Please stand by. We're about to begin. Good afternoon, ladies and gentlemen, and welcome to the Ping Identity first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. After the speakers' prepared remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you do find that your question has already been answered, you can remove your question by pressing star one again. Now, at this time, I'd like to turn the call over to Mr. David Banks, Vice President, Investor Relations. Please go ahead, sir. Thanks, everyone, for joining us today, and welcome to the Ping Identity conference call, where we'll discuss our first quarter 2022 results, provide our outlook for the second quarter, and update our outlook for the full year. Shortly after the market closed today, we issued a press release announcing our first quarter financial results. In addition to the financial results, we'll be presenting a live supplemental set of slides through the webcast portal. These will be published to our website following the call. You may access the press release and presentation on the investor relations section of pingidentity.com. With me today is our CEO, Andre Durand, and our CFO, Raj Dani. Today's discussion may include forward-looking statements. Please refer to our annual report on Form 10-K for 2021 and our quarterly report on Form 10-Q for the quarter ended March 31, 2022, filed with the Securities and Exchange Commission. There, you'll see a discussion of factors that could cause the company's actual results to differ materially from these statements. I would also like to remind you that during the call, we will discuss certain non-GAAP measures related to Ping Identity's performance. You can find the reconciliation of those measures to the most closely comparable GAAP measures in our first quarter press release and the slides we're posting on our website. To assure we can address as many analyst questions as possible during the call, we ask that you please limit your questions to one plus a follow-up. We will end the call after 60 minutes. With that, I'll turn the call over to Andre. Thank you, David. We had a good start to the year. For the quarter, we delivered our fifth straight quarter of accelerated annual recurring revenue growth at 21%. Total revenue grew 23%, driven by robust SaaS revenue that surpassed $20 million and grew 68% year-over-year. Net retention climbed by 2 percentage points sequentially from Q4 to 114%. We again grew our base of customers with $250,000 or more in ARR by 21%, matching our overall ARR growth rate. Our non-GAAP unlevered free cash flow was -$6 million, a bit lower than originally expected, driven by cash collection timing and an acceleration of some investments, which Raj will address in our financial results. We continued to make progress in Q1 advancing our 2022 strategic initiatives that we've labeled our three Cs, cloud, the customer use case, and the channel. First, the cloud, where accelerating adoption drove results this quarter. With 100% of our solutions available as SaaS, we see the acceleration in our SaaS revenue growth to 68% as a clear indicator of our growing strength, differentiation, and ability to sell our cloud solutions. For the third straight quarter, SaaS drove more than half of overall sales versus software, and once again increased the total number of customers with at least one SaaS solution. We also saw another solid increase in the number of PingOne Advanced Services customers with a commensurate uplift in ARR. Importantly, the newest addition to the PingOne SaaS Identity Platform, DaVinci, punctuated meaningful customer activity, both in terms of new sales and implementations as customer excitement is building. One such customer is the U.S. Federal Government, where our sales activity and pipeline is strong. This quarter, we sold PingOne DaVinci to the General Services Administration, which, among other things, provides the U.S. government with real estate management, centralized acquisition, and other government-wide services. The GSA is also a conduit for U.S. citizens interacting with various federal agencies, including GSA, through their various websites. In order to verify citizens' identities, PingOne DaVinci gives the GSA an agile orchestration engine that integrates with various identification providers such as LexisNexis and TransUnion to verify tens of thousands of citizens per month, scalable for millions. One of our integration partners, Easy Dynamics, will help in our development as we ramp the GSA. We were very pleased to have grown our relationship early this year with FIFA, the well-known Zurich-based world governing body of football or soccer, as we in the U.S. call it. Beginning in November, FIFA will host the 22nd FIFA World Cup Tournament in Qatar, engaging some 2 billion fans the world over. An existing user of our PingFederate and PingDirectory Software, FIFA is in the early phases of a digital transformation that will leverage its FIFA+ platform. After viewing various use case opportunities available through our DaVinci orchestration engine, FIFA decided to engage more deeply through PingOne SSO as an entry point to cloud-enable more digital services. In early April, we successfully brought an initial set of users live with a plan to significantly scale in the coming months as FIFA builds its digital capabilities. It's still early days for DaVinci, but with several clients deployed and others in pilot, we believe our bet on this new orchestration capability is already yielding the results we expected. In Q1, we successfully took a London-based customer live on PingOne Advanced Services. The customer is a European-based international provider of location intelligence, identity verification, and fraud and compliance management solutions, serving tens of thousands of customers in more than 80 countries, and that verifies the identity of billions of people globally. Atop our advanced services platform, the customer will also leverage MFA, which can scale into the future. Both PingOne Advanced Services and DaVinci are delivering compelling results for us in migrating customers into the cloud and driving this pillar of growth. The second of our three Cs growth drivers expanding in the customer use case is increasingly contributing more ARR each quarter than the workforce use case. In Q1 by more than 2x. This is consistent with the strong customer use case growth trend we've seen over the last several quarters. Two customer use case implementations in Q1 offer great examples. We went live with PingOne MFA for M&T Bank, a $6 billion Fortune 500 financial institution headquartered in Buffalo, serving millions of customers in 12 states across the Northeast and the District of Columbia. A customer since 2011, this launch is a part of M&T's global enhancements initiative to enable future cloud capabilities as a complement to existing Ping software solutions. Great Southern Bank, Australia's largest customer-owned bank, successfully deployed their open banking platform using PingOne Advanced Services with Ping Identity's Purpose-Built Consumer Data Right Integration Kit. Within eight months of deployment, the bank was able to meet their Consumer Data Right compliance requirements, which allows members to seamlessly share data with other banking providers. Turning to the channel, our third key growth driver. This quarter's progress was highlighted by the announcement of two important partner initiatives. In February, we announced the distribution partnership with Carahsoft Technology, the trusted government IT solutions provider at federal, state and local levels. Carahsoft will serve as Ping's master government aggregator, enabling us to make our solutions more broadly available to the public sector through Carahsoft's reseller partners. In March, we announced a new partnership with TD SYNNEX, a leading distributor and solutions aggregator for the IT industry. They will become a major global distribution resource in the Ping Identity global partner network. TD SYNNEX sports a significant global distribution footprint supported by some 22,000 tech professionals. We continue to develop relationships with leading global systems integrators or GSIs. One of those large, well-known GSIs told a group of our leaders recently that they hope to unseat one of our existing GSI partners to become our 2022 recipient of the GSI Partner of the Year. We are game to facilitate the competition between them. We know the channel can be an important driver of growth. The channel is a great source of new logos and deals that are both bigger and more often customer use case-focused. As we develop our channel expertise, we plan to release metrics to help track more routinely the progress we're making. We are pleased with the ongoing progress we're making against our three Cs, cloud, customer, and channel, and we'll continue to report out on those each quarter. A few thoughts in closing. First, I focused a bit more than usual on our activity within the government vertical for good reason. We're making strong headway there. We'll have more to say about our U.S. government-related business as the year progresses as we add capabilities and authorizations to PingOne for Government and complete the final stages of authorization to operate under FedRAMP moderate level. Second, I'm pleased to announce two new additions to our board of directors, Anil Arora and Vikram Verma, both of whom were appointed by the board at their meeting yesterday. Anil was most recently CEO of Envestnet |Yodlee, a cloud-based leader in financial technology, data intelligence, and wealth management. Vik was previously CEO of 8x8, an integrated cloud communication SaaS company. With their collective experience in the technology space and ability to lead companies through periods of massive change, their contributions to our board will be critical. I'd also like to recognize Lisa Hook, who stepped down from our board at yesterday's annual stockholder meeting after helping lead us through a transition period from private to public status over her three-year term. Her insights were invaluable. Third, we surpassed an important milestone with the recent publication of our inaugural environmental, social, and governance or ESG report. It highlights our efforts to promote diversity and inclusion in the workplace, build strong corporate governance practices, and promote social and environmental stewardship. We have work to do in some areas, but we're pleased to have staked some commitments in the ground. Finally, I want to emphasize our ongoing and stepped-up level of vigilance given the war in Ukraine and the Shields-up cyber alertness we're having to maintain here in the U.S. Identity and access management remains the basis for driving Zero Trust, and we are committed to doing our part at Ping Identity. With that, I'll now turn it over to Raj to walk through our results and outlook. Raj? Thanks, Andre. We're pleased by our strong start to the year, highlighted by our fifth straight quarter of accelerating ARR growth and fourth straight quarter of accelerating SaaS revenue growth. First quarter ARR of $323.5 million grew 21% year- over- year, with net ARR in the quarter of $10.8 million, up 50% compared with Q1 of 2021. First quarter revenue grew 23% year- over- year to $84.7 million, of which 95% was subscription-based. Revenue growth was driven by SaaS as well as maintenance and support, or M&S. We generated $20.2 million of SaaS revenue in Q1, up 68% year-over-year, the strongest quarterly growth rate since Q4 of 2018 when SaaS was less than a quarter of its current size. This quarter, it represented 25% of subscription revenue. We generated more than half of new ARR from SaaS versus software for the third straight quarter. M&S revenue grew 42% year-over-year in Q1, making up approximately 20% of subscription revenue. The SaaS and M&S revenue categories together comprise our ratable revenue, which made up 45% of our subscription revenue and 42% of total revenue in Q1. Term license revenue was $44.3 million in Q1, up approximately 8% year-over-year. It represented 55% of subscription revenue. As we discussed last quarter, we forecasted these shifts in SaaS, M&S, and term license revenue percentages, and we expect a more pronounced change as the year progresses. More on that in a moment when I update our 2022 outlook. Professional services revenue was lower than expected at $4.5 million in Q1, a year-over-year decline of 5%, driven primarily by customer-delayed implementations. We ended the quarter with 321 customers with at least $250,000 in ARR, up 21% year over year, and once again, in line with our ARR growth. Our first quarter dollar-based net retention rate, calculated on a trailing twelve-month basis, was 114%, a sequential improvement of 2 percentage points compared with Q4 of 2021, driven by strong base expansion in the quarter. Unless otherwise noted, for the remainder of the P&L, I will refer to non-GAAP metrics. You can find a reconciliation of non-GAAP to GAAP numbers in the accompanying press release. Our non-GAAP gross profit margin for the first quarter was 77%, compared with 80% in Q1 2021, driven primarily by our high-growth SaaS. Our GAAP subscription gross margin this quarter was 83%. Total non-GAAP operating expenses in the first quarter were $61.2 million. We ended Q1 with more than $213 million in cash, with cash used in operating activities of $3.3 million in the quarter. This resulted in unlevered free cash flow of -$5.7 million in Q1, slightly below the bottom end of our guidance range. Now turning to guidance. For the second quarter, we are maintaining our revenue outlook range of $70 million-$75 million as we start to see the more meaningful impact of the mix shift between license revenue and maintenance and support take effect. We anticipate the impact of this mix shift will persist in Q3 before revenue re-accelerates further in Q4, as you can see in the growth wave. Given our outperformance in Q1, we are raising our full-year revenue outlook to a new range of $332 million-$342 million, up 13% year-over-year at the midpoint. We continue to expect GAAP-reported revenue growth to be lower than ARR growth due chiefly to accelerating SaaS market adoption and growth. We are now recognizing an increasing percentage of revenue ratably over the life of a contract versus upfront. That change showed up partially in Q1. You'll continue to see it reflected going forward in our disaggregated revenue footnote, which you can also find in the appendix of our supplemental earnings presentation. We expect to end Q2 with annual recurring revenue in a range of $337 million-$340 million, or 21% year-over-year growth at the midpoint. We are slightly raising and tightening our full-year ARR guidance to a new range of $380 million-$385 million, growth of 22% year-over-year at the midpoint. Over time, we expect that the difference in growth between our trailing twelve-month revenue and ARR will shrink. As we have said for several quarters, these revenue fluctuations support our ongoing belief that ARR is the best metric for measuring Ping's growth trajectory. In addition to the timing of collections, this quarter's cash flow and expenses reflected more aggressive investments that continue driving growth in our three focus areas: the cloud, the customer use case, and the channel, our three Cs. As the year progresses, we expect sizable increases in COGS as hosting expense becomes more substantial in order to keep up with accelerating fast growth. Additionally, as we continue to develop new products such as risk, fraud, and DaVinci, we expect significant incremental sales and marketing and R&D spending well above historical growth levels. We are also investing to ensure the resiliency and durability of our platform and to harden our security infrastructure given the heightened risk environment. G&A should track in line or just below ARR growth. The impact on margins will be more significant due to the expected fluctuations in our revenue. From an unlevered free cash flow standpoint, due to timing of both payments and collections, we expect Q2 unlevered free cash flow of between -$12 million and -$8 million. Our full year unlevered free cash flow estimate is unchanged at approximately breakeven. Given the rapid acceleration of our SaaS business, we may invest further to take advantage of market opportunities during the second half of the year. We will also continue monitoring the threat landscape to invest ahead of the curve as needed. In conclusion, we've had a strong start to the year and expect to experience growth acceleration driven by continued execution against our three strategic focus areas of cloud, customer use case, and channel. With that, I'll turn it over to the operator for your questions. Thank you, Mr. Dan. Ladies and gentlemen, at this time, if you do have any questions or comments, simply press star one. Just as a reminder, we do ask that you please limit yourself to one question and one follow-up question. With that, we'll take our first question this afternoon from Jonathan Ho at William Blair. Hi, good afternoon. Just wanted to, I guess, dig in a little bit in terms of, you know, your commentary around the U.S. government. Are there any specific programs or directives that you potentially could benefit more from, when it comes to the U.S. government vertical? You know, why now? Like, why the decision to sort of, accelerate the investment here? Jonathan, this is Andre. We've had our eye on the federal market for years. We made a conscious decision a couple of years ago to build out a federal practice that coincided with our commitment to get FedRAMP certified. As we've reported before, we have now built out a dedicated team for federal. We have been investing along with our sponsor, the Department of Energy, to get our FedRAMP certification to create a service that we call PingOne for Government. Along with that commitment, we obviously well, we announced a partnership with Carahsoft, and we do have a pretty exciting pipeline as well as some early customers as we just announced in the GSA. The federal government is a very large opportunity for us and for identity. The commitment was not driven by any one particular, regulation or mandate that has come out. Although obviously as we've watched in the last six months, there is growing concern and a growing number of mandates like MFA and other things that are coming out, as guidance by the federal government. We're watching it closely. We think the timing is good. Got it. Then just in terms of your commentary around the customer use case, I think you said that, you know, there were two times, either ARR or, you know, wins in the quarter that were associated with that use case. Can you talk a little bit about, you know, maybe what's driving, you know, the strength in that market? You know, do you expect that to continue to, you know, expand in terms of, you know, the customer side getting to be an even larger portion of revenue, or is this, you know, going to remain somewhat consistent? Thank you. Let me step back. As a company, one of our strategic growth focus areas is the customer use case. That was a very deliberate and conscious choice that we made that is part of our long-term strategic focus. We do see this market as both ultimately larger than the workforce use case and stickier. If you look at the competitive landscape and the current dynamics in the market, most of the customer use cases have historically been homegrown. The need now to consolidate the user experience across a very complex but digital omni-channel is driving new requirements. There's a lot of room for innovation in that space. It's a combination. Our interest in the space has to do with the TAM, has to do with the growth, has to do with the historical reality that much of what has been done there has been homegrown and is ready now for commercial products. It has to do with there is tremendous room for innovation, across risk, fraud, verification, and a focus on exceptional user experience à la what we're doing with DaVinci across the omni-channel. We see this as a long-term area of strategic focus and growth. What you are seeing reported is that, you know, that focus that we've had, the investments that we've made are now beginning to pan out materially in our business. We do expect that to continue. Thank you. Thank you. We go next now to Matt Hedberg of RBC Capital Markets. All right. Thanks for taking my question. Andre, one for you and one, a quick one for Raj. You know, it's also great to hear about the progress in the U.S. FedRAMP. You also mentioned DaVinci in your prepared remarks, and I think one of the things that we're watching is some of the orchestration capabilities with DaVinci really seem interesting to us, especially when we consider broader expansion, but also perhaps some legacy replacements. Could you talk maybe a little bit more on some of the successes you are seeing out of DaVinci? I caught part of that, Matt. I think I got the essence, but you were breaking up just a little bit there. Question was around DaVinci and some of the successes we're seeing there, and I think you were asking to elaborate a little bit more. That's right. We've commented in the past, identity is an integration challenge for large enterprises. If a large enterprise wants to make identity the center of security, and really the control plane in this new distributed Zero Trust World, or the center of both security, personalization, privacy, and experience for the customer use case, speed of integration is extremely important. DaVinci is a tool that allows companies to elevate where they spend their time and focus, not only integrating identity, but weaving it into everything else. It is a 10x or better improvement on the speed with which companies can achieve their outcomes and see the value from their identity investments. We have focused, modified our go-to-market and put focus on DaVinci and orchestration as the starting point for every identity journey. Doesn't matter if you're pursuing a passwordless or adaptive auth journey, whether you're trying to centralize authorization for a customer use case, whether you're trying to consolidate a bunch of siloed identity websites for end users, or whether or not you're trying to verify the real identity of a user before you enroll them or register them in your system. All of those use cases require integration, and DaVinci is becoming the steel thread that delivers on that experience. It is a modification to what we lead with in our approach to the go-to-market, how we POC, ultimately how we deliver value. The customers are seeing and beginning to experience that now that we are in GA. We announced that FIFA+ has now gone live much sooner than expected on DaVinci, and they are all about delivering an exceptional experience for a worldwide base of fans that measures ultimately into the billions. You're gonna see and hear more of this over time, but it is an extremely important component of our platform, and it is highly differentiated. Coming back from both the partners and the customers, head and shoulders above the competition. Super helpful. Then Raj, one for you. On the margin side, you're maintaining your unlevered free cash flow guidance, effectively break even for the year. You talked a lot also about some additional spending this year. I presume that's just because of some of the pipeline that you're seeing. Wondering if you could break down a little bit more, you know, sort of what changed in this quarter to drive, you know, some higher spending levels. Again, it's not really impacting on what free cash flow this year, but maybe just unpack sort of the rationale on spending for the balance of the year. Yeah, absolutely, Matt. As you know, we're highly ROI-focused and have a lot of rigor around spend around here, as we've proven over the last several years. However, we are seeing this opportunity now, right? SaaS accelerating at 68% year-over-year that surpassed our expectations. And that acceleration does create some incremental spend. Additionally, we're seeing great progress on the channel. As we've said, when we start to see these signs of SaaS acceleration and channel adoption and acceleration, we are going to lean into that. I think we've, you know, we've been fairly clear on that, and this is the time. Now, it's happening sooner in the year than we had thought, and that's actually a good thing from our perspective. Over the course of the year, we still expect to be breakeven. I will caveat that with, again, you know, we're with the kind of success that we're seeing on investing behind those three Cs as we've talked about. If we do see opportunities to go after the market, we will, you know, we won't be afraid to lean in further. Thanks, guys. Thank you. We go next now to Andrew Nowinski at Wells Fargo. Great. Thank you. I'd like to start off with a question on the competitive landscape. I'm curious if you benefited at all from the Okta security incident that they sustained, and if the combination of that breach and DaVinci and how it helps customers migrate to Ping might be swaying some of those customers to actually migrate over. Well, I'll start by saying identity is the gate. Obviously, we and everyone in this industry work hard to earn customer trust every day. I'll also say we are investing to ensure that we maintain that customer trust and that we keep customers safe. As we become more competitive in the cloud, I would say overall, we are seeing a benefit to our ability to compete in the cloud, not just with Okta, but against other vendors with customers who have a cloud-first mandate. I think that has been benefited by all the acquisitions that we've made in the last couple of years, and the fact that our cloud platform, a truly unified cloud platform across all the use cases that can address the very advanced hybrid needs, you know, has clearly not been commoditized. Our investments in risk and fraud and verification and authorization are all now starting to significantly differentiate us. DaVinci is just the most recent addition to that. I think there's a number of factors, not just as you mentioned, the breach that occurred that has been leading to increased competitiveness for Ping. That's great. Thank you. Maybe just a follow-up. I wanna ask about your net new ARR growth, specifically in Q2. You know, you just came off of Q1 with really strong net new ARR growth of 50%, and I realize Q2 last year looks like a fairly tough comp, but I'm wondering if there was anything abnormal in Q2 last year to consider as to why net new ARR growth might decelerate so much in Q2 based on your guidance. Thanks. Hey, Andrew, it's Raj. In Q2, it was just a particularly strong quarter. In fact, I believe we booked the single biggest deal in Ping's history in that quarter last year, and that's what's skewing the comp. Yep, that makes sense. Thank you. Thank you. We go next now to Adam Tindle at Raymond James. Okay, thanks. Good afternoon. I wanted to ask a question on NRR, obviously up nicely, 200 basis points sequentially back to 114%. Could you just touch on the key attribution for that between gross retention, upsell? I think we used to think 115%-120% in that metric years ago. Is there like an updated range that you're thinking about the business can sustain? I'll let Raj comment on the updated range. In terms of a little color commentary on the 2 percentage point increase, we did a lot of base expansion in Q2 as a result of a number of the new SaaS service offerings that we've had. When we talk about continued, I'll say growth and acceleration of the adoption of our platform and our cloud vision. We had a number of customers decide to go take the journey to the cloud with Ping. When they do that, a number of the new services which are SaaS only also become available to them. I think that you are seeing now the beginning of a trend where Ping now has a unified SaaS and cloud platform and a number of new services that we've acquired and introduced in GA over the course of the last quarter or two. We don't expect that to slow down. It's kind of a new day in the chapter of the transformation of Ping to the cloud. On the numbers itself, I mean, when you look at the 114%, we're really pleased with that, especially if you look at the evolution of net retention rate over the last four quarters has continued to increase, and it generally tracks with our ARR growth. We're within the 700-800 basis point band between ARR and net retention. As we continue to accelerate on the ARR line for the fifth straight quarter now, you've started to see net retention rate tick up along with that in that kind of range that we'd expect. Got it. Maybe as a follow-up, the partnership with CrowdStrike and Cloudflare, Andre, those are two really impressive names in terms of the partners. Maybe you could just help us understand how that partnership came about in the first place. Secondly, it's a little bit different in terms of the motion where you're offering a product essentially for free up front with a intention to, I would assume, convert to a paid customer at some point. Can you talk about how you're planning to implement some sort of conversion funnel, and any early indications of wins in terms of converting customers to paid? Thank you. Well, I'll start with the last part of that question. We actually are starting to see pipeline now develop around that partnership. The early part of your question, how it came about, the world is clearly being attacked on the digital front. The Ukraine crisis and Shields Up as a result of Ukraine and anticipated increased attacks from Russia. That drumbeat has been growing over several quarters. It probably accentuated over the course of the last quarter or two as a result of the conflict in Ukraine. What we're seeing is a shift in the way companies think about securing themselves, and it is a shift towards Zero Trust, where protecting the endpoint that a user is coming in from, strongly protecting the user's identity, that's Ping's role, and then protecting the cloud edge, Cloudflare's role, all three of these really are the pillars that make up the new fabric of the Zero Trust security model. We got a call, I got a call from Cloudflare before we obviously announced that week, saying that in contact with the government and with the Shields Up mandate. They were looking for companies that were instrumental in Zero Trust to step up and build some awareness around protecting our critical infrastructure. You've seen us do this before. Anytime there is a call to action to help protect our companies, Ping has risen to that challenge. We did it the last time with MFA, and we're really proud to have been selected as a partner by those two companies. We see a lot of opportunity, not just in what we announced, right, in the critical infrastructure project, but we see a lot of opportunity growing in the secular shift towards Zero Trust, where we play a very important and central role in making sure everybody's strongly authenticated, everybody is appropriately authorized. We need to connect it end-to-end in partnership with the endpoint and the edge, the new cloud edge, as defined in Cloudflare's business. Understood. Thank you. Thank you. We take our next question now from Saket Kalia at Barclays. Hi. Hi, guys. Thanks so much for taking my questions here. Apologies I joined late, so apologies if these were already asked. Raj, maybe just to start with you, can you just talk a little bit about the shape of revenue this year? I guess with the increasing SaaS mix, which is great to see, clearly ARR is the cleanest metric to look at. For those of us that care about revenue, how do you sort of think about the shape of revenue for this year? Well, it's interesting you say the word shape, Saket, because you know, we have the growth wave out there in the earnings presentation. I'd really like to kind of call attention to that because we've been pretty thoughtful about how we think revenue not just revenue, but ARR revenue and cash flow is going to evolve towards our end of 2024 targets. When you think about revenue, we do think of Q2 as being you know, I don't necessarily wanna say a trough quarter, but it certainly will be a low quarter as will Q3, and then we'll start to see some acceleration in Q4 back towards our full year targets. You know, we will kind of see that dip, and then we'll see it re-accelerate. Again, that's, you know, as you rightly pointed out, that's a byproduct of how we RevRec. The good news there is we're getting more ratable, right? 45% of our revenue is now ratable. You know, when I think about the full year, I almost think about it sort of flip-flopping, right? It's 55% ratable and 45% upfront. We're starting to see some meaningful shifts in that. What happens through that process, as you well know, is, you know, it does have a very near-term revenue impact, but it's a lot more predictable and a lot more ratable over the long run, which is a good thing for us. Got it. That's very helpful. Andre, maybe for you, just zooming out a little bit. You know, I think you started this year really with just a lot more focus on working with the channel this year. In fact, I think some sales comp had changed to reflect that. I guess the question for you is: Can you talk about some of the early data points that you've seen from that increased focus? Strategically, how does that channel focus, the increased channel focus, gonna help with this SaaS transition? Sorry, there's a lot there, but does that make sense? Yeah, it does, Saket. I'll start by saying it's a top initiative for 2022, but it is a multi-year journey to come from essentially a direct-to-market versus a through the partner channel market. We're in the middle, but all of the indications of continued strength in the channel are headed in the right direction. Actually, our anticipation for the first half of this year is it will be above our targets on all the major KPIs that we track for acceleration within the channel. The anecdotal data that we're getting back, and the level of conversations, the number of conversations, the number of people in the conversations from the largest GSIs, Accenture, KPMG, Deloitte, TD SYNNEX on the kind of the reseller side, Carahsoft for the federal government, the level of conversations, the depth is very, very significant. They see tremendous opportunity in where we are going as a company. They see tremendous opportunity in DaVinci, in authorization, and a whole slew of other things. On every dimension, number of people trained, sourced pipeline, attach rate, our aim is to have a partner in every deal, and we will be sharing more stats in the future around that. All of the indicators of our commitment there are positive and on track. Very helpful. Thanks, guys. Thank you. We go next now to Tal Liani at Bank of America. Hi, you have Madeline on for Tal. Quick question for you guys. I wanted to just check in on the international segment and see what the results were for about this quarter. I think I got that question, Madeline. It was around the international business and how that trended. That's correct. Yeah. International was about, you know, 22% of revenue for the quarter and roughly flat year-over-year. International still continues to be, you know, good, a good contributor to our business. You know, we don't anticipate it sort of shifting a whole lot from that 25-75 international to domestic mix we've historically had. Thanks. Maybe just one follow-up to you on the net retention. I'm just wondering if you would be able to talk about the cross-selling motion and, you know, what are you seeing in terms of natural steps for companies investing in that second or third product from you guys? Are there one or two, you know, solutions that companies are really going after, or is it a mix across the board on your offerings? We tend to land in either the workforce use case or the customer use case. Historically, we tended to land with authentication in one of those two use cases. Expansion took two dimensions for our existing customers. One was if they started with, say, single sign-on and directory in the authentication use case, their expansion was into passwordless. They would add MFA and risk for an adaptive authentication or passwordless journey. The other dimension of expansion is if they started in one use case and were successful, they would expand into the other use case. We have roughly, you know, just under a quarter of our customers that use Ping for both use cases. That's the reason we're very focused on a unified cloud platform that can serve both use cases. Companies can get leverage from that. I would say the typical expansion journey is they start in one or the other use case, and over time, they expand to the other use case, and/or they start in the simpler scenarios of either authentication or authorization, and they expand into more sophisticated authentication or authorization use cases. Okay. Great. Thank you so much. That's it from me. Thank you. We go next now to Adam Borg at Stifel. Hi, this is Austin Gagy on for Adam Borg. Thank you for taking the question. Maybe for Andre on API security, can you talk about your role in API security and how you expect this market to evolve in coming periods? I'm sorry, you broke up on that one. I think you were asking about API security and how we anticipate the market evolving. Exactly. Yeah. Okay. Well, we see three things that companies have to do to secure their APIs. Number one, they have to secure the front door. That is, who can access the APIs. Ping is a leader in that market, and there is a protocol called OAuth that is used by companies to basically gain access to APIs. A lot of our major enterprises use us for API access security. The second thing is we believe we must have complete visibility into all transactions for the APIs across multiple clouds, internal and external, and leverage machine learning to see the attacks against those APIs, and that is our PingIntelligence for APIs. The third level of security is to, in essence, centralize the way companies authorize fine-grained access to those APIs and control what data is returned from those APIs. Three levels of security, and Ping has essentially solutions across all three, and we really are the only identity vendor that has gone that deep. It's exceptionally important in certain regulated industries where their APIs are now forced to be open and accessible by third parties. Whenever you hear us talk about Open Banking or the Cures Act, one in the financial services, one in healthcare, open APIs have to be secured, and we're one of the only vendors that can provide that three layers of protection. Great. That's it for me. Thank you. Thank you. We'll go next now to Gray Powell at BTIG. All right. Great. Thanks for taking the questions, and congratulations on the good numbers. Thank you, Gray. Focusing in on the SaaS side, really good numbers there. Please tell me if I'm doing this incorrectly, but if I look at SaaS revenue, it increased by $3.3 million sequentially. That's like a $13 million, you know, annualized increase. If I look at ARR, it was up $11 million sequentially. Is it safe to say that SaaS is now driving almost all of your incremental ARR growth? Or is there something unique that just happened in the quarter? How should we think about that trend for the rest of the year? Great. It's not driving substantially all of the incremental growth, but it's suffice it to say it's in most deals, right? Either companies are going wholesale SaaS or a good chunk of the deal is SaaS-based. You know, I think there may have been a little bit of coincidence there in terms of the linkage you're drawing. You know, the way I think about it for the rest of the year is if you just think about the growth rates on a CAGR basis over the last three, four, five quarters, we kind of expect that to continue into the full year. Like I said, you know, we feel like the ratable to upfront RevRec of 45-55 for the full year will likely flip to 55-45 ratable to upfront. Which, like I said, drives predictability and ratability, and that's a good thing. Yep. That makes a lot of sense. It's really helpful. I guess just my follow-up question would be that, I mean, given that there's at least a 2x uplift to ARR when a customer takes the SaaS product, is there a way to quantify how much of the growth is from the conversion of existing customers versus just sort of pure net new expansion, either new customers or existing customers taking, you know, pure expansion with SaaS? Yeah. You know, right now we're still close to 50/50. I'd say, you know, what we saw was probably about 40% new and 60% existing, so in the quarter. You know what? It will take a while, Gray, for our existing base and we have a, you know, $300 million+ base here of ARR, right? It'll take a while for migrations to occur. And so I think that, you know, when you look at it over a longer period of time, yes, you would see more contribution from these migrations. But for the near term, you know, as companies are renewing, we're having those discussions well in advance. If it makes sense to them, we are putting them on that on-ramp to the cloud, and we are seeing sort of the benefits of the near 2x expansion potential. Got it. Okay. Thank you very much. Sure. Thank you. We'll go next now to Brian Colley at Stephens. Hi. Thanks for taking my questions. I was curious if you could provide some color on just how the win rates progress specifically in 1Q, you know, against legacy vendors and modern SaaS competitors. I'm curious just if you've seen any acceleration in win rates in either of those buckets, kind of, you know, just as your SaaS platform continues to mature and gain awareness in the market, and kind of where incremental net new and ARR is coming from, you know, between those two buckets when it comes to, like, net new customer adds as well. You know, if you go back a couple of years, I think there was probably a pretty healthy mix of we were winning against the legacy incumbent. On occasion, depending on the requirements of the enterprise, we may or may not be competing with a modern, say, SaaS or cloud competitor. You roll forward to today and there are still legacy migrations taking place. To the extent that their needs are hybrid or on-prem or maybe in their own cloud, you know, it's a very short list of companies that have the proven track record to kind of meet their scale and meet their hybrid deployment needs. I almost take that for granted. We do exceptionally well there, rightfully so. What's changed is that now 100% of our offerings are SaaS. Today, for many enterprises, they are starting out in the cloud or they are planning to migrate to the cloud, and now Ping is able to say yes across our entire platform, and that's what's changed. Wherein in the past we might have been less competitive or a disadvantage for not having 100% of our capabilities offered as SaaS, that has now materially changed. As a result, our win rate, not just our win rate, but our ability to get past the first round of, you know, of requirements, which is it cloud or is it SaaS? We're able to say yes to that. It's improving. Our competitiveness and win rate is improving as our SaaS maturity has improved. Got it. I also wanted to ask about your new cloud solution packages that you announced along with DaVinci, and whether, you know, you're seeing those result in more customers landing with multiple products. I think it's too early to tell on that one. We've had, you know, as you would imagine with a SaaS offering, it's all about simplicity and ease of use, and that includes simplicity of packaging and pricing. As an initial onboard to take a customer from zero into the Ping SaaS house, if you will, we wanted to simplify what the base package looked like. We had seen enough customers buy enough products to know typically where their journeys began and what features they felt needed to be in a base package versus what more advanced features they would want in one of the higher tiers. We took all of that knowledge with the goal of simplifying our packaging and simplifying the way in which we land new customers in the cloud, and we applied it to those bundles. That is a long-term strategic initiative to be competitive in landing new customers in the cloud. Too early for us to report on that, but from everything that we've both heard from prior customers who have purchased our SaaS solution, it's a big step in the right direction. Got it. Thank you. Thank you. We'll go next now to Mike Cikos at Needham & Company. Hey, guys. Thanks for taking the questions here. What I wanted to ask was probably going to Raj, but more about net new ARR, the ARR guide we have for calendar 2022 and seasonality, anything to think through on that front. I know we pretty much have the first half in hand given the Q1 print and the Q2 guide. But when I look at historically, the back half of the year from a net new ARR perspective, Q3 tends to be around a third of the total net new ARR for the second half of the year. At least that's what it's been over the last two or three years. I just wanted to see, is that a fair way to think about the cadence when you guys are thinking through this year? Is it maybe just more circumstance or chance because of the environment we've been in with COVID over the last couple of years? Yeah, you know, as you know, we don't guide necessarily to Q3 right now. You know, I would say that when you look at the second half, it will be Q4 loaded, and that's fairly typical for us. Okay. I know there was another question earlier on that point, but I think 2Q, we're seeing this impact year-over-year because of the difficult comp. Obviously, you had mentioned that you guys signed your possibly largest deal in company history during 2Q of last year, which benefited ARR. I totally understand that. Is there anything else to think about from a large deal mechanic standpoint as we put pen to paper on the H2 of the year for ARR and how we're looking to model? I don't think there'll be anything unusual. You know, certainly, as we've developed our platform, we have a ton more solutions now than we did 12 months ago, and certainly, you know, 24 months ago. Naturally, the deals are getting bigger. PingOne Advanced Services is driving larger deals. PingOne for Government will drive some larger deals. It's more about sort of getting more strategic with existing and new customers than anything else. Awesome. If I could just tack on one more, please. The commentary that you guys have had on this call has obviously been positive. One of the things that I did, and I wanna make sure I'm not misunderstanding this, but obviously you're operating in this difficult environment, whether it's from macro, the volatility, the geopolitical concerns. Can you talk to the impact that that has had on you, if any? The derivative question, I know in the prepared remarks, there was a comment that professional services was lower than expected this quarter in relation to customer delayed implementations. I just wanted to see if you could hash that out. I don't know if the two are connected, but I did wanna make sure that those were addressed, at least in a public forum. No, those are not connected, by the way. Generally speaking. Correct. Okay. The macro market conditions have been a tailwind to Ping. It's putting more focus on identities. It's putting more urgency on identity as a whole. With respect to professional services, we are seeing and experiencing a very healthy acceleration in SaaS and a lot of interest from the channel. We are leveraging professional services as a strategic arm to support the successful go live of very large referenceable cloud customers and to accelerate the learning and the training of our partners to do the same at scale. That's mostly what you're seeing there. Understood. Thank you for clearing that up for me. I really do appreciate it. Thank you. We'll go next now to Rudy Kessinger at D.A. Davidson. Great. Thanks for taking my questions, guys. It looks like in the quarter, you did a really nice job pushing for multi-year license renewals for your one-year subscription term license customers. One-year licenses down 34% year-over-year, multi-year terms up 38% year-over-year. Am I saying that right, or was it more of a factor, you know, of one-year term license customers coming up for renewals switching to SaaS? It really doesn't have anything to do with one year switching to SaaS. What we saw was more of what's normal for us, which is customers opting in for longer duration contracts. You know, the bigger the deals, the more strategic the projects, the longer, you know, we have seen that correlation over time, where customers sign up for longer, and we are seeing kind of a reversion to that. I think it's a confidence in the roadmap. Obviously, the environment had improved a little bit. There is some correlation when they go cloud with Ping, it does kind of open up the future runway. All of it is, I would say, embodied in confidence in Ping and our roadmap. Got it. Raj, just maybe kind of a housekeeping question. You said G&A you expected to grow kinda in line with ARR growth this year, S&M and R&D to grow faster. Is there any kind of bounds you could put around the growth you expect in those lines? More specifically in S&M, anything you guys can share, maybe quantified incremental sales capacity, you intend to add this year? We don't quantify the quota-carrying reps, Rudy. But I will say that, you know, we've made a commitment to certainly to the channel, and we're investing across the board in sales and marketing, and that is, you know, everything from marketing awareness all the way to the channel and enablement and customer success and quota-carrying reps. You know, we're fairly well balanced across sales and marketing spend. What I will tell you is through the balance of the year, you will see us invest in sales and marketing and in R&D. Primarily, those are the two areas. Just the two other areas, I'd say, one in continuing to build out our SaaS infrastructure so we can accommodate the kind of growth that we're seeing in our SaaS business and also in security. You know, that's a constantly evolving investment that we make to make sure that we're out ahead of the curve on security internally. All right. Great. Thanks, guys. Congrats on the quarter. Thanks. Thank you. We have time for one further question. We'll take that now from Eric Heath at KeyBanc. Great. Thanks for squeezing me in here. I guess just to follow up on the delayed implementations that you called out on the professional services side, did that have any impact to ARR in the quarter? On the delayed implementations? No, that would be pro serve revenue, not subscription ARR. Okay. You see that in the pro serve revenue line, that impact. Okay. Thanks for the clarification. That's it for me. Thank you. At this time, I'd like to turn the call back over to Mr. Durand for any further or final comments. That concludes today's earnings call. Q1 was a strong start to the year, but most importantly, we're making really solid progress against all three of our strategic growth drivers: cloud, the customer use case, and the channel. I'd like to thank our team for all their hard work this quarter. It's paid off well. For all who tuned in today, we look forward to talking with you throughout the quarter. Thank you. Thank you, Mr. Durand. Ladies and gentlemen, that will conclude the Ping Identity first quarter 2022 earnings call. We'd like to thank you all so much for joining us and wish you all a great day.