Okta (OKTA) 29 Nov 232024 Q3 Earnings call transcript

Hi, everybody. Welcome to Okta's Third Quarter Fiscal Year 2024 Earnings Webcast. I'm Dave Gennarelli, Senior Vice President of Investor Relations at Okta. With me in today's meeting, we have Todd McKinnon, our Chief Executive Officer and Co-Founder; and Brett Tighe, our Chief Financial Officer.

statements forward-looking Private to of Securities but limited include provisions safe XXXX, will outlook not the financial of Litigation to, meeting statements positioning. the pursuant harbor including, and Today's market our regarding Reform Act

and achievements Forward-looking or by uncertainties that results, be the or implied materially different forward-looking risks may statements unknown and our cause involve actual expressed statements. known to performance from those

factors from date that management's our and only made. beliefs our results Information Form the included section with on time, previously affect Forward-looking our statements represent XX-Q. in the is could as assumptions Risk financial time our filings of Factors including filed titled in the to SEC

not state explicitly meeting, during profitability of between non-GAAP. equivalents for references of with measures and financial in the today's are the accordance it limitations their to we performance using all in non-GAAP substitute a superior release. earnings our a addition, to non-GAAP or available of and in GAAP non-GAAP addition closest meeting, and are to may financial financial measures versus GAAP measures discussion prepared not measures These reconciliation is discuss during In non-GAAP we will A measures. GAAP. financial Though

or today's represents find website. In You comparison. each such changes meeting, statements which as include we otherwise and performance. noted, our quote detailed trended growth more And can Relations our supplemental financial will also number a financial our well on key in information financial reference numeric of Investor unless materials, as metrics discuss a year-over-year posted

Todd? McKinnon. Todd to over meeting the turn I'll Now

support quarter. allows to the new blog by everyone, threat what's case incident e-mail press kick some my in posted related release while was customers to us trying more information security support and release remarks the this we in the want all quarter. and obtained IR we it as the important posted we this new time so off format light hit of new opened top actor a including customers, around earnings contact for time of prepared Okta morning, start admins, analysis Thanks, earnings Dave, which environments. this time and commentary well. of determined involving We customer afternoon. out spend the addresses before to joining get of security by event, our of for same DoD This the of the to and contains across this that leaving typical and post format want of the our we from thank a summarizing we're for around ILX Upon significant wins names In this And news that we update the deeper wire, the new the me our a portal portion guidance our felt High October mind everyone, more the discussing the the to to information except notable market system. addressing also other blog Q&A. I shared FedRAMP users the call management website, morning you,

information for data, this cannot the phishing we themselves help attacks. customers personal this a sensitive our threat information, and strongly may and against better While detailed credentials user an will this risk engineering Okta sharing or directly use does not With to protect more felt social information environment increased phishing include be information actor an used attempts. of access targeted that

share customers validate forensics mid-December. digital a our and the with finalized, findings that will and We firm currently they publicly. have expect Once in complete will their to engaged analysis we report

ourselves to doing is Okta from what address security me let better Now protect threats.

significant we dedicated product environment. securing Over our resources towards years, have the

of to That our do we use, vendors Given that includes with. applications events, the work hardware security the need the deploy architecture we broader we we to operations. and the recent recognize more we improve

several strengthen weeks, further have past few we the taken our steps security Over to posture.

as We fortify have rallying more will security future efforts. project initiated during Okta stakes job done, a by our and hyper-focused no other security securing well our hyper-focused organization to engaging as area we customers. priority our protect the of Bolstering are but or team's far do product environment the to current firms it development third-party the with plan action security The will by this high, highest entire and is takes for phase, Okta. The important. be is ecosystem even never whatever

that highlighted week. for new The will Privileged and month the being generally be last Oktane exception approximately In products pushed becomes this out days. Okta we Access, fact, dates at available launch which features the XX

our to turning strong. metrics line QX were results. Now Top

continue over across We $X vertical. our strength to sector particular with experience fastest-growing upsells public large also new the ACV with It growth past of XX%. Similar quarters, our customers with for cohort a strong few to quarter and customers. million-plus was was

everyone us driven team, a Operations. Okta our to is our the thrilled appointment profit Addison, and the have the and non-GAAP Jon increase President flow this go-to-market fiscal the of appointed start of been produced measures other vision the gives as We to CRO the has demonstrate position. The move operating in safely since our any quarter we for closed to in ability news, interim record record permanent our as in of who we're by model. In been continue our we're that and continued we free forward. ecosystem technology. cash CRO also in free the With to Worldwide to security year, leverage taking Jon's confidence use Okta confidence to Field search has our leadership

independent the access even for out come privileged will identity platform because of access. only Okta modern We and neutral now stronger is governance management, and this

supported Brett, who us live everyone Francisco Before people Okta viewing their turning last who tireless at their to it in put customers online. event at to over our Oktane want where thank and over the every over San XX,XXX for had also I trust and thank employees to X,XXX efforts. our month, I want I partners day. in thank we

our Now walk Brett results to details forward I'll more financial and of through turn outlook. it to you

thank advisory and you, such our Metrics that which joining quarters continue quarter cost half commentary some the review our on largely the as environment. the ago us in XX actions past but we've of incident the to the security recent our today. while macro consistent first macro size Todd, duration, with structure efficiencies was headwinds, impressive taken experienced The impact start the the to business. to continue October year. Separately, over and results. quarter. we stabilized, pipeline contract our Thanks, mix with to in I'll environment drive results few and third I'll for use yield everyone, first, outlook, on the deal average XX, what we we gauge days were regarding published in Macro

overall QX business While was strong. performance our of in at somewhat, the slowed financial the quarter close

Total has RPO lengths a or total international revenue FX for The point XX% impact Turning International shortening quarter was results. a subscription and contract X%. quarters XX%, signed XX% X QX revenue Subscription but a term total to grew the revenue our growth of third XX% over revenue. backlog represented driven by in growth. RPO subscription growth. several was had revenue our growth impacted general represented the past revenue. on total grew revenue of headwind of to revenue. increase XX% minor total

remains which length subscription revenue the Current term to average overall to recognize we backlog $X.XX represents next months, over expect over just X.X grew RPO, billion. years. XX as XX% Our

the Turning range. strong remained to Consistent gross in prior retention. mid-XX% quarters, with retention rates

activities. the XX-month net period the may trailing Our fluctuate few retention mix seat retention years. by dollar-based of to from resulted Similar expansions than believe driven smaller quarters, was and and business, fluctuates. this current The environment. remained quarter-to-quarter pressure and We for as cross-sell rate rate upsell macro-related in net will in at new persist renewals previous upsells past XXX% the trend strong in the both

previously, experienced noted more macro-related a shift we've in mix upsell I've versus business. to our cross-sell business new and As

and discussing noted. unless Before out be non-GAAP I'll point profitability, that expense items turning results I'll otherwise to

sequentially $XXX due collections. The better-than-expected strong flow measures. Total margin for the over-performance profitability million, of better is XX%. continued lower of free Looking combination flow at cash a end Total Free was quarter at were the and expenses efficiency operating increased spend on than billings operating cash the expenses. to QX slightly QX focus free X,XXX. of significantly headcount a expected. our and yielding approximately by record was cash flow than driven to expected, revenue

our $XX million During the convertible third notes. resulted GAAP-only quarter, $XXX opportunistically an debt in gain. million repurchased This we of XXXX

million X past resulting a in the repurchased $XX GAAP-only gain. of debt quarters, Over million $XXX we've

We priorities. regularly will continue allocation capital capital evaluate structure and our to

equivalents strong, by $X.XX Our in anchored short-term balance remains and investments. cash, sheet cash billion

debt net position investments short-term million. and equivalents cash of is convertible $XXX cash, remaining Our

QX for 'XX outlook preliminary at 'XX. FY turn Now a our business let's to FY and and look

forward We're also stable take in incident. guidance, environment. to are we factoring the recent but a As security always, in we prudent factoring macro still approach challenging a

For income which to the we million, billion, income non-GAAP $X.XXX of operating representing XX% diluted to $XXX growth and FY of a XX% per growth of million, of operating million net fourth XXX share to to shares XX%; revenue outstanding $XXX XX%; current yields of million. $X.XX, million billion $XXX expect to quarter of average diluted $X.XX of to non-GAAP weighted total assuming $XXX non-GAAP of margin representing RPO $X.XXX XX%; 'XX, of

range. We million revenue 'XX, FY high expect revenue now billion our $X.XXX of outlook For $XX at we to growth are billion, the the by $X.XXX of of XX%. end representing raising

high FY million. the dollar operating diluted 'XX net raising up margin million, of income raising to for achieving assuming of and Non-GAAP free to Rule over million average is that's a non-GAAP On XX%. a our And XX. a basis, sets cash to are raise flow to $X.XX, $XX are outlook per from yields million by share us which income to our close margin XX% outstanding We shares of $XXX outlook end raised diluted we $X.XX non-GAAP XXX to of operating $XX XX% previously. the million $XXX weighted at year for the

'XX. planning, to in we factoring in as of are stable still we as challenging would well of While a prudently phases reiterate we the but potential macro security the that early impacts provide are a incident. view preliminary environment recent like financial from FY I'll

revenue be control XX%. of growth to free perspective, total to a approximately to operating also XX%. focus cash least $X.XXX be non-GAAP continue billion margin we XX%. estimated revenue of range $X.XXX expense and in We're estimate approximately billion to of on We From flow margin at the or targeting

rate a static tax applying of years for XX% we path up, the come. that are profitable are 'XX. To for set FY we've effective We growth and FY to 'XX non-GAAP things confident wrap

while and cash operating back drive our that, improvements Dave? over focus the continue turn Dave We to initiatives making to flow top on significant it line to for to margins. With drive to progress Q&A. I'll

few a I'll take with raised Instructions] quite that, are there And JPMorgan. that see hands already, go I order. [Operator at Brett. to Thanks, we'll them in so Essex Brian

recent outlook. the start rates, with to guess channel with consideration partners one, would guess, 'XX want of and your impact, other to, you the be you to alluded would I ask I particular. I'll improve preliminary for And need growth. that's guys relationships. And into pipeline, in the to in you just in the the the order context as I better of, off the taking customer issues most easy breach guess, relationship One X drive close on I be, fiscal your

contribution should assumptions and traction from that as until issues? consider outlook, it So And sinked" preliminary considering into to "kitchen in guidance outlook, we these to or forecast of to being that the this relates how baked regard partners we think with churn about particularly customers spectrum we're be. with

comment Brian, given question, atypical little jumping and a everyone thanks well. morning thanks customer release early it. I'll it this it's We was the planning advisory, guidance the strategy the we first the else on know you covering, behind -- us. the the We for something before just all. appreciate That situations you the business for weren't covered of bit market. of that on as for extra appreciate but

I'm is security We've other be -- the it's might very helpful. level years, it's we efforts, and gone top over that The new and prioritized balanced have was bit not good very sure important everyone solid. those it's a we at often to we product but product have run very, various that infrastructure, And little now that's know Okta think clear growth, the very some that priorities, that making priority. And been development things to -- enough. at security -- business. and the into security, I with simplifying

makes management, this most have have identity do in know of Okta We is important more. We the of we position in world to that game that defend the one leadership targeted targeted of those against the be with access able And and customers market cybersecurity we because companies and ourselves attack. along us, to to and our relentlessly other our to attacked. have companies, raise extremely

priority, most to next full we're is and giving after that profitably and business. teams. think is this clear prioritized after the -- second securing Okta really it's that, of of growth, security and of the everything priority very end in Okta and is I customers, So the business the upping profitable that. And #X the growing in year, the reflected level everyone strategy going for we're the direction is that growth year And at see else into you securing And priority stop. our -- the #X terms

experts in accelerated company, year focus world. Remember, across cloud. a hands more of a down X all it of and We've X industry input started help on -- It aggressively in was We a on -- most on secure terms sure bolster experts. change. we're really outside to years to was really us. We're our to being cyber adopt all deck our problems as this continued own our and the ago XX degrees a for best necessarily technology as efforts cultural started years, not ideas -- in making having various have of tops the get from Okta change focusing minds and companies bottoms-up the security and doing over getting easy wasn't it really these company. a to making this the done but best the opportunities that quarter enabling of or culture the evolution just it's the of of one It's XX-day

full the and now into Now clear in that the for -- few that years company secure last the to has is and years very us most bar changed few stop. the world, company, the it's a been that

work that, And the use that's those products #X we're course, now, highly. that of themselves, as the on actual kind are products focused so really security and cases resources, we sure when because think customers that of that's of is sure sure Okta access making priority, -- we console with great our management making prioritize example own are it going administration such new focused use A great with prioritized is of on. And managing make is target. that a our the because pillar access product, on privileged that's what we're making about which privileged we that then to part valuable and last attackers incredibly the after them,

to to customers nothing a we stop and is it's communication investors, to and make full stop, priority, and So sure will clear we top and to partners wholesale security employees at the that. to of companies the and kind need of it's to because of clear will where we secure become that one most the in we're short everyone be world now, fix we

of But Brian. just Thanks nice comments in for I'll there, from question. of Thanks terms really the no difference before. couple a what for done you. guidance see the we've to one, And add -- philosophy,

for we quarters us. got We've look. ago. ahead years early prudent look. all of We've got now, we give know, X I It's this big a think a QX

FY far factoring about out And and said at X in point prudent the ago, we're around macro this from so major and making few of given like then how is a factors, 'XX. we're end minutes the being incident are the also which security the around guidance sure I we

On the about Brian, -- you channel asked a too, the question partners?

Yes.

about we're our that's a -- program investing and doing year a from clarifying that the moving we're execute calls, of ongoing in thread we've in enhanced the an continuation ones previous are on business. partner you've heard to benefits would this with think and that's really I continuing I The seeing things us and on that's continued partners and thing, working the what talk say been needles. with that the and that

are how doing you internally confident without I hit contribution? incremental Or you in XX% pipeline that the guess do ]... get to [ partner number that improvement

with is. We're pipeline very happy the where

given said, no guidance in Like confident today. we've guys in what We're you the I Yes. change philosophy.

at Rob Let's to go Piper. Owens

on these breach more can from for itself what some life proactive launch dates to But to curious retention? pushing any the realizing and steps of doing And time future taking you're breach I passes. I take so things transparency around own customers their was as assuage concerns around aside appreciate the and here. disclosure the a out you're that help

can Yes. I've many weeks as the over been you -- the reactions imagine, I've vary. conversations had many, few with last customers and

for the frustration The incredibly our We on Customer their relying is appreciate common the we're theme infrastructure common us important a they're and for communication," extreme, critical or their customers, thread "Thanks to are is Some of that concern. Identity. from, Identity the or update. other and lot to the their which Workforce of

them, we they are really the and do. things top So this the to forward? in have seriously. set first matters. And know to is the look company comprehensive the and themes place opportunities we product and And want across can the know that things clear these that these cultural important get no going when to way making and it to thing react plan that do resonate the the in threats at right else how appropriately, do is priority, talk better Do can I in are from all one we sure is and a the all tone I infrastructure, really taking

-- own is foundation So this more that. And products be further to they I And about security. our foundation can solid, their the help clear because that once secure be the for is I'm the their then security. then them about how products thing last about before very talked can is to enhance all use

specifically, transparent. is open part question think about think I of your what being it's specific I and -- we're doing to So it

to disclosure, they this they transparent secure recent threats. one -- risk journey that and that transparency. as know talk we the we And all we we to what we we're fulfill is open disclose yesterday commitment is most reasons what the and to sure of and companies then commitment possible make want sure make as this have. the one the publicly of morning is on the most thing is information why our One customers, the did the are our increase, want the And be when world in and #X soon as thought to

my doing these sure adopted was and it, see communication to of large one talking than seems one a you you're that's place more the some and to the be this as attacked it from you to was understand know companies this them. about is I what industry, just seriously and of manufacturing what on common what then enough these the executing have was and yesterday in made to -- but we So you'll many how strange way in priorities talking did making most the are toward customers and day, you're you're to have -- ecosystem in this with today -- you we're one commitment sure of the forward. But know position be companies will. we Okta, And are on been and take we plan about going are and you end -- these of do secure perspective CISO your a than focused what because these of more more for I company things most adversarial as in we we can on going now, ways, little conversations there's us the in the the -- plans world, right attacked that's go. I you ever He I world. saying and this at improve terms if a this these And things going need are do said, do more happened of in make you an efforts think -- I we've that heavily -- Todd, to the in

away and they possible. and really think it understand can at the ultimately like once the the and I that's more goal, so comfort. they And communicate this, we is our to again, our our with -- plans focus, of issues our these whenever But prevent see end once they no day, priority try come as to they what details, want

to Tindle go Let's Adam James. Raymond at

renewal more so mentioned light kind contract wanted process little what ask of And any be incident. Todd, moving the renewal customers. happening place to retain in have processes to frequently to Brett the that forward. more I a shorten, duration you bit of ideas is security process continues about the that you're the thought imagine most, the in embedded brings would Wonder assumptions to helpful just process? this CRO but that's Jon and I know would on the touch security to that to going retention to And incident, the Brett, you assumptions embedded, be NRR hit the it's understand role I on if are. the so gross in where really what could would likely factoring

The execution something mature it. good a where it's we're is our of renewals company at and process part very and of very that

as -- several healthy is it's our to in leads we mid-XXs durations, it Brett the have muscle a strong think mentioned, the it's -- as times, retention been gross And so we've talked a shortening. have. Contract I level. about

happening wanted slowdowns not of they on to. board, they're I subscription during signing I as some more the economic think as -- in across as -- up length terms much of started they they're are And think, shortening is years. last this X.X for still, people It's reason just, the it's of average, the year.

renewals think need by don't new conversation. be that of So some I addressed that existing will kind continue motion motion new to our the conversation effectively we or

adopted and the for down good is being that comes and high, getting value price the we're our the sure making to sure it being making they're that delivered is think of that adoption very is which the at fair. products product I charged

I renewal that the big focus communicate -- be definitely motion security team and down about some will across of customers to the and our prioritization well. renewals that our changes don't this. But see of overall because there'll any plan, our to as be just to we as So on execution funneled

that, Thank to can also on I add Yes. the you for question. Adam.

So be a shortening talking public been contract to is just first sector, actually we've had the on but of contract. X-year in general which the what reason a part typically about, the is only Todd to clear, was contracts there's duration, success of

So so contract that that's headwind our I a contract duration, on a terms put business guess, good doing to to going is have issue in duration. well of

we So we in what process. terms into both of and the rate, guidance specifically net gotten I But so or puts we what security level rate say also the gross for in the haven't we're is on 'XX, early to that retention planning in baked FY retention a would NRR, do incident. of detail growth given headwind believe macro the

each terms From what we've QX, to where XXX%, you of the FY perspective, impacted in you in talked throughout is quarter business, upsell the more nice growth number is balance going like I there. with through, we've tick Net is can in to seat give down. about in it macro, this tell past, is, year. the And we that being so comes had security FY 'XX. But retention flat think I a or impacted. of retention QX. about of tick down talked it of new I mean, fiscal terms 'XX, can't expect And gross expansions incident is them we exactly more did we

talked as how retention we've still on but bit a detail net that we we're little helps thinking near with macro term based quarter. rate as it well that do those about expect seat in more expansions the to with very So about you drop hopefully FY headwinds QX next in 'XX on

Next go Davidson. to Rudy Kessinger at D.A.

clear to hiring as or you Field today, close of relates you search. hinting closing Todd, new a you're that of that that candor the the breach. I pretty know seemed Worldwide it Sales, Oktane, to it Operations were at Appreciate guys were President and Head

You're permanent into moving the Jon role.

I impact Sales guess both be Head of of new you And structure, your to Officer on the the taking I and couple Jon roles? to Sales being? Head is the of all? a the current just understanding I secondly, for clarifications. ability time have Sales Or So Head going Revenue be guess, breach the just of Chief remaining, land at a Did will

Thanks clarification. for asking for Yes.

On the early finalized answer so the for The previous question, was before was structure October about October. the XX, go-to-market I Jon. decision it finalized forgot part to in

since this So the do incident. on no it security of I to nothing line things to were search line. year, -- decision our finalize started we -- we there The in make -- the was October, late January January, it time had time a think and hit were to the with going by

President Jon -- to was ready and I the around few to it under the One and Officer, were up understanding levels experience backgrounds. segments And our presales made them. world So interview. And finalize one the for was that to executives, we to planning hard our finalize was for and final -- he of sure made I -- decision made I is We different compare. strongest the Operations going about those were me. in the to outperforming order of down would just every Eric finish person -- dozens when the October. The candidates It's Global like the like candidates person finalist came right looked I be going the operations doing said, to customer -- candidates. wrap and it with a was, him areas of the decision forward to market of and I into -- it of for think was made the was really things. a X-month and remember meetings operations once of of Chief original FY he the October. the decision I industry in which the schedule, was structure talked marketing time the as to and really to also so the great going is interviewed the to that it We business Eugenio finalist kind guy made other to, and have sales with Jon one structure I candidates can't the want when I roll talk we what then current interim and strategy goal reporting doing partners versus familiarity job I an on and product talking didn't and of by strategic was running of one 'XX, terms that that to his the like I of shine everywhere going of in be is brightly. dozens end Jon with those it directly comments. But and that and so around the And Revenue the think being identity I job knew it at and exactly and more Business I vision function world. our Business -- importantly, job. his under the Operations; I and Kelleher; Jon operational decision really soon

was Chief So going structure directly Officer -- forward. to business then or best marketing basically, organizational customer reporting Customer customer the the thing and have the flatter me, Revenue success where operations, it I us Chief direct for

forward. Okta capable layer finish do Chief place world, best like best we president Officer really in So for the and talented drive search who's the a need the in these extra Revenue for of and president. future to the us X people It that have And thing that there's then the decisions. was is out for

Great.

to Let's Hamza, Morgan Stanley. go

costs of speak early some based your And Todd, customer the conversations, could the very would your anticipate a on switching you you a products? result churn as of incident? on level, high to

are Identity great and Customer products can the vary flexible. that about think they're and products, you the the I Workforce costs -- it's the of both very switching things Identity one

You in them then implement and resource easily. quickly environment. And can in way and can technology and quite connected also cover implement comprehensive you everything customer's very them to a every very and the that's and complete every

switching there that are of higher. there lots that implementations a light integrations switching costs very So vary. I deep pretty have the are costs are costs so low. implementation and and switching the then and relatively custom and forth, and broad are are mean companies the And

I and -- think costs, that true. that's for I but pretty various don't why less reasons. there's some -- customers varies. I is So always people that hard, we're -- adopted are we've people And likely switching it's and have think think pretty off. I reasons it's think I -- various think off switch in seems lower seen which And it switching I obvious,

of think trying our to Sometimes go it's it's and covering we're it out And in to going every the success to use of the day, is be thing, percentage going we lot we're execute value going case customers, gross baking across our going huge identity with workforce successful think customer long -- and and like a going to for is macro. the success show and that comfortable we've to the think to and or And retention I baking we're incident but side doing I there's the said, forward customers directly some with converged prudent switching hard and workforce. assumptions to by products. And the the in term, make lot means, that one just I have, Various value our platform what strategy provide and so there think, in guidance, guide be ascribe of it's reasons security a that that's plan. on definition, off. at in to to I end -- are -- about We're in mid-XXs, deliver drive that. of so a And board.

Joe at to go Gallo We'll Jefferies.

that unpack about think next kind just Do all. reflect then new Can you of -- growth And a margins then longer-term guidance algo leverage maybe potentially growth? growth? a whether through quarter talk these year. the Impressive at and how further of just reality do whether the And long-term margin of performance you there? inhibits this lower drivers sustainable just

Thanks, Joe.

to headcount to regions software, been us to able of be or margins. up So been really rationalizing probably in on we've moving these remember. effort types structure is for long-time started from this this we at terms lower-cost the don't the if efficiency be be structure months of to we're to about a point. how working I It's really rationalizing estate. achieving this, it whether know this -- something year, able Last deliver cost set real you XX for

offer at can confidence you lens talk from the flow look ultimately, think Rule manage cash that margins hard to all with least about the at guidance, 'XX allowing because guide profitability. that's the But us that business I'm margin. XX% these actually this the FY we is really work how excited up and see operating in XX% free non-GAAP about kind margin, of this of it growth of XX and and we versus year business

a And going as in that And We've always for as business. growth X. look good balance versus we're so balance shift up the far to to to able that be ultimately drive X margin, drive and efficiency, the the that's the us. structure set really to leverage

we're something beyond I but really achieve we move Rule year proud something always can't doing business 'XX as that It's we'll feel we ourselves we the on the to FY XX, always as overall. 'XX, through lens we're we FY manage of going that into of So kind you this anything can of forward and give we and target beyond. of pride very

we're going got to the to knocked Brooks She back up, here. in queue. Madeline of spot Next I'm the BofA. at go putting her out actually

that, it. Appreciate people many the appreciate of that. know your have emphasize just want transparency And but to said remarks. really I just

net It's I XX% peers, quick parter. existing my look again, post the So positive customers what of quarter, came the roughly question is turn increasing contributions those from Across happened new that implies net new at cRPO kind if base. begin a to where two from math this numbers macro. of

and next will second numbers less into pushout saturated products is the concern than this And especially from the event? already the different room the for is your existing trend given customer the is, any base do security cyber other is bids in of new leaving be upside, that recent there you peers. new the So XX-day with potential the year, first headwind heading part think why part

a was mix cRPO the you that... on Sorry, think were saying me, on Is business? versus Madeline, but new you I bit broke little up related more upsell to

said cRPO from She the existing of came calculated XX% customers. she

Yes.

of that I more toward that those about putting to We the Okay. Madeline. have has numbers. upsells. say on at house I I will I that's think side and really talked Yes, so hand, as business number the related in shifted you're directly mix believe pressure But past, our we've what business, new is, say of the can't macro that's seeing why

customer I think we nice Net was up XXX. adds new a had from adds. quarter

had You as an well, increase sequentially than addition $X million heard QX. Todd nice customers. about customers talk $XXX,XXX Greater a versus the

helping do stabilized, the to us see due a business. new business do we growth but So that, headwinds headwind out, we see headwind the still have are macro there although to in our

there, one And hopefully, add new the is thing I Yes. helpful, can products. it's

at I We posted had in GA a X existing We now, we success, been pharmaceutical a have Customer upsell amazing some our sell -- then Customer the we have we important to thing mean deals That some early a site, had Governance it's was roll. my traction. sell products I we customers ton and but the get GA-ed of that really customers Identity year to just have the comments had still Identity, new many a starting OIG big have couple sell to customers. And global a one with but mentioned over Identity of company, starting lot then to. with many, to. little It's have PAM. of customers Okta a to to of a is

ton some potentially -- and newer the 'XX -- at think sure think pipeline point, for for products to new but I not sell for operationalize of 'XX or products from sure FY of those well some XX-day that's selling could sure. in delay we're short impactful don't on I the we and be we're products products FY And of new sorry, customers, execute I the have what So making we our a those.

Let's to Heath go at KeyBanc. Eric

great rolled PAM So guess I out this week. the to X Todd, kind to parts of it's getting see PAM's opportunity.

environment? customers what So make number be their you similar to used own Okta to you from something PAM, two, into OIG extra early charge one, into And as one? can environment, success learnings to draw some just at customers PAM number it just given can that on could potentially protecting available then protect Okta relates to is the this that just no relay

practices phenomenon expected, much -- market. of excited new call in will independent things Access. in so and -- was there's are larger I enterprises I it expectations the could and the different we enable the learning have we'll we're lessons we having when of any enterprise one more Like learnings to our just to that think think anticipate from introductions best that a I of larger when it's I to than sellers across product would we Privileged OIG with sooner think PAM did And OIG success that to really I product the so from OIG -- enable the than segments because just roll exceed think there's enterprise. and couple them same enable that about area, board, broadly, the biggest like larger

OIG they where an governance that environments was of, phenomenon Another already is brownfield for interesting solution. our have them, OIG exceeding expectations call in kind existing

PAM learnings those as well. the product to bring we'll So

Linux on in these -- apps. or sorry, been the through Windows so customers servers, on -- of that we these On into phase access the learnings that LEA, privileged through -- access early find the is is in GA, lot the product and access has infrastructure-type area that been the us move product clusters, direction, and product's servers, manage managing the of Kubernetes having resources. Customers things, focus directions main kind one early the accounts value to now Limited has the of through one a SaaS

there. GitHub, privileged to the We're in connected to accounts We're manage Salesforce. we're connected to So Workday. connected

you mentioned, in So the that's account most direction world. one is as critical an privileged of Admin what the systems It's exciting as, Console. Okta

about to and a on the it big ideas offering very earnings every going time is I So integrate product idea Okta do to one. it. take first that's And interesting taken free be be we're ever might for to call, but input better that, this I've an a And your focus. exploring customer

Great.

go let's Powell Gray to Next, BTIG. at

Okay. Great.

similar a be quarter, sequential million. at QX. you added here. seen in years. cRPO of cRPO. of in to level the $XX in QX $XX of that's in So what question you couple a new added to At Normally, I yes, you've year, that I Last guess, would seen growth least kind what you've net This modeling last expect million

we is left the something there of main else the taking a in that to is of then part XX the How like much we of be much difference is to with say breach be, just was Or or of the there? customers? of? And trends, of lingering as happening I be pause? So QX I the it with know then days hangover conversations kind would on and expect should is question customers how there should think this XX thinking impact breach But rough. that like a quarter the the other safe like

Thanks, Yes. Greg.

wouldn't So that heavy math the think from with the more a terms impact think would cRPO timing. renewals in do about I impact incident. of into I sequential associated a perspective, I have quarter-to-quarter. That on can backing

in billion in quarter QX of terms nice really a had we feel RPO. we XX%, So growing $X.XX current

into too wouldn't much that. I read So detail

QX, it's of terms all In of in. baked

here impact today, that $X.XX XX% All of given XX% is what in the of and at security we've that think the guidance billion top we end range. is to associated potential incident, with the the the you

of kind think about things. that's how So we

Weed to at Go Bernstein. Peter

of actually, before? that are customers, sequentially things quarter Is you up. leading win that new going are failing Is Do believe seen a are occur you customers, there like been that implied last Is new It at it's impact is so is looks you percentage a anticipate -- that you they upgrade have in turning harder really quarter to to nice getting already what said that anticipate words, take you X you pace people the they're to In the out thought of that that to showing of outage. other I'm that stack And I in a see as think anticipated of result points. that been up that you've have in sequential came growth that shows leave? down dive? the outage. definitely normally have that figure like change where of in experiential? by to seems some the the the would that where customers kind growth you to kind to kind X you've to of your quarter of kind that almost will trying like this that quarter-over-quarter, up had are relative that. And eliminated

the incident. Yes,

ascribe that at every deals there's part quarter, business. that, from an we incident. could you So potentially always Peter, security look just our quarter-to-quarter. It's push natural that, We saw elevated be to of and a that if of level related the

about thinking our So setting be that QX in and can number we 'XX. think from the into it when guidance about given we're taking a and the trajectory perspective, how QX prudent for especially big year fiscal

how that's things. we're thinking about So

there that actually into from deals are plug ] of gap? of deals of you'd you more [ some So closing pipeline, to quarter should that did QX but point. may QX. have already push they stayed But this just this deals be you the out just to Wouldn't So QX and out a anticipate quarter. at that that push in it's they into out lot give like QX in next of that that quarter really would the

a which Yes. with incidents. And environment security is being the prudent QX, those good We actually already out macro deals but today, seen the the we're you're some in sign, the given close of right. have associated impact both and there given

So being we're just thoughtful.

the we're just in quarter, if it, mean fourth of I left month a only quarter. Yes. XX it's you the think the then into chronology about days and

drives we're little the the the impact, in of impact, bit think the guide. see -- so that window in a of pragmatism the some we on So limited to window to I a terms see

right. All

Adam to at Stifel. go Borg Let's

question Maybe here. a picture bigger

still of the seems And opportunity So international just about there's mix. the of XX%, given like just XX% is international a company, size ahead. lot of the

in CMO you new in opportunity So potentially the international kind about about you investments and accelerate the of the about help growth? just channel think thoughts to the are and theater as think CRO what place, accelerating

last macro in but impact terms observation, internationally a from the North challenging year been probably the in I over stabilized from macro macro than opportunity. I has do my big still a think think America think perspective so. macro, the it's of pronounced, a I or more

interim Manager Jon, that for have Europe, candidates the have opportunity us pipeline to backfill in to the late-stage of -- CRO permanent terms gives as the We also some Jon of in that. General with we the also and

that internationally. great Couple that's leadership team which Pacific, So Asia performing leadership with in more well. a is stability

really which our have has opportunity to for is internationally, You a good of part future. an be -- solid important performance

numbers. of market's of in numbers, half identity rough it over we sure to the that the percentage of market probably we're revenue. than And XX at If mix We're get in management. higher to over the you make -- outside next years, time using the terms just the look a terms going is X U.S. is now

right? also that being we're internationally. opportunity agree in And Jon lot himself, excited add, with just and of of front really that I'd the because lens, like I Todd. We've out about international so us an he a person opportunity got brings

up Next is Matt Hedberg at RBC.

noted Todd, prepared surprised, of pleasantly the Governance product think, Identity Great. a your adopting question. you're size organizations by product. In you I remarks, your

a surprised think would it have year ago, probably a us. I lot of

some would I have been of midsized organizations the think organizations. or thought smaller maybe traction we have from would

about maybe you're about thinking I But think very outlook, think, the product I thoughts from your up modest point? So that how then, the success on -- in Brett, you do you year? guess approach. to impact when assume taking at market, you're next governance why a just And this 'XX

assume maybe of solutions that doing covering the were -- these that new. these they all were the underestimated And what also existing just and organizations they apps, there's assuming covering large we were that larger stuff cloud a have would I the legacy I the with they some I governance -- -- looked solutions, be the and organizations and the at and The we complexity. of think Oracle all we -- think SAPs, think the lot apps

assumption be that as we think maybe as thought. to not accurate is proving I just

the aren't application which of I lot and covering is of is infrastructure. gravity think cloud-centric a these legacy center cloud where products moving, workloads

we is And for fit than these thought. so the better large a product companies

or last, I more we there bigger the could X in quarters segment overall just the macro the attaches for with think OIG success it, OIG future I think the also with seeing -- when environment so think not X think now, you're SMB. that companies, and has our Okta changed, the so -- just I But it's slower a seeing I big that is just mid-enterprise call segment right in over time. we're --

better in So ACV from deals I the QX. large people in so in of -- both enterprise. your it of -- looks because those have and more deals value think in in a are problem that well customer cohort, And and just growth finding kind enterprise large it also doing with those XX% is

So to I attach opportunities business, the there I think entire -- well. OIG think perception as relative more to attaching the so there's influencing that's

have given asked in end how guidance would we've One so we much guys told is very to Matt, I our going we're hold update we to we're of and continues you here thing today. excited being And steady in with we modest far, progress new a time Yes. add, mean, I the workforce that the past of I the being about are But you although yes, -- through expectations the that know we've -- you every get IGA telling number. third QX. keep spend you

continues be the you in that's and given the number past, to So we've that. it

very we're is Todd things are So going and how with the just significant, like it pleased upsell associated said. with

Great.

William Next up, Jonathan Blair. Ho at

maybe in With going confident you how bit on finding third-party the a are detail more of out breach, be what's give investigation? to and last this comes is the validation us left And regards to can little the still you that investigation? that this

comes fast many, a does this information disclosure, and they like is to great Jonathan. what many as of my take with possible as cetera. disclose, know want else why disclosure It's Yes. all conversations the question, and and left speed In to customers, time et up

mind on is So it everyone's obviously.

I possible. the as taking we're know to is as as as general that we're much trying philosophy we quickly disclose think

the we line all incredibly knew couple by line, you're system. I the quite talking when then first disclosure, and the security remediation first data sure disclosed steps the and looking first reports kept took everything would, at of things click, by pass wasn't covered more from team and thorough kept support more. run them then everything kept on the of went click they a these it about a saw reports made made we we published weeks and And log our to digging voluminous, at were sensitive time. like good interesting completely over some we've further files outlined. thought took about row, kind we looking. Like quick these the by risk of row a we data decision much had there, and our and were disclosure we far found ran incident, was We're think and and the just do the and after RCA of like of and had And and and a company based phishing looked

we X to ago, times We've times, done still cover characterize of couple the we now can it a we started weeks investigation to many, with we But X, want so logs. way combed anything We've X, on done. it. we think our it Like everything looking internal bases, that brought team look internal there's they're And and has gone the all check think it. firm and We've vendor else many at don't and this it. the at. got so through productively I is is supplemental over sure make I has our worked

be doing thorough clear. obviously, we're think and it, to I very

with it's priority additionally, when done see a their to they'll low think I have wait mid-December find and but analysis. they're anything relatively in that we'll

Citi. Okay. to I'd like Boolani welcome from Fatima back

very Todd, the you categorical appreciate were about Okta. question. securing I

as customers priority. your So the being #X secure are

maybe, for Brett, is, it's in that And above or to margin or apparent not all these that the immediately question and be the maybe investments. taking is going making So you conversation. technology guidance process people, then you're a of your

understand that to So what of is a can architecture, this your just and and up-leveling us form of shape of of reinforcing kind security envelope going you or take? what lot sort help internal

and a -- guessed, it the It's them -- the I'll program it's Yes. you And foundation. bedrock, has the is The called above. super internally all insightful we X bedrock And call question, Fatima. it's program -- I as building pillars. think pillars. of

this world, up customers from around pillar bottoms to we like just the be is the to ideas with The get us first would ideas thing And most table world. the having on one advising the is good example that make know this of like company we're the team something a latest do of all for most of in instead -- we, not. Again, most to the That accounts. being there's thinks everything in some choice of MFA that the going all and made option the really great frictionless secure an administrator notification companies But implementation one the be as the of or should that's secure to years, over shouldn't march we for There change. required. adoption in convenience toward speed security. be the or cases,

that well. better. And customers Maybe of and out, and them it's specific reason that team we workflow. bottoms-up and through So as time on you a on of do let have how Maybe space a whole we a -- now to make that we have there's to awesome a and got to good it's smart account. implement of don't bucket lot bottoms that going up, MFA a they're to ideas as everyone, going the people those because service have required. there's have required the this to can ideas like we effort, have that time make sometimes come space lot to we're But work

the bottoms-up track. that's So

architecting companies make our our product -- and do and internally us opinion inclusive want to in the and experts call secure architecture blueprint most operations with posture in them to specifically on security operations we have architectural from that obviously those the overall the perspective, perspective. IT give down, business this it, how people of is experts and an sure an as best sure from part the security but tops of experts making should our security take really, architecture, The be this second the and world which we we their internal in top and for getting track combine infrastructure, there's to and is world,

we So up. have bottoms

before, got like one We the companies that to be down. And with make team you the to have clear leadership the this sure amount is to get have our want are and world, priority resources one think cultural. to the that I really be most is companies successful. And about and and straightforward. last kind -- setting then the executing to sets tops set prioritize be of We you up starts it world. then most secure of can product. in one me the think And the going third goal you We is clear expectation in be to pillar that I cultural priority the the we setting going you the most right we're in -- pretty the this be one. When secure that, mentioned a And on have to component It's vision. clear of number is, well, of want it. in and

to this feature, best of security cryptographically quickly implemented and the administrator powerful have being They to this which as of notification the the customers. session October, that a in ensures after the actually our for we console incident have binds just products network. is, are themselves well. a to specific this sure in And customers example an our valuable be We for that built make way beyond

company very the is kind many things valuable and these we and is for as this the can our use And to deployments most the overview, that the it put of customers through So them the their customers world. from and products more perspective of there's think secure occur. And and entire keeps thing more architecture closer go and product fourth pillar. a being, of that's it protect in of their and product that us about that it,

alignment you'll focus I now, closer goal So XX most getting will no have And -- gives kind many for after But XX about comprehensive. it's real being form ourselves after just being need been of days. the think think to the or confusion shape and days, they secure of this what company have some quite these in years, priority. obviously the in -- on is XX-day that this on and right everyone's space clear efforts I we going the The these to they've clarity world. see continue

then of already 'XX. investing good in we're -- for question, things. part it's a really, your the FY there's amount And X Fatima, second One,

to So in starting the it's like step up at not X. margins, we're

good investing we're like operating the the now. driven these expand amount QX. But us we areas to X from XX% more allows this benefits the in efficiencies XX non-GAAP right into to security. It the to more invest XX found So that last months. a structural investing while to of going XX% over margin We're is and also critical of

so invested mentioned. a already. to you we've And FY going margin while even to the being able 'XX We're invest in that also but it balance lot with more

months. of benefits been one it's So us those XX of the what doing XX we've on hard for so last working to

to couple get going more. to to Okay. try We're a

Let's Research. go Tilton Josh to at Wolfe

me? Can hear you

Josh. clear, and Loud

conservatism different ecosystem the does different kind for vendor QX incident a customers of to base any from anticipating an I all are that wanted and targeted of target because it Does mentioned embed whether spoke questions a guys you the you that sense see provider? a you raising provider? being security provider, are some to some that impact. makes #X the customer you to seeing so go the as follow-up as sense and because your guidance you needs make an and given then are all the identity are they to your Great. to center clarify understand by hackers, the diversify not PAM from a hackers identity previous with guys maybe or of Or recent risk governance across it in you for question. around is, much. Is of to already one something And identity Todd, just why, or

Josh, I'll part. the first take

see, out running we're because short earlier, said pushes of pushes answer into did the anticipating like elevated answer, or since from deal time, an I is amount QX. So QX of we

because, linear we we're a so everybody, It very as back-end have quarter. is go quarter do And as the weighted. we just not reminder anticipating to a through that bookings

had at taking account so put what and for we're of sure we and into making QX. that expectations And QX the end looking just into saw our we

the the with from how of can -- value getting things one of products then to is how are on are because question everything things second terms I to out vendor. And it you has getting comes simplicity, that of physical at the it vendor think the down like decreasing from secure thing getting better lot the of of a different Yes. risk risk, actual vendors, And in spreading one on layer you integrated. everything the -- how your product, the X power vendor the versus there from be in implemented, mitigate operational risk

-- a reward So think the conversation versus risk risks variables I vendor are fact, a And I in in having customer those the people around around, the the that's equation was the -- days exact this things the one that about. and few just that's of with consolidated the ago think spread perspective. about spread

DiFucci at Guggenheim. John to Go

you never about really So Todd, know, because -- you there question. my with there, but her, but can I ahead question. never don't to and to question you're she you're I actually don't relative the but customer you're her going a is them that comfort a try ever I follow that still of, to to quite to it's you that -- the there? And long was be got hard thank good is comfortable get down that? to in don't say, want listen, to point to Fatima's will. when thought how not But worry But happen sit get game gave tell comfort You're that, take bedrock. remember end, of where it all long follow-up detail say you a to to, it get We day. program, to like again. to to you get the point do relative you we this have a never how around as That's going raise your through to the for every it

question. smart It's Yes. question, smart a super super

color of focused a We've companies been progress add since particularly couple has I years, several secure most This our bit breach progress of and something been in world. the focused comfortable way. being very one I make Lapsus$ ago. us toward about think we've quite been it years of to for feel very this on on a made would actually the

a are focus -- there there the sprint I the significant XX-day importantly, priority, there enough that'll there's the management enough I a but think level. requires nothing the cultural. It's clear is things think that everyone But worth that a and probably a of and calculation decrease are clear for a in a more we things Not it's at at priority -- the that it's than level decrease incredibly focus as the reason for will risk makes kind risk here. team are sprint. is significant and sprint think of high, full risk that XX-day the execution John,

So and beyond tone toward comfortable the important for secure decrease feel there think you thing, cultural progress one as area, very this real in we it, for setting is as the companies for most is just described as customers to we which us in the being a risk and employees and investors closer of where I world, getting well.

way, XX then I'm And and just going to... keep the going. days it's by So the just

product a we've the in security Like specific areas it. focus And never it's not we've said, of very very, had mature like the and huge absolutely infrastructure. been on on because focused I the and

we're ourselves I've and expect critical position like our customers. of operations. then think we'll from doing I secure time we from it we're as to -- we something not many have to that's and be have and the us mature times, be and one in after the the well. overall company we've operations haven't comprehensive we as to sprint doing have what the we overall because what long the and expect the and it's on we're And that's the companies said for given a role time, they world most for we fill a playing had long going approach But IT been for keep

thing, I job. And I listen, last good I mean then have this on, given something job. some you guys guess, a good and quarter, never I I say. numbers did one that's just Actually, add nice -- to look going think even everything

of hard team. A appreciate the work it. lot from Yes,

that point. going here. Shrenik, and Fred into have at going and And from off then cut to We're to But go to Fred we're it Havemeyer Great. now we're overtime ahead. take Macquarie, going

good been asked. I think questions have many

what of time you have progress data frame here of the understanding also concrete good in what So think, posture, all with news that frameworks to breaches. we secondly, like what is, doing the you are I sort meet outside is place upcoming overall of kind what from at you looking on Todd, you're respect no that to see might understand making And SEC comfortably requirements, at those feel news reporting towards one, checkpoints your as I'd ask with disclosure that the do we were expect and requirements? to to security Okta, improving to

Yes.

something feel the question, in put a place disclosure of disclosures. The we're good play I I in the think, on we're to ability we role good frameworks standing transparency in about have we that. to ways, in that the customers, forth, our execute set with us and and On really -- so terms some and second those things trying industry the of -- tone lot there in the we

out -- have network there's future These is -- be releases you I answer session -- we're on for a product -- capabilities. The product do things. the mentioned examples first be for good like the tokens going the to would as That's we to those asked visible think reporting X MFA. question binding I We're required like the and published. going we or are really

those map for And that you'll customers. road and publicly so the things, into published thing you'll see see

the but we also this every is and one be that. like and stuff, this, secure to customers. I think the what they're how can give how because of not just I experts, look world. it's think we're team Okta talk broadly from comes only the communicate most security up customer as taking to operational learn taking that that But we I on can about to, outside I internal thinking the because customers of seriously, it in help at our things just important with learn because the in security the terms aggressively improving to companies have comprehensive more can is and them journey think learn to from it Okta how in confidence

and So da sharing but the from the there's not helping the just that also think from value in through perspective education. I that learning trust customers

Baird. at Okay. to Last Kothari Shrenik question

the Brett. Appreciate transparency, Todd and

deprioritized. Can is so conversations? More hand, hack incident security up PAM perhaps PAM should. landscape, that there, broad-based. Todd, leading customer of evolve? incident, In even customers responding? the light are focused core It's And how threat if puzzle the you importantly, versus how to your elevating relatively is your be great you to on feedback features customer to whose of kind perhaps on other perception are focus. implementation your be knows provide know product customer recent on product environments track Just GA becoming course, within follow focus incident the of to while of adequate of PAM, as only seem one on going PAM the elaborate of on does I this in and solutions the see And to can thoughts internal role you a point, of you product you the maybe not said, more hand, and security post this you key given guys positioning PAM on how customer in other are piece hack everybody your

better addresses and every think than and some specific -- good of a it's others. different, PAM the incident is definition No, PAM them I Yes. of

I But this what doesn't our right. PAM incident So or on is product saying broadly you're won't does speaking, recent and specifically comment what do.

the management and with reception All of customers very strong and think access the identity governance these then -- access attacks, simple. basically, very it's management, need whether is, that for seen it's we've I are phishing-resistant privileged highlighting control. And

applications, same to quickly you're your manage mentioned your very is business SaaS you release and the Console earlier, same Okta Admin containers position It's for and servers a for engine the use using life privileged should control I as simple. Our the and itself. access future coming like and Okta the the in access and relatively for applications many user for cycle

business So comprehensive across integrated points what of apps, that's all they get is pitch. And applications, that's that what value customers And they to and the of and the to they're complete like get workflow that them. kinds for governance, different compliance whether secure, and from they trying report visibility prop resonates. applications, that's then servers, access assessment, this their can the back auditor, a risk and that's

so threat about products future reasons the putting it. and and drivers the So And long-term that. about excited -- work And we're and the it's part optimistic the all after. of opportunity and it's sunny some serve the and it we're getting the is us. bigger only of products there's focus the our bigger, market the the given why future into company we many ahead of bullish We're in for bright is the and -- is size team. and market other landscape There's going one of we're

That's Thanks, for meeting. Okay. it today's everybody.

at Thanks. have you e-mail can questions, you investor@okta.com. us If follow-up any