who are you?" must be asked and satisfactorily answered as a precondition to every digital interaction. Intelligent Identity asks and answers the question by leveraging AI and ML to analyze device, network, application and user behavior data to make real-time authentication and security control decisions. Additional security measures, which impose friction on the user experience, are only utilized if anomalies in behavior or data are detected or in high-value transactions. This optimizes the balance between securing access and providing an enhanced user experience.

Our Market Opportunity

According to IDC, the worldwide market for IAM is expected to grow from $6.6 billion in 2018 to $9.0 billion in 2023, representing a CAGR of approximately 6%. Based on management's internal analysis, we estimate that our market opportunity is greater than $25 billion across our use cases. For a more detailed description of how we calculate our market opportunity, see "Business — Our Market Opportunity". We believe our market opportunity has the potential to expand in the future as the proliferation of IoT and APIs increases connections, complexity and the number of identities in the enterprise.

Our market includes opportunities for both greenfield expansion and replacement of legacy and homegrown solutions. We believe security budgets are shifting from network-centric to identity-centric solutions because the adoption of cloud, mobile and IoT has led to a disappearing network perimeter. We believe the focus of cybersecurity will continue to shift to the user as targeted attacks against users and their credentials increase. As a result, we believe that IAM will represent a larger portion of future security budgets, which we are well positioned to capture.

Our Growth Strategy

The key elements of our growth strategy include:

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Increase Sales to Existing Customers. Of our more than 1,275 customers at December 31, 2018, only 13% had purchased three or more of our six solutions, providing a significant opportunity to further penetrate our existing customer base. We believe there are significant upsell and cross-sell opportunities within our existing customer base by adding identities and use cases and selling new solutions.


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Innovate and Enhance our Offerings. We intend to continue investing in research and development to enhance our existing solutions, add new solutions and deployment options and expand use cases.


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Expand our Customer Base by Investing in Sales and our Partner Network. We continue to make investments in sales and marketing to grow our customer base and drive broader awareness of our Intelligent Identity Platform. We plan to deepen and expand our joint go-to-market efforts with our channel partners, system integrators and technology partners.

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Expand our Customer Base by Targeting New Buyers. We focus our selling efforts on executives such as Chief Information Officers, or CIOs, and Chief Information Security Officers, or CISOs, who are often making strategic top-down decisions to purchase our platform. We recently extended our cloud-based offering to target developers who represent a new addressable customer base for us. The ability for developers to directly integrate identity into their applications accelerates the adoption of identity within the enterprise.


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Continue to Expand our Global Presence. We have a large and growing international presence and intend to grow our customer base in various international regions by making investments in our sales team globally.

Our Intelligent Identity Platform

Our Intelligent Identity Platform is comprised of six solutions (SSO, MFA, Access Security, Directory, Data Governance and API Intelligence) and supports all primary use cases and deployment options. Our Intelligent Identity Platform provides the following key benefits:

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intelligent authentication of users based on contextual signals and risk attributes;


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one platform for all primary use cases;


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flexible hybrid deployment options;


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turnkey integrations across cloud and on-premise applications;


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high standards for critical security and resiliency; and


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scalable to billions of identities.

Our Intelligent Identity Platform Supports All Primary Use Cases

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Customer. Our platform helps enterprises better engage with their customers by providing a consistent, modern, omni-channel user experience through personalized access to all digital services. This enhanced digital experience improves brand loyalty and drives additional revenue, while also strengthening security.


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Employee. Our platform allows enterprises to provide their employees with seamless and secure access to all of their cloud and on-premise applications and APIs to enable better employee productivity.


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Partner. Our platform helps enterprises rapidly connect with partners and manage their access privileges when onboarding and offboarding users.


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IoT. Our platform is increasingly being used to manage IoT identities, such as connected vehicles and consumer devices, and authenticate machine-to-machine and human-to-machine interactions.

Deployment Flexibility

We have designed our solutions for flexible deployment because every enterprise has different customization, control, security and privacy needs. Our deployment flexibility provides the optionality to adopt cloud-based offerings for rapid deployment, remain on-premise for maximum control or to comply with industry regulations or deploy in a hybrid manner. Our deployment options include: