ForgeRock, Inc. Class A

conference call. As a reminder, this call is being recorded. I would like to turn the call over to Mark King, ForgeRock's Head of Investment Relations. Please go ahead.

Hello, everyone. Welcome to ForgeRock Q4 and full year 2021 earnings conference call. On the call with me today are Fran Roche, CEO of ForgeRock, and John Fernandez, our Chief Financial Officer and EVP of Global Operations. Before we begin, I'd like to remind you that our discussion today includes forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include statements related to our expected results for Q1 and full year 2022, our future offerings and enhancements to our current offerings, the market for our offerings, customer demand for our offerings, and other matters. Actual results could differ materially from those indicated by these forward-looking statements. We encourage you to review the risk factors that we have included in our SEC filings including our quarterly report on Form 10Q5 of the SEC on November 12, 2021, for some of the factors that could cause actual results to differ from those indicated by the forward-looking statements. All non-GAAP numbers referenced in today's call are reconciled in our press release and in slides available on our Investor Relations website. With that, I'll hand the call over to Fran.

Thanks, Mark, and thanks to everyone for joining our second earnings call as a public company. 2021 was a momentous year for Fordrock that was capped off with strong acceleration in our ARR growth rate and a record amount of net new ARR generated in a quarter. Our ARR grew 35% in Q4 and 35% in fiscal 2021, a significant sequential acceleration compared to the 30% growth in Q3 of 2021. Our strong results are driven by the consistent demand that we are seeing for ForgeRock's enterprise-grade identity platform, as we continue to win business from many of the world's largest and most demanding enterprises. We added a record number of customers with $100,000 of ARR or greater in Q4, bringing our total to 394, representing an acceleration in large customer growth to 21% year-over-year. Adoption of our SaaS offering, the ForgeRock Identity Cloud, is exceeding our expectations. We previously said we would provide disclosure around SaaS ARR, and today we are pleased to announce that the ForgeRock Identity Cloud represented 12% of total ARR at the end of 2021. This traction underscores the rapid enterprise adoption and strong product market fit for our SaaS offering after its first full year of availability. Our achievements in 2021 and the momentum heading into 2022 supports our view that we've raised the bar for ForgeRock's growth. We are confident we can continue to grow our ARR north of 30% in 2022 with the potential for further acceleration in this exciting market. We built a leading enterprise identity platform, and the demand for our platform is stronger than ever. We also play in a massive $71 billion market across SIAM, workforce, and IoT identity, where legacy platforms and homegrown and point solutions represent a huge replacement opportunity. All this plays to our platform's strengths and contributes to our market share gains. Before diving into some of the highlights of the fourth quarter, I want to revisit four key drivers of our growth. As we look ahead to 2022, we see these dynamics as core to our strategy in continuing to gain market share and capitalize on the larger growing market for identity. First, we have the right platform for enterprises that have made digital transformation a top priority. What makes our platform differentiated? We're purpose-built for enterprises and we cover the broadest identity lifecycle. We do this at an Internet scale with one platform for all identities, consumers, employees, partners, and IoT. We make it easy for companies to deliver personalized and seamless omni-channel experiences. And our customers don't have to cobble together multiple point solutions. Our unified platform takes the complexity out of it. Second, many companies want choice in where they deploy their IAM solution. Our ability to serve customers in a self-managed hybrid or SaaS environment really enables us to address the full market. Third, our differentiated SaaS architecture with a focus on high-scale performance and data security is a key reason why enterprise customers choose ForgeRock. We give customers control over where their data resides, which is becoming increasingly more important for enterprise customers globally. Fourth, we have an attractive land and expand growth opportunity. New customer acquisition is being driven by new product innovation, increased productivity of our go-to-market engine, and industry analyst recognition. Our expand opportunity is being driven by customers adding more identities, use cases, and product modules, and we have a big opportunity to convert our existing self-managed customers to the 4DRAC Identity Cloud. We've continued to receive third-party validation from industry research. In the past, you may have heard us mention the Triple Crown, how 4DRAC continues to be the only identity provider recognized as a leader by Gartners for Access Management and Forrester and Coventry Coal for Cyan. Just a few months ago, Gartner published a new report called Critical Capabilities for Access Management, which is a deep technical review of 12 identity companies. When you combine our scores across all three categories in the report, which are SIAM, workforce, and application development, we are the highest ranked platform. We believe we are best positioned in the market with the leading identity platform that has earned recognition from many market analysts over the past year. Customers are at the heart of ForgeRock's culture, and I'm excited to share several notable wins from the quarter. First, let's take a look at the momentum we're seeing with our SaaS offering. Both HealthPartners and Nationwide Building Society are net new customers for us. HealthPartners is the largest consumer-governed nonprofit healthcare organization in the U.S. with a mission to improve health and well-being in partnership with members, patients, and the community. HealthPartners saw an opportunity to leverage identity to improve and grow its business, such as enhancing the user experience for members and providers and driving efficiencies, such as reducing health test calls and eliminating duplicate accounts. HealthPartners selected ForgeRock Identity Cloud due to its unique architecture and features that specifically address health partners' innovative use cases, as well as Forge's ability to drive rapid success. Our HIPAA compliance is essential to help enclose this deal as well as others in Q4. Nationwide Building Society is the UK's largest building organization with 16 million members and one of the largest providers of mortgages, savings, and current accounts in the UK. Nationwide selected our Forge Rack Identity Cloud for both its retail banking and mortgages divisions as it improves and enhances how it authenticates people across its mortgage and banking divisions. Our next two customers are great examples of existing customers that have decided to migrate to our SaaS offering as part of our Software to SaaS initiative. With more than 1,500 companies in over 130 countries, This global financial services company offers end-to-end managed payroll service, including Visa, Medtronic, and Intuit. The company connects all employee pay processes, including payroll, payments, and on-domain pay, through a unified SaaS platform. As the company continues to expand, it was looking to broaden its existing 4DRAC solution to support more employees, reduce overhead, and lower the TCO for IAM. The company chose to migrate to the ForgeRock Identity Cloud to address their performance and capabilities needs, and ForgeRock's ability to support on-prem and cloud simultaneously to minimize typical migration challenges also influenced their decision to choose ForgeRock's SaaS offering. Our fourth customer example has been a ForgeRock customer since 2015. and has been managing identities for its nearly 13,000 employees and more than 100,000 customers when the company decided to transfer all of its applications to a cloud-based environment. This customer is confident in 4DRAC's ability to operate in a hybrid model during the phase transition with on-prem and cloud applications running in parallel and not impacting security or business functions. With ForgeRock Identity Cloud, the customer expects to reduce their TCO and reduce risk through the automation of patches and upgrades while continuing to meet the company's scalability and user experience requirements. We are extremely proud to announce that two of the world's largest banks became significant customers of ForgeRock and Q4. For our fifth customer example, this banking customer needed to migrate off of its legacy C8 site minder and custom-built infrastructure in order to provide the business with a more flexible and stable identity platform. After an exhaustive review of the market, this bank selected 4DROC because of our deployment model flexibility and the strength of our platform for large, complex enterprise use cases. This particular bank needed to provide their very large consumer customer base with the exceptional user experiences and improve security for multiple devices to reduce fraud, ease regulatory compliance, and continue to deliver innovation to maintain their industry leadership. This customer chose ForgeRock for the key reasons that I highlighted earlier. First, our ability to give customers choice of deployment across complex environments. Second, our leadership in Cyan. Third, our full suite identity platform that scales to meet the demands of the world's largest enterprises. And fourth, the ability for our customers to design frictionless identity experiences using our low-code, no-code identity trees without compromising on security and fraud reduction. For our next banking customer example, ForgeHawk was selected to support hundreds of thousands of identities across the globe for all lines of business. This customer chose to replace its existing enterprise identity governance solution in order to improve visibility and onboarding of employees and applications. Initially, the customer will deploy 4DROC to help provision and reconcile millions of applications with non-human identities. Currently, this process is manual, which is extremely time consuming and costly. Streamlining the process with 4DROC will help the customer realize significant cost savings and ensure regulatory compliance. They plan to address these same needs with human identities next. We are also seeing ongoing traction with our AI offering, which we refer to as autonomous identity. And the following is an example of a customer that purchased autonomous identity during the quarter. Ameritas offers a wide range of insurance and financial products and services to individuals, families, and businesses. Like many financial services organizations, Emeritus was managing roles and entitlements manually, which is time-intensive and costly. Wardrock was able to quickly produce an assessment with autonomous identity in less than two weeks in order to show Emeritus how the company could more rapidly and efficiently clean its data. Specifically, Emeritus was impressed with the AI capabilities and autonomous identity, which provides excellent time to value by identifying relationships in the data, in an automated way and labeling them as low, medium, or high risk. This helps the analysts at Emeritus to make decisions much faster than before. This is a great example of the value of autonomous identity, which helps organizations save time and money and lower risk by automating decision-making. I couldn't be more pleased with these large customer wins across our SaaS and self-managed offerings as well as a broad range of industries. We released over 30 new features on our IAM platform in Q4, focused on advancing our SaaS scalability and resilience, making our market-leading identity trees and orchestration capability even more powerful, and deepening our support of identity standards, such as OAuth 2 and OpenID Connect. Looking ahead to 2022, we are extending our pace of innovation in areas of AI and SaaS. We're building on the success of our existing autonomous identity product and we'll be introducing a new AI-driven fraud protection solution in the next several months. It provides a risk signals and scores for users in order to stop bad actors and fraud in real time at the identity perimeter. Core features will help to identify account takeover attempts, credential stuffing, suspicious IPs, impossible travelers, man-in-the-middle attacks, phishing, and bots, while at the same time improving the experience of legitimate users. We are now into our third year of having a converged identity management, access management, MFA, and identity governance solution. Since 2019, we've been innovating an AI-driven governance solution and customers choose our solution because it automates commonly used identity lifecycle processes, gives the users the access they need to do their jobs, and ensures compliance with security and regulatory guidelines. Later in 2022, we will release our identity governance solution into the 4DRAC Identity Cloud with a cloud-native modern architecture that will scale to large enterprise needs. Before I turn the call over to John, I want to revisit four drivers of our growth in 2022 and beyond. We are extremely well positioned to continue to capitalize on the large and growing market opportunity for enterprise-grade identity, which will drive durable and sustainable AR growth for us. First, we have the right modern identity platform for enterprises for all types of identity. Second, we give our customers the power of deployment choice. Third, our differentiated SaaS architecture. And fourth, our attractive land and expand growth opportunity is a winning combination. These four business dynamics give us tremendous confidence that we have the right platform supported by a best-in-class go-to-market organization, which is fueling our growth. Our achievements in 2021 and our momentum heading into this fiscal year supports our view that we've raised the bar for growth. We expect to grow at our north of 30% in 2022, even as we further scale our company. We are a leader in this massive market. We have the right platform, technology, people, and partners to continue the acceleration of our business and further gain market share. With that, I'll turn the call over to John to walk through our financial results in more detail. John?