A $3B Ask on $195M of Revenue: Ping Identity's Pre-IPO Numbers
Vista paid about $600M for Ping Identity in 2016. Three years later it filed to go public on roughly $195M of revenue, with 1,000 employees and 60% of its business running through the channel — and a $3B number in the press.
On this page
Three months before Ping Identity put its numbers in a federal filing, Nathan Latka tried to get one out of Andre Durand on tape. Was $300m of annual recurring revenue a reasonable goal for the year, or a stretch? Durand would not take the question.
Without sharing numbers, let’s just say my goals in the foreseeable future exceed that. Now, foreseeable — I’m not going to say that’s this calendar year, but we certainly are making plans now for scale above and beyond that number.
Andre Durand, CEO, Ping Identity
That is roughly how the whole conversation went. Gross churn: “those sorts of numbers now we don’t share.” Quota-carrying headcount: “we don’t share those numbers.” Channel-sourced revenue: “we’re not disclosing that.” A CEO who had given Latka a full metrics teardown eighteen months earlier had gone quiet, and on 23 August 2019 a plausible reason became public: Ping Identity filed a Form S-1 with the SEC, seeking up to $100m and planning to trade as PING. Latka was interviewing a CEO on his way to a prospectus, and did not know it.
The argument. A buyer looking at Ping in the weeks before this IPO was not buying growth — 25% a year is respectable, not spectacular. It was buying an installed base that spends more every year without being sold to again, run by a management team that had already proved it could take an old perpetual-licence business apart and rebuild it as recurring revenue. That is what a $3b number would have to be paying for, and it is the only part of the story Durand was still willing to explain.
When the interview actually happened
The episode carries the title “Exclusive: Ping Identity CEO On Breaking $180m Revenue, Files to IPO,” but the conversation predates the filing it advertises. Latka never asks Durand about an S-1 — an impossible omission if one had been on file. The internal clues put the tape in spring 2019: Durand and Latka discuss the Zoom S-1 as a fresh document, Latka refers to Vista Equity Partners having “just raised a massive” new fund of some $14bn, and Latka opens by saying it had been “about a year and a half” since Durand’s previous appearance, which was recorded in November 2017. GetLatka’s own record captures the episode on 23 May 2019. The title was written later, at publication, once the filing existed.
The number Durand would not give, and the number the filing did
The S-1 says what the tape does not. Ping’s annual recurring revenue was $147.0m at the end of 2017 and $183.6m at the end of 2018, growth of 25%; between the halfway marks of 2018 and 2019 it moved from $159.6m to $198.0m, growth of 24%. Full-year 2018 revenue was $184.99m, up about 26%. Customers paying more than $250,000 a year grew from 144 to 202 over 2018, and 25 customers were paying over $1m a year at the end of it.
Set that against GetLatka’s Ping Identity record, which carries a revenue figure of $195m dated 23 May 2019 — the day of the interview. They are not quite the same measure — GetLatka logs revenue, the filing reports ARR — but they land within $3m of each other, and the GetLatka row was written three months before the prospectus existed. Durand gave neither figure. Both were assembled around him.
Why $3B is a five-times markup on Vista’s price
In December 2018, Reuters reported that Vista had hired Goldman Sachs to prepare the offering and that Ping could be valued at $2bn to $3bn in it. That report, not anything Durand said, is where the $3bn in circulation comes from. It is worth being precise about what a number that size would mean.
5xwhat a $3B price would be against the $600M Vista paid for Ping Identity in June 2016
It is also roughly fifteen times the $195m of revenue GetLatka recorded in May 2019, and about sixteen times the $183.6m of ARR the filing shows at the end of 2018. For contrast, take Vista’s own entry multiple, which Latka worked out on air in 2017 while putting The Information’s $600m figure to Durand: the company was over $100m in recurring revenue at the time, so “it’s a good 6x, right.” That was Latka’s arithmetic, not Durand’s, and Durand let both numbers stand. A strategic buyer stepping in ahead of the IPO would be paying two and a half times that multiple on a business growing 25% a year.
- Sep 2014 · Series F $35m, at a $251.8m valuation in GetLatka’s funding row — the last venture price before the sale.
- Jun 2016 · Vista buys Ping $600m, on over $100m of recurring revenue.
- Dec 2018 · Reuters reports Goldman hired and a possible $2bn–$3bn IPO valuation.
- Aug 2019 · Form S-1 filed 23 August, up to $100m, to trade as PING.
What a buyer would actually be buying
Strip out everything Durand refused to quantify and a mechanism still shows through clearly. Four things carry this business, and he described all four without putting a number on any of them.
Ping tracks how many customers spend over $100,000, over $250,000, over half a million and over a million. “All of those categories have increased in the range of 30 to 80 year-over-year.” Asked whether expansion revenue was running around 30%, Durand said only: “No, I would say it’s larger than that.”Durand, May 2019
“Go back maybe three years, we were maybe less than 15 of our business was channel influenced. Today it’s over 60, right about 60.” Channel-sourced deals — ones the partner found first — are a subset of that 60% he would not size.Durand, May 2019
Ping once spent two dollars of sales and marketing per dollar of subscription; efficiency work brought it to about $1.20. Then they decided to spend more on purpose, because the cohort data runs back to 2002 and the lifetime values are long.Durand, both interviews
The reason the deliberate CAC increase is not reckless: there is no clock on the money. Durand: “We’re profitable. It’s not like I’m consuming a finite set of capital with an expiration date.”Durand, May 2019
The retention arithmetic is where the tape and the database part company, and it is worth showing exactly how. Latka does the sum out loud, using figures GetLatka already held rather than anything Durand gave him that day.
100% less 12% gross revenue churn plus 40% expansion = 128% net revenue retentionLatka’s arithmetic, run live off GetLatka’s stored figures. Durand confirmed neither input; on revenue churn he said only “nothing has substantially changed.”
On his 2017 appearance Durand had given the churn number himself — “it’s 10% annually, and that’s logo,” with a small gap between logo and dollar churn — along with a $1.20 CAC and a 14-month payback. In 2019 all three were off the table. What he would still say is that lifetime value is “absolutely in the millions” per enterprise account, and that the correlation between deployment services and retention is real: “the last thing we want is a customer who unsuccessfully deploys our technology. That’s future churn risk.”
A strategic buyer already lost this company once
The slug’s question is not hypothetical, and the answer to it is on the older tape. Ping did not simply pick Vista in 2016; it ran a process, and corporate buyers were in it. Durand’s account:
We had been approached by a strategic partner in the first quarter of last year, and after being in the space for about 15 years, having investors who were in for over ten years, and achieving a certain size and scale, we thought it appropriate to see what the market was interested in. So we tested the market, had a couple of strategics interested, and then surprisingly had a few financial sponsors also interested.
Strategics were interested and did not win. The reason had nothing to do with price. Durand’s early investors had been in for over a decade, and his read was that an IPO would not get them out: an organised secondary might return their capital within six to nine months, but recovering the profit as well “could take two to three years, and again that’s assuming perfect execution.” A sale to Vista solved a liquidity problem that a listing would have prolonged.
Three years on, that constraint is gone. The decade-old venture investors have been paid; the shareholder is a private equity firm that Latka notes had just closed a new fund of some $14bn. A corporate bid ahead of the IPO would face an owner under no liquidity pressure at all, with a functioning alternative already on file at the SEC — which is exactly the position that makes a pre-emptive offer expensive.
What the $3B rests on
Being blunt about the sourcing, because the headline number is not Durand’s and should not be presented as if it were:
- Reuters, December 2018 — the origin of the $2bn–$3bn range, reported when Goldman was hired, nine months before the filing.
- The tape — Durand never says $3bn, never mentions the offering, and never gives a revenue figure at all.
- The episode title — “Breaking $180m Revenue” is not a number Durand states; the nearest figure in the record is the $183.6m of ARR the S-1 reports for the end of 2018.
- GetLatka’s row — $195m of revenue, dated 23 May 2019, assembled independently of the filing.
One more discrepancy, left visible rather than smoothed. How much did Ping raise before Vista? Durand said $110m in 2017. In 2019 Latka read back “you raised 123 before the Vista acquisition, right,” and Durand said yes — then Latka’s own outro on the same episode says $128m. GetLatka’s ten pre-Vista funding rows, running from a $5.8m Series A in April 2004 to the $35m Series F in September 2014, total $136.4m. Four numbers for one figure; the ones that matter for the multiple — what Vista paid and what Ping earns — do not move.
Durand had one more thing to say that afternoon, when Latka asked what he wished his twenty-year-old self had known.
A very, very deep question. I would say that the way people tell you the world works and the way the world really works are two different things. And really, at the end of the day, I’m describing wisdom — and once you appreciate wisdom, you listen better.
Sources Nathan Latka’s interview with Andre Durand, recorded May 2019, and his earlier interview with Durand recorded November 2017; GetLatka’s Ping Identity company record (revenue, team-size and funding rows, dated as cited); Ping Identity’s Form S-1, filed with the SEC on 23 August 2019; Reuters’ December 2018 report on the planned offering.
