Okta (OKTA) 4 Mar 212021 Q4 Earnings call transcript

Company Profile

Participants

Dave Gennarelli	VP, IR
Todd McKinnon	Co-Founder, Chairman & CEO
Bill Losch	CFO
Eugenio Pace	CEO & Co-Founder, Auth0
Michael Kourey	Incoming CFO
Jacques Kerrest	Co-Founder, Executive Vice Chairperson & COO
Rob Owens	Piper Sandler & Co.
Andy Nowinski	D.A. Davidson & Co.
Alexander Henderson	Needham & Company
Jonathan Ho	William Blair & Company
Eric Heath	KeyBanc Capital Markets
Matthew Parron	JPMorgan Chase & Co.
Patrick Colville	Deutsche Bank
Hamza Fodderwala	Morgan Stanley
Joshua Tilton	Berenberg
Matthew Hedberg	RBC Capital Markets

Call transcript

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Dave Gennarelli

Hi, everybody. Welcome to Okta's Fourth Quarter and Fiscal Year 2021 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, Chief Operating Officer and Co-Founder. Also joining us today is Mike Kourey, our incoming CFO; and Eugenio Pace, CEO and Co-Founder of Auth0. statements forward-looking Private to of proposed Securities but limited include provisions safe XXXX, acquisition will outlook, not the financial of Litigation to of meeting AuthX. statements and the pursuant harbor including market Today's positioning our the regarding Reform Act

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

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

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

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

Todd McKinnon

remained time spoke. you hope us joining since the for and last everyone I we to thanks healthy And your have families and Dave. that safe Thanks, today.

grew revenue additions are customer forward. backdrop quarter in security, IT, importance That's customers. a any the financials, record fantastic especially strategy, announced for the trust for to are of dynamic events. proud business key transaction, the we added our cloud periodic of of acquire their These We security punctuated accelerated Subscription so want XX%. remain crisis. to milestone proud AuthX. to these of is agreement identity growth greater also amidst being do very customers. adoption being and of than and customers. in fourth from has remaining be of of include with mega XX,XXX environments of upsell success. expanding repeating driving XXX agility part nearly results customer with and Okta, customer large a Department been on their are which have and past given which more our on performance annual success revenue $XXX,XXX, base able for we contract with the the focus we flow. customer This customers year exciting three the we a ongoing new generated triple strong and ago. identity, I'm having to team's a of Okta Alaska customers going added Labor It's work shift AuthX Air year, to size a the results. total when Dell had will quarter thanks both of of were the nearly of growing to definitive we'll than the real half customers execution digital testament QX, $XX transformation our before. an of that and of that a deliver identity the It's the we're pandemic. business we we walk results could know afternoon, another entered and reaching million went ever the Kansas combined State A In more the their grew number grew highlight news and obligations, enterprise financial Notable To record. of we entire value team and I Our a by only about and than right years, We're the another public our years fortitude, new XX%. that base relentless of for spurred hybrid fourth digital pandemic this less X just customer quarterly quarter capped to evolve and wins worth highlight trends is been XX%. with that by the And the hear several few our being zero quarter And cash Organizations Boomi. Total QX or RPO, free through after you but

in Our base continues large the could fiscal approaching of annual not now these enterprise be our contribute is XX% of more X,XXX customers pandemic. the of approximately and face especially contract to total I value. we in what accomplished XXXX, of proud

highlights include year record results record with XX% growing of the flow of few another $XXX a Just of cash million. revenue and by financial free

safety quickly customers. XXX% the employees our to of added the effectively were first work from and on execution. And of we our over miss X,XXX we employees beat and transition health as and a home priority, With new able not to

front our which partners Identity the products with Access we us customers place paid in proud want customers maintained of our day. through attract navigate to XX%. Customer investments who we're our our address. role by very launch I trust employees, and formal of made emission the talent, thank services, our and helping ESG our with crisis. In Our first retain and the in carbon ability Okta the progress cases growing Server this State And that finish greater Inclusion to very exceptional even workflows our the use off proud and innovation of for incredible can We employee launch strong on a of the QX base ESG of we've another publication And year. program, and number report. companies pandemic the value study new upgrades, played their undertaking provide our of I'm the and of Advanced several first to to increase including our every was in of summary,

As have we fiscal a the surface side market XXXX, we scratching momentum begin just of our on massive our opportunity. as are we

I career. Okta's Okta growth. joined will want has expertise that X-plus for to an success. and Bill in companies over past and the I take the X scaling want to team Lastly, experience platform Susan Okta's of past critical a to thank essential. sales to thank who X-plus have St. again our super minute been phase invaluable up next contributions Ledger to also for after lead excited enterprise years Race retired Her incredible We're to sales headed has people Charles his Losch the go-to-market be into Okta years. worldwide in

who Board retirement. Next of years. week, best past member familiar Chair Committee our the and been but to who is really Kourey, with Mike's also Bill, we'll To We're X a and someone strategy. caliber business make Mike nothing you Audit for fortunate we official to wish has CFO someone but in intimately transition the the Charles transition to and

one Now Bill? I'll for time. pass Bill last over it to

Bill Losch

us. Thanks, Todd, and everyone joining to for thanks

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

afternoon. will only of such, some highlights commentary the As I this cover my notable in

highlights now QX on touch a fiscal then noted, we our some finish had QX go I'll the outlook the full XXXX. across board. Todd and the year strong and of As into for

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

billings QX invoice quarter. discussed related $X last million timing we to included headwind modest reminder, a As of that a

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

basis While growth for throughout not provide believe on RPO, subscription AuthX, will we organic year. excluding guidance current RPO an growth fiscal we the do that current outpace specific

retention. Turning to

rate continues retention for strength pandemic, by and quarter net points from fluctuations particularly rates, both customer period be Our The rates have X within XXX%, strong trailing may upsells, in down from QX remained more enterprise XX-month that may current dollar-based retention driven quarter. the possible throughout Gross the strong. last remained at to Revenue And customers. in retention rate quarter. the pronounced. in be fluctuate retention environment, our with it's retention to

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

flow fourth globally. Now increase and was cash the as growth flow billion sheet expenses expenses grew XX.X% growth cash, generated free looking cash as at to support collections cash slightly with strong go-to-market million plans. just which office-related operations continue ended $XX XX%, biggest during we operating expenses. free expenses. and The in we travel quarter count with Free a from Total a and investments. cash to and over $XX driven higher operating margin. the by We by strong respectively, Head team our was investment accelerated scale of flow balance to reduced and billings offset equivalents in the our by X,XXX, short-term cash anchored XX% partially We to growth increased yielded $X.XX than forecasted quarter. million, in flow

Moving our outlook. on to business

uncertainty we given remains environment, for pandemic the optimistic there continued demand our some While the products. about remain

do Okta AuthX our this give does note that not I Before the for on from impact want is any to stand-alone I a and include transaction. basis guidance outlook,

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

to related our seasonality expenses everyone and taxes. modeling that For the of kickoff, I remind purposes, some sales to reset annual Oktane, has QX for payroll want

from year have annual merit In addition, this our cycle moved we forward QX.

revenue for total strong our QX results, $X.XX view the you last full quarter. expect representing a preliminary XXXX, we are rate XX% of to now to fiscal XX% revenue Given year $X.XX billion increasing outlook growth from billion, of We the our gave year-over-year. we

the part am market ahead to sales been of approximately net million Okta operating achieve primarily business this to $XX $XX to Todd. past in related take ahead. just team. by has with to $X.XX And of average cloud, and We to forward I transformation years million to fuel incredible operating and I my to strong to year. of driven us increased marketing, million. seeing growth, market an a many of is to in weighted tremendous work is tailwinds fourth Okta plan moment increased be to security for finally, Mike. It's financial our In look The been great innovation. say outstanding over internationally, end said, expected our Todd call. further XXX also on to drive share summary, head pleased I count across I expect to leadership loss achieve Back great to the and assuming scaling is with non-GAAP you, accelerated per non-GAAP count with such us. expenses years. our The earnings position shares X-plus $X.XX, and targets. We have in to of The never company the capitalize future R&D honor for we know head last on performance position our are well an the want brighter, increase the loss how Okta quarter and digital as of and and especially long-term been will things truly thankful opportunity hands

Todd McKinnon

Okay.

identity for we're talk AuthX and about and why and market Now about current let's a I scale a changer Freddy solution grow this and all the we is Okta saw years need of the because for burgeoning for adoption cloud that the workforce a so real customers. and why we excited prospective with modern game XX believe started would applications. company's ago for identity

and to a the independent Okta's to portfolio built we growing sell of vision CIAM, security now and to Importantly, grew and include our ensuing years where it best security big applications of had neutral well, customer challenges meet QX. we and out any challenges safely identity identity years, complex their everyone market platform similar product want and ago, CIAM Several breed. our products the is help from of In companies customer you in our or broadened that is business the be of to environments. meet opposite workforce other experiences. help approximately of world as who the customers in identity, use a X/X can scope technology. organizations XX% for identity

end cases more allow company serve international customers CEO about AuthX, to a is stream addressing companies and Pace, the security choice flexibility developer, company Supporting become majority incredible to by to the firmly business primary we Like can for more to part transformation, believe Combining of and customer millions These while here proliferate the reasons is developers be in they've infrastructure we're day in of accelerates the that identity risk tissue faster our FY penetration and the makes use you It's increasing use 'XX, one beginning highly workforce of few that cloud billion customers AuthX scratch reducing digital bring smaller will We'll view sense. a also CRM, that much transformations organization. AuthX AuthX, when And like growing customer more the standard with as offering. and yield that $XX be now, why is a scalable market. an standard vision, organizations. more clouds built. more more collaboration, their digital of customer companies for to a is workforce will ERP, so This and underpins more growth tell Identity operations, shared Okta, business from be identity. an there and who tremendous accretive seen really sides in massive leader a areas the connected a Okta and I'd customers. our representing vision, time that identity synergies. As matter users. of really a developer-centric which only go-to-market adoption in will ARR their primary years will a use be even at a technologies. identity identity inside accelerates we Today, grown TAM growth many of with and motion for cloud just that for to AuthX other very adding better it be across are as the market. primary earlier, that and essential of footprint. a loyal. customer of number X, over digital on of surface as our comprehensive X to where strategic growth between markets. in into with of expanding We've These we Co-Founder With the facilitates complementary has secure $XXX brings AuthX, Eugenio IT identity. and these our over the like such clouds. of X-plus and ways accelerating revenue of recurring looking of primary our approach world all customers, trajectory generate and other combination We thousands on By also believe market enhancing strategic might the combined the The effects supporting cases one a significant identity a of establish is They've both partners, continues our split Combining XX%. all vision just clouds company we these and from and example. network interact evenly clouds nearly with to digitally cloud. cases adding I the base. said identity off the more will and we've makes identified hundreds the to the is and we're many security million

Eugenio Pace

Todd. Thanks,

this company excited our world's to that market mission This we it extensible are It global all identity COVID We X the by the making We the are sizes transformation faster login just transaction is rapid share vision years we their opportunities. of We true accelerates company, securing happen when with as Okta Matias identities all believe innovation CTO, innovators software from faster. platform, ago building of company I and with especially innovate and same range acceleration every Okta customers. this for large-scale closes. true empower companies, complex customizable. to Woloski, billions is our experiences and AuthX with era all can so secure started is creating digital month. team who We short, about and and identity and and a of many every in solve joining a applications vision efforts. the start-ups is to serve software In on simple, combining small, well-established, and developers and that every across removing across use believe complexity in verticals. better the the to deliver cases We wide our applications with companies transactions big a levels. easy-to-integrate extensible of these geographies

huge built solutions. is new is opportunity but the largest incumbent market the mentioned, Todd As still as internally

grow, because more to CIM, resources: than this just most both in-house take how AuthX's market, we companies and to doing applications scale messaging. Organizations turn free very they like extensible Twilio us and scarce one implement and consumers what and is As which We footprint for valuable Stripe much to complementary businesses, up or secure approach of developer-centric digital better their to risks solutions. for can much security and more to the is Okta. their developers. are secure a flexible, turn for payments more for They do their

developer powerful which AuthX enterprise that grassroot support provides for large We community, we sales have a SMB motion. and thriving leverage in within our

fosters with with and for the the large need become user their we exceptional an less having with running can to challenges in of We opportunities experts building superior any into scale Developers today the combining users language and to and are of our our shared written which innovation, millions solutions. provide authorization matters the builders. a customer applications adoption engine, growth. service revenue-generating authentication blocks growth, a stack than they can universal at integrate on what all and business, look the spikes application with customers can approach identity to mind, systems their focus and customers. security With future. prepare and We opportunities for larger give vast with and in our is rules In connect while Developers which market, vision developer-led summary, with without of experience, for themselves, rapid truly loyalty users days. majority developers Our of and and Okta up which better engagement volume. to are be any then give secure customer them will with anything Taking us, our complementary AuthX, to with user flexibility translate in and XX we advanced fantastic we a will application API. And our define or designed authenticate. how allows them so in developers serve applications closer cloud

to Todd. call you, the hand over me let Now

Todd McKinnon

Eugenio It's built and you company. that an clear the have AuthX extraordinary Thanks, team

our an even why we in, and innovation foremost, to platforms combined integrated will and Both market. unit to Identity we will the in First be Cloud, That's Okta. time to maintained as can, invested within AuthX only independent will making the maintain compelling. be and Okta momentum platforms but run not and accelerate AuthX with over committed everything do more are both

many see addition use cases, AuthX community, synergies developer for $XX businesses the best also complementary have into of With market, choice. finding for believe their more ways, generates and added or In to for our their choice Okta's customer expansion in the the will customers. U.S. the that in further business We identity significant instance, approximately no will scale and AuthX's a are customer audience every expertise our speed addresses enterprise international identity innovations so acceleration customer matter user. solution the as outside We combination XX% billion

of we identity itself and established deeply shared customer in of and same market leader on the through to AuthX we access maniacally in segments. to map Transparency a to about back as Okta management. shared effectively And focused go-to-market We strive model developers, a and involved core both value efficiently the proposition which customers' the serve Beyond to quickly road be operate. and development Identity with we market our address the needs. ethos We're allows to of care in values. product our the communities vision, product our and in accelerates share innovation. our success And give category is combination our Okta's Cloud more has extends many employees. more DNA. AuthX expands self-service identity Okta and ever-evolving

to We continue rapidly. AuthX, the able address much and be with CIAM we to market And quickly needs customer completely. to expect more will grow

Now over our I'll incoming Mike? to wrap things CFO, turn Kourey, Mike to up. it

Michael Kourey

Todd. Thanks,

and Okta's you working member a role success, debt Committee the pleasure Todd instrumental couldn't of was both Okta you with chair, both. a have we with that Audit as to First, I owe agree and it Charles and In my Bill been more Board gratitude.

from Board have which been recently the the Committee technology an executive several and most and leader pretty was built at For position Audit career those at member private and year. Medallia Board easy. companies, in My Vlocity, holding who a was by know CFO and finance and Salesforce don't Chair decision to Polycom, acquired with last I've me, move public including

X all an From iconic the ability of than strategy and and into to being company. Okta's part ever and future next that chapter I'm view more looking of unique excited an with forward For Okta. business, you up-close opportunities. I'm the I've build really cloud company years, past about Okta's working to perspective, had the into

the agreement, billion to the is slightly AuthX on an nuts acquire estimates. of than through of AuthX. current lower consensus that on a purchase of and some 'XX I'll acquisition multiple walk based will the terms $XXX.XX. of FY stock The price definitive revenue back Okta's price Under Okta in bolts. the based Okta Turning for revenue represents multiple $X.X

to expect second our acquisition closing to in the quarter, subject close We customary conditions.

We AuthX guidance outlined accretive 'XX be that expect to Bill earlier. FY to the revenue

We combined transaction-related on to of the flow annual costs. integration basis, remain expect the company positive cash an impact and excluding

While be potential we expect some cost entity. to there synergies, support any we to plan to the savings for combined reinvest growth

being We specific next the we're earnings mentioned, remain the more transaction guidance we Okta's We'll closes, insights event that with details the go-to-market is quarterly and held OktaneXX. during Okta's X, same. Investor this vision and an regarding consider combined and AuthX's provide transaction ideal provide will beyond transaction through And priorities propelling likely which in Day has company committed as will AuthX the Todd our April conjunction combination. as success at after and and on our this achieved to more strategy call. immediate next

it I'll Now who it up open for Dave, Dave? over turn questions. will to

Dave Gennarelli

have Instructions. Thanks, from And Owens Sandler. [Operator Great. Rob? up, Piper Mike. first we Rob

Rob Owens

if And of off changed curious to it that usage business in of conservatism level, enterprise year you the just relative a talked anything's year, faster, If I relative Todd, you around at know look initial the expectations. or I look forward, of decel. we demand in like as either is CIAM terms growing side understanding to of engagement. guidance, does terms trends with throughout side the of increasing a a to business. were that customer that of every take potentially we transition certain you level the kick as a this look tend guess about high bit the at

with and just sales from execution us maybe is your right picture So an help where demand enterprise the perspective. now

Todd McKinnon

Yes.

That's is quarter. And demand nearly number now. adds, record saw for the think the XXX,XXX-plus numbers, in a the you I X,XXX strong.

So business is strong.

I Bill is still mean can and around certainty talk economic the pandemic the think go-forward over, I that. guidance, about details about there's but still -- not I some more

we've But a security So good time, in been work, I prudent position with and think we're long this. help people, remote We being driving pandemic, the challenge. very heightened that And daunting the for we're about be a guide. Identity a could being to cloud things it's identity. more on all you in we the more customers. customers requirement in top that a of from -- CIAM an and well. independent it's and with doing which the amazing help which it's and business the flexibility -- our that to But really company, I and can CIAM amazing, is CIAM, And solution, them mean, layer with marquee is then bring combining just AuthX, market. accelerate along galvanize is, going talking

steps in about lot spot. day. good forward It's talking we're So work we're billion a to We're still there's a a TAM do. making and $XX -- of across workforce every customer identity, but

Jacques Kerrest

believe optimistic macro guidance which cautiously really and the year Todd confident I'll as environment. raise the for demand And you that, by RPO in did prepared that growth the December. told why our to outpace current full Rob. or our this our in is our growth, sub But growth, add Also revenue we $XX million versus we what you we remarks, said, about as year. business We're products, Yes. actually my mentioned -- CRPO we're I revenue will gave our last

And strong demand it's products. say, indication in So the an final for early that I about you that is our actually thing the that's which mentioned, our pipeline year. and the we would feel

that the at point. is the for we've we guidance prudent year -- think that this So given what

Dave Gennarelli

Rob. Thanks,

Okay.

D.A. Andy question Davidson. Next Nowinski Andy? from from

Andy Nowinski

Great.

So guess have I great I Mike, excited And of I again. your Bill, and working was few chapter questions just very to life. next you, work really it AuthX. with with on hope you the enjoy you a

reason to more with are I of think sort uncommon they have the think et integrate they from get it, you that know cetera. that expand applications, like of, it. applications, they library chose allow was own think developers, the AuthX to more for homegrown Do you And of will the our uncommon that talking that sort really reason API has you and call just I you I AuthX into really developer that to already applications? framework able

Todd McKinnon

of thanks thing -- your for that just with be company of is And focused expressiveness And approach the the amazing question. lot they the the powerful. the very, on the an a in from is ethos integrations more it's I'll need. and the really, lucky a of we're This cultural itself question, and the builds, application that Yes. terms really details it call ways, into manifests It's them. developers. but an to is AuthX and then join way biggest just And up manifests is get developers flexibility built And very and of to of the that I almost ground brand and way. in up company company. different itself out, flexibility

Andy Nowinski

Okay. to a then follow-up more I versus know they -- heavily Well, question skewed the workforce. that. case And were identity the believe on I just customer use

you're solution there So does to customer somewhat already seem wondering -- companies going their But you what it that complementary. -- run certainly do know if might identity I been I'm think you in than initially. have But was two something these better separate had?

Todd McKinnon

very complementary. It's very, very,

in the And about the you past. own. mean I billion if your think market The talked we've "competitor" market, that this is at TAM. customer biggest build look $XX in identity I

own, to their developers, up have very they're AuthX ground from So And built to build of have want customers vendor, or exactly if you going to to address service any going a developer buy way that's choose needs in that or their right? build you going look own. to from at they to the the it use are they're a very, solution a other a flexible to or

AuthX So that's why and that's has excited. so magic we're the captured, that

Eugenio Pace

of a Todd. words team. your what you all. way, for the you Andy, for kind complement to By you meet to thank having bit from you little Maybe great words afternoon. the it's and And this the kind Thank me said,

friction also a no has strive with you you also many So that we of we deal time because with that happen. other do to right building used solve the extensibility, developer-oriented with word of the want a cases effort, will give we times, everything platform Todd a cannot the power predict XX% But yes, to to that but away. mostly has dealing XX% for want use because the unexpected And for the problem lot happen with the no you to situations, were it the Frankenstein to tinker that flexibility in to mentioned developers of you. all for so that depend require And end this legacy you. integration is want a give I works you domain. doesn't around the last unfortunately of us integrations, and up things in it on corner tail anything way and delivering the like you to long your part finish doesn't up mile We do which with cases, simplicity encountering, think that solutions, for go

is, then We are required. the your and it extending developers it's making are free as platform to and own take -- their when

Dave Gennarelli

Andy. Thanks,

Okay.

Alex from Henderson Needham. of question Next

Alexander Henderson

Great.

when AuthX complexity is us overlap would extent of might what to wanted tell and you rewrites? that full talk a Could second share we for integrate it is portion the functionality Okta, be X ask feature X just is there then pieces what in you housekeeping. much can customer-facing valuation have takes those how a there customer-facing how are the Just the to about count customer-facing. So long if So baseline to that some question the that integrating overlap you of look require the year I and guide purposes. in portion were you between for the the profitable? at And

Todd McKinnon

Yes.

mentioned right? $XX So market of it I TAM, lot big developers that the billion. is There's side, from own they -- buying solutions of know addressing or is their from and mentioned. before, they dynamic something, thinking Chief the Officers, have customer other identity CIOs, Security which build the dynamics market do those as Chief problems. is in you the And vendors another a I Officers Technical a It's buy are solution

this a are themselves. like what doing the developers Okta, of because be solution familiar does but seeking CIAM. it's better solutions than out workforce executives and building that So part with better The maybe for it's doing maybe combination forte. the going there or will AuthX's -- executives are it's that's and their customers are their is The

One them we this the vendor?" together, were leader about, granted, world. for work They're those needs a really take cloud company. me, port take technology. how which native of shouldn't catalyzes future "There's They of them everyone." build a lot in Should all stacks. we for "Should vendor can here, to, trying for these turns put a software -- put even new the is cloud a AuthX and is to thing up into That use that things an in is it case myself? a A legacy identity the that I haven't I customer, win-win the of clear You ground the it's are the talked built of from, concept old-world lot that from market. it and serve which in legacy cloud, and should of isn't a

here. that have don't we So

So it's exciting. very

terms integration, as XX%; north we're of both north very growing AuthX, we of In of quickly: the XX% Okta, mentioned.

like customers our And both support first customers, order innovate so is and with grow.

-- platforms integrated. already will the Secondarily, we are

and can log you specify to today, into versa. use You you vice AuthX can -- can Okta

tons things for to these know thoughts So ways some in it's integrated somewhat today, more on powerful customers. too. but has And potential of that, Eugenio there's integrate I

can You you... how comment maybe on

Eugenio Pace

on going Well, that across go other for because already things, are the can financial points we other and as us you it's There's workforce big unusual have log touch. services was cross-log not their a company customers their for in of already that to can all to common. mentioned, in you uses integrated Todd I East the use will in. products customer-facing portals. workflows mention that and And And lot it's both Coast Okta already for they the in, we that

a together. unleashed of I'm that to there -- do, for to can it be customer customer be focus is be there though working make the and simpler. the on will what achieve, value really customer, even even the we by other what So more might we trying is What is lot sure more -- to opportunities trying

Alexander Henderson

combined I the last portion put one doubles tell of it I the business? of the just consumer-oriented portion together, the item. but Can X Okta And business? XX% you of roughly the company could, the us integrated, I of whether the double currently, If size know customer-facing does you've when it's said

Todd McKinnon

right number ARR this for of we year by end the Yes, of just million the AuthX. mentioned about Yes, there. XXX

about So yes, right that there. puts it

Alexander Henderson

congratulations both. Great. to Well,

You guys have done a job. great

Todd McKinnon

on too. comment it, And Bill? Bill can

Bill Losch

that fully shares obviously Alex, transaction. but XXX excludes the million, diluted is AuthX

Dave Gennarelli

Okay.

at question William Next Jonathan Jonathan? from Blair. Ho

Jonathan Ho

a Bill, It's just to wanted to echo the you. my been congratulations on well fantastic with work pleasure retirement. as

process went really out maybe some you the make around acquisition to of the now acquisition? through and Just about that guess, with, starting rationale. need the the talk you why Can acquisition the I

Todd McKinnon

I the Jonathan, Yes. perspective. Okta can comment from

cloud. call If Okta, you priority as for look I years primary to XX us continue out for identity what the is a strategic establish

we only I handful collaboration think to sure focused And But going Infrastructure those thousands identity have but that And very, broad. that company's to technology very is to execute be can strategic hundreds the of is we're about be to and identity. to use both workforce there's of will customer companies rise be of handful, have We in that on or And really on a so, that, is clouds be other well. X X to cases making to identity beat or sell as the to up candidates. vendors establish -- one that environment. on going primary level and there'll the a as will -- talk one. one one. There's few. going

that is want their of want at all big into can mentioned We're some level. market unique integrated joint a a right? times We've certain the executive a part they to is a really data with use on solution? So to the involved. stores, built And capabilities, at. I've at be side, look at the if we build have so even certain things CIAM we good identity market because perspective, they market, certain you those the the if company Or developers do catalyze from vendor, own couple you customer Okta really to great service applications, that drill And of there's capabilities. going that it to to do

together that broadens realm, of customers really becomes and with and flexible, which customer developer extensible put amazing this not overall the choice You platform identity only that this platform, the focus -- in AuthX it value compelling for identity that this Okta's amazing portfolio. has,

both independently. it's to important over of independently. year instead talking market together. became So to or work was it work time other started this could we catalyze the that last clear And faster than together, as it of so, it together really And could us that we do either each we

Jonathan Ho

and how the are a developers often a decision decision And around the the you is often as trend making of about maybe follow-up, left? the around platforms maybe a how process more then can CIMS sort just bit Absolutely. Absolutely. talk little shifting

Todd McKinnon

Yes.

decided small in to But in about would past the the -- there AuthX right, was and market, whole of dynamic, decided kind because the faster think then in and the AuthX of deals, wrong either you compared and brought more market us just both, became and compete If to more most wanted clear went flexibility wanting were the And went customers us could and that CISO in or right? the was Okta. CTO of together, CIO go with one the or place to of cases could time or everything business. AuthX. developers with the be compared where They could we the the whole It that relatively than that table. we case, that better with you the Okta see But on margin, be independent. the and over

brought that's -- why us that's So really together. what

Dave Gennarelli

Heath Next at question from KeyBanc. Eric

Eric Heath

Could PAM? you to aggressive with in double AuthX decision maybe push the more down management or talk about of IGA making access into an versus

Todd McKinnon

through strategic through right? cloud, add be the all of all back to or we just customer And not use or all of think that's broad ourselves. strategic that whether through got part it's that's customers, I across touches priority integrations, It's value identity going building can be because this cases, that's use to and It's opportunities. how primary workforce. whether these identity of anything partnerships we're these to to interesting really cases they're whether

to start focus dynamic. have something building I think the to about of you for scratch thing importance from the unique identity have this customer and the scale to developer the customer This it. size strategic developers, and is and mindset and this

And If at they what great companies scratch do that has. that's you like from or Twilio way. started look this Stripe, AuthX this

a it it's line mean, they code, jump little should bit first in Eugenio, But what about and focus. core this of this. here was you The talk I to have.

Eugenio Pace

Absolutely.

there, developers you opinions. very, if our very talk beliefs have want and we to about So strong

think hire this aware all I was a We scarce written new the there the years cannot are that that. of anywhere enough think developers you're Developers many paper world now was eating I industry. is developers every ago, kingmakers." resource. and titled, "Software in are

own which resources in And survive going in invest The to planet in. put without deciding is your the can company you software. going you're your and own and to are expertise software, there's that software key no

we tagline are for another Twilio work, is a anything we company that perfect are on things example. the And company, authentication. so our successful. the up that anything created building anything friction Twilio be absolutely that will from for from -- box DNA, tick essence our was example. that to is a ground My the will remove that And the developer will of hypothesis when first and perfect the to like important is daily Stripe and point the

movable. influence. lot They I same might themselves, They They the a have are project stack, another. into another. company to things the Developers go the from not one budget but they one have technology the go life in from think their will developers that to do of own make easier.

wouldn't this effects depend are "What around recommendations Oh, AuthX. for the spreads anything the some authentication? relay voice. So they viral using use are of the that And they they others. else. you a world essentially using I on They I'm have constituency. loyal -- and

on build be are happening. of this kind dialogues to Those would crazy own." You your

little oversimplifying powerful. it makes what so a that's I'm But course, Of bit.

Eric Heath

maybe a using platform and Microsoft? like off with about any follow-up, customers And I And are changes could competitively maybe better on Okta talk an seeing independent you AuthX? if Could Great. That's then elaborate you you're helpful. may. why

Jacques Kerrest

about Yes, absolutely. bit. Happy to talk a that little

the I fortunate as things or workforce And continues we're in very business in very identity So well. and board, we were to whether -- that go across seen you've customer it's access the management. think results, the

the customers out just lot acquiring press a of execute ways. to We means like continue interact Digital It's industry. better customers. and and and new transformation point these the challenged on in-person a ones in to they have web. for really across it And and with every like a about suppliers. is really industry, find and about think to put make releases. I most go-live We with to the put out find new new today would they particular industry successful. But overused we is to retail and Eugenio that's said, most And just live need not both term around centralized move in out what they technology. these going as It's just just and even quickly in of, in forward to successful. their And the solution sign always have live that one partners, just better customer I retail, Barrel ways access with Crate the getting management customers customers, to vendors, identity

very competitive comes to continue I When go well, themselves. speak has nothing the to results changed. really think that it We see the and dynamics, for

very pre-integrated who now prospects Identity think mean -- shop I technology with or into SAP or pieces And IBM that if and are XX every you shop. speak it to of day. And Okta homogeneous you came were years I think X, shop their they had an companies ago, a an when I look, X,XXX XX, customers over or there's you Cloud. were that shop Oracle environments. I an Microsoft the

fewer I very in "I one the focus think with so themselves, And I are I fewer all folks vendor." eggs to my AuthX. why to think really is the who go independence provide want and and basket every one that neutrality done think saying and well. has for are there we day, That's same true

thought they really being to everything, open, about extensible, integrated highly build highly you how see up their customizable. it's how If they service, about

but think future. us people very thinks portend way implementing about breed, the the future. And Everyone I are that's forward going really think in that that's to it. of the I best in well for

and the world. for well, provider that #X identity Finally, be XXX to just very XXX we the say the in I companies would Office for to Office do continues continue largest

got efficiently some its effectively when the portends the around Global much Office XXX, else. underlying that the prospects. is. XXX, Office they look XXX running world, about We and the I XXX, don't beast. remember, you again, do future than you the very And think our to deploy anyone and you And when for there XXX, up really these So is of Global just they more very, identity We get biggest as own what at customers provider well deployments well. Office quickly, think care,

Dave Gennarelli

All right.

Matt Let's Hedberg RBC. to go at Matt?

Matthew Hedberg

talked are in impacted XX% your the I in verticals. customers I know you've Bill, of think, past, about,

embedded what's for Just well with the how I wondering how the guess performed those impacted Mike in quarter as guide. perhaps on recover vaccines. into sort they verticals the And of and

Bill Losch

Yes. Thanks, Matt.

to So about continue of we've our talked be about the impacted industries. They XX% value. annual contract

So that stayed pretty consistent.

impacted customer an particular, industry very wanted to but Todd a therefore company earlier, strategic as with of of example new that we still it to saw as said as very that a strategic good deeper going throughout relates we much identity to we As year, companies Obviously, that, we as by as anticipated need about and Airline. Obviously talked for we essential much but into as companies. example of believe, business. the I is some our those in had nearly not us. do got an the did certain project that year, it's those headwinds an impact do thought and think that demonstrated is, identity were to the extent, a a Alaskan that a

said macro. but We think thought year, those how that in far especially As the there, impacted today. still I that as industries, we the the we've about optimistic about we're cautiously considered some guidance out as been still with guidance there's uncertainty has gave for the earlier,

Matthew Hedberg

changes then follow-up. shape And you might any bring that St. impact to of this year? -- have the guess of might great. Obviously, now? is she the as that Okta Can this sort combined coming she quick AuthX year. Susan And now trajectory Ledger the I owns maybe of, number or she a you sort company That's with of just sort talk the sort in, about

Todd McKinnon

Yes. she's ago, phenomenal. Susan we I'm a over a get We're very of in decade I'm We've long go to histories that to finally times, and brought excited join days and the Matt. up, time. about number are Salesforce.com a that. known for so. to you glad Obviously, our glad doing We her successful tried that back company

right? her speaks itself, able for think was success X Splunk What in years, a she over to I would last do heartbeat. at we take that the

there. just having of is going and go-to-market platform opportunity there. starting are AuthX products go to there's I accounts. we the it our a team, customer workforce a global of to But now our organization, huge to are days, joining only company. where great think a early in from development mean identity going impact you a motion, also had got to saw you She development the to remember named accounts, more expansion not with we over Obviously, different be lot from management. I

large She's number at joined see that scale. have last and the terms yes, I when with visits. talk in leadership, of us been over she's years relationships, can you of just And with approach dynamics that about customer. the so of customer terms prospect I've just thought and over I been brought relationship since I It's fortunate her which existing longer-term but see but to work there the it's month, bringing you different terms a in platform. lot in Susan, process And her -- of about particular about to right? on she's about in strategic it's the products such a a

to it's And then people and working month, the with and synergy, product I mean in learned so together think really go-to-market important think great that short forget, it's is she how and between how organization forth be in I partnership I go-to-market partnership that that I just a and and already a I've a that and to grow. companies ton overall, her going spades. -- right? to engineering going brings can back our be but works great. as think for

it. So to we're be yes, great. excited very going about It's I'm --

Dave Gennarelli

All Thanks, going Matt. to , right. to go Deutsche bank. We're Patrick

Patrick Colville

-- I guidance. horse, want the sorry, to to don't deal. call. that's really, to be the guidance, congrats say. have fiscal also 'XX And the good It's mean on I really flog but dead I ask great a I Can a on AuthX about company.

Or the So into right? kind That's what just billings 'XX just Fiscal those is bridge growth why number of expecting days? in a of the two, is fiscal under help guidance just conservatism you're kind 'XX was because it's isn't XX%. guidance. bit me translating it of early forward-looking for XX, --

Bill Losch

Yes. Thanks, Patrick.

we I think things. of that think macro optimistic a about that there. product. historically there's feel because bit that earlier, of the the cautiously do early we're of a There's year. be very the good a there's Certainly, I We the in That's the pandemic, lot business. but of still at to prudent it's for tend do think We what little uncertainty demand We the pretty as conservative beginning said that's done. year. we've few given

think we we that. what So when about on guidance based be, the should forecast

growth going mentioned, that we the do I revenue. RPO believe outpace our of also is current to As

feel in bit to acceleration obviously, we year. that's a bookings also. the see like guidance going of reflected So this there's And that we're

a back that a I investments. We it's a be was -- it indicator. recalibrated. with pandemic, revenues And lagging pandemic thought that the as And probably into was year's we although think going not better. as like of we companies, outperformed that's potentially, in think we're is that take I lot very pleased we a is to as a on early scaled you to of because weigh possible know, result bit the hindsight revenues our other performance, even this because as could thing model, we are our to in because impactful consideration that, and the we subscription really done going have

than grow of it's current which think predominantly, believe focus RPO that demand business all on the with the is year, of what I would fact to strong the sign product the early that. do is guidance and right being And is. we it's think how our going So But I how is faster also, our revenue, I is strong a we feel our think course. and in is for prudent we

Patrick Colville

And I competitive list? Understood. can you against guys who you it in feature the mean Azure in that customer do is come ask feel environment AD identity? Okay. I BXC about up bake-offs? in And that most

Jacques Kerrest

Yes, absolutely, Patrick.

results seen. the very we're we've with I think happy

a XX I you just being build scratching business. if it's But is built even or the has biggest phenomenal in the we AuthX XX know two, know, also I your billions billions think of or are of as dollars. spent. the if whatever of market And I -- tens dollars combine is competitor, own. mean don't you It's frankly, that surface are a

around is that the sure the So the see is you year true in a I've analogy noted seen universities a I X.XX million here, America there's I'm our world. and world. to XX,XXX of the think what printing numbers North around today of shortage shortage developers same up in We're alone. only

growth was there would no So X years to if up. it in take software, catch

all is we continue grow. think I software that to to going agree

said And total get the to continue to of so these need. developers as companies not number most Eugenio grow. numbers eloquently And earlier, are so are to going going they

in identity. the be. So solution -- these Stripe they simple gets they with the also these the going do trickier the it's can the do Journal one all easier reasons. front the to Twilio wrong with organization where No and wants their better for can same applications, of Wall Because payments, customers line. a revenue. and to identity are it messaging on page with we put make inside provide is And an way has shelf everyone as for the for very it it take with or off the Street to It to be top obviously trickier off

on So you're about take line People move top can't forward. talking this. to They break a business. of have

of more And available so you to our for to it is, make customer-facing is when advantage our about modern opportunities. and easier solutions for think take just companies job more what frankly, job, identity

feeds -- competition we to have like on everyone do then customers that that, is really more better finally a do as know of of the how letting it successful there because they're there, itself is job of and easy so obviously out And it to and making they starting. getting convincing people

the These People to are numbers. it way starting are best You I and not mean upgrading do go. realize and building see to that. they're managing can growing maintaining businesses to fast. starting is it and it the themselves it

competitor to is this a and biggest ahead. the And that's when think management. we innings for that's comes it identity it why very opportunity business frankly, So such and customer access big early

Dave Gennarelli

Stanley. go we to Morgan Next, Fodderwala, Hamza

Hamza Fodderwala

Eugenio, the and And congratulations, enjoyed while a retirement. your ago, on speaking acquisition. Bill, luck, with the a to of Best on story. cap definitely great little Definitely you

So deal AuthX you thought of company see becoming? your you it to Obviously, ask, What to building that multibillion-dollar Todd will wanted Eugenio, to a Okta ecosystem that process and your the do on a own. on really were that I it allow you become acquisition. from accepting adds strong just think that

Eugenio Pace

and the see Thank you words, great again. to kind for you you, Hamza, thank and

we which very it's way levels. It's mainly which look, foundational I the me to of There's the how more the requirements. level, this, the part is first It's the maybe our important. different the -- vision. saw X at of opinion evolve the was level, industry in particular So in have what we future, the this what common. and it's And we common, have see

don't same cloud, the about this and use We surface deeper, the those talks terms. thing. a cloud. of about actually system. for the different operating use kind on We Todd peel that. So go But we're the word the identity you identity talking use term when We you

mission, vision, too. common so And values, common common

same and about -- again, core few go labels remove concepts, We into have the you But X values. we're have part care the We for problem. customers. customer. invest are the technology we ecosystems better the about our continuously and the innovate things. when when They We talking you a team, more. the that in the about about of, We care care We the communities.

So those are of kind fundamentals. the the

then But are complementary those what together. great They us For on execution. required me, necessary and are makes really pile on conditions. you conditions

we develop Maybe bring over Okta high-performing team and own a which developers. its create to We've all is been inception, We sell appeal XX% our U.S. They all a primarily work more and few of IT. is with company perspective. international. the things, to work revenue right? time foster workforce. the in a We the in They to the mentioned CIO, They it's from distributed our that concentrated takes So CTO. in world. that remote

CIM. primarily are We on

other. almost like we the each it's So are perfect complement of like

And pretty -- so in it's the realized I to and mission. I that big I future, a own, pretty and can XX vision have big it me couple ambition that see the is or this realized for on what see the together. could our a years in it's one, a can makes X we it of years really And compelling or

which it's to are a completely customers compelling. opportunity It's we run the in long, this having -- seeing all-stock long the we is as the where do -- game. our this this all seeing a committed and what happening around for of that to is time. really long heard, together no could so do And a in game vested means It's going be deal, what And we not and could faster, industry infinite we're because this together the you've end to for an there's game. an

Dave Gennarelli

to Berenberg. All right. to Joshua We're Tilton go going at

Joshua Tilton

on opportunity. I the just start wanted to cross-sell

So I customer customers already use know that you of lot and workforce for a mentioned for Okta identity AuthX identity.

much current that solutions, to when look that the existing you're there opportunity current as identity customer cross-sell customer cross-sell going you complementary the assume workforce you given then And your So just customers offerings? as, your is alone, we customer identity to view I at current AuthX AuthX AuthX's on base well? guess, on to should how customers

Jacques Kerrest

the absolutely. hasn't Yes, announced Yes. it opportunity. we so question. the I of Thanks, deal, Obviously, there's mean lot a just for Joshua, closed.

a we But ours them today. I workforce available. yes, beyond aren't. But dug built Many overlap access management into publicly are certainly, there's of customers comes management. and and big We significant identity and customer what's haven't access many work with we to that opportunity. of it identity those a business so when customer joint customers of And think customers

AuthX Some customers. them of are

which Should Should that's think certainly, as Some we're that, I as are to think big buy do where I this? I opportunity And going position. I still in build my are about business, own? a "How what something?" when a that. do compared we the you well. in excited be about us great. we But for a the are had is XX,XXX now And X still at I'm very just we that drop just which is it's But potential ago, -- to all bucket crossed customers, there. IPO Xx out accounts years

of penetration today the is our with team definitely that can more our the customer to that rest then stand-alone the existing order joint to we we of our lot possibilities relationship still just products can there there's more AuthX continue that's existing is base. all finally products only -- and AuthX So bases. bigger customers sell customers The opportunities Okta but prospects than but not also the out on. And known existing customer of to inside provide develop into existing Adding magnitude of and a customers. going build universe our again, of

initiatives, to about opportunity opportunity message, it's appeal offer plenty enhance of there. broaden be to important there's more the about think cross-sell. think the and to the also on I it's going and But projects identity, to that Certainly, So critical really their to forward take some industry easily it the move of how inside solutions better projects. and customers they with applications can put their most and

and the that. think I it's excited about very yes, board, So we're across

Michael Kourey

in I'd to If I here. love may, jump

is story. both a this a job did at think the terrific But that growth I synergies Eugenio delineating and here. Freddy look the -- if clear you

just penetration. talked If at the a you than on that of fine than international it. The point ours of AuthX There's Xx we the about. and at as customers of revenues growth international is cross-sell just percent a look put There's more prospects is. percent a synergies,

opportunity that's The complementary, touched products our We synergies. a significant of a once going we've closes, point, our There are as be are very this that's channel actually as have to well. to driver one of bring to tremendous channel initiatives. this at and core So AuthX on. a channel robust

small a and of CIAM $XX a Xx opportunity billion AuthX on And for you again now percentage with big is then take, growing. a a -- that TAM CIAM there's roughly that's very if say, So even there. Okta year identity, customer

least X, and from those the get in the it are I I coming at look big more door, So kind way of at the excited.

Joshua Tilton

the just helpful. about guys very your how you of through some you would Advanced That acquired offerings, benefit angle Access? of you was that think of And when guess I such developer sales kind would Server AuthX, that other as the think

Todd McKinnon

Yes.

I highlighted insightful a lot you together, just think why talk one. question. of about workforce there's be reasons but can that's as a separate, CIAM We better really they and and

or then you then mobile Access that for you're using deploy that AuthX customer for if player. to better That's Okta better use the have your infrastructure that your So are website to and then logging engineers for the from that login app Server one Advanced and integrated. into or CIAM customer solution, it's build

can all more really compelling there. better threat There's a is you visibility data. consistent keep into have the good better those, across You synergy protected. That

Dave Gennarelli

Great.

JPMorgan. here, from Okay. We're running overtime at more question Parron we're to one but Matthew take going into

Matthew Parron

heavily way I does How about investing this were that you faster, both It's AuthX growing Matt so you on plan if wondering that the think investing forward. how guys talk you for identity on in going Auty. could would was the and customer change Okta do Sterling in in I was going Okta that. you business The segment guys core invest forward?

Todd McKinnon

is growth growth that This a Mike Yes. story, is this mentioned a accretive. growth company.

to support customers, so supported sense growth markets and on investing. of we over is aggressively so the get both these where or customers growth But platforms platforms and the and both we're They're the both R&D side we sharing terms maintained invested good going combining And be we'll quickly. for that. ways make And growing will then the to can that are time, -- -- support we're services in strong. big and news So do in it's is value are synergies businesses. prop and in Like in. investing the

serve over opportunity We value time have build and a customer one to lot unified platform. of

Dave Gennarelli

let I know be to Okay. want Well, thanks, week. before everybody. next conferences And going attending that to you virtual just go, we're you two

XX. be April Conference in We have the X. the That's and Truist mentioned, And Mike as hosting then Technology X DevOps with conjunction March on virtual on event that you Berenberg Conference on time. us please Day register have sure it Investor OktaneXX. we'll Security if you of March And Thanks that's any at to for to reach can you Talk today. joining. quarter. follow-up And And for ahead be next for investor@okta.com. questions, our

Todd McKinnon

you, Thank everybody.

Jacques Kerrest

everybody. Thanks,

Bill Losch

Thank you.

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