- ARR grew 30% year-over-year to $212.8 million
- Revenue grew 32% year-over-year to $58.2 million
- SaaS as a percentage of ARR from new customers was 74% in
Q3
ForgeRock (NYSE: FORG), a global leader in digital identity,
today announced financial results for its third quarter ended
September 30, 2022.
“Our ARR grew 30% year-over-year in Q3, marking the 7th
consecutive quarter of ARR growth of 30% or greater,” said Fran
Rosch, CEO of ForgeRock. “The ForgeRock team executed well to
address the strong customer demand for our enterprise-grade
identity platform, and in particular, for our SaaS offering.”
“We outperformed our guidance across all metrics,” said John
Fernandez, CFO of ForgeRock. “Our revenue growth rebounded
significantly in Q3 to 32% year-over-year compared to the 8%
year-over-year growth we saw in Q2. In Q3, we achieved a gross
margin of 84%, non-GAAP gross margin of 85%, operating margin of
(22)% and a non-GAAP operating margin of (5)% – a significant
improvement on a sequential and year-over-year basis.”
Third Quarter 2022 Financial Highlights:
- ARR: Annualized Recurring Revenue was $212.8 million, an
increase of 30% year-over-year, marking the 7th consecutive quarter
of ARR year-over-year growth of 30% or greater.
- Revenue: Total revenue was $58.2 million, an increase of
32% year-over-year. Subscription SaaS, support & maintenance
revenue grew 36% year-over-year in Q3.
- Operating Loss: GAAP operating loss was $12.8 million,
or 22% of total revenue, compared to $8.8 million, or 20% of total
revenue, in the third quarter of 2021. Non-GAAP operating loss was
$2.7 million, or 5% of total revenue, compared to $5.7 million, or
13% of total revenue, in the third quarter of 2021.
- Net Loss: GAAP net loss was $10.9 million, compared to
$15.3 million in the third quarter of 2021. GAAP net loss per share
was $0.13 compared to $0.44 in the third quarter of 2021. Non-GAAP
net loss was $0.9 million, compared to $12.2 million in the third
quarter of 2021. Non-GAAP net loss per share was $0.01, compared to
$0.35 in the third quarter of 2021. Weighted average shares
outstanding used to calculate non-GAAP net loss per share in Q3
2022 and Q3 2021 was 85.1 million and 34.7 million,
respectively.
- Cash Flow: Net cash used in operations was $4.6 million
compared to $2.0 million in the third quarter of 2021. Free cash
flow was $(5.1) million, or (9)% of total revenue, compared to
$(2.2) million, or 0% of total revenue, in the third quarter of
2021.
- Cash, cash equivalents and short-term investments were
$342.5 million as of September 30, 2022.
ForgeRock uses certain non-GAAP financial measures, which are
described further below and reconciled to the most comparable GAAP
financial measure after the presentation of our GAAP financial
statements.
Transaction with Thoma Bravo
Due to the Company's pending acquisition by Thoma Bravo that was
announced on October 11, 2022, there will not be a conference call
or live webcast to discuss these financial results. In addition,
the Company will not be providing financial guidance for the fourth
quarter of fiscal year 2022 and is suspending its financial
guidance for the full fiscal year 2022 as a result of the pending
transaction.
Supplemental Financial and Other Information:
Supplemental financial and other information can be accessed
through ForgeRock's investor relations website at
investors.forgerock.com.
As of September 30, 2022, we had 11,666,544 options outstanding
(vested and unvested) with a weighted-average exercise price of
$5.69 and 4,237,523 RSUs outstanding. As of October 31, 2022, there
were 47,666,366 shares of the registrant's Class A common stock
outstanding and 37,692,159 shares of the registrant's Class B
common stock outstanding. For more information, please refer to our
Quarterly Report on Form 10-Q for the quarter ended September 30,
2022.
Non-GAAP Financial Measures and Key Metrics:
Besides financial results prepared in accordance with generally
accepted accounting principles (“GAAP”), ForgeRock believes that
evaluating its ongoing operating results may be difficult if
limited to reviewing only GAAP financial measures. Accordingly,
ForgeRock uses non-GAAP financial measures to evaluate its
operations. We use non-GAAP financial measures to understand and
evaluate our core operating performance and trends, to prepare our
annual budget, to monitor and assess our liquidity, and to develop
short-term and long-term operating plans. We believe that the
non-GAAP financial measures we review are each a useful measure to
us and to our investors because they provide consistency and
comparability with our past performance and between periods, as
these metrics generally eliminate the effects of the variability of
certain charges and expenses that may not reflect our overall
operating performance and liquidity. We believe that non-GAAP
financial measures, when taken collectively with GAAP financial
information, can be helpful to us and to investors because it
provides consistency and comparability with past performance and
assists in comparisons with other companies, some of which use
similar non-GAAP financial information to supplement their GAAP
results.
ForgeRock presents non-GAAP gross profit, non-GAAP gross margin,
non-GAAP research and development, non-GAAP sales and marketing,
non-GAAP general and administrative, non-GAAP operating loss,
non-GAAP operating margin and non-GAAP net loss per share, all of
which exclude acquisition-related costs, stock-based compensation
expense, and certain of which exclude the tax effect on the
provision for (benefit from) income taxes related to such excluded
items. ForgeRock excludes acquisition-related costs because they
are unrelated to our current operations and are neither comparable
to the prior period nor indicative of future results. We also
exclude stock-based compensation expense as it can vary
significantly from period to period based on share price and the
timing, size and nature of equity awards. As such, ForgeRock and
many investors and analysts exclude stock-based compensation
expense to better evaluate its operating performance and cash
spending levels relative to its industry sector and
competitors.
ForgeRock presents adjusted EBITDA, which is also a non-GAAP
financial measure. We define adjusted EBITDA as GAAP operating
loss, adjusted for depreciation, acquisition-related costs and
stock-based compensation expense. ForgeRock excludes certain items
that it believes are not good indicators of ForgeRock’s current or
future operating performance. These items are depreciation,
acquisition-related costs and stock-based compensation. ForgeRock
excludes depreciation given its standard exclusion in EBITDA and
adjusted EBITDA results. In addition, the frequency and amount of
such charges can vary significantly based on the size and timing of
the transactions.
ForgeRock also presents free cash flow, which is a non-GAAP
financial measure. We define free cash flow as net cash used in
operating activities less cash used for purchases of property and
equipment. ForgeRock provides free cash flow as it is a commonly
used non-GAAP financial measure to indicate the amount of cash
needed to fund its operations and capital expenditures.
The non-GAAP financial information is presented for supplemental
informational purposes only and should not be considered a
substitute for financial information presented in accordance with
GAAP and may be different from similarly-titled non-GAAP measures
used by other companies. The principal limitation of these non-GAAP
financial measures is that they exclude expenses that are required
by GAAP to be recorded in our consolidated financial statements. In
addition, they are subject to inherent limitations as they reflect
the exercise of judgment by our management about which expenses are
excluded or included in determining these non-GAAP financial
measures. A reconciliation is provided below for each non-GAAP
financial measure to the most directly comparable financial measure
stated in accordance with GAAP. Investors are encouraged to review
the related GAAP financial measures and the reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP
financial measures.
ForgeRock also uses the key metric Annualized Recurring Revenue
(“ARR”), to evaluate its operations. We believe that ARR is a key
metric because it is driven by our ability to acquire new customers
and to maintain and expand our relationship with existing
customers. We define ARR as the annualized value of all contractual
subscription agreements as of the end of the period. To the extent
that we are negotiating a renewal with a customer after the
expiration of the subscription, we continue to include that revenue
in ARR if we are actively in discussion with such an organization
for a new subscription or renewal, or until such organization
notifies us that it is not renewing its subscription. We perform
this calculation on an individual customer basis by dividing the
total dollar amount of the customer’s contract by the total
contract term stated in months and multiplying this amount by 12 to
annualize. Calculated ARR for each individual customer is then
aggregated to arrive at total ARR.
ARR does not have a standardized meaning and therefore may not
be comparable to similarly titled measures presented by other
companies. ARR should be viewed independently of revenue, deferred
revenue and remaining performance obligations computed and/or
disclosed in accordance with GAAP and is not intended to be
combined with or to replace any of those items. Specifically, ARR,
as calculated under the definition herein, has the effect of
normalizing the impact of revenue recognition for term-based
subscription license agreements. ARR is calculated based upon
annualized contract value and not actual GAAP revenue. Under ASC
606, for term-based subscription license agreements, we recognize
approximately half of the total contract value upfront as license
revenue, with the remainder attributable to maintenance and support
that is recognized ratably over the license term. Annualizing
actual GAAP revenue for any particular period could result in a
meaningful difference from our ARR calculation, particularly when
we are experiencing increases or decreases in the mix of multi-year
term licenses. ARR is not a forecast and the active contracts at
the date used in calculating ARR may or may not be extended by our
customers.
About ForgeRock
ForgeRock®, a global leader in digital identity, delivers modern
identity and access management solutions for consumers, employees
and things to simply and safely access the connected world. Using
ForgeRock, more than 1,300 organizations around the world
orchestrate, manage, and secure the complete lifecycle of
identities from dynamic access controls, governance, APIs, and
storing authoritative data – consumable in cloud or hybrid
environments.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Revenue:
Subscription term licenses
$
23,904
$
19,364
$
59,089
$
62,949
Subscription SaaS, support &
maintenance
31,282
22,940
87,029
61,543
Perpetual licenses
91
183
197
885
Total subscriptions and perpetual
licenses
55,277
42,487
146,315
125,377
Professional services
2,943
1,739
7,674
3,652
Total revenue
58,220
44,226
153,989
129,029
Cost of revenue(1):
Subscriptions and perpetual licenses
6,635
4,517
18,903
12,312
Professional services
2,929
3,977
8,692
10,658
Total cost of revenue
9,564
8,494
27,595
22,970
Gross profit
48,656
35,732
126,394
106,059
Operating expenses(1):
Research and development
15,554
10,827
45,699
31,214
Sales and marketing
28,973
22,509
86,001
64,795
General and administrative
14,551
11,188
43,030
28,091
Acquisition-related costs
2,364
—
2,364
—
Total operating expenses
61,442
44,524
177,094
124,100
Operating loss
(12,786
)
(8,792
)
(50,700
)
(18,041
)
Foreign currency gain (loss)
2,173
(2,684
)
3,634
(3,003
)
Fair value adjustment on warrants and
preferred stock tranche option
—
(2,729
)
—
(10,068
)
Interest expense
(894
)
(1,195
)
(2,674
)
(3,572
)
Other income (expense), net
721
339
1,065
(66
)
Interest and other expense, net
2,000
(6,269
)
2,025
(16,709
)
Loss before income taxes
(10,786
)
(15,061
)
(48,675
)
(34,750
)
Provision for income taxes
152
205
1,103
660
Net loss
$
(10,938
)
$
(15,266
)
$
(49,778
)
$
(35,410
)
Net loss per share attributable to common
stockholders:
Basic and diluted
$
(0.13
)
$
(0.44
)
$
(0.59
)
$
(1.26
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders:
Basic and diluted
85,085
34,680
84,488
28,124
¹ Includes stock-based compensation as
follows (in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Cost of revenue
$
657
$
26
$
1,789
$
193
Research and development
1,632
564
4,685
1,058
Sales and marketing
2,798
1,078
7,859
2,046
General and administrative
2,638
1,441
7,822
3,099
Total stock-based compensation expense
$
7,725
$
3,109
$
22,155
$
6,396
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
(Unaudited)
September 30,
2022
December 31,
2021
Assets
Cash and cash equivalents
$
138,542
$
128,381
Short-term investments
203,971
241,411
Accounts receivable, net of allowance for
credit losses of $155 and $34, respectively
33,307
55,999
Contract assets
22,778
19,670
Deferred commissions
8,697
8,457
Prepaid expenses and other assets
12,899
9,787
Total current assets
420,194
463,705
Deferred commissions
17,891
15,601
Property and equipment, net
2,800
2,463
Operating lease right-of-use assets
10,272
12,626
Contract and other assets
3,495
2,783
Total assets
$
454,652
$
497,178
Liabilities and stockholders’
equity
Accounts payable
$
1,511
$
2,039
Accrued compensation
19,214
22,359
Accrued expenses
8,961
5,016
Current portion of operating lease
liability
1,562
1,820
Deferred revenue
57,923
67,222
Other liabilities
1,331
2,258
Total current liabilities
90,502
100,714
Long-term debt
39,579
39,483
Long-term operating lease liability
9,519
11,037
Deferred revenue
1,377
8,172
Other liabilities
1,909
1,646
Total liabilities
142,886
161,052
Stockholders’ equity:
Common stock
85
83
Additional paid-in capital
623,671
593,196
Accumulated other comprehensive income
1,613
6,672
Accumulated deficit
(313,603
)
(263,825
)
Total stockholders’ equity
311,766
336,126
Total liabilities and stockholders’
equity
$
454,652
$
497,178
As of October 31, 2022, there were
47,666,366 shares of the registrant's Class A common stock
outstanding and 37,692,159 shares of the registrant's Class B
common stock outstanding.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2022
2021
Operating activities:
Net loss
$
(49,778
)
$
(35,410
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation
812
795
Noncash operating lease expense
1,865
1,186
Stock-based compensation expense
22,155
6,396
Amortization of deferred commissions
10,652
10,436
Foreign currency remeasurement (loss)
gain
(3,636
)
1,972
Change in fair value of redeemable
convertible preferred stock warrant liability
—
5,871
Change in fair value of preferred stock
tranche option liability
—
4,157
Amortization of premium / discount on
short-term investments
1,690
608
Other
28
157
Changes in operating assets and
liabilities:
Deferred commissions
(13,182
)
(14,366
)
Accounts receivable
22,094
(2,170
)
Contract and other non-current assets
(3,416
)
(13,500
)
Prepaid expenses and other current
assets
(3,291
)
(3,696
)
Operating lease liabilities
(1,301
)
(1,614
)
Accounts payable
(506
)
272
Accrued expenses and other liabilities
509
3,244
Deferred revenue
(15,699
)
4,306
Net cash used in operating
activities
(31,004
)
(31,356
)
Investing activities:
Purchases of property and equipment
(1,474
)
(459
)
Purchases of short-term investments
(139,149
)
(201,415
)
Maturities of short-term investments
133,615
—
Sales of short-term investments
39,110
19,960
Net cash provided by (used in)
investing activities
32,102
(181,914
)
Financing activities:
Proceeds from the initial public offering, net of underwriting
discounts and commissions
—
295,694
Payment of offering costs
(145
)
(4,076
)
Proceeds from exercises of employee stock
options
4,150
3,189
Proceeds from issuance of common stock
under employee stock purchase plan
4,374
—
Employee payroll taxes paid for net shares
settlement of restricted stock units
(188
)
(3,528
)
Proceeds from issuance of redeemable
convertible preferred stock
—
19,951
Principal repayments on debt
—
(120
)
Net cash provided by financing
activities
8,191
311,110
Effect of exchange rates on cash and cash
equivalents and restricted cash
857
(638
)
Net increase in cash, cash equivalents and
restricted cash
10,146
97,202
Cash, cash equivalents and restricted
cash, beginning of year
128,437
100,042
Cash, cash equivalents and restricted
cash, end of period
$
138,583
$
197,244
Reconciliation of cash and cash
equivalents and restricted cash:
Cash and cash equivalents
$
138,542
$
197,221
Restricted cash included in prepaids and
other current assets
41
23
Total cash and cash equivalents and
restricted cash
$
138,583
$
197,244
Short-term investments, end of period
$
203,971
$
180,872
FORGEROCK, INC.
NON-GAAP FINANCIAL MEASURES
AND RECONCILIATIONS TO GAAP RESULTS
Non-GAAP Gross Profit and Non-GAAP
Gross Margin
Gross profit is defined as GAAP revenue
less cost of revenue and gross margin is GAAP gross profit as a
percentage of total revenue. We define non-GAAP gross profit and
non-GAAP gross margin as GAAP gross profit and GAAP gross margin
adjusted to exclude stock-based compensation expense, as presented
below (in thousands, except percentages):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Gross Profit
$
48,656
$
35,732
$
126,394
$
106,059
Add: Stock-based compensation included in
cost of revenue
657
26
1,789
193
Non-GAAP gross profit
$
49,313
$
35,758
$
128,183
$
106,252
Gross margin
84
%
81
%
82
%
82
%
Non-GAAP gross margin
85
%
81
%
83
%
82
%
Non-GAAP Research and
Development
We define non-GAAP research and
development as GAAP research and development adjusted to exclude
stock-based compensation expense, as presented below (in
thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Research and development
$
15,554
$
10,827
$
45,699
$
31,214
Less: Stock-based compensation
1,632
564
4,685
1,058
Non-GAAP research and development
$
13,922
$
10,263
$
41,014
$
30,156
Non-GAAP Sales and Marketing
We define non-GAAP sales and marketing as
GAAP sales and marketing adjusted to exclude stock-based
compensation expense, as presented below (in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Sales and marketing
$
28,973
$
22,509
$
86,001
$
64,795
Less: Stock-based compensation
2,798
1,078
7,859
2,046
Non-GAAP sales and marketing
$
26,175
$
21,431
$
78,142
$
62,749
Non-GAAP General and
Administrative
We define non-GAAP general and
administrative as GAAP general and administrative adjusted to
exclude stock-based compensation expense, as presented below (in
thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
General and administrative
$
14,551
$
11,188
$
43,030
$
28,091
Less: Stock-based compensation
2,638
1,441
7,822
3,099
Non-GAAP general and administrative
$
11,913
$
9,747
$
35,208
$
24,992
Non-GAAP Operating Loss and Non-GAAP
Operating Margin
We define non-GAAP operating loss and
non-GAAP operating margin as GAAP operating loss and GAAP operating
margin adjusted to exclude stock-based compensation expense and
acquisition-related costs, as presented below (in thousands, except
percentages):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Operating loss
$
(12,786
)
$
(8,792
)
$
(50,700
)
$
(18,041
)
Add: Stock-based compensation
7,725
3,109
22,155
6,396
Add: Acquisition-related costs
2,364
—
2,364
—
Non-GAAP operating loss
$
(2,697
)
$
(5,683
)
$
(26,181
)
$
(11,645
)
Operating margin
(22
)%
(20
)%
(33
)%
(14
)%
Non-GAAP operating margin
(5
)%
(13
)%
(17
)%
(9
)%
Adjusted EBITDA
We define adjusted EBITDA as operating
loss adjusted to exclude depreciation, stock-based compensation
expense and acquisition-related costs, as presented below (in
thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Operating loss
$
(12,786
)
$
(8,792
)
$
(50,700
)
$
(18,041
)
Add: Depreciation
263
259
812
795
Add: Stock-based compensation
7,725
3,109
22,155
6,396
Add: Acquisition-related costs
2,364
—
2,364
—
Adjusted EBITDA
$
(2,434
)
$
(5,424
)
$
(25,369
)
$
(10,850
)
Non-GAAP Net Loss and Non-GAAP Net Loss
per Share, Basic and Diluted
We define non-GAAP net loss as GAAP net
loss adjusted to exclude stock-based compensation expense and
acquisition-related costs, including the tax effect of stock-based
compensation expense on the provision for (benefit from) income
taxes as presented below (in thousands, except per share
amounts):
We define non-GAAP net loss per share,
basic, as non-GAAP net loss divided by GAAP weighted-average shares
used to compute net loss per share, basic.
We define non-GAAP net loss per share,
diluted, as non-GAAP net loss divided by GAAP weighted average
shares used to compute net loss per share, basic, adjusted for (i)
the dilutive effect of employee equity awards, excluding the impact
of unrecognized stock-based compensation expense and (ii) warrants;
unless these adjustments are anti-dilutive.
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net loss
$
(10,938
)
$
(15,266
)
$
(49,778
)
$
(35,410
)
Add: Stock-based compensation
7,725
3,109
22,155
6,396
Add: Acquisition-related costs
2,364
—
2,364
—
Tax effect on the benefit from income
taxes
(65
)
(14
)
(198
)
(37
)
Non-GAAP net loss
$
(914
)
$
(12,171
)
$
(25,457
)
$
(29,051
)
Non-GAAP net loss per share, basic and
diluted
$
(0.01
)
$
(0.35
)
$
(0.30
)
$
(1.03
)
Free Cash Flow
We define free cash flow as net cash
provided by (used in) operating activities less cash used for
purchases of property and equipment as presented below (in
thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net cash used in operating activities
$
(4,580
)
$
(2,035
)
$
(31,004
)
$
(31,356
)
Purchases of property and equipment
(500
)
(118
)
(1,474
)
(459
)
Free cash flow
$
(5,080
)
$
(2,153
)
$
(32,478
)
$
(31,815
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221109005954/en/
Investor Relations Contacts:
Mark Kang, ForgeRock investors@forgerock.com
Media Contacts:
Kristen Batch, ForgeRock kristen.batch@forgerock.com
Stacey Hurwitz, ForgeRock stacey.hurwitz@forgerock.com
Edelman on behalf of ForgeRock Evgenia Sinopidou, Edelman
evgenia.sinopidou@edelman.com
Grafico Azioni ForgeRock (NYSE:FORG)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni ForgeRock (NYSE:FORG)
Storico
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