OKTA - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day. And welcome to the Okta First Quarter Fiscal Year 2020 Earnings Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Dave Gennarelli, VP Investors Relations. Please go ahead, sir.

Dave Gennarelli

afternoon. Good for results today's of of you discuss call Fiscal us financial the Okta's joining thank conference on to 'XX. And First Quarter Co-Founder Bill on Chief the Officer; Company's me today's Chief are Kerrest, McKinnon, With Operating and Officer. call and Frederic Executive Company’s Losch, Okta's Officer; Co-Founder Chief Financial Todd and

our Private market not forward-looking Act of Reform include will the limited call Litigation statements pursuant to our Safe including Securities but financial Harbor Today’s statements provisions positioning. to, regarding of outlook, the XXXX,

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

affect its the sections assumptions SEC Forward-looking as filed on date including of the statements filing from Form results time-to-time, Factors the Risk could previously Information company’s included is with filed our represent XX-K. financial belief the in and it's in only made. titled that management's factors

during equivalents earnings measures non-GAAP in measures In substitute superior addition, will financial These of and to, their available using not measures the in performance of for GAAP to are GAAP. non-GAAP reconciliation non-GAAP release. a our is or GAAP of discuss and measures. financial addition prepared today's call, we financial non-GAAP discussions financial limitations closest in A accordance and with measures versus between

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

the to to call like Todd McKinnon. I’d Todd? over now, turn And

Todd McKinnon

in subscription everyone free today. with we grew off X,XXX. positive over $XXX,XXX. for and our generated base revenue quarter, XXX enterprise to thanks customer broad year XX%; additions XX%; cash across total quarter; value customers made We and annual customers our $XX total flow 'XX in kicked revenue billings calculated greater count Once XX%; us contract added grew new XX% Dave, grew Thanks, again, the with another We customer growth strong bringing we million. with fiscal join of than

these The a QX. strong scale customers numbers well we really clear over is that seasonally even XXX than our the of increased about more customers excites of sequential at is indication What new half from additions traction landing enterprise these these providing logos, addition us market. are experiencing that came in of

security. hybrid the strengthen plays of even to because role momentum Okta, the transformation technology the complex digital contributing cases and continue broadest able uniquely tailwinds to of IT, cloud set to market address our These and are to turning Organizations are and use most in The growth environment. are Identity them. across each rapid of we critical a

the examples share I'll highlight that quarter our few customer a momentum. from

First, and with a of its transition deal. company SaaS technology over friction workforce automate because looking hybrid it off-boarding current new applications. and and selected one easily integrate enhance was X,XXX their third-party future. to profile, IT the help Okta, a of landscape, world's for The cloud Identity significant employees hosted on-boarding of Cloud The largest cloud into them solution a banks reduce managing security Identity and was company

ordering so all company team secure, looking Takeda's win experience new Identity flexible workforce. Okta's marketplace, provide will will modernize to reseller when to The and and products global access implement IoT global customer can services win identity merged Takeda Customer workforce new marketplace. company. identity seamless the IoT world. Shire, access to of XXX improve in A effectively. more in partners with Another streamline their pharmaceutical company employees applications partners. with After products needed was the IoT with that was their technology to a members its provide across collaborate was one the combined for largest Takeda, secure Fortune The companies access XX,XXX the its to Okta company

software, our financial by U.S., customers' a was serving secure selected technology common many What have access and are than more becoming households its Advisor, provider million organizations that in providing resources partners' these planning sensitive Customer in companies has to necessity. the data and eMoney upsell. and is XX,XXX and eMoney X seamless Lastly, professionals Okta a and financial they applications. customers Identity company of by leading of noteworthy The other

enable scale, Okta for Today, require. built transition what and capacity organization's speed, Cloud with that success. to that the we've customers flexibility And Identity security an technology is its will determine our

are the three capitalizing of technology forefront on broad We on trends.

hybrid the First, best-of-breed IT. and cloud. and a co-exist are enable Organizations with These in existing to on-premise are the frictionless adopting platform need applications adoption solutions their cloud way. infrastructure to rapidly we

challenges of where ensuring their the right biggest the right to time right regardless is located. One they're able of technologies at access people are the

new But so a employees why solutions. Hitachi units. are time important. in to that is hundreds the Okta, an for solutions, replace is platform it companies would able replace like of of enables access consolidate become take and This to is more business traditional has than fraction With accelerate with customers for legacy unlike adoption across legacy technology XXX,XXX and systems, Identity adopt technologies environments independent identity purpose-built that Okta diverse

is Second, true the Okta of to This than applications. to digital Rather their while their functionality, focus transformation. leveraging platform also to and functionality connect scale and Financial on build in to that like is security core get for themselves, and a to layer their flexible that full we market easy identity Okta to the of building identity rely Okta they Allied have identities the so facing Health enable faster, customers. on. developers of the and building it Cardinal can the companies as extensible, platform enables protect sense on them customer millions

And a of lot who breaches security the to one it always the access concerns centric identity are never of Third, to trust Zero and Trust to this of face. we brought a organizations attention Trust. Security Zero is risk resources. top to enable has are users boards and of now concept requires trying verify and of platform Mitigating is security. CEOs

For threat AECOM, real Trust, lays and customers like that access Zero can be from advanced data time the foundation management to for protect capabilities of because Okta attacks. NASDAQ and organizations our used proactively

use rooted products, through last our how the that service integrations Oktane month, day. At and millions set customers valuable using data successful I cases of our we talked our every our is strategy through about making collect in and people increasingly leading of our growing

more data that can used generate these used more that As and customers and products to we unlock more built attract customers leverage more better our be products integrations, successful. build more we cases, make

and to strategy. positioned are is result network The of that a at Oktane we the accelerating believe made we're significant we announcements effect a aspect step the forward powerful uniquely leverage, every in

announcement to which and shows low their high, using context, access this When data we’re authentication, network. Based to data, analyzes our appropriate attempts the someone first made, determines enforces risk-based automatically they more device, users' how customers The decision. or risk rating, medium, make are secure. a location on an including and we sign-in, Okta assigned

authentication with deeper be level used more was Hooks, Hooks like creation, or which extend infinitely to platform calls flows third Hooks, enable user Okta a or customize to include streamlined second us makes our teams to things user extensible announcement can integration can of The developers completely registration Okta party to verification and IT account Oktane the systems. catalog. enabling

network build the for community our I effect customers to accelerating can our the earlier. broader As Okta these integrations, leverage, published further be to they integration network discussed

customers also address our to of making core our use an platform of enable number unlimited We’re the customizable to cases. functionality more

The of their that of identity best way made customizable products the Oktane every core functionality customers building that Identity business. our in can our their consumable, was third experience. customize for experiences We’ve the identity of announcement Okta Engine, such set suits out a essentially blocks

at also two We brand products new announced Oktane.

Access seamless their hybrid and available case, Gateway is lastly, of to response positive large customers. continuous Access product to Advanced for already to centralized across environment. use authentication access encouraged access on-premise from enable new applications access customers, Server enterprises Okta Server and cloud and cloud use we're the today for very critical ground used especially Advanced Access, hybrid being that Secure you generally which service Okta this is our secure access got from already customers. on-premises, and controls Okta has can And by by dozens a underserved uses and servers. First, our

Diya on Product of products. the scale their forward officer. Product other Management And at some Google has in largest We're development to was over to of we us she team, have XX thrilled experience, our leading Diya news innovation. very this Chief product her joined new recently of of are most brings world. adoption and drove critical the continued most some years looking excited are as of And at VP Okta large enterprises quarter, that where the Jolly

In driving. summary, in year with powering be market business, as our I'm Momentum side, how of very we started as that both well innovation pleased continues terms tailwinds 'XX. are our on to the the fiscal we're

seeing and remain on large We on traction focused market great are all of executing fronts front us. in opportunities against the

time. the financial our your Bill? And for to results. call Bill now like turn to I'd through to again walk Thanks over

Bill Losch

full business everyone Thanks, and go first Todd. outlook year. the us. for our quarter for to and discuss And results QX again our through joining the I'll thanks then for

revenue, up QX our XX% exiting areas, experienced U.S. the from of and we revenue million flow. XX% of As than revenue to Revenue of XX% XX% outside compared the an many and $XXX in totaled revenue, expected momentum the had last Subscription better approximately our quarter billings first we XX%, quarter, including increase year. in Todd grew last maintain first calculated year. growth QX QX representing and in total cash mentioned, XX% strong from of represented in

international to growth as continue international a view are business long-term expand our driver footprint. We investing our to and

both new is of example in Germany, this and were announced office in we center data that hosted opened Asia-Pacific, afternoon. which expansion the An our this recent

Another from source resell is momentum of partner the our channel. of growth revenue

stages, partners channel business. reach that we on early and be quarter of own. to over our global its our scale provide with Okta able efficiently channel already partner contributes the wouldn't a a achieve in still While These

existing strong strong obligations to of the beneficial segue some performance time. for Billings bookings factors, billings, and in billings a last Moving continues billings RPO be commercial. strength or by for and provide also across XX% QX a third combination year. The a good That's timing. momentum new quarter and month. both enterprise calculated invoice from total XX% and on business color close to relates to within The billings over current first including strong increased remaining of the benefited the particularly on grew driven customers our and to calculated me

SEC and build un-build last current filings software since likely for been the have which heard companies report in you've us over quarterly RPO the QX not adoption RPO, XXX. backlog, subscription It's total is as yet that reporting that will of part recognized both of which been or our both RPO of revenue year subscription RPO. XX be contracted and months next We We've ASC other reference recognized. as revenues,

We current at RPO was XX% be the and XX%. Total gauge RPO viewed over or as next the to million with RPO in And recognize of as QX $XXX metric was Growth to only have history the an such, we quarter. simply five and our should expect this of that performance quarters grew additional end total RPO metric. XX million months. of XX% $XXX in

billings when caused because also dynamics. or some invoice Year-over-year in RPO variances sustain it growth in metric timing, invoice variability in subscription viewing is and while current invoice meaningful changes Billings duration variability seen eliminates of these in revenue RPO reduce can more the by growth. billings, a can

factors be There in QX vice and versa, as by growth current in depending the can like where just calculated I factors we cycles. growth some outpaces noted. such be contract influencing RPO will However, in influenced on renewal billings RPO experienced quarters and duration

to Turning retention.

as for reflection and evidenced Our annual dollar by natural with of value deals customers a in decrease $XXX,XXX strong larger the based that enterprise at is with in XX% retention point XX-month remained we're over growth the net achieving trailing XXX%. the X sequential rate customer Todd initial mentioned. contract a represents period This

quarter-to-quarter. we So remain believe we grow, target a bit net to from enterprise dollar-based customers will increasingly large and may retention rate fluctuate deal as initial healthy our and very size continues

XX.X% Turning gross to XXX at versus margin to first first margin quarter, strong up points. XX.X%, profit gross was Total basis XXX points last the basis Gross continues be quarter Subscription year. the margin. grew gross in XX%. up

more investments expenses. increase driven organizations and market of looking XX%. marketing geographically. to our Total win and Now, at for operating QX of operating expenses expand look grew is large sales more capture world's we as by primarily The largest the addressable

this moved year also the to Oktane year. last from QX Importantly, QX timing of we

growth strategic we've last the expanding business investments The about Cloud. with of include investing our the what overall and to priorities, Identity you with the effects security Identity to reflects commitment platform, Network, made strengthening which driving organization, we world's largest expense quarter, in the talked presence with Customer the our in our and Okta Integration network Okta

the from the talent, in XX% biggest increase related spend support successful We've scaling in headcount and usual, these and retaining components strategic been headcount total is to X,XXX. to attracting initiatives. As great to

investments in period quarter negative year invest last and payroll to scale in we continue related XX% the in reset our worldwide Operating reflects sales I a this seasonality expenses to to to the XX% annual in Oktane as operating Keep year our increased timing $XX margin for mind each compared negative shift We growth. same I experiences loss said, in due of first business to kick-off event QX taxes, durable the QX margin and noted. just the the that was of as year. million

year in share at QX a to million basic $XXX last compares with shares million time. basic of XXX per loss outstanding shares share in loss net $X.XX This outstanding. with per $X.XX Net the was QX

seasonally cash drove performance. strong line Our performance cash top our solid and collections flow

a X% in We the with flow cash, $XX flow and in short-term enterprise Operating and QX million Free growth continued to third QX. flow seasonal ended capital, these Operating the cash was results XX% by compared compared quarter cash $XX fluctuations was was million QX in in quarter working flow positive positive investments. in factors. in year. year. first margins last in variability the negative encouraged equivalents for business flow XX% remain row. margin expect We the cash to and Free million cash to for cash was cash due last $XXX X% margin ongoing

resulting quarter, During on items. ASC-XXX accounting the use leases line and lease operating adopted the operating liabilities standard new in the sheet, reflect balance new we our of to right assets the

balance and our cash no current prior This or recast have impact prior income adoption. on to the sheets has flows. We year period our reflect statements

full results, outlook. our We about are on And to on raising we current based the optimistic first demand Moving business outlook. environment. remain strong our quarter our year

representing of shares rate million; share non-GAAP million we growth XX%; For loss of of $X.XX $XXX million XX% to of expect second the quarter, $XX.X assuming $X.XX, total operating to non-GAAP revenue million, of approximately XXX to $XXX a outstanding million. per $XX.X net to loss

of $XXX the 'XX; to loss operation representing of of to total assuming now loss For growth million approximately of our $XXX rate $XX per non-GAAP fiscal million; and $XXX full revenue we million, $X.XX, $XXX expect raising guidance to XX% non-GAAP of a million. to net million XX%; $X.XX outstanding shares are share

overarching our still business trends the In are in year. The in a tremendous place, summary, of and we the opportunity. to great stages market are a that remain quarter fiscal we new believe and we had early start this strong propelling

are further the market positioning such, our to innovate opportunity. making As on our platform, enhance the growth, appropriate tremendous competitive investments and capitalize we fuel

that, I, will your With Operator? and Todd, questions. Frederic take

Operator

Thank Instructions] question take Owens Please go from you with KeyBanc [Operator first Capital We’ll ahead. Markets. Rob our

Rob Owens

guys you Great. my taking And question. thank for

you up flavor move with channel market so the acquisition. do will more across give us this that market, point? increased contribution as there. and that is be this customer Maybe that coming Is vis-à-vis direct channel traction the I seeing some with accounts think at And the you’re just coming enterprise As guess mid-market? ramps, or

Todd McKinnon

factors, more everyones the -- really industry do with they small, then they are how out do second. say, can companies cloud, every how digitally figuring transform up mentioned is a good question. the a but that would across Yes, I say large all is on that and and securely. the they can all would I what’s how can back going I would things it’s you business

these enterprises our talked it, So to there. about But particularly we've momentum you’re really larger before. a big seeing trends secular contribute lot with are

helping It’s reseller a themselves want see adopt company especially cloud enterprise, opportunities the channel are. channel those digitally a cloud, from only do macro the to certain big buy they capitalize markets it and it’s out so a about So large every the not figure and but on is when integrators and reseller internationally. to through the parts like channels, those in whether transform contribution. how factor securely, are channel the the partners systems And our They you do companies helping wanting adopt enterprises that to companies these talk of forth. things, trends,

And so us. the it’s a for across combination pretty positive board

Rob Owens

housekeeping for you have a us? do as count Bill, And share follow-up. fully a diluted

Bill Losch

the Rob, XXX I that would million. use fully count diluted is share

Operator

And ahead. Please go our we'll with take question Bellini Heather from Goldman Sachs. next

Heather Bellini

you is a momentum? than Two of customers how driving first impacting and look and Identity you added with increase from about more at lands? it could size was in the questions, you greater what's just, us this in share And in if is you question than second ago. year Can almost the Cloud double you. talk us of maybe incredible a you be QX the to Thank if little how bit initial the is might the the resonating, that actually QX, XXX,XXX, added amount message

Todd McKinnon

security deliver your from access and stack access your was your management and your eight about going to the to cloud. new make control, interesting, selling also Heather. delivered it first Cloud that It's your question years idea. years that When it concept the the from pretty This ago, how of application it's and seven resonating. your -- Cloud Identity or enough Cloud be was cloud, infrastructure, started Identity to we the the was going have So Identity and pretty enough be of sense ago, that would there identity

And in or over the that. as they trends about a you of Okta. the talked just for way eight Identity forward, that about has seven as companies the the is bigger and And success And are is it's, shifted about larger trying that dramatically impressive they of the enterprises, to powerful. now as that many Cloud us that very There's cases, it the where past how which position years, it's course results, these understand of years, looking trends and context to in positions lot with especially versus much macro anything. to these us coming having are than

see and have to imitate some they So there's that's so, success emulate too, that there. can company peers success people realize driving wanting and this their so forth or success

I'd but But a more their forward and They their want cloud. in say finally, They their cloud. not moves with And internal is they drives, of enough as only and a these And that efficiency, way the have key to resonating. to scene the it the their do costs company it's to fact do technology business more then securely. that do that than do Identity Cloud anything, message it enterprises the digital themselves. want is

is it's that our combination driving powerful results. So, a

Frederic Kerrest

you starting add. opportunities us Heather, early Department. are This to it's Frederic. just very the markets where in they're still large. that last business. the mind And is see I us think to in quarter with ahead we come talked start keep have to federal about like opportunities of these State large I some would And mean add things when that in I I the to you would just to very,

they're hybrid. This have workforce, banks the because Identity largest Cloud to for adopting one now that quarter, of Okta the is we moving world's

think these starts early be more markets are to cloud. it technology, to And the these the typically see organizations first going opportunities When not you the the to and of very start get that of large that times as more realize modern large to exciting. and interesting ahead power I adopters where that's are

Heather Bellini

to And adds any increase the on you able above. comment net just fact were that your

just… there than anything You QX QX. mean, that usually I you think don't is see better

Todd McKinnon

a -- you the not it's But working question. it enterprises. And by if a tactic It's thing we've wouldn't larger the coming or for It's it's of customer we're at did. success, it's a look good lot And I'd on say good causes, the trends with market the I us execution very on it's new we the happy growth. just for way, root it. focusing been any particular say specific fueling together. thing

Frederic Kerrest

mind And an we're that would organic company. I just development software add keep in

can products. the we're product different releases solve, the new for building We and more address out of take and opportunities people to components and to cases platform and going keep used rev that's all more we more come with the So more time them. that's that

forward. to move and more Okta more starting just see different their Identity find organizations to you're of who So ways leveraging businesses Cloud can the

Operator

William And we'll from Ho our take go Jonathan question with next Blair. ahead. Please

Jonathan Ho

announcements looks us And with revenue Major you just case I out that the overtime? sense how how uplift, give opportunities maybe around made maybe Could add-up wanted start like? to of what of one League a you large it additional use can Baseball. external these

Frederic Kerrest

about to absolutely that. happy Yes, talk

time. So of then for and They small at their internally first and headquarter Major League as so teams some started deployment. Cloud been Identity it pretty you teams, League their for of ours more the teams, the employees has more mentioned, Okta the Major adopting and used a actually Baseball customer

modernize managed the customers you and they to opening day, native. the the it is We realized quickly do bringing and realized entire which had to see digitally them. was up access as trying They are what folks running really upgrade were they digital it they younger in MLB to not thrilled we there. and more What for that who and opportunity And mlb.com, they importance with and were very then of about. more infrastructure got and for

the any running streaming live, were for any customers millions games getting mlb.com, of of Okta. they updates on were of and so millions And the all mlb.com, the or you whether for

very about with deployment, it worked -- very well. happy we're very, out Now, you asked that

So we're that. thrilled with

workforce which customer access Obviously, per two You is is there the asked priced then user and also that. identity business, and identity about price behind components for management, the economics is authentication. to which the uplift management main and

of for number obviously certain they consume So a that all of access. authentications

And the become successful we become customers right identity successful. line so more on and these they it's in as projects more and really and go that more share that up access with way management, customer as in market with

Bill Losch

into in just to mind Yes, seeing us, listen because the explained as One interested end on workforce more interested platforms we're I start of is on looking initial the they -- we my us, the they popped in companies and them. have for product are part that. are bigger, that parts customer can that also and and Freddy But platform would because buying us it's powerful, thing more gets one platform. identity a that the side use of benefit for many both the cases initially gotten the of side, up even deals

for tightly platform of benefits having is see and is authentication had us the a just they end what the to upfront. authentication standalone seen authentication example multifactor multifactor And this number identity of more for of we've good product whole people buying and that A integrated we've years. multifactor of they increasingly happen the evaluate up

positive which initial makes think is deal it that very So the business. I bigger, for

Jonathan Ho

Trust maybe this? what an Trust, this side? at security? as how perspective sense opportunity you are the ScaleFT a their look Zero us well, terms Zero in again, about And to Can you customers How economic with talk looking from as fit like does it an increase does when in of give

Todd McKinnon

big pretty and network where outside don’t world is inside Basically separate a it's and broadly that’s separate a have it you means your Trust a a trusted. secure is defined. and firewall Zero trusted not trend that

of your allows much give more whole You treat to thing as it you is and just untrusted. flatten the the users that everything access. you free advantage And

they identity. office or can data access the things flexibility, outside way. the the of in that the more same much at rely network data on center the they're whether -- rely on is a in So you for or they center, can’t do And Okta to powerful you in outside parameter, have to office the can or

system an that device. have what And you knows access have time identity who should from to resource, the what

it’s that they You more system what’s environment, have identity this have to have be a Trust need for flexible more And to to secure, try be companies identity. get to an to And fortuitous us try position in. right. Zero it’s really as

is mentioned, pretty you as ScaleFT, interesting.

technology, we they the Zero ScaleFT, So would because do help the when world. technology bought the had in some company Trust we us continuous it originally, key that bought authentication

device then So where know and identify can device uniquely. the you what eventually do Server or product able just the matter its really just be strong a hit we got was which no about we lot it, became we was as we found Advanced -- had, we own. to the they were, and Access, Server at authentication, is And Advanced would look into a that product on

fully seeing. integrated expectations. Oktane and last that since of base the the about Advanced product forecast Server just the technology, had we of general near the at product forget of product the hit So exceed end enabling had started to And to Advance that’s availability Access we’re Okta initially selling Server up what We it a continues our announced we've that Access makings of product and year.

both very helpful been ways. So it’s

And think approach to I our informs overall M&A, organic. about think that largely we story also

We’re an there’s organic where for trends, or that product well. customer demand technology. of see technology looking advantage and very example in our an But see markets company. we out of take We own the and ScaleFT we’re or where like flexible build key worked ability add open we key to

Operator

Bank. go ahead. with take question Powell And Gray Deutsche from next we’ll our Please

Gray Powell

and strong taking the for congratulations Great, results. on question the thanks

you larger then something that Gateway the deal just potential should product the how support -- the that are help Thanks. products Dave, think So that And launch about accounts? move to more and enterprise your thinking of the on-premise can of your applications. Access us upcoming of you impacting launch needle sizes? Is with

Dave Gennarelli

growth is early one going question how is don’t at mentioned, It organizations because reality Those anything organizations, Octane. larger adopting in on and excited first made about So had terms the to they product, enterprise of And technology. this for while a them more it it the very we’re the Okta live Gateway, about IT, the as is Okta large of of we very front. customers announcements thinking in right is deploy in And throw that we the glue Cloud. earlier more another things as a they Access new you a of about they’re exciting now. Identity inning cloud away, with set

aspects these are they of of investments all so still made of advantage advantage modern cloud. but about how thinking can And large the today, they’ve take organizations take the the

which gives they can And a why The key but on-premise leverage a use new way on-premise Identity things connect leverage is could of Cloud their cloud, Access hybrid the easy, about is a with these very that authentication larger technology, Gateway integrate header-based think Okta how lot called infrastructure. them to their and factor for that Okta simple, organizations also powerful they the applications

So of we'll to capacities powerfully from and infrastructure. technology. forward, Access Identity do. for plug-in their deployments. what very like this moving a Cloud products capabilities now CA the way them But they they do want Gateway companies Okta allows to of still have But use that’s all others Okta on-premise can they and the modern their Traditionally, and

adopt enterprise understand Cloud. the quarter ways get first main to over next trend Identity that around looking a part be your will is deployed happily find the and And In two helping ahead. terms of powerful think organizations be really and this or to in that's The But make that's large Gray, easier We're we customers from how there it, the times the going second Okta is successful, to from the of with set really driver to sure works. going that very more all it very that's here. the question, revenue the not of cloud these it. revenue driver main

Operator

take from we'll ahead. And question Morgan. Auty our Please next with J.P. Sterling go

Sterling Auty

circle one, Rob to question want Owens I back to the the started. that

We are source growing growth, investors, getting just of the about questions lot talked large of understanding for a enterprises. the a the number

versus would terms question So percentage How you maybe enterprise coming is large what the SMB? stratify in enterprise way. now to revenue ask of this from of midsize even versus revenue your

Todd McKinnon

you the if I -- big internal a if lot we're success at and and look you investing that. we commensurate large potential But But of our it's we -- there. look We still that with strategies. at made how And don't -- focusing, We've would with we're it how saw say enterprise. we're our a out market. break like we still that. And plans it's have internal

So, clarification. I the we're color -- or even in give mid-market very doing or would our commercial well that Lot market. the of still

enterprise and So few about focusing is in the to its potential talked really would enterprise ways we've long-term over that. large especially on the and in a capitalize on successful. call, we're I the massive, is balanced large different But say

Sterling Auty

maybe Bill, for one then, you. And

more You the about talked be the we expect equal should new hiring about of pace Or the year? year? through should think hiring? hiring. on-boarding of front-loading How Are headcounts to of you the through the the we

Bill Losch

focus on going As to continue we for think we that investing investing, both talked opportunity that there's are year last about, focused the at talked on And to talked facing in Oktane. the these we in and quarter, was growth this that because first to headcount we aggressively, we customer we're in had areas to just continue going quarter And we're about tremendous XX%. hire about we strategic headcount us. R&D,

that. going we're and to we a market what try make retaining we you continue we expect think want actually opportunity strong to of growth. said, to maximize like on year there we feel success think I the capitalize -- we attracting very like those are on. as And and that And I is because growth into we having second should opportunities capitalize investments half get strong the want talent, going continue are huge to prudent is strategic as we that and accelerate, to to

Operator

we with our on, Franchi from take Stanley. next will go ahead. moving question And Morgan Melissa Please

Hamza Fodderwala

This is Hamza Fodderwala on Melissa. for

range, that Should adoption forward increase remain you it Just Bill, And or see it lands. the about you we share thank traction wanted as to outside as in a down Management. any you. initial expect follow-up mentioned given for move and that's And MFA being color forward? from that larger a dollar going or particularly Lifecycle with if retention should then your your XXX% that point on enterprise SSO, XXX% could of me, you could sequentially the net

Todd McKinnon

lot more Certainly, Same of opportunities We products with. multifactor the of well sign-on in these doing. we of all segments. are first how in single because a continued of the Management. very, version signals a Lifecycle version of areas. question all see well. added around take last year, to Universal multifactor are are can so very Obviously, all is the there an adaptive adaptive They doing that we true the very, data authentication systems, our customers I'll help and lot across a very more for single sign-on authentication and Directory and do do an

enhance think Management, And lot in can one you highlight. there's fact, drivers purchase of Azuqua that different product. the ways in as was which quarter, of think But I about is of important last our that a we that Lifecycle to

there's and with deep. of it's happen existing First things lot product, a pretty of that our all, LTM

Azuqua So now us, strengthen opportunities going but it workflows, of And network, continue we customers for there. in allow workflows. going a to pre-configured going to you're and and how Workflows, that And continue to more Okta of our we there. to capabilities enhance the manage of also more is broaden which But more more as do allow is to system. us Workflows as only on offering, think that deepen and not more to a lot see Identity addresses the and essentially we about and is Okta start to more can and lot to

bigger obviously You upfront mean realize have to deals. more products

there workflows functionality of the what also it now And the these you events system Oktane to that SSO, with you of leverage UD Cloud. you're can going have different talked Identity and but which there with so whether we or is see configure trigger to flexibility really the well, And is as the Okta that's system. to drive about advance to customers and base like introductions for have, out different with a Hooks, capability lot functionality

Bill Losch

retention you're right. the it rate, relates to And net as

which enterprise target net all to the rate. As healthy continue business. larger do as retention we some to base, customers, are as initial the expect very we indicators fluctuation in And sizes see build grow, our for those we customer

few be it up points. to now might XXX%, I we in right are level a and go the think that at very healthy a will or range down

XXX, So the modeling. would talked would range I say as that a to of XXX range for comparable you be it about you far your as

Operator

Please next question Moskowitz our with Securities. take from We'll go Mizuho ahead. Gregg

Gregg Moskowitz

guys. Okay, strong thank quarter. and a you good Congratulations afternoon on

uptake seeing moments But I'm high in adaptive wondering particular mentioned multifactor been you or around the a past demand around MFA, ago. what just few of the authentication months So you've few level over so?

Todd McKinnon

The it It’s multifactor just be whether MFA it’s security mentioned, very for out the is helps to secure, whole there. adaptive But or it’s it’s figuring Okta, visibility that’s specifically adaptive parts products we very it’s really the the it’s as platform, broader of that most every and adaptive and the more whole, and suite, technology multi-factor -- with how as have. I -- and a products And the related MFA demand doing security upsell and And authentication of strong. multi-factor later or is enablement. driving are company directly just from like sell then a deal product strong. the interest broader

as both whole So it's our part also of perspective platform. a an dollar from powerful the a entity and just ramp important into suite, on

Frederic Kerrest

financial to there, quick think And can a you of a of company. sticking just example couple services situation with

that have sure businesses right financial where right are who consumers want customers technology some private management adaptive that obviously to records. have accessing make wealth We the they

thing of same Zero with government are around more in adaptive President authentication government. lot basically But multifactor memo around and recommendations access in simple a if the as the the see managed Trust of shifting all and There I specifically that know to opportunities aware. multifactor a released the Office don’t from of making well. it last is week, making complicated. you to You do The

person right and with do we of chain, to want or right a you the that’s sure access that adaptive. to time a allowing supplier. what that solve whether Okta in supply who a then supply makes And it you make to real And finally, case, large Cloud you’re manufacturing have signaling that And to use chain the customer some number customers the Identity want that opportunities. might

and flexibility were in product it customers there So into workflows. there’s that the a and baking different their ways lot of which adapting

Gregg Moskowitz

year still so? more in or very less that’s Workflows. quick then lifecycle Azuqua, And fully up expectation Is that follow or Freddie be your a on that Okay, a or integrated Okta helpful. just will with management under

Frederic Kerrest

absolutely. Yes,

it well months already of a some It’s doing with So we’ve integration and off. couple work very kick are we already to good been seen that. very just

going quarter Okta advanced integrated to using within fully are I certainly, be or think of be of absolutely. take the the to year it’ll the And advantage that customers functionality two, within able next some workflows.

Operator

from moving with Shaul go Oppenheimer. next And our on, we’ll take question Please Eyal ahead.

Shaul Eyal

about ongoing Bill. and Congrats channel you. continued improved with Thank Freddie seeing to the Good on afternoon you’re Todd, board, Gennarellie. partners. traction outlook. ask on Dave I Welcome your the wanted outperformance and

down I channel it the be about we plan with As to should respect What roads contribution? believe represents already you’ve five of as business. expecting indicated, year the your XX% we think

Frederic Kerrest

the kind about to you, words, Thank happy for talk absolutely. Shaul Yes, that.

might of you be So us for the to story, of partners there’s a buckets different not with channel of as who and it. familiar couple those partners

vendors, Workday, Okta independent to software obviously the Cloud so where very like deployments Salesforce, those partners better ours, XXX, ServiceNow, Microsoft is good faster products. results first integration because of The one Office Identity they're means organizations and with obviously

have And in Secondly, the they're about to strong system integrators, call comments on very large practices be global PWC, enterprise, all today’s Accenture, of how we’re particular building number it's a whether going with there been happened certified, as Deloitte, We saw security they're and is whether their February them more as practices. very in for and trained Okta, more kick-off, it's all great. well. sponsors which strong around getting sales of which

managed digital or a So in large implementing service for with organizations helping transformation Workforce environment.

a phenomenal. which is identity obviously regional grew International of and And overall organizations year-over-year, a every firms think of then out public there open is Identity it more looking of other with Germany. business. bring that But lot environment, adopt channel. international, But the makes Shaul very channel. consulting you're who talking excited for huge us. is a there's In out with XX% did more experts this are the in like happy lot in about services partnering Cloud where and opportunity Okta where about We're of are territories offices We're opportunity finally, also more partner lot there's organization to growth to to going the and what hybrid particular, we to there. just to in cloud do to sense, the is a there, we the with us

that. see So to continue to going you're

model have today look quarter I growth of specific And ahead. don't I at that What like is very, channel time. good. strong over times think the and five having three a is business impacted the the by we're But continue We numbers that very sharing the that this to in the next years? expect

Todd McKinnon

or then infrastructure to is a add at you so we're that platform channel just scale bring would player and apps strategy, the positioning, and the because because you them party, relationship a that neutral. differentiator. it's super trying part platform, our Because only resonates if to look choice really broadly, I partners customers have they as very they that competitive it mote. sell the important that And doesn't all with give And our the our we're the competitive of network the of can will bolster we're neutral their competition channel, an us see in

while because is differentiator. in making investing it competitive giving is it an and very specific interested aren’t we're over productive, time, we that numbers So area

Shaul Eyal

the Thank introduced Access may for my Server follow-up, Oktane. Access Gateway, you I recently the products that. And if Advanced so during

started Given do recently going its these with you a see competitors new when on-premise you've list out focus, products? both of

Todd McKinnon

Okta pulled edges. connect things. Okta these lot things. of products customers. what to these products like more customers resources. maybe Customers secure from But on-premise to that, find request the to would are a want say, of our use Customers all, is on to Meaning I first we want more

in build products to response that. we So

the that be asking use So customer what there at just for a cases, it. if wouldn't the us that probably some great is solution in the that means there if competitor excelled was market, was

run there's ourselves in where So of these we places putting to lot room there's any greenfield products before find a competition.

is of. is So way other The partnering more we might seem vendors we behavior. other even our vendors, than that there's you talk have governs or and to adjacent reality areas may these when these follow we what though competing, some to of find really heard do

relationship positive at SailPoint, If relationship. look very our a you like company synergistic it's with or CyberArk,

the other. by with on like do that Although, fighting can we can we bumping customers each together do it find each surface, seem What might other. we're up we is more against than far

Operator

question next Alex from And Needham. take our we'll go Henderson with Please ahead.

Alex Henderson

[Indiscernible]

Operator

I'm so you are Alex, sorry very quiet.

please phone? get the you could mic to closer If the or just

Alex Henderson

space. last ask. to SailPoint very the them. what actually you that into patent risk any pretty question So feeds in patent technologies for the nicely to relative was OktaneXX a product identity There filed and addressing event, overlap wanted I I at you if that I wondering they granted there's was that offer the was actually And guys? recently, question with implication heavily that And had launched know

Todd McKinnon

familiar it. not am with I

have a vendors patents, of of We have patents. most bunch bunch

But side. on with that productive SailPoint we so for do our am in with But And is management. to a on -- that. familiar not we the We together, great. more of with relationship as customers. do because on-premise very that having that think some lifecycle I areas side governance of this governance I the well overlap particularly very of found software We're functionality. specific deployments relationship is working They they go excel, one. we're and cloud doing

the So partnership And I to future. am strong. in very is long continue be confident to going the it's

Alex Henderson

Second I'd is. ask to love question

had that translate Oktane unbelievable timeframe the attendance is my of the But of order have an for that a of that implication post into you calculation, last the at adds? the uptake an in translate I in Can those massive the deals your -- for amazing. reasonable for pretty somewhere those almost of that mean does within as show, two Cisco of events? that each attendees had post attendance has by specific timing Live years. events size, happen customer new company which that's size that to X,XXX type You've you events

Frederic Kerrest

And to focused more has received here is big idea year keep and behind the transformation out up-to-date testament platform software. so on here there was innovation since that just Certainly, that coming. many Oktane tailwinds to around I things prioritizing tell it. That are grown are it's us think we're happening. digital the so started that get Originally, cloud, things is wanted was the more started. and them original They are we of the over last way on we the what the because big a we just coming security. much customers releases significantly of for these This you to

going now they that to attending, more more to grow leveraging the the make see but different is all are cases and not customers It started and fast and sure use all obviously products only we're also to exactly pretty address. where are they there can

that. new lot are more and there's and prospective or should customers is our either of working or So I customers purchase to say teams a address attend great. Okta channel with, But then more and there account who who find who about and use which is cases, more ways out are go partners realize products they hearing can new also find about

the when business moving the business, think and annual to it main up timing. in basis. had The to new of subscription with it that It do but Obviously, on it's it really do that only to of is business there an with and the drive driver business, cadence QX the new the Certainly, to customers the in both not I does going the existing recognize QX perspective they way of retention and come it going net to in ratably. customers. have anything doesn’t running come timing from more terms we

what Okta as out there, they’re side, of to platform. And partner So, getting that’s advantage the attendance, event, of record year people but really to that obviously, partner I of software channel really this And we for are no as record it. upside a and number had, growth products both speaks the there excited also well the opportunity side. the think but of attendance think about Cloud take I is it Identity the we on to

Operator

on, take Moving from Nowinski Piper Jaffray. our next we’ll Andrew question go ahead. with Please

Andrew Nowinski

change average targeting including to of products I'm a new the your duration new environment. products you’ve on-premise wondering, these So markets, launched relative contract the number duration? historical new hybrid do

Frederic Kerrest

there’s anything these to starting we’ve seen the overall products. yet in see of think contracts. of what you’re don’t new terms specific would multi-year always I same changed say is because I

large organizations, into As larger and and larger identity for longer that organization or customer major get when platform, see, And is they five the an change whether years want you're longer you undertaking. three identity decides to workforce duration sometimes, contracts. because that’s or a either to even starting

to can so are term long they they that want and us into for relationship. build that really sure that with partnering And we make really the

certainly will fall Okta that products -- that that’s length Access advantage business that in category drive that term like lend specific Certainly, there’s that really driver the model really hybrid but are companies taking Gateway to focused on the no on more enterprise to into themselves of today. focused enterprise for agreement, of the longer

Bill Losch

biggest with of you see the of and XX%, them starting lengths. contract backlog. I prefer we ones is as driver thing landed, enterprise know of the would have larger you One mean Freddie's to in had and that really that duration. we deals we’re specifically guys growth our to some number to longer the contract point if understand that But RPO I total just year-over-year along backlog is,

that So that’s there what seeing you’re growth. with

Andrew Nowinski

that the it’s all per offering. progress percentage the that I'm more track along of deployed, number share any could metrics it, then to how you products you’re call customers are perhaps of products order adopted, solutions? with in or And new those customer or have given your and there whether lines, wondering, these the being is average us three

Todd McKinnon

customers, customers mean all of we our Yes, products. number deploying have on success I a had the our with continued average of

we’ve have those As about before, talked all products scale. of still we at

going bit see that they’re Management a traction LCF, to strong from Lifecycle continue all on more increased multi-factor perspective. and little but authentication, We

Operator

from take Berenberg we’ll last Markets. our with go ahead. Capital Please Joshua And Tilton question

Unidentified Analyst

it's Ganwun taking [ph] Zahir Josh. question. for actually Thanks Hey for my

market, I The the want is to just first have again. around enterprise one

more more enterprise, looking How moving And the the is partner? into what expecting changing in CSOs. larger deals, products? becoming more of security a access are from guys to and terms you management implications I'm If adding are to perception

Todd McKinnon

Cloud, What the are to parts Yes, we as seeing, and reasons. on happy call the Okta more we've seeing the that. world’s opportunity about very and are the to of Identity again you straightforward talk more mentioned as is discussed largest various leverage organizations for

to they to more want workforces, adopt a of cloud want do for capacity. in First all, they that hybrid their and

they every focus of to digital Second is attack because on company. technology software initiatives, modern all, new need by under these transformation basically company

with seeing sea and You the And and to financial look top this. level healthcare, or why large organizations. we're services, is priority have across level, that's the opportunity of a finally, all access retail, And identity these security board a it of hits management. industries, lot businesses. do at customer And line it and whether its because their quickly, or the then you do they

executive of more years. last in important of Officers, on have Security they much process become decision Chief And or part us lot makers challenges number the the important CSOs, a organizations. two for buyers plate. become buying their three They've an and mentioned a have You they over of large

the that. can of concerns looking quickly, identity some for partners effectively, is efficiently, them of at They're and major core who these address help

understand us. problems specific quickly We them can also of engage not with but of then helping rolling. become Officers. partners get So ours, show strong them help and do. advocates only Chief we we solve Security great typically, And them terms they how these what we We we in help

opportunities earlier, next. we're that's these think why Okta saying these opportunities about us we're a When mentioned by in customers and markets. modern think can they're access, we're we ahead. the help want solve advanced about way to to like products modern more. we're problems what new As bullish that we And do hoping these looking And new Todd server very that for pulled these into getting build about

Unidentified Analyst

up follow one. that to just And on

you mentioned In enterprise integrators. place concept interesting You've market concept, the more product the partnerships you your an have becomes then itself, pull, which with system pull. is when the and of prove in a the

all as partners, enterprise more on-premise, have the security the Are You seeing And Gateway technology that? to so for links in-theory to you be guys. Access in the become OpEx to as becomes pull place then seem a more market? still even pieces market this you the Or you. well implication it pull. future be that is of could relationship on push Thank obviously And a what the for market? in I'm of more on implying

Todd McKinnon

Yes, I don't think binary. it's

I progress early. think it's -- we're but still it's making

exciting. it. still is so hard working why that's and we're is the substantial The big. and solid going So keep to progress to on opportunity And capitalize

Operator

had And call we Gennarelli all today's back to the any now like additional would turn remarks. over to I the for Mr. that was question-and-answer for time or session. closing

Dave Gennarelli

us this Conference Chicago York Blair afternoon. Xth. joining everybody just in Baird the we'll for attending Coming in up William on next the thanks Well, the week, be New Xth Conference on the and

any at dave.gennarelli@okta.com. can those one have of And events. you see to you additional hope me you questions, reach we So if at Thanks.

Operator

conference. Once does participation. you for conclude Thank again, today's that your

lines. now may You your disconnect phone

Okta (OKTA) 30 May 192020 Q1 Earnings call transcript