OKTA - Earnings call transcript Q3 2021

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Dave Gennarelli

Good afternoon. And welcome to Okta's Third Quarter of Fiscal ’21 Earnings Webcast. I'm Dave Gennarelli, Vice President of Investor Relations at Okta. With me in today's meeting, we have Todd McKinnon, our Chief Executive Officer and Co-Founder; Bill Losch, our Chief Financial Officer; and Frederic Kerrest, our Executive Vice Chairman, COO and Co-Founder. Today's meeting will include forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our financial outlook and market positioning.

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

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

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

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

Todd McKinnon

remote nature and hope XX%, since grew performance of XX%. your since the RPO we a remaining mid-March, growing that that continue quarterly execute been XXX% We're we the Organizations I'm trends proud Okta mega Thanks, Total Zero at websites this for Dave. workforces results. the to operate us or business XXXX posture of that solutions are high successfully XX% the revenue strong to record business subscription grew to fortunate applications. We're forced have environment. continued security and generated and flows. digital also remained the spoke. and level. the and of distributed of And that that Digital and cash we connect and demonstrated quarter security over for strength and another several pandemic. has driving the with we Hybrid the total being quarter our revenue we are thanks three obligations allows time their strengthen strategy adoption pleased you everyone past our delivered in IT, identity accelerated. being I Okta's and have their today. third securely In Trust evolve our navigate Cloud of to The fact last remained us families joining Transformation through customers dynamic safe work financial to their healthy report help years,

part a work environments While business. critical remain their remote their of

plus our with over continue from with We customers value large of XXX again $XXX,XXX base of XX% expand of faster. now we're an The even And of now at increase customers base customers XX%. of our nearly were QX once enterprise greater have our contract annual customers success an new total contribute contract $XXX,XXX value. enterprise to total and customers. added Large ACV bigger of than additions stands customers. with number In growing XXXX, these half we annual seeing

XX% ACV XXX to For over example, than grew an our customers with $XXX,XXX customers. greater

migrate a Technology, became large serving DXC public X,XXX of of workforce wins efficiency costs, on enterprise its and customer wide improve for come in has state Okta industries. a organization a to single securely integrate Okta upsells, entire services applications user new help by and Okta Here identity provider, will infrastructure, to IT clients complex plans experience gateway with on-prem its systems. workforce DXC a while to single to QX. while access secure just replacing multiple few help sign-on, a existing better provide from private the DXC legacy applications COVID-XX state's Okta sector transformation with hybrid look help a The Okta its operational standardizing selected environment. response. a workforce accelerate to and reduce Fortune was identity was in company XXX customer IT digital of cloud to initiatives Iowa range an and and the QX win, which where exciting notable examples

the are on-prem best-of-breed their identity As its the supporting solution on state applications customer nearly replaces to applications, deploy By cloud based XX,XXX having it cloud-based integrations secure quickly. identity Gateway. employees. million has a password. sought X employees state Okta Access access, for pre-built providing secure its its to focus successfully ID resources and Iowa using state citizens. to and for to state The also connect Okta deployed serve a their citizens, better able access its legacy all help tools, seamless with legacy systems state with single move Okta’s Okta agencies a will simplified time and plans

with $X were by by of XX.XX% scale. and This solution in new capable with compared includes of further its QX believe total infrastructure. and our that's component new business effects were $X of evidence are transaction and are our can to expand size of value. and network more, the We year. of companies products more better What's manufacturer to to competitive the fantastic XX workforce both International opportunity and is system, its this build average the progress. integrations legacy we key solutions. harnessed leadership. booked customers trained platform neutrality, are always of with that had is the make market a enterprise in advantage deployment at than getting when We complex we because these is Customers provides was be increased We contracts These cloud key capability we QX network upsell to drive that has looking identity on more This to XX contract catalog to upsell by and a organizations. breadth that our contracts. an and move of progress All over Okta our to have customer a now last million. deliver a insights data operations business that million, flywheel forward. still top customer of its enhance a its expanding our is Okta, effect generates both wins with accelerated XX% XXXX X significant applications with also a Well, started, sustainable successful. a customers help top auto global contract large great believe security scale that better SLA extensive Okta's Further and XX aiming products. cloud our just help more protect to large turn, demonstrated The more of continued for at and over

few itself of new more in Speaking particular the now. of Okta we event making October. further platform. Annual the we them CIAM The last several Cloud, success, Showcase increasing The Second leadership a our identity customer advance building a of system every I'll position layer on over how a Identity with at announcements and every Okta made solutions, around to the year. products, as integrated our of technology stack. times emphasis into help highlight viewership nearly tightly we're modern There we're enhancements a Event was announced and huge at product innovations was innovations feature four

code. provide is customer processes completely and experience, connecting programmable teams first identity as having complex to development, to enterprises of progressive the will every Development to without by make greater part and identity work automates and to The identity unlock which user agility such write registration, flows use customer workflows, greater profile customization. enables actions

We In app. super devices This into MFA customize for SDK creating short, the single user experience, secures it's integration omni-channel now directly simplify overall an platform easy to also developers and tooling for to increasing experiences. API and announced things, embed security our will simplifies embeddable customer in login This while their many their passwordless posture. including service. a developer

of expansion management and announced Lastly, Advanced scale its dynamic the environments. at our staging manual long that and One the Tokyo, of enterprise is long enhancements de-provisioning, to internationally, deployment Zoom. speed cloud QX, country is from with Hitachi, the initial hiring access With Japan, their customer compliance opening component especially developer the privileged which office including our a we accounts local a benefited security, in or term highlighted strong growing several ASA, and success up Server a NTT and that and production earlier our Okta infrastructure, the DATA, in year, and Watanabe, added Access a and this is to provisioning a Zoom of ASA. of with automate its expansion like enhancements security ASA a of Takashi as and provide production to significantly servers. market. upgrades technology deployment making simplified Early base our the seamless term global another investment user key footprint expanded of Expanding of new first to we strategic in This testament deployment helped and in is team, of customers manager Japanese priority. priority,

COVID new to to continue class we of Speaking the hires, environment, world talent Okta. despite attract

leaders In addition third and of and St. to February growing Worldwide decades high software as building Operations President quarter. nearly XX%, in three we Ledger, growth on be by of Xst. Susan businesses. two new brings will of Susan the announced Okta over Field joining our cloud senior overall headcount experience transforming

who us join Antar, more than growth business couldn't have performing leaders We years high-growth both also companies help IT We CIO, to these and startups. our continued more Alvina success. experience and XX high brings lead at at XX Fortune excited announced to new to of experienced Okta organizations be

they be quarter seventh our data look very by report and been wrapping point report an want summary, this trends investors organizations today. know how growing in XX. become analysts love for report Before fastest that Network, this driven momentum. our apps the great industries, January edition us, Integration to several and before execution Okta another continued and audience revealing commonplace. Using people In on I to work Work at it takes in-depth we'll @ the things Businesses it's strong of and into well, I from was more because this market out up. releasing

we extensive expanding have big platform it's We players, high other and incumbents, products. because cloud the win whether against win We most and platform. are and modern our broadening legacy competitive rates, maintained competitive based mode point have or very

us financial independence we're is position the We're Our and that’s and of our toward a confident Network success We're also achieved, customers in just I'd And results. coming we've proud time. Bill? over of in unmatched now of market execution, are our And market our to cloud. to being Okta the maintain call industry. ability to neutrality. in our massive the to value scratching the for in high like we of the the the your again in enviable Integration surface walk opportunity. because this level Bill Thanks through turn

Bill Losch

for Thanks, Todd. to us. everyone you And joining thank

a website. an on that results financial reminder, Investor detailed posted contains As presentation we earnings our our Relations have

I third outlook had a board. only for find across touch to you'll highlights summary. the a think cover And highlights afternoon. in of full QX as this my We I’ll on it will and such, commentary the some year. of I be then the now go And our useful the some and strong quarter into

next $X.XX Turning to subscription billed grew represents for total a growth. unbilled calculated represented invoice total yet months is along driven both viewed billings when strength growth backlog XX and and Total our strong in revenue subscription Current expect in new beneficial existing also to we or the customers, revenue XX% driven RPO XX%. revenue. that recognized, of in XX% revenue growth was revenue meaningful billings respectively. current increased Year-over-year has by results, revenue billings been more the experienced our which over and with which and by subscription is revenue. grew XX% and not recognize both XX% XX% RPO subscription and QX metric RPO to contracted timing. increase current us billion. of XX% Subscription The

quarter timing a fourth billings headwind to be modest We expect to beneficial QXs growth. invoice

is which mentioned on is by subject variability timing, types current which I dynamics, RPO revenues. caused be no eliminates an of before, it why these important billings invoice metric as As have can to variances, including impact

rates was period Turning X to quarter. our in gross rate current rates upsells, net retention with point retention, during pandemic dollar-based retention to XX customers. month the increase not retention fluctuations any from degradation and fluctuate experience customer for a retention in We've the experienced XXX%, may particularly more strength last the The quarter-to-quarter. with may possible our be continue that rate from it's enterprise pronounced. And trailing environment, in

discussing like I results and non-GAAP will to Before turning to be I'd point profitability, out items that going expense forward.

in offset growth we've Now and reduced which investment XX% was to XX%, back our over third looking primarily increased related talent, We stronger engineering operating was increased loaded partially to begins travel plans. we total at at and than operating expenses by XXXX, successful mind with expenses and our expenses normalize. in The the when office to quarter, to been increase support teams, Headcount important It's growth driven the as higher to strategic expenses, as expenses. more while to grew rate hiring is the and forecasted, And retaining continue initiatives. market end hiring environment a quarter. normalized again just run in our by revenue in in profitability invest go the that to we more than performance. keep return will business expected achieved

flow and includes business our and continued third flow headcount record be within our to yielded quarter margin. by XX.X% stronger free fueling by and billings respectively, with than marketing, and $XX We free collections equivalents We was also and [ph] million, cash, strong cash short increasing as and million generated to We in driven ended of investments. the from R&D. during balance Collections a cash sales during Free term cash cash investments pandemic. flow which anchored strong quarter. as billion the which increase the $X.X sheet have globally, $XX expected operations look well a cash flow

investments the we our uncertainty Moving and strong demand so outlook products third we optimistic upside ’XX is return. only that throughout platform, innovation meaningful full year on continued raising environment, of year, our a continue business in pandemic our growth our for believe Consistent based there the the about outlook. fiscal opportunities further and year approach competitive will this we do our remain our our results. is But to our on positioning. reinvest bias to Well, some our given enhance with to have with quarter fuel

growth We to fluctuations also cash flow factors. the due ongoing our business in see enterprise in variability continued to in expect capital, seasonal margins and working

For the XX% $X assuming revenue of to rate weighted a $XXX representing of year-over-year. per XXX fourth total shares expect and of operating million million XX% fiscal million. of XXXX, to growth million non-GAAP to to million, quarter of outstanding $X.XX approximately $XXX share Non-GAAP net we loss $X $X.XX loss of

shares billion $XXX rate income The net we weighted of expect of $X.XX, For now the full of year loss $XXX share preliminary fiscal to and we be diluted for are of shift million. the to our a to milestone full $X.XX non-GAAP of per of outlook $X count billion and view million, to of XXXX, phases strength us range $X.XX gives $X.X for the provide $X.XX to Non-GAAP growth ability to XX% revenue next representing operating year currently in business profitability billion. of fiscal we in The early our for But total share year-over-year. a financial total our execute. year. revenue XXX revenue million We the assuming the to million in of of estimate planning, confidence exceed million like the higher $X.X year. to XXXX approximately outstanding would reflects

into it well is cloud, our and further continue our tremendous performance. our a the We to there remain execute third security our market With are factors our against will forward financial In on to that of The we pleased in plan things consider, market long to to drive ahead model. strong that, out confident to that closing digital over look capitalize fiscal term confident our and us accelerated All position and transformation turn well note. the Todd. to today the business macro we driving remain Although quarter business with summary, our we as achieve leadership uncertainty, opportunity of targets. on tailwinds position long are term the ability a year back continued future. I'll

Todd McKinnon

his the Before succeed of best an Mike also spend Bill's to him of and has he's next has committee million early him I'm stay and organizations. Kourey past to X year, more we bummed Member Committee he's intimately discuss able the Bill talent and wish announcement successful with and Bill's charitable March, take and next favorite and board be to fortunate when integral happier that for to were in Mike and We're quarter excited wanted with is a of Bill grateful CFO Audit to retirement Mike his Okta and him. our I retirement appreciate appointment the to through business of XX Selfishly, the growing of were first XX-K the in have all an expertise. go through incredibly be we results next incredibly couldn't really greatly someone a been head the we Okta of a caliber I of our had the time invaluable Q&A, quarter and everything land seven Board Kourey’s and and career member family Okta, part revenue, than past Chair, been had We has with strategy. as for then year. years, on our an his familiar and over because friends announcement reins. advisor We're fourth less such audit person startup, the to over going Back filing to done our years. and plus young year.

So hit able ground we know the running. be will to he

private in and board that for team plus career both rest I'll we has executive years, tremendous executive have and before as companies. continue the to months confidence questions. coming and an a even more public working wants technology, in as look a know get in to him say board closely I we of and past the storied XX the business. the years, Bill? member the built also forward words, with Over to the scale to Mike in we and Mike few we speak Bill

Bill Losch

of I'm been Mike, in who to say a will And I from been believe And back the decision, truly Dave team to a me than I Q&A. miss move moment never future was I'll it a really to talented this been the want to But am for and excited with day. Okta But has on past such just chapter mentor have has IPO be going more part turn take to the great building, my our current know next difficult these financings through thankful Dave? to because all to for scaling, Relations I This years. brighter. I through hands before with Okta I'm Okta team. how I'm anything, X working with him transition. working forward for life. our a to to looking now Investor to of

Dave Gennarelli

hand yourself screen. announce a question JPMorgan. unmute And it's interest Great. a one that question first question. question. at Thanks, your follow I the time, that ask we'll and And click name to from will And time. one turn have take question, Sterling you yourself your bottom at To have Auty, on you of our will please indicate with Bill. And that, when to to please limit Sterling? in icon your the of the up raise

Sterling Auty

up bang, of you put dollar one mic with start drop. out know a guidance billion and really with Congratulations to how the give a let's heck on you Bill, guys. Thanks, right. All just run, you. the go

So going to one Onto I'm we ask question. really appreciate just - that.

this terms in upsell, from was what of came strength base? cross-sell the characterize just a in you the So when new it into look additions last business? you're the new strong very revenue in your Can how and quarter, momentum seeing quarter of the and logo logos much to bookings you the at existing

Todd McKinnon

to see you. nice Sterling,

I across think was – it we’re quarter the pleased very board. with the

little I upsell a weighted it's to more think transactions. bit

couple our customers with our One lot of to last started is that's think We the just a of do - getting testament few things. tend that, are I products. speaking, they especially relatively the use us could grow. of from lot lot potential deals, a that we've small customers of terms a of years, done these but not were to was there - a room in

move well. to just you of some think I benefiting solve, that not more more into motion, to There's to we're also just there's from problems know as a the we as degree value We're natural more more add. part So enterprise. -

more of So of on think really mix an it's easier versus build I some the too, think And one. as be a bit is upsells in enterprising. will that's existing we new COVID I a relationship margin work But a little also on bit I the think. move difference, little to marginal a

Sterling Auty

thanks. good, Sounds

Dave Gennarelli

Blair. from is question with Jonathan William Next Ho

Jonathan Ho

Hi.

and me echo well the my Let you. will on as retirement congratulations we miss certainly

seen. provide that there and Just growth use you've color Is on of or maybe driving with of cases can get more of you that color the the to penetration? little piece. size that what's additional deals the any that on this bit Is a wanted additional upsell? expansion Just

Bill Losch

that. Hey, to Happy bit a you. Jonathan, talk see about nice little to

what think getting started these just seeing I lot just Todd So a of larger with said, we're organizations. is, as you're

the million, at back you just that were figure over just of top six a an million. take idea contracts If were to service. gives by they can how really you $X $X starting book, them XX and That out Todd of the advantage they people look some numbers TTV you mentioned, when know, over that go of are to all you this

giving a really also products And company opportunity customers a the from in look platform service. the to more to consume of a of transforming more we're announcements we're be do lot [ph] you Showcase and think really where some able I more from to at starting end-to-end middle and through to company. management, access of the identity customer workflows it's right if

or it's with need about workforce and a customer in and I with exciting next some today, release wins who the the think you're I adding our or if great just that's and management But of adding Finally, to customer go-live important And, important, to a very, talk we at logos. look I [ph] especially to workflow, happy it's of net examples so, very terms to today's with giving you age, I always are the press And up put if to in out at basic of not room comfortable we results. you of new getting the say And with access we been products, of do for earnings, to quarter starting service. live, advanced going more and talk people then going single solutions workforce open the a going that a which great us. And years we're platform us think the would are always if identity being provide customers more today, look, you five the as and there's think on. and lot and customers continue year. who But be with day upselling, that versions successful very lot just about MFA sign for grow. three, of as they look

Jonathan Ho

Excellent. again. sort of as are commentary can a to to give some how and of know Thank magnitude? the that fourth terms about in are And than any thinking the headwind, - going there But we that congrats the there more less just quarter? growth is be you, prior billings relevant your you Or is given hints quarter quick us this in similar that could around of you up know, just be Bill. RPO. is headwinds I that billings follow

Bill Losch

do going did as talked relates really Yeah, has it said, eliminate quarter. that's to metric, Appreciate that. know, which timing, Thanks, see it impact this does like as you're no good a is current I've you it relates some really Yeah. headwinds timing, to we, why And timing. RPO see to how invoice Jonathan. about revenues. think before, we that billings, you on some because

you know purposes. modeling at of look billings a I However, lot for

talking And million. as that so think into approximately about quarter that that $X as far beneficial you is QX next for timing as the we about, saw it, come invoice we're headwind

we I strong also, how talked But would the time. think business, about that's that as if we that. very the, And this invoice billings, strong So had very strong did about performance. you think very had we beneficial success you quarter have in we about, bookings, and know,

So subscription in delta delta we about will that delta, talk like previously to X% previously and about the probably range be the you of that how growth, revenue know, X% you think the probably to of had between and talked, now to we when second year. narrower, we think for the billings about half

Dave Gennarelli

Okay. And on question a the those on that reminder, to please like are would our going come icon. And if hand question, for raise you is just Oppenheimer. a to ask click from at next Eyal panel, the Shaul

Shaul Eyal

Server Access. summer the Thank about thoughts you. years. you [ph] Bill. output from alliance results over the few May It you and CrowdStrike? guys back announced about you initial may and working workflow going pleasure on congrats Hey, with progress Proofpoint, the everybody, have be with product, any Netskope the past Gateway forward. Good ask Freddie, seeing initial been luck a the was Todd the or that we've I to in wanted

Todd McKinnon

and still we their a importance then have - we're I think customer is this Workflow about Advanced to do product, of in understand Management excited strategy. of the terms really the Service product workflows it. this people identity and Lifecycle frankly, of Shaul, work Platform helping And

use into build the And that to areas. been an that a then from to native the think years is years. platform Okta future back Workflows and various these product. use piece Platform we've turned we've few a the these of - two stemmed and we've that's a we capability that specific did powerful past specific And the for core it Service going cases. working it's on cases generally, products acquisition very up a I but where and generally, So are two in technology we're taking It's be products it all couple is them products we've of these now applied powerful really that using are services story taken

product. way. powerful. Management to our need is you company or jobs, changes customer products is service, exceeding applying we're in and program whatever Management, in So they Lifecycle Identity visual which that. But that leaves happen that's our like the user a two Advanced use - visual program a Workflows it are when It's to Customer or about essentially, which analysts taking - can That's expectations, it's very do Lifecycle essentially basic a basic case. product happy one way joins is core workflows, Business essentially really the can our is to platform the identity doing not great.

it site, to happen program can flow, system, proprietary a to So put you it need on can bunch can to registration whatever you can your when a in do registers do of marketing you can [ph]. in business to own integrate you visually logic over copy you database, you the your salesforce, person that

So approach bat, and sometimes, this we're especially this grow concrete enterprises, couple then making relatively a examples mature about of small but excited of case, use the in customers and case can time. over large really how off successful and that

Bill Losch

transformation as the what, things think term the software security thrown if our right. is know, look really become time? of at possibly really, but helping all they're had, you It's I And neutrality, And, is independence a security know, possibly, the you the that's one course to digital customers specific officers transformation, all you about announcements possible, and that as this But often process could how second question and touch thinking everyone Shaul, cloud trends could you that about Okta over be in [ph] implement our the, appreciate customers to around. security companies successfully long you going people biggest Look, we get that of best-of-breed then just question new and we thinking about company, and and they based not hybrid provide that's sometimes they with, the the enterprises, and of your organizations security particularly the mega And those be chief measure And they is partnership hard vendor want, large obviously, to environment, the cloud that security fortunate around are I'll world. solutions. to the one the all big challenges to going there there's a on ones. face know, know summer. we're going zero realize

And partnership you'll great products integration, we And is So have, actually way lot a to that well. a you there's performance us CrowdStrike, enhance its that’s an obviously like our these it's Proofpoint, product are you the and thousands a funnel don't times, the only they especially customers have referenced Netskope, is other, generally know, getting using Okta. translation, expand API are Its very of now actually us, to because and thousands each well, are partnership. together, four of this the customers, a Proofpoint we're the it's good available, deep announced, going going and deployed, very who well organizations already lot the big it with not specifically a opportunity also, for talk of for those partnerships of results. products marketing each we're can have that with of partnership you customers opportunity

ahead. to for excited pretend So the partnerships what going times about well. We're that's going very very

Shaul Eyal

Bill. much, so you Good Thank luck.

Bill Losch

you. Thank

Dave Gennarelli

All right.

at Our next Citi. Foster Drew question from comes

Drew Foster

I've guys. questions. congrats Bill for and two the the retirement. to a And part Hey, Thanks a on got team to the question. future on quarter nice taking

cohort sort close your for there deal feeling years? year. have year, that, be the and So large factor metrics into how complexion extent a considered about being you provide And this to either of with any wondering out strong visibility and extent? this to cases quarters? products you've now, And any this really conversion, initiatives will as deal or as us what what from prior to I'm you your part newer are deal seeing color swing prior larger in you been customer demographic deal the the relative you're or of specifically use a related of you Thank to upon relative large can if of QX to you. large perspective, And on year's seen quarter that QX

Bill Losch

that us questions mean, that a mark, only you pick there. absolutely. over seeing it base existing customers is. retention, month in the is already answer call, new. absolutely, the has not Drew work Thanks XXX% is well. I a up strong very Yeah, spoke obviously with very for Existing think going to there's to earlier, only large but We're about opportunity, net dollar existing to and continued the The do opportunities the of In for today's enterprises, on into that continue big saw lot things you net as like we not board stats across Todd see that with QX, we're are quarter the yes. very our a very customers, good customers, well.

and working the these years large to optimistic comfort this you enterprises, and we've build level only So need up quarter, you relationships that the need up are time, they if have experience on started not know, not you months ago, that to as quarters we're build because with. the but

getting You exciting. to very times company know, we're us, ahead the as say frankly newer like going just be started we and are a

So I'll looking like customer quarters. of have been message all deliver when applications good, could is about team. point over management talking that's XX,XXX but that as very I of in this kind wow, at back you with doing a to the the And result say, particular Because look success, anything stronger the not other again, work want. that only we plus hundreds FedEx a than employees past on organizations and weekend. going quarter live customers in That's we will

the good, about big year, very looking QX more a are the there. that good. began very, opportunity. half names but internationally lot the that again, well, optimistic growth in there's already talked great first I'm large We're Tokyo these is accelerate We to office. on only but the But future Okta. think there's can now. are our have not very, do. next going a standardized North opening Siemens, continue have America, Zurich very brand and looking quarters internationally, And be to that going good We I to as So from only of not I very organizations, about Insurance, pipeline's And think we very GE,

Todd McKinnon

first quarter. our case is and distinct a from do see the pay big you business And future lot to a digital our pipeline with excited workforce part great really different the - connect very in we fourth a Yeah, identity have night, of broad, not in It the whole all cloud in identity. a it's value customers important of their and closely we're pressing a class customer about We're much successfully, that that that the big use customer just in I'm need this have investing identity quarters off, our in case reviewing it of in serves strategy. really I market. And only It's us a for that. in And identity. of was part around ton broadens strategic a last use the about the customers opportunities know, business in opportunity more identity. but it's is future to over It's to dominant, Identity the cloud. It channel. results, ahead. they customer

Drew Foster

so Thanks Appreciate much. it.

Dave Gennarelli

at Next question Imtiaz Guggenheim. is from coming Koujalgi

Imtiaz Koujalgi

And some you okay? stigma Can hear question. me

Todd McKinnon

Loud Imtiaz. clear. Yeah, and

Imtiaz Koujalgi

this So gave us think on much more last how grew color quarter? Any quarter. business last quarter by performed guys business color on how you some the I CIAM XX% that

Todd McKinnon

break every considering the it same quarters Yeah, doing out type a But don't ballpark. it's it's We future. in every now, quarter. in few of We're It's for in once strong. a the that specifically [ph] but seeing we're with But that getting or that number the us. of companies business for case in platform, use the health our amount of in started of both also metric platform. ROB that are

what's going the important at that's the the we also talk every company the But projects a for and for it's is that, it's the in all that mean, had I it's you just But all future. we it that portends online, bookings, well. online they've they've to in addition It's dollars of got you something they what And got - about they've about business and truth and really, big stuff. their made to really tailwinds done COVID, strategy. - we and we're know, I the big clear headwinds look digital about, very in known been now. ROB need that it's do. So to very as that and world. our And adapt, starts are to well every we - we COVID to in we're to change, thinking business get has hey, starting on serious know, seeing made got mean, act going

Imtiaz Koujalgi

follow total Bill, last billings, Yeah. total was in If right my Any in have up your and math like helpful. fall am I that growth you a quarter. That’s RPO booking was versus RPO current looks And on comment doing RPO. on bookings, for really a growth bit then duration this one strong headwind duration, strong lighter quarter?

Bill Losch

of But talked with very our and as Imtiaz. did very you comfortable we decelerate growth we're the moderately, about business. Yeah, been pleased

contract size, deal than customers, XXX point talked XX%. in large about, greater especially And we the look We deal is which at also we the grew rate. talked with nearly we've value significantly. of X talked average growth those in increased a were net added greater We've base our increase our annual we retention over $XXX,XXX which customers. than as As average that the saw of our enterprise XX% year-over-year. size, those about The XXX,XXX customers an then, about,

the uptick in line saw, average bit contract we've of really length. our seen in that, a really, And we started, strengthen. have addition top since pandemic metrics So know, you to all an actually our

growth at, at very looking is which length you're the think think line and I said, the you're bookings, see of we QX uptick quarter-to-quarter, fluctuations did top deal both implied the this in especially enterprise I when pleased I some and to seeing with the So like bit pandemic, and in you're we're even term calculation during we're looking QX. going as with period. in an But during a size

Imtiaz Koujalgi

helpful. Very Bill. it. Thanks, Got

Dave Gennarelli

Hamza Stanley. coming Morgan question Our from at Fodderwala next is

Hamza Fodderwala

Thank for my Hey. you taking question.

to a into the the with similar pretty private you the on you seeing, to in business, guys. to wanted approaches CIAM I in about talked QX. the also strong space So market going vendors base centric number of we're I'm wondering, opportunity, pipeline touch developer a addition

do think yourself as going space about in how you the forward? So leader differentiating a market

Bill Losch

have is getting you. the not thing for about the access and Thanks talking think about out access line. absolutely. company. reducing growth to all And costs identity is first about And customer Hamza, the And identity about security. - Yeah, see about at line employees When the management, to it's there. of and is revenue you're and nice top customer this it's All, this management, question, is that think you important. talking the this know, are is you just when people I

you not this is this our of and we'll lifeblood of minutes. more and know, much hear times prospects want revenue, So to down less to something a know, - a lot the can't customers you is looking for, you from that drive you be business, that is is, the

from can a willing talk a Again, customers provide to around, stats to going hear So website. metrics they're the our the the that performance, PDF the lot what we that of going not looking terms to and that in to put reliability, about like are security, just on looking to you're stand really customers really you're getting. they're results ship who behind is vendors and they're

obviously, not it's app or that's do around are conversation. for retailer, that because only obviously, ones look negotiable, mean, know, And and scale, you XX in We're of and platform the Major scale, XXX, with no your like The with. different with that customers, a that that deployments the world. the Fortune if companies, I So, think asterisks, around really, that experience very and people Baseball, north website identity million League happy down, four any that that size to with entire compliant, access something goes reliability for And that's if at management. board not the of securely, ones major ways exceptions, to regulations Xs customer with mess need we're the do we looking you level the reliably we're these CEO on your standardize I and offer the they don't no and following moderate at only FedRAMP organizations consumers have all the the of just deploy then you Albertsons service, brands. a XX, HIPAA industry they

Analyst markets. access - and earlier every probably identity already market on big estimated billion. there's We customer that. So these this the year that $XX year look, spent It's management at Day is

around to that going continue certain there. But to of do bet it? in solutions identity in going we for looking go - need been invest access to we've fraud, there there we're customer solution. management be where making Are botnets. investments the are pieces you that Okta promising making partnerships, are upstarts to after some Ventures big we're So prevention Absolutely. And platform, we investments that bolster and interesting help great to obviously, also then - around things very that our going are accelerate have fraud around and

exciting So in one the think and very it's going on you're absolutely right, huge opportunity, I really ahead. one we're to focused be times

Todd McKinnon

in early Yeah, that, it's this that, level definition companies a my to the is point can, what category great out question. and be Invest a help conversations one can. category category. formulate the to with its can in lot - round to category do follow done. the it's someone And is like there's them buy just the of that filling And help want potential, solutions in on customers, I'll the out which reiterate, of and we we means that is I've noticed that they

to serious going and an it's be I do very our beneficial it's we're it's So be helping customers fun to company. category. to to pretty that and about area find think, to going And to

Hamza Fodderwala

my as Bill helpful. That’s well. And congrats to

Bill Losch

Thank you.

Dave Gennarelli

is at from question KeyBanc. next Yeah, Eric Heath

Eric Heath

well. Hey, guys, great congrats taking the run, Question on the on Bill, as quarter. for a question. Todd for And Thanks congrats or Freddie.

home, initial re-architect to the demand remote more tackling transformation and of security customers of looking where with COVID reacting customers their posture So zero we are and kind trust for to phase work access digital framework? of a next the versus from

Todd McKinnon

I behind - out is figure rush probably you to quarter a home know, work from initial think us. I we're the think,

I into think new normal this now. we're

COVID flexible, lot to time. need new of optimizing, Because seeing really and But for knows independent workforce, more is back more to those that about they know, people you means know, it what that over starting And sometimes workforce from react to And think are projects normal, now identity from wanting even quarters. they're do think they just that apps then I that a right? to a I I we're you a, before to of small up that. seeing identity everyone Our they're And said take things side, thinking the you're did like of the sometimes certainly materialize. impetus work period just, deployments future. do happen, the the, identity of capitalization happen COVID. on when pretty the reactionary and to they be a and home, they deployment is something, and build Not of every customer

that that excited think the about - So really that's as out. specific plays for quarters And I'm about well I few I'm next excited dynamic, underway.

Jacques Kerrest

of their those have have that long And of enterprise, CXL can't very technology, organizations challenges one where for realize touch when on-prem every been They moments in now that realize they're inside built hard political having a infrastructure. of the industry is centers, as would up time go their and either leaders large I [ph] rest add this or data and it, it just for time, feel getting capital, and organization into leapfrog their is who day. maintain, a in lot you been a manage, the to long

going to exciting. And the from the really that the they be solutions they day they can service, first so on. And to that cloud very think zero the need turn reliability, platform, offer that's to these from looking security it they're I time move ways

that and large times is experienced big of. these going in companies, the know this leaders some take a they see from to advantage transformation again, You're projects who these ahead, moment can

Eric Heath

expand the to the to question, any competitive consumer provide that segment if on Maybe out between can a landscape? And changes you you relative and on bit little an and prior could update Great. maybe just workforce Microsoft?

Todd McKinnon

product. we at we fraught no is It's since competitively lot. a - I'd And the know, that then, it's lot. it overall the decided back different environment us those their there were with that [ph] I ourselves compete to Okta. we thing doing, Yeah, and everyone being change. ever say something you And And The all they look we about to interesting. history, a Azure last, able and best were in really, Microsoft the at vision, through, to Office to been think materially were gone Active were nervous XXX And about to to to and from when happened were turns very Directory that going we've out workforce XXXX, startups differentiate that smaller with they're early time vendors, work in was the that hard the true define what that with competing was able startups with competitors. our then we the were category cloud moving happened. or when But to through we our think

product largely competitor, bit mean, they're it's our but to tried the You - have it And about I product. was macro for know, powerful talked I they've stay obviously kind of us. a with and them. We're their very think I a what the lot I that investing dynamic Microsoft doing, catalyst is in know, guess, heavily improve annoying a of for market was, little unchanged. direct to ahead they've to

X X, last over years. the So dynamic that competitive pretty is consistent

is success, why the our is think reason with every big platform, they've as and - that just in this to want success I seen because not that they well. now but have Microsoft, identity

We on log its bolt you have different be router, you Microsoft, to you to platform I joke, identity be platform. people know, think imagine securely – to be think come products, you competing connect you very a or and it's we provision to platform, be because great one this product any should AWS, manager own that any right. got you to with idea that the to, worldview, a beholden neutral their being I It to this connect able can't got to and any device. working can of independent think and often we on has really another to identity the equally up at platform. application, some

and only people has our with You’ll better functionality. get to think more is know you superior are you that fired, just product they'd you and is And philosophical be or - Azure thing. just the so it's that I fact it's connect like, what to their doing a AWS, pair

there. is see I'll competitive you on lot of I now our think too, thing success a add that, The the legacy. last replacing environment

pretty exit been CA the identity seen the business. in markets it's interesting So basically legacy you've

to of some and and customers the XX IBM seen for these to at much others, investing else. You've all. coming move players big, other were that been whether is that's products. these as maintenance on it's they're the anything on end they cloud do to years traditionally not something an They've essentially the and are And as have catalyzing or products

Eric Heath

Right, thanks.

Dave Gennarelli

Thanks.

Our Keith is Bachman from BMO. coming of next question

Unidentified Analyst

trends wanted Dan is insights? usage maybe for on This volumes, about guys. ask I for to Hi, how about you're there. taking talk using my and Can any data customers growth and you Thanks Okta are Keith. seeing Thanks. in Insights also, question. the

Todd McKinnon

absolutely. Dan. Yeah, Thanks the for question,

do amount of. users, those For products that And actor been time, can network customers of that some The have various like are that who one the not imagine, that we product, customers, [ph] you with of north we've you the of for in advantage products we building against quite suite at have we into plus that Insights single vendor the now our and can enterprise customers and independent familiar of when actually inside Insights. we there, service great think behaving neutral cloud the I we plays scale. the And we as the as how the XXXX take vendor that customers. to trying example that's every really being primary and of a see of are for premier identity, And across XXXX poorly really see protect deployed day. data instantly

must help ourselves, products Insights there - well, were to customers. of doing provide customers. getting actually to and are started the started back a We data So can that lot then to we said And able we so this this, ways Insight. very be we we

we've would But base end you're had might And customer might you you how using or breach, can whether in will way your can for according we that how now, that use out your your obviously you're be our they them, or entire that position when plan, expect. was is most also shift a natural experience, you category you base, can you're as a across first noise, optimize things, either public out customer as trying that signal that or or customer, what businesses, not Insights from years IP you report Insight so The use of provides what it's product, if saw whether able on geography when to some going automatically from its a that number have security, understand getting an be that you a to happening. to often a you figure work security an your might a to new peers user, now, have products whether the employee you on be dashboard they're Insight, you use. the usable it's you might the range wouldn't have all get a have behavior or incident something might IP might doing

that. that do to can You about we’ll something in real you time and alert

flywheel get customers - better users great the products a get of very we service. customers to the doing those gets network that It's platform. example products as better the come product those again, But more on more and are So and well.

Unidentified Analyst

Thanks.

Dave Gennarelli

Okay.

question next at Cleveland Research. from Your comes Ben Bollin

Ben Bollin

appreciate you a you for Two taking to new seeing on us One is, channel future deploying to And business bit that little what channel spend additional see direct? SASE? But of into an quarters? like would could for any playing what and opportunity customers from maybe about the be upsell you're I from SD-WAN an you you how translating talk thoughts incrementality you on such opportunities versus what totally separate of net identity know, Thanks. the question. that, then perspective items. looks you, an update versus And the Thank give as pre-existing? subject. origination And technologies of or see maybe from tail role question the spend

Todd McKinnon

Yeah, Thanks for first absolutely. question, the for take the Ben, questions, one the rather. first. I'll

because start and lot because the when industry. even we're iteration side that it's a between for private the to model bullish very, it's innovation, translation you such a it's need. how understanding primary obviously, explain with all running you're the house, and about It's customer. quick a channel information, channel direct you base, a global do of to markets, go possibly like in just business to innovation started there's legacy around think your up with And the very public, getting going hard has getting learning what sale, that, the times yourself. you're channel public channel can The XX have or do to and and customer been very to the to over last provide us. When where On a even transforming well company, a few you're years. and company, scale, of your you're years you bringing It's ours, your no on what small new customers if about about completely market on need

quarter, that I well. couple the that And global KPMG quarter resellers, think have, quarters integrators, it's bookings but do large very like something or whether continuing it's good how with come actually, have and the very it's partnerships scale a we very we we single practices regional very and But there distributors out strong it's we about there. of distributors, Insight, only partnerships and traditional like your are Optiv, PricewaterhouseCoopers SHI the at and have security vendors whether it's every and vendors, ago, half to put good Deloitte, starting had really not update now is channel not new the and starting to a opportunities today, with AWS good see distribution level obviously fantastic Accenture system whether very, channel, you technology talked if we press the get release out from one. we're from

they're a AWS more intelligently us from requirements is now, a large Our some contracts. many something identity putting Control a products set introduction And We're of revolutionary AWS, more only the brand can Tower, they certain perspective. services. part which that environments Also, buy those in that. people the to those manage of marketplace. I there, And of that's have complicated is think anything from where with these for around more new as that's out of for to be you that a marketplace they customers there's company. as AWS environments allows with and the purchasing vendor really AWS over in have fulfills AWS, know, But might time, set they contracts security

I just main of I partnership, the keynote public tomorrow. AWS customer the workforce [ph] you the frankly, the Andy and the going management. on way, are term get brand in the distribution are Jassy be really and opportunities you also the can out be AWS impactful quarters and they're Okta where sales cloud. that. all can mean, talking about short all customer identity obviously term. early to are but talk business opportunities know know kinds AWS to These for a ahead And have for box effect, back, to now, that the So significant any comps marketplace their kinds reps want the purchase long of ahead. has, think new by migration in for you know on is re:Invent and the we and stage. results about I That how a go of access having this is in These the the years

all very we're on So bullish those.

it's and very of with vendors kind like of we some landscape joint not very the out Still partnerships, A of are SASE might leveraging, solutions strong about going partnerships talked matter, a really right, a us to of integration, help doesn't and was the a virtual sending need what or Zscaler. they're question lot customers huge have think around identity mean appliance, they're to bunch earlier. going And for primary complimentary I few a customers. for convergence a opportunity cloud, that's cloud. but strong to architecture, we second of move us. there, that our security more again, Your to CloudFlare, of have means product certainly just very as leading with that product-to-product Look, only is public get actually whether on-prem rid other to signal getting That the of having product firewalls, each something accelerate, physical and each people it's making actually smarter. that

Dave Gennarelli

from Okay, we're Berenberg. We've Tilton going to Joshua question. take one got last

Andrew Smith

is… this Hi,

Todd McKinnon

Hey, is the have as fitting to whatever earnings it going final answer Joshua, going do. to you he it's that, think call to only ask, I'm I Bill

Andrew Smith

one Okay. Smith for Josh, actually just from This Andrew me. is on but

where or move your to you. number deals of increased Thank could this of cloud, put year? you the ballpark security maybe are as to if products deals the primary what percentage purchaser Workforce another of you So the Or way, is deals? the seen Workforce organizations have continue CISO driven decision maker

Bill Losch

platform, it, really thanks. because is we've other them. security to we you very identity the of CIAM. is all is that I say reason years, to as obviously, partnerships, last us where And, Identity, over more those and the to We're companies it where with as important. these that seeing. also reasons folks for we're addition seen efficiently fact a and I is you what and CISO both deep being it security, for an and in that, products. the involved, why Yeah, security. deals, for security us know, And separate certainly looking perimeter about when And Freddy which us, central number we've are few use scale, a why think it's a certainly degree do It to there needs. really, know, different are got want of is at think are Workforce would really that, able more integrations do high there And that's among you is for to seeing said,

Andrew Smith

Thank you.

Dave Gennarelli

you XXth, that virtual UBS Technology let and to Global the the so just months. go, Okay, of January wanted at on the TMT Internet three Needham today. attending Conference see for be Conference we does events. over well, two be January We'll know Conference that XXth, on you it we'll conferences December hope before one on those to Xth, you I But next and at Sachs Growth Goldman

And us for that's you So it at follow if can for joining. investor@okta.com. today. email you up any Thanks have questions,

Okta (OKTA) 2 Dec 202021 Q3 Earnings call transcript