OKTA - Earnings call transcript Q2 2023

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Dave Gennarelli

Hi, everybody. Welcome to Okta's Second Quarter Fiscal Year 2023 Earnings Webcast. I'm Dave Gennarelli, Senior Vice President of Investor Relations at Okta. With me in today's meeting, we have Todd McKinnon, our Chief Executive Officer and Co-Founder; Brett Tighe, our Chief Financial Officer; and Frederic Kerrest, our Executive Vice Chairman, Chief Operating Officer 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 our the the results that time, beliefs Risk is Information the factors our 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

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

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

Todd McKinnon

afternoon. Thanks, Dave, and everyone, thank you, this us joining for

we're detail performance I'll quarter. as into taking modest with to call performance. our then the notable our Okta actions to about due finish our remains macro we from related metrics some market where and QX as on today's than I'll items identity the the were results the challenges line be integration and healthy, going start profitability, to them opportunity financial specific other the top sales talk expected well We to wanted were our While improve organizations, better QX AuthX mixed. headwinds. but by of then produced more not

more evaluated QX three were into closely. results, we dug we As our there primary areas

was to passing is We impact first customers the which not security discussing the with a in business We latent spend QX, with each The for quarter. year. month. with our did security last this have incident of on incident consistent search quantifiable potential believe details any the impact and less the area time prospects from earlier incident

many action our security their fact, additional of increased after in implemented part measures is expressed customers have confidence plan, Okta, security we series a as okta.com/transparency. on which In available of

discernible environment. any the macro was from area impact evolving second The

that at providers. offer Okta of organization forward, identity starting Integrations are And talking of both as to lengthening important AuthX, of leading believe integration leads creates customers, our long-term unmatched are occurred some IT the the identity of were confusion well order in that and ways powerful to on to for network our the we effects difficult faster action are to improve win interact impact business teams, customer notice primary part the we this with This was cloud. heightened identity beginning going secure Individually, impacted for a area touch weakening momentum. looking third AuthX in an our digitally globe impact the and revisit business. tightening vision our establishing some organization, us Okta rationale around have market every and from examined together AuthX. competitively We is it's which While for and experienced the Okta field, to about AuthX as which platform and is strategic budgets we acquired sales some Together, In are of fiscal last economy number and why the relative sales always comprehensive year. the we performance most market we attrition the within and the When accelerate having the us cycles quarter. making our our of to scalable customers. progress, items. Organizations of we've as a we've AuthX, go-to-market of implemented the with and

training to to align within ensure on changes the and committed me we're to structure go-to-market success. strategy, actions structure comp for up improving organizational and starters, enablement includes, making our For take. also better is our our on my for and team they steam in sales priority This to go-to-market increased the team. top set to feel lockstep staff, and This for nutrition a we're

share system. improve action because go-to-market second from now deal month, pricing, Earlier and this unified our single The This we've the integrated system, as we've are management quoting is And opportunity markets, is this of with big month, team working plan this of taken approach the effectiveness. simplified sales our you CRM to the a a we beginning the which case to is and we previously. wasn't high-level third, today. of all to excited our

buying of Information customers. we moving cases in use product Okta part Customer centers and And for strengths use These clearly by cases SIEM, our relationship best workforce Workforce elevate improve reps Officer importance the benefit customer Okta's Cloud. becoming into CEO a identity unveiling the To plays lead strategic alignment serve we Cloud the Officer. customer SIEM the by Workforce of use This move can greatly traditional our with this help vendor and refines selling results Chief As heavily more becoming Reaching how for deliver solve, order we identity. identity product the vendor cases C-suite a Identity strength. identity, both with. in plan organization. members team the of with this that, more entire changes choice reach Identity defined with other immediately the removing distinct to change and more over Chief to our the change achieve often Chief Okta two Identity AuthX vision Cloud. go-to-market approach is Customer of them the to across Recall type is and Okta confusion products, extended power as the the deployed learnings about which be and Officer, go-to-market influenced customer effectively Ultimately, is this of the strength including and to and to allows will users to Chief identity Technology toward clear, the deliver to service our cloud. In the simplification the that primary or Officer C-suite, forward to does and not will Security sales our quarters. are they from of our this the of identity we're stem The for will which more in big Identity the Cloud. call what the workforce need Officer, AuthX a and the organization. Digital step value strategic can more to developers Chief us Product past buyers is audience a we selling more their who Okta developers of

the excited the of their over now into We fits process and communicating customers our early weeks, details about from with on technology coming long-term directly they largest our some specific in are are the customers strategies. more this feedback based how of plan of

our QX XX%. representing quarter, growth customer total back to to XXX new of our Turning base added customers We results. XX,XXX, in bringing the

XXX ads to see workforce and the work customer NASDAQ. with continue growth some QX, for we in as such are important proud $XXX,XXX-plus And customers, identity. In and NTT for we most both which customers quarterly our We DATA, second large of new with cohort. added the is ACV, to with highest brands this world, Siemens

total $XXX,XXX, million Cohorts of of all even $XXX,XXX stands and an $X at Our plus customers grew grew larger and north of $XXX,XXX-plus for that X,XXX customers base ACV have now XX%. ACV over XX%.

In represents This ACV. $X quarter fact, had we QX. roughly total of in large customers for base ACV record XX% customers of a million new

a examples and Here a of health a XX a customer known in notable workforce as wins insurance come QX provider wide Anthem, industries. substantial Health, Fortune customer which from few identity win. of are formerly was Elevance range just

services. the workforce The Maryland on legacy management outstanding Maryland an and is of increase on provide governments. was actors the and to and also threat used as state's burdensome will of by deployment will great Lifecycle focused its for and Next, DHS the needs was the support use and more attacks to workflows applications Okta authentication Management will workforce US with lacked automating Security. foundation productive Okta and functionality against modernization strategy. the was offboarding department enable identity help quarter initiatives. tool This risk users. resilience The state the onboarding of solution building the initial build new enhance state. security and for state evolving state the local Department Homeland support mission of all shared the in department's of and be a a Okta decreasing and upsell expanded to win. modern statewide identity standardize identity to the A be

MFA Trust of government wins just sure couple had Zero were posture that the many were the architecture. Adaptive of I'm noticed two in Okta to its and upsells callouts used will the Additionally, support build we government department's and be organizations, a cyber you quarter. customer they

and well Two achieving is step areas Okta the in end the vertical, businesses built we federal the as rates year of American comprehensive the Okta presence business. platform milestones launch significant identity upcoming and federal Authorization anticipate FedRAMP We're growth North and the Governance. typically a further biggest momentum experienced forward One is is note position significant launch This Okta's Identity excited of into To-date, cloud, for this for what a business We've identity of to focus as the the our our the across of partner very vertical. our both primary which in High important of we've increase this as the federal strategic by a recent deliver federal are; year of to going we globe. year. Military and solid about state local. quarter as unified also

we're Okta principles a became to efficiency. to focused and improve couple services access to and the done just This that and means was event about teams risks organization's of identity to dozens compliance mitigate employees for security Kyndryl, security customers, talk now Identity use. the better on Identity quarters is Our secure governance Okta posture. a ago and Oktane. Francisco way resulted for that is as conjunction great product San in person with This approach modern improving also unified a great the IT resource on built our Governance later easy coming out Solution at than this expanded to products win already XXth cloud-native This was managed is Kyndryl traditionally to drives a will a an and with Oktane’s IT modern technology maintain was to security hybrid Kyndryl. We’ll global more year. with forward hosted better is is a and product early governance product anniversary delivering Day OktaneXX, workforce start and a quarter use. business and to hosting this be IAM be We’ll to spun a looking at applications rethink which that it off IBM. their It customer deploy Okta ever. We're easy this in this was Investor launch simple customer. of of to with Governance of in November. roadmap in outcomes

And you there to finally, few see in leadership person Board. hope to I team virtually. and want Executive a updates to or we our acknowledge So,

leader sabbatical. November builder. XX much First, Officer spend is and more is Co-Founder thank my our see his and couldn't to Diya Jolly, time to the taking to and family, and together, about last Freddie simplify our Diya during be we as and next staying and recharge exceptional with member Xst entrepreneur the deserved through XX-month new year his appreciate Kerrest, strategy. pursue as I an company Product to years. want product Freddie be Executive her batteries an her contributions be intense Board a Okta Vice staying her plus over his operating for years on also early for excited going close to beginning go-to-market Okta. I as next sabbatical, what's Chief passion building four teams to think after with an will partner, her We as adviser Chairman the product align Okta

President Pace and to the I'd of Eugenio identity like And Going the Coinbase’s forward, development Choi, we're Sagnik product cloud, splitting our so cloud role, for and the COO, joined Nandy, Emilie welcome will interim for CTO, our lastly, Board workforce will lead who lead identity customer Directors. products. be recently

Coinbased technology perspective highly Board. LinkedIn experience of into last She two scale with look influential and working forward a Over entrepreneurs, and wealth to we companies. technology brings to Okta's her helped the decade, bringing Emilie

Every digital component a taking and work. get across for every for trends our of wrap We continue adoption committed company's my shoulders things encountered and all continue security, confident us view will track. cloud. squarely have improved These that we deliver more lay and on that Trust and results. to is our their energized incredibly We've entire critical priority is Identity I'm steps identity to to focused a some of three that our thank who strategic strong momentum. is want for Zero needs The remain their in critical teams is recognize the support for of sales investing the recognized opportunity mega organizations and and hard productivity over the organizations that customers, integration infrastructure we do leaders I transformation yield are we've We positioned to to the to for Okta have challenges leader globe. identity. long-term decisive we opportunity. than regain around organization XX,XXX believe massive capture team I sizes. Okta best us. company on $XX more back will I up, And front strength on Okta To to market ever success. is of work the taken this billion in am market the actions

walk to the the outlook of XXXX. for of financial more you Brett QX FY through and here's details Now rest

Brett Tighe

quarterly our and Todd, of second anniversary that in AuthX thank with outlook. the start you, joining business on today. basis. now mind one-year everyone, I'll Thanks, like-for-like now for are the provide Keep results and comparisons the are we the and of us for acquisition some then quarter a year-over-year past

outlook FX take the QX look and the second Total for area revenue International XX% revenue. increase had closer of half a represents for Subscription a growth our in the Let's second monitoring. XX% represented grew driven XX%, at international then are With this we revenue. closely level minor was subscription of headwinds, exposure, our I'll year. the XX% results, revenue. revenue XX% total but quarter go of an total over we revenue fiscal and by of it's

of its grew of Customer identity. and ACV and workforce ACV. XX% split identity especially XX% XX% total identity ACV the the scale. Looking and pleased workforce at ACV. between of the represented grew customer Workforce ACV at XX% with represented current total We're growth durable business,

term total a to one-year links in grew link. which the billion customer continues generally While recognized, us or by which addition impacting billed that is revenue have sector challenges contracts, that growth contracts impacted the general of integration outpace to the been overall yet unbilled term was both in outlined. shortening XX% $X.XX the business not for sales backlog, subscription RPO growth identity to business, has Todd and public recently our RPO signed is increase the of contracted

term XX% Current current fluctuation customers. which under revenue and in next relative current we We XX%. recognize just subscription years. noted, to can calculated RPO, $X.X remains due as in RPO better billion. length XX performance invoice which the and average to to billings, The to be by months, current strength calculated new noisy over driven RPO three assess billings grew to our was duration. metric view as Calculated we've across the represents existing expect and quarterly timing billings grew growth Our

retention. to Turning

This they net dollar-based on expand motion strong existing XX-month the period strong users. both and was with retention by are as upsell our rate trailing XXX%. driven customers seeing products the remains we Our for at

as fluctuate with very reflect retention quarters, of mix our remained Consistent products the As gross new our prior renewals upsells business, quarter-to-quarter always, rate net may from and healthy the value customers. of the fluctuates. rates to and retention

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

expected, Total X,XXX. Looking much operating additions. lower to loss increased expected, due the were related primarily primarily revenue headcount Total than XX% to was is expenses. headcount and than the and for $XX overperformance we lower-than-expected combination operating quarter operating at expenses. and nearly better lower-than-anticipated million expenses of Operating

cash was and free flow being short-term the flow sheet cash to this with billion cash $XX anticipate nearly free year. cash point flow low Free QX million. flow. We second balance quarter negative ended equivalents cash, Moving We cash strong for seasonal anchored by the investments. in a $X.X

our the challenges. the To resulted our capacity sales this, heightened A relates attrition, over year. in as sales factoring our outlook headwind economic into we We're a to the reduction integration is evolving half challenges, QX outlook. in sales performance, conservatism a contextualize of And to additional finally, portion environment. smaller related the integration in of which get attrition help let's relates an environment. to the build macro through heightened portion secondary lower-than-expected move Now

our outlook plans, year. spend be half facilities greater reducing We are applying the steps for second cash our also for We financial will margins our ability of year. the improve our flow these to free our discipline. hiring attain will by rationalizing improving reductions targets the operating achieved believe overall footprint and profitability and The

we XXXX, of For million, $XXX quarter XX% representing to million revenue total of growth XX%. to the third $XXX expect of FY

XX% current assuming share expect per net weighted $XXX to non-GAAP of to outstanding loss approximately RPO million XX%; $X.XX, billion We shares of to $XX average $X.XX $XX $X.XX million. loss $X.XX non-GAAP of and representing of of operating billion, growth to million

to at we high billion, of XXXX, For outlook XX% growth representing end to billion $X.XXX are approximately million $X the to by FY XX%. raising our $X.XXX revenue

We million. million. $XXX shares weighted loss to per outstanding $X.XX expect $XX $XXX million and profitability loss of million now $X.XX, of approximately raising share outlook $XXX of net average approximately to assuming are We our non-GAAP operating by non-GAAP

to Lastly, a Okta. I to modeling comments help want provide with few

through pressures line, mentioned committed for This the Despite are XXXX. off the XX staying FY Rule I've in to includes downward free for in original and top Rule low As to XX we year. quarters, past on our growth at fiscal we adjustments margin look lens. the profitability single-digits assumptions cash the the are and spend of making a flow

flow positive strongest quarter our flow. cash third to and expect in cash to expect to seasonally return be free QX free quarter for We the

'XX year 'XX. a FY billings your will with to help to current billings continue FY Next reference to on in we modeling for discontinuing IPO, full outlook any transition providing before

for year the XX% approximately outlined due by billion, when an billings headwinds XX% million our like-for-like 'XX We are now representing as-reported or a of on viewed approximately lowering growth We the basis. calculated for calculated be $XXX earlier. FY to outlook to $X.XX $X.XX billion to outlook on billings basis expect

and outlook call. coupled up, with on market of are targets turn it QX confident for environment to the balance continue outlook will leadership in back we you place our growth forward plans right near-term and our the I'll build time. things reevaluating we 'XX on progress Question-and-Answer action long-term we our on at position. we to our Q&A. Dave? Given this earnings have on expand and said macro we're profitability the evolving To that, updating our to look the Having wrap Session FY uncertainties to Dave

Dave Gennarelli

raised there's that see them I a I few and Brett. in that order. already [Operator take Thanks, Instructions]. quite will hands

KeyBanc. I Erik? So at with start Heath Erik will with that

Eric Heath

thanks taking the and question. Dave Thanks for

changing on additional some structures off? going the on how the then on forward? any you're detail reorienting just kind I take you're Freddie, But maybe comp could you're that sales provide of the of he portfolio. appreciate to you reorienting time also sales organization some drill how the color product wanted And Todd, how in So,

Todd McKinnon

sure, the for for thanks Yes, question.

after in the acquisition through the was we this three Feb AuthX -- big -- terms group organization. them of sales with team. the the sales combine the organization Okta X sold of of change took beginning The team of together I where first we first think all that for and and so an fiscal the year, at quarters sales year with the -- as independent sales the last I'll start on there's that's

reps the And plus hundreds the AuthX. so, idea the AuthX and there Okta came portfolio sell reps is Okta the sold portfolio. AuthX that over, portfolio, hundreds and whole And that of then Okta

significant really integration. in that was the So a step

was team thing talk is and teams earlier integration Steve customers In terms and forth one and Susan of -- in is But a involved this about the manage very that's the under doesn't Freddie so that, Rowland to the sales can Ledger we sales to I Freddie of talking that St. combination really our year. want separately. clarify CRO. organizationally

you headwinds there's things a customer identity make them think are hundreds those into and cloud and workforce cloud I do reps identity really productive of hundreds go that. how the take of selling couple that and about both and

Okta that, was Executives use identity whole platform will primary is and buyer which better for to -- of to goal technologies, thing successful, those being suite Officer, customer primary first our CIOs all CTOs, landscape VPs and C-suite the be Marketing the But strategic forward. have win achieve for we for all the if and Chief a them can that an the The we of we their reach we going to traditionally have Digital Officers, cases, have of CISOs. piece of cloud all we really reach about new is, Okta, of Chief identity

together for all mistakes as on buyers bold But sure that those level course more use these we high in the this tactics, we're the optimally, the of unified all strategic these cases. we're I tactics, make buyers, acquisition on frankly, doing correct. or to to and the And iterating long-term we're big do you combining of have that.. identity things the and for we think, sales making if back platform on and confident the bullish of and teams motivation that's So providing of super it take reaching implication

we which simple. cloud, workforce, cloud, and your a simplifying go enable like both to to employees it a we of like, suppliers offer kind that more offer that really things It's identity they of identity making So think for example with. those workforce the that's the and customer platforms good and one product and and sellers suite and customers, workforce I those is -- the this there's partners the portfolio is way the extended are market in are AuthX. And product there's for we're to

of them vision and going these have much this for them portfolio this and hundreds so market. train be bring it's And sellers, and to them hundreds easier product enable to to and

Eric Heath

Thanks Todd.

Dave Gennarelli

go let's Henderson Alex Next, to from Needham.

Alex Henderson

Great. understanding been very in focused news hack since much. out that's the Thank and and on you the I've come announced particularly Scatter that Swine October was flow recent the program… the Octopus

Todd McKinnon

love you Alex. the hope I names,

Alex Henderson

Excuse me

Todd McKinnon

love I hope you the names.

Alex Henderson

Yes, the on VAR it already they're and address came please this little said, upgrade when to cloning piece about their an Okta with when I it's awesome, people that morning, obviously a there's a from additional of then of right? some a recently into the one as terms better permissions. as permissions result apparently quarter had out the you we conversation attacked he's all And we puzzle end in that XXX-plus of the happened the those that? that of deals Can after a seen customers mechanics because closing for transparent cloud customers. the -- SMS speak. to us see That and of to talking penetrate opportunity use pushback

Todd McKinnon

Yeah. I understand. make Alex, I sure want to

said You October, that… is

Alex Henderson

Octopus. called It's

Todd McKinnon

Yeah.

Okay.

of Sorry, October, you didn't the month yeah. mean

Alex Henderson

No.

Todd McKinnon

Yeah.

incident attacks the on going And -- was because happens all the that's identity about time, the time. to infrastructure have often of all that these dark something notify The and these so talking is you're monitor -- phishing web take into it's get in bad and to And which in that and occurrence site entire And putting commonly actors, it recent the a there we Okta issue down you're into talking and they system. that try is job break try fake a have so use that used can providers then this guys, teams sites there fake Okta, most to trick we credentials actually customers the the and is many they target use to they fake the about, users users their it's are threat So the customers. us, site, -- the Octopus have Scatter… they their way.

Alex Henderson

Scatter. Swine

Todd McKinnon

-- is same that that issue, about actor. this that’s they actually this Yeah. targeted is attack ways the The few got reason their and Okta. for approach unique was they Okta other only secure also how they XXX not customers. Swine less where authenticate on Scatter for The customers thing some because some password, innovative in, Okta and a the worked SMS and same threat they less they why unique one had secure and not the the but targeted into customers, it's so phished that but to like the code onetime tokens,

So it customers. worked so novel this approach, few work, usually it but was doesn't a on a

move so So is no vision to make -- password. that the to to need we what here to takeaway for us need the and customers need do having we is,

be a can there, are you're attacks. configurable multiple risk-averse just you secure all can to that should. which to platform impossible sensitive the password, very situation from it's of is very fishable, but how up cryptographically have based way the password, on scenarios from not and – to in turned it configure or to it all them so were as it's fish, page, protecting work be no had these a and out this using that so were is customers fishable, on think as approach verified go that problem our can these they way machine which log-in that was now, of they a get fishable, you you in your the that's resource I not and And you and And resource not kind no which it's some

help better the aggressive that everything that very we openness configuration, this with resource on transparency. Scatter up to but share being configuration, is We're their the no that So the password, risk don't have and also, kind if I whole our versus and understand what And of on a and this unfishable you happened customers happened. along Swine industry exactly do job, customers. I saw, we is with risk then the no task page. for post blog outlined us a first, of helping communicating about that what towards move we know the and they're log-in the the think, which appetite configuration protecting product them need

Alex Henderson

So result your as visibility event? high of is there that impact in August results in no a

Todd McKinnon

Well, was it after first QX, of all, QX. in

no… clearly there's So

Alex Henderson

quarter? In the current

Todd McKinnon

But and all effective. their customers. defend partner customers happening the all all we're the to way to something comfortable infrastructures to a confident their is know very that ratchet to all our being ability they're And that conversations things this because of a our defenses has in They attacked that's them help them understand way being towards in very this them been partners protect mass can and good time how to configuration product up the with unfishable on configure having is with. of these

Alex Henderson

Thank very much clarity for Great. you the

Todd McKinnon

a I Yes. know helps. Hopefully, that it's of lot detail.

Dave Gennarelli

Let's Mizuho. go at to Gregg Moskowitz

Gregg Moskowitz

taking much very you Thank Okay. question. the for

without the this acquisition Todd was as a design announcement articulated XX a But ago. refined the a initially doubt, what you go-to-market of months So following than AuthX, developers. strong very different solution about for is is, noted,

opinion given that of is across science Workforce is Workforce this a big solution? why step And and on identity forward? will to you joint So convergence the Access SIEM, that's have and deemphasizing can your And so in not going some ability deals any towards this bearing happening first the case? may your in SIEM sell then tell secondly, wonder, us Okta's core

Todd McKinnon

little question. simplification. I And is bit would this a and I'll it's I way mean. think a I think to more what I I describe super a insightful clarification a -- Yes, the think explain

bullish are the market, all, the it's every emerging. be. this And you form person long-term of impactful If about new with how on extremely the digital and a Every in we every customer organization and SIEM, interaction big at it's SIEM market, it's with is identity category, think customer first could -- identity. planet on some

so you the And have much And an to to have in you forward. participate try as it's it evolving drive market, to -- market. as you

adapting this and as adopt clarifications we evolving, the also we're defining make market market. we as but So we’re strategy, our to that's

exciting. really it's So

think you market, it's think as So about the a if -- about it spectrum.

BXC and team. it's yes, the whole or it's a there's It consumer. – your Think all of super to directly online. capabilities driving one is and password end -- and extensible identity development Parker, the and pure to flexible, list has one the So spectrum butter. about The do it's sorry, and on app, to a the Warby revenue. - the It's into consumer spectrum that's the business multifactor app really for new that's probably the super be that bread their is AuthX’s

a The it bright of very off -- there similar wasn't partners to like SIEM was it on the really SIEM AuthX you're they blended Okta spectrum salesforce -- It's was end is side, of the left where were where on side, in all a right spectrum. app instance really workforce. Okta to or along to about maybe instance and wasn't spectrum shelf, or kind the those that's line -- it's that to partners and the or your that customers all SaaS your other e-mail it's to access of giving mix of it your of think

side very it was the was more you market it to It XX%, or XX% two it clearly on the got other clearly acquisition, was the of was before the AuthX. overlap, as side AuthX So there Okta but middle, mixed. overlap. some not And it on very why that's was but the one Okta was companies was

SIEM being doing Okta platform And the now really majority focused saying the on is platform now we're -- SIEM use SIEM the we're that. what really we're Okta if is clear platform. the saying of extended what really were extended workforce, that cases And about AuthX is the So, workforce. we're

where some you're shifting a there's there's -- aren't no a of sales -- going in clarification terms the it's really But it's reps to from the bunch other. in of where interpreting -- this is spectrum one middle So probably the go hundreds middle time and hundreds that spend there, SIEM, metal, in is this of the get to we've of Workforce, market. reps said, and clarified it taken we've

Brett Tighe

I of if And a can that couple add help. examples just to might

and workforce and context extended remember as was Historically, about. -- focused started of using that that a Customer and customer Okta to the of we business. people got historical of you lot see Access those We you Todd is Identity here. just Access Management Workforce Okta added a started talking Identity examples Management First all,

supply Access lot to They Flex, limited example Identity giant distributors an It's use a For Workforce. works know like contact on their a exactly they Management that manage number. and manufacturer, Okta chains. Customer are. the extended they the who have It they more

who customers what communicate about our think understand you the to they Cloud, salesforce it Customer about Identity Identity go, to as If that. with we're it's It's as simplification. should making trying do the talk to where they should for here well easier Cloud and about for to Workforce

so that's driving -- really the And force. that's

-- and to Workforce about. of example and of AuthX very organization. provider. access the their have just it's that's say happy also so very new global spin-out a and services going already about this Okta big over bought work good We of couple value far call, and talked some last Third their a to we is earnings which Eventbrite, customer of secure modernization have a They have DICK'S to quarters. would I And is, we Partners, actually PwC, what they News your finally, of AuthX of across on want new question organizations mobility which we're how so working it's a well also Vialto then entire good this AuthX Okta just supporting see the Corp, them it's plenty Bancorp, of the conveniently, far good talk We've examples Finally, efforts about workforce IGA, examples bought that customer, and cross-selling? Goods, to Sporting together Fifth quarter

Todd McKinnon

for Chief of strategy members Security, we the -- cases solve those, a to Chief the and Chief of when good our But enterprise; to it's Chief CEO, Technology, IT, you that, we point to -- appeal we important C-Suite all whole other to very this, Product, the solve Board. when of from the Digital, was the the the across part is that make Marketing goal the all of use the that other thing --

strategic are platform. identity the We

right. are you So

be platforms, top all so another rationally to those, to have when that the leader integrate it, the CEO able We sense looks of they the make together. products at or and all

just over And workforce the the have not like the and GA of excited happen over the about, IGA, obvious you'll across that years. other we're and products, ones see time, the next five we but all to AuthX products build which we couple so

Gregg Moskowitz

the Thanks, guys. Appreciate explanation.

Dave Gennarelli

Okay.

go Let's at Wells Nowinski Fargo to Andy

Andy Nowinski

you. we're that was you're And recent my just you I you I Thanks. whether the need for guess, of, to Okay. a Did your question then table seeing these go-to-market you curious had the reevaluate targets, billion target now? I for as taking we're reevaluating over investors that so that Just it. until Thank what XXXX to a these can cycles? deal macro make lot elevated $X fiscal that getting guess, from since the the quick attrition was, clarification as off XX now it revenue triggered say point first. it, questions extended or the you with refinements last, the changes call to changes -- finger why perhaps actually months if

Todd McKinnon

a It's question. Yeah. great

that, a that, if going customer achieve cloud. when FY XXXX we first to the billion successful we're your to of $X identity to target, we're have the part On going achieve question, have so

the call very it's that those that detailed -- to of make coming target. a short-term, momentum refined of optimizing I version And everyone so think for we committed that then to sure at back on the short-term commitments in that we're the keep a And cloud. as customer that to and going, changes and reevaluate with given next how earnings to the target that, prudent we reevaluate we're

So think important. is very I that

the that's everyone here, the the which then understand think, were second teams And the first thing. this events on is I that So sequence for to sales is important thing, of integrated year.

on -- AuthX learnings team, a and six It's sales separate a this and they year, thing. that had of we information really last as year. not it's ran months So iterate great have to

So sales talked we fit. and about this strategic can achieve in customer the back be get that of terms this of the is we market. to identity long-term market of winner things attrition, opportunity that there's imperative, and is on we which we tremendous It's terms in thing. have grow optimizing drove know what the the we've in just the about and integration some this track know We how of to teams

Andy Nowinski

Thanks, Todd.

Dave Gennarelli

at Adam Tindle Let's go James. Raymond to

Adam Tindle

business you. revisit acquisition. to because M&A, Thank logic Okay. the know maybe synergies, catalyst was of the for industrial The if company. differently have just we for is the some guess And start, potential future a would separating question I I some the the could better wanted together, idea maybe talked would about now AuthX Todd, but them. what be, we're you you assessment, I that done in being

Eugenio learned? AuthX Thanks. you do what will have what more reenergize role standalone new to So his secondly, business? And in the

Todd McKinnon

did sure what didn't I industrials? you I Adam, make want follow I that understand Yeah. part. mean your by to question.

Adam Tindle

partly was behind AuthX better The industrial logic and acquiring AuthX are Okta together…?

Todd McKinnon

Yeah, I understand your question.

some interaction digital product And digital. to sense, of idea that all I be that. company every going -- to think So every not Every and first a -- of is core the with so in acquisition all, -- identity the opportunity. was customer person I high-level every for don't of at customer is that we're identity massive was that idea the the is

opportunity. secondly, a massive the primary And building identity. we that's are for So cloud

in -- And the say, I'm It scenario vendor to safely your world I for a if your healthcare cases. is most size. and of technology, creating be major And the and to has company and want I one and predicated all everything workforce. every There's our customers success identity to workforce like no extended workforce identity chain buys, strategic CEO the vendor for or company morning. So that of this platforms platform did to CIO a using I everyone every our our future and one have the most buys, use a workforce where on between. strategic the of your freeing I'm for you go be the your talk to vision every or cover of the it's where Board you organization,

It's and as That the very of Digital. into It's difference So into And they acquisition important. a the there, lower big a identity of and would the times, CIO under their many there category in very many CISO leaders would clear new importantly, CTO. those and a not product for Officer. the that It's those developer and the built uptake was times having and getting experience a Digital it's rationale solutions. was be Chief more Technology. VP an VP level buyers of or buyer. It's a would be adopt organizations this

high-level the that's So rationale this. for strategic

first fast nine you in May months was forward, closed year. deal which in last the the Now last the year, of of integration,

so months, forth. first ran team we year. system the like integrated largely, nine and awesome some But the an the systems back So had and the they alone, HR and in the team sales of office product

and AuthX the next and the let's growth. like sellers take and of their hundreds year, is Okta put the have in this bag so product forward them hundreds that step And scale

that And so was big companies. coming a of two together the

forth, Chief used -- a app. about buyer partners, Okta the SIEM, BXB that's that's your the in complexity. to Workforce, gone in through the What Okta the very, to VP of things market building it's and and we've And and -- call of your customers employees, -- the and We that six CTO, talking really cases, app, cloud as pipeline simple process for clean, extended a it's if in we learned very products very simplify to for Digital you're and one just workforce things Officer, Workforce, people Technology, learned we've customer lot. to the the that's AuthX. the and So first the needed app, CSO very much you're the your go. we -- that is of not the terms what and the and big the use also but the or CIO, different I'm buyer one is identity SaaS to a consumer It's so is large. suppliers of trying where and is there say talking first that market a we've If -- is was if and that Workforce these complexity building we in apart just months, learned the parse too that

we're have kind say wouldn't message after sales and we've a and the we where I So of now combined team we're a got there. separating clear races

gives some hopefully, context. you that So

Dave Gennarelli

Ittai let's Kidron to go at Oppenheimer. Next,

Ittai Kidron

It that. to going Thanks, follow have the time. Dave. to sales maintain you're to two Todd, like just up maybe seems forces in same parallel just on

I'm out I your trying to So priorities. figure guess

it create to synergies you -- two, bringing you together As fully to that think these a organizations that this years, like the -- sales ago. R&D how Profitability important there much hoping get is years a now to trying out least of was be the have the given about from to in are don't far a a looks I still standpoint, trade-offs. duality you three cannot But realized, separate. next by more couple motion going in two investors know of difficult have you're today figure at question it than from

workforce to have a at standpoint? a at two to sacrifice these where So growth a AuthX how side away enable to be or… drive profitability mean same or the trade-offs you in organizations the running You're in do the of want more the look to order I certain profitability as business to to profitability maintain of from degree, order from you them going does to you're time think about to that taking

Todd McKinnon

Yeah.

its… think I

Ittai Kidron

breakeven? to get that to longer It's profitability

Todd McKinnon

And you There's synergy one part Salesforce. a is it's question. correct be good Yeah. One one I want to It's is should really more a clear, big the though, thing my I on, fault. Salesforce. that of

the fit this massive and the board a to cover vendors for a to customer motion believe fit that these market the market deals really CEO, all higher sell vendor. that these on massive sell we sales cases for sell this the do buyers all reaching these level, workforce and use that identity, So is identity in at strategic

one that. doing sales that's it's team So

the on so making the and synergy strategy sales the deal And deal team the one of is successful. of this predicated

as positioning can. and to anything. splitting We're be this think scale the not they we're product as one So we clarifying force global the sales so efficient can messaging

operating And always trade-offs And So you reference we question fast us how attack is going going about no can at is say to Rule I balancing grow, back the to when efficiently think see we've matter We're of talked this why And to the that I that's these and we're this last your be cash can very, to how XX. very this definitely hopefully, we're and this sure grow on an and going burn to is so we're think that question rule market about profitability -- thing cash doesn't always well and we're there's good. I balance level. the -- lot spectrum. off that on very generate we that would R&D, talked XX. about calls, when your grow, to efficient making understood. above we're and not of mean we going balance just a

product was product thing. pure The BXC there's wasn't spectrum functionality at at extended SaaS So it the very that really this SIEM the good this like of good case, a AuthX spectrum. a, It workforce. was And different BXB along a really functionality apps. in use was functionality was overlapping a lot between. There's Okta completely b.

now, So in I over of rationalized. duplication two But think terms right teams. the that time, see R&D some there is be you'll

common services. the out. talking years see You'll multiple I'm

teams and clear, really see go-to-market and the focused first more of that common pulled the combined to synergy this But and scale be side the being be You'll we're year. efficiency want of and really the on efficiency more of produced now I go-to-market R&D services being by from the two as right this. is this together the synergy the is

Brett Tighe

year. in expect framework, balance of can see I margin, doing and the our the growth what you loss, year expand coming to that about margins to and the going growth improving you're long-range have add look think moderated And if us And about for $XX mean little million to already do if expectations that, I fully this growth Ittai, over bit. And in you we mean, I'd about forward profitability, we're right? we're operating balancing going talking you continue to a years. at then

Ittai Kidron

side? up standpoint, side that, more from Maybe an you the on or the it just Okta attrition AuthX was following can on us tell where pronounced

Todd McKinnon

that attrition. up. Yeah. That's for about good talked bringing question. We've a Thanks really

-- attrition I to my we really and it's believe. all resignation, the little can COVID is? team numbers. team on we our the And time super can we a all, it? many XX%, get talked had think years across Okta around traditionally bit back over of sure want all do XX%. think argue attrition culture there's board. is And to peers real we been and stability, discuss We too the It's to opinions of the been I bring we first all I pre-COVID making strong is back great of that. know and all mixed XX%. about the we attrition that we focused high, go to that across So we're we strength, is overall, CEO a number But how before how realistic down We could do down think and to very on the things and build do team can the

attrition in a saw team. you think AuthX So that more on former pronounced the I the go-to-market side,

And this year, expected scale smaller this your you're in some first so if multiple these them company because of you're this more see working now to -- much smaller, multiple team. that -- decided could is you're states the of being company of Like for probably states working maybe territory some And products is of really why a got sell your expected. it's buyers as I and this for asked your sales to territory or work Okta and the pre-IPO to AuthX, smaller, forth. for you're number with your US. go we and eight of have

moderated had in I to we things super, super should one nook cranny in I is in make I from would And the market the of opportunity team, hiring to the the this the of been plan at level we had Okta to. trying think growth that retrospect, of covered. coming we again, make could growth all do a was We had we if one really have I the and more differently And a had terms overall, cover do were a aggressive sales -- of a beginning into think that wanted achieve sure to and we year. plan more that, sure mistake. every all

The of a are having doing. thing the would we're just is starting trends lot the I'm So to some not But which I've see differently. companies; of of lot flowing think high. folks terms money them we're don't the a that's a go-to-market as although companies, great. one these of I reverse already as for lot and left wasn't are The was. aren't good. grass some that small look sure things there valuations in come few We've But those back is a always the prospects smaller about I seen of do as already, effect, greener. talked as it much and especially recent. they've industry,

you on is for Hopefully, at because anyway, that's important us really if this think I that. that's it So more some bit and working success, color our fired make all we little to do to But that. very great goal, that's common really look -- getting helpful. this to of better can team a towards I solid think because and a it's been up back past

Brett Tighe

at of things we're of some there. today. in lot attrition, structure about And add compensation talked just the the sense hands. our improvements not problem, looking at the looking a I trying making address the sitting that on including might to I'm we've and to Obviously,

up them nimble and tax implementing can these coming problems like solutions items then quickly definitely these we're and remain said, on identifying rather So Todd with we

Todd McKinnon

managers. more I really good of and one just Ittai, are attracting talent, in then, add terms both a is thing, reps lot And which would of we

ramp the there really back think might have that's think of the I that reps And his prepared I in coming, Again, to they losing folks. but up, of some big of managers, new build top also we're a and are just the So getting hiring reps left one that part we because ramp. carrying but organization. who the bags, multilevel the good were Brett there but of great ramped things folks have way who up the in lot are of referenced quota terms comments of to are all capacity is

Brett Tighe

the it, that to makes make huge. can also the them of it's payoff for leverage you but is ramp, simpler it and the Yeah,

Ittai Kidron

you. I Thank color. the appreciate

Brett Tighe

Yeah, sure.

Dave Gennarelli

All right.

let's Bachman Keith go to Now, BMO. at

Keith Bachman

side, and question. understand broader the ask there, taking question didn't you the as competition Good opportunity prices last on Todd, Gartner's that and workforce much it of both share. afternoon. to you into to two I'll Microsoft guide. factors, from to in the getting back presenters had come Thank a wanted actually comments want to conference break one a the your Okta you And influencing it's on to to I try for -- there and the broad losing of A, whether change I was causing mention or competitive perhaps attendees discussion more pieces; here, and we attend lot week, Identity change certainly is

to Okta get be would to the was IGA and side, development, competition". response of b, your And and the both that. PAM wanted was relative And the feedback to of and that another on so I stages Solution then comment PAM "light in IGA while they're different

just in side, I could update wanted against down? workforce and broader Microsoft PAM? so the Thank in particular And kind what you on role IGA on your played And of and specifically, to perspective then guide get the talk competition an you. about

Todd McKinnon

Yeah.

the the going not very, a or call this of So at mean, but It about this we it's because – will all. important because think talking is of lot say, a very I the market happy environment, the I I with And to away up, customer that's I first is important. and can had drying guide workforce I market workforce business, not and strategic is – the competitive now. about all, spent I'm important, for do environment. competitive us, to before, And talk of XX%. it very this mentioned nothing growing ACV identity,

to So very workforce the is us. for these important enterprise world, company. every you for And – It's win both be be the these platform identity have reach to remember, markets. the one strategic is most buyers, every the of strategy of in vendors

workforce customer have identity. and You win to

workforce stuff. consistent year the is category competitive So right versus so market, maybe than the Maybe kinds there's there's also there spent but all environment potentially fragmented these like massive, some market seen that's it's the the a last years. kind very of over very evaluation really, what in incredibly highly that's is with The the build of of environment though. customer every deal, probably identity there's I – versus and It's billion-plus years. exaggeration, competitive And And companies, different out very which buy. of X solution vendors. mean, $XX workforce any XX an is any different. is competitive important. Every the of it's is different amount It's carving of dynamic customizability. or IDC we've

don't it's we us. we're the we've what validated. I mean study identity and talk And ironically, think the category competitive idea this, was early we're I on I when to is following over like, and that now the when trivialize want, value was I I'm don't do like some is from companies customers, demonstrating do are that workforce only basically – – software to about cloud being the the and them to simplify and in competitive it, knows very mostly XXXX software or architectures market ways. the went side, It really different. really the security they market. teams, I totally they again cloud. as-a-software. are cloud this are obsessed adopters. environment, the in we system, could buyer and because want then, it validated that you seen that The good crazy the And is the a selling But – we And and and almost we reality They're like old is identity And the It's I to want against to the new. were at in mean come competition. It's do vendors or see trying do a for have whole we that to of they cloud, is, what before cloud enter it. don't evolving we did Microsoft to come well. kind That's cloud. choosing market since cloud

market We're right industry on one and the the on is That's that's going. – there. of that's So workforce competitive the where the dynamic side side.

talking it. Global massive chain. other conversation But I and the Technology they The or time, Our is And of of was best and thing. the we strategic for stuff person is they their identity Microsoft is -- having was it's of or was and independent to strategic is over own an not X,XXX I an yes, with so to there another has this it reality Microsoft Head neutral that to service about stuff competition and format this going do identity some know – that and a – every of this applications. healthcare technology application the they from whatever course, Amazon do have company – from like competitive they but want have so is platform. identity vital. adapt, customers example need offering to is get dynamic This It's – or platform want flexibility so and want to the some is choice believe

across So need their just so multiple applications they collaboration. and myriad that not Windows all iOS to Android, integrated, windows, devices, directories not just work have, have the to this devices Windows just wired and not across need IDP, e-mail to Mac, has and it's has that's just to work of They have Mac, medical not that X,XXX into neutrality. be

And do choose the choosing that bigger they technology to Microsoft for their they an enough. world Microsoft. frankly, see platform saying good lot to so within money want CFO to and never it. Microsoft on ecosystem is whatever it's identity larger of choice. spend good of a or to something they hamstrung it not want to take point the will kind be is their we kind I'm And want they've as the kind do, going platform don't it deciding, that's is independent years. like They See on like as been neutral away My that or people a that lose decides do support enough of and aren't strategic, going of a needs,

lot and in is and it's things you this the this have they're clouds, aggressive. that's Identity think choice. And way, espouse sends aggressive. that's the because -- to where, of I know they and to one people is important is people it understand to they're why I you going by choice, and why Microsoft This doing an it's know announcements primary market. So they're lot a the and reason why us And world important them of to They is they're And it. Gartner to makes a most no, they're limit successful, of one of going too. important that they're do. that your for if lock strategic really

your vendor a that cases. covers use need all You

how You into need Officer these Officer to Officer long-term. everyone cases on bought use CIO your and we're be and from and Digital Marketing going we and that's build Technical and C-suite and to vendor, win that

Keith Bachman

And IGA PAM, the and how any comments? about

Todd McKinnon

Absolutely, yes.

I think that thanks -- rather. yes, me. for so got I reminding -- all

to I remember It's -- the thing mean the identity shouldn't don't ask I -- single too real remember I platform. these a first I reason just It's simple. -- not So it's too so the sign-on. started It's It's Okta, heard light. lightweight. we when was -- question. we

great access improve chat. have apps. just these IGA can light, it's don't means comes go snap. their thousands simple so It some are means to when so It that to it's is the They these in things that That And say to people working. pre-integrated a legacy hear of tool. that I it's integrations do means employees IGA that and because requests

IGA bigger think the all, is we I you're So to first it I that much think because industry -- is see there's been better is the going -- in going bigger. pie. than of I think kind think ITSM said have everyone that ServiceNow of but constraining It's solutions the market small like the made was product a the started, size market very of to the

similar a thing see you'll think here. I

Keith Bachman

floor. see tonne. right. All will Okay. I Thanks the a

Dave Gennarelli

do over to XX at of we're to try minutes Yes, here. least going time

Ho at William Blair. So let's get to Jonathan

Jonathan Ho

to an it Hi, the will to and -- each reduction in you also, three market main for get in take I in impact? came bit improvements that good detail – and how outlook you. wanted outlined it the the how have the just quickly much terms Thank of maybe of more you from think afternoon. of factors little a motion

Brett Tighe

can I Yes, that. take

a little issues. sales integration half was So over the

pretty other And actually the hasn't Second really some we've the talked piece then two. small about is biggest headwinds it. the the we've I was mean but attrition the nearly field. issue, size it seen in macro in macro of been of the

-- to in of to take not a how issues? the But we've So mean, on then it's address already. of these one issues attrition terms two the and them. it going I plans and issues integration long Obviously, sales implemented is really,

and in long-term have this example, This and today. buyer heard with by go done obviously this way massive sure, For it's we the with end about as here's of or now. to the is we is talking we're operate going because run to making play that sell agree to focusing where on QX, be about, is SIEM market not a that we've the something right? talk continue But hey we that enablement Todd you to to right the it you product, we're been something have

obviously, mean some how year, there say see realized were right? evaluate fiscal the the and things our would the four, of we're doing you wait same were I first see to six I doing, and fruits So, three, we're evaluating next need couple take of see we and approach going can that and over were the quarters, the labor to we a we're five, we months that with to going adjust thing. how do

we as confident adjustments have, to in we're we're see we make but fit. the So, going solutions

Todd McKinnon

easier Yes. a we're the and are very -- that's why level, we're to raises how world make We going and for we and every they like term. long that's bold. this them of to and could paths. see the like philosophy bold, we're I and technology but that to work. here? company, cases -- think a decades. this to category the We're my acquisition, this to huge opportunity. build stretch use want cloud big not in not going see going for lasts – the we we're want not about our that's We could not at identity organization of be hear you defined leadership to So I ourselves, company going as this to be addresses to think it's what -- philosophy that trying push do free that's important iconic trying something when to this ourselves, we're And massive philosophy safely identity not and to conversation, build primary to bold. big. outlining big use these going I there how We're think think to all And this we want any build for

And so not we're on very stubborn in long-term is oriented vision, changing. that that

how do it's quarters to and and more it. it going that. iterate, and tactics to to these not we month-to-month going well, successful, to it we we'll on we're stubborn going we the not and be working, works. things for and make We're sand about roll If integrate how and how that prosecute we hopefully, how fix the make teams in how We're stuff. and and stick something how head we and and the We're IGA say work. our months quarters On we reactive we sales customers going tweak not messaging be out

then clear, I'm and happy as me good I that things, differently. I of that balance. be a some And And my you're shoulders very proud is wish this importantly, the the almost bold to and that's long-term we're aggressively I'm about not have mentioned that our to we realistic over this gone changing working long-term let that leads what's And have so, on seeing would But time, being and massive think I vision. and it. more that very, very And success. and what's operate confident best

Jonathan Ho

Thank you.

Dave Gennarelli

Okay. We'll go to of John Guggenheim. DiFucci

John DiFucci

how guys. mute. to Sorry, turn-off guys, it's been Figure out a while. Hey

Sorry about that.

In interesting. deals. you So it's listen quarter the record guys, $X had really a number million of

a back which right? it's in You receivables, uptick of you big and and accounts sort sense, Because large are really saw usually makes back makes loaded. that loaded. But deals think

of I it, influence. in kind that? your the all think you and all little can question You're of also and the some specifically guidance about bit But says your context seeing talk a pipeline begs about this macro but

Todd McKinnon

the you've we working take I heard continuing is about And always pipeline continually on that question. one is the area of working it's sign pipeline. I'm the continue already a up bit -- So on. little it's it on we're on We're oriented. There's workforce cloud. think operate, this there there's right? more lot a field we out is mainly identity serious Todd to continue Yeah, to front here obviously and can can obviously lot opportunity to oriented pipeline thing Freddie, that I grow clarifying an enable made of used you we us. in make sure from new into But customer really or call guidance, think or workforce But as and how really, add some and land of we of inroads in pipeline, a there's the extended there

get what And that right area. we've and in buyers like into future a of over lot so or their that's the be gives years to got is their about next in able coming us purview, to the other optimism quarters

lot on And a so obviously today. about and we're talk that's heard us working you’ve something

Todd McKinnon

start of and deals. really effective Okta think massive on self-service the deals I need developer more over big, -- more lot. Yeah. closes, that customer And pipeline sellers these a taking time the and broader these customer sales turning hundreds developer trials but at hundreds and Are a will specifically all and they trial a deals on identity and self-service, into cloud, and these AuthX the them enterprise for identity motion team, helps they're from they or get

John DiFucci

makes say that for which is you're CIAM still business to So figuring is that conclude safe still anyway pipeline I the out, or sense? -- it mean, the

Todd McKinnon

think figuring still I that -- the -- it's especially overall BXC influence, still out. on that's developer I figuring to part think integration. the of we're true out how We're

sizes, not progressing we've expected past, we're when -- is where I that's as eventually was. CIO, think at the pipeline look -- that the you in that. new we will just CSO, that's as traditional on not be CIAM, it muscle It's

John DiFucci

much. so it. Got Thanks

Brett Tighe

Yeah. grow. not specific John, to problem. pipeline continues the That's

it, customers. I think it pipeline prosecuting we're sales for really not it's But well making itself trying some problem. go simple as why changes. is that's how these to the of our And make we as force both about

John DiFucci

Great. Thanks guys.

Dave Gennarelli

Trevor Walsh up, JMP. Next at

Trevor Walsh

for for Todd. Dave. my taking Thanks either Brett jump Thanks Great. or question. team Maybe off

Your going comments of it throughout just a little more directly. about kind have I’m so to this, touched on asked

just that is if IT Todd, workforce bifurcate of you happening kind would to cycles, seen around great? on CIAM much second that are scrutiny just theme, CIAM Wondering cetera. versus names, two more You of more mentioned longer broad-based? if the had given you kind -- way a budgets, any or sales type the had that around centers on color common add those workforce be that think like it’s the if just I there, with fact buying and security That's realm delay et piece, there of quarter. been can side, security ops the different cetera, or data throughout that you not additional any et so

Todd McKinnon

Yeah.

I that earlier of macro the each we EMEA but one broad-based, was have thing signs more headwind. bit it's over the really seen for think a first is think I little

the So data you. could give best I that's probably

Trevor Walsh

Great. Thanks.

Dave Gennarelli

Piper. up, Next Owens Rob at

Rob Owens

Thanks question. Hi. for taking my

Todd McKinnon

Rob. Hi

Rob Owens

you me? hear Can

Todd McKinnon

I just said hi.

Rob Owens

hi. Oh,

Maybe touch bit a little on public sector. Sorry.

you the scale third some exposure larger What's wins And running? mentioned here. some of of bigger they're quarter, You the guys for the then process? picture, there, thought obviously, federal having a month what mean that can Fed Thanks. with programs

Todd McKinnon

Yeah, Rob. talk Happy that. to about

of FedRAMP very have of federal FedRAMP up the sales briefly market. the brought state infrastructure. prepared Todd and lot of very investing well remarks. things talked go force, his that a lot the distribution out which and have but right good identity, one, We in in terms priorities We attended you the level. federal international we to this It been call. in September company, us Okta year. end business examples to obviously, to We've highlighted, the have that very about as That Customer of was IL-X both a very the on talked allows you been highlighted. to make obviously, at couple a that on focused we did well number into an primary extensively a cloud. a we grow also year. sure June about coming want QX. obviously, just in event of moderate, not good a was in We federal had D.C., the big doing high well the the the from continue a military in one, the relationships It third as business. We've And being very DoD coming very and the to has well. is of making up phone opportunity, sure are as is in on side, having And we QX, done there

So opportunity there's a think we of there. lot

invested in. have we Something

very have going with today's threats of needs bear the close and on the a great evolving some questions even turning in obviously of threat that are pay think We some They're to Obviously, cloud, a attention that's the it's continue that we've the the something dynamics to. leader, there, call, had fruit us. That's opportunity government and to the and more landscape. be for we going of to to actors, ahead. big times to more out

Brett Tighe

that I segment quarter in actually Rob, think public for is fastest-growing I might us. add the sector a been too, second row, has

we've we're fruits and of thus of got labor seeing as work of the pleased a a the Obviously, obviously, So do, far. there's lot with ours, Freddie we're progress to really you heard but focus say, there. our

Rob Owens

Thank right. All guys. you,

Dave Gennarelli

Go to Matt RBC. Hedberg at

Matt Hedberg

internal this the internal any Brett, the for And Just the of us played versus line – out, QX bit quarter kind how of on Thanks sense final through walk couple billings. of guys. what time more little mid-quarter? the shortfall Can you full happened headwind of sort of weeks the sort of to of put $XXX was what us your the billings maybe year appreciate it maybe just for sort did plan? the quarter? last of give Was of quarter? your headwinds. a I Hey, the insight the time. point to million a

Brett Tighe

end you back-end the some a also we've think think something from actually linearity I is and And Yeah. attrition probably the the of integration we the I result seeing we started then, about the of It little quarter. take started loaded. of the sales somebody is oh, really rate the getting we say bit end tighter. little been issues the right? quarter May, issues, that's elongate. guys the saw things macro biggest hear to frankly, is was also, a of I said you're for matter wasn't of quarter would of budgets at like end where in And the a quarter like because more the with see the kind the the the – starting talking to earlier, towards of cycles more It then macro, toward are

loaded bookings that's just we're saying perspective, see balance so and billings bit what overall more why a quarter an from So the and so. you was AR back-end little that like

Dave Gennarelli

Okay.

Next Bernstein. up, Weed of Peter

Peter Weed

the around Thank I'd sales really light you. on and love on also the research the churn I development. to actually turn your and appreciate conversation marketing and side. challenges the

as of that? come that suggest where go of perhaps signal? into which how tight going there. on the we you're to given desiring stuff And from to opposed And efficiency attrition you get certainly, people, down talent forward I like get of for a to? take bunch some at Because the on spend on side to great a just out about R&D to should read to sequentially impact think quarter-over-quarter, I some a going you product everybody and Is look assume X%, think should that G&A. efficiency And want think trying that how of I we basis, to on you're your of doing hold kind and there and the that would marketing. weren't whole it's something some sales to trying market and

Todd McKinnon

been attrition Yeah, good areas. question. it's The a one in actually really has the stronger R&D of

from an the but that that to are I is comparisons probably the – making So like I follow, comment, it's acquisition I hard Brett, attrition would can some don't not you numbers ask – don’t thing. about know. there

Brett Tighe

there's a well. acquisition we as do have QX little kickoff also, in there. of in Yeah, And bit some activities the I think

what And great have organization. we think about actually lot lowest attrition the areas out So like of as I too been much of a don't I with you're Todd into trading well. hiring in is saying RMB doing anything said, would there the we've frankly, of Todd's people read one that

Todd McKinnon

important. Yeah. I really just -- this is

a So and about We identity they're exciting companies fishing both with the tactically, they just the that mix strategically of robustness identity the really against customers strengthens there. workforce cloud with of of applications about of cloud have cool further the the coming -- side, and up. stuff lot governance. tangentially, on talked We customer and doing talked about amazing around the both some coming talked even -- the customer we these of things a lot out have cloud, ecosystem flexibility stuff identity to integrations the both more gives we for need really defend themselves

we're to be in technology that capabilities that eventually. this of layer best identity going a it's vendor pursue And make and going wants and up strategic cloud going these a to we're -- at independent -- pick and momentum to hundreds They're all to so their them that all over are customer going addition having to cloud over we're vendor the freeze it's of to that. lot we're for good and and good to success there. identity that them. win together, clear going CEO it's that work and that It's we of strategic or that, workforce whether time strategy, And on dollars spend to -- millions neutral

Peter Weed

Great.

direct that we integration, wasn't So you're to around out in on thing. synergies of it the hearing This able it costs get what other into read anything a R&D is attrition talent Tale. I'm was shouldn't

Todd McKinnon

yeah. think right, I that's

Brett Tighe

Correct.

Dave Gennarelli

Josh final to question Wolfe. from our Okay. We're at take going Tilton

Josh Tilton

Hey, me for Thanks squeezing guys. in.

Just a quick for one Brett.

you're have challenges the in going what guys down the you again Given all to numbers the mentioned, you to of gives half that the confidence year? back take not that

Brett Tighe

that we from integration what today, talked the revenue, account that it sales be know we've point, whether macro. RPO, headwinds baked regardless attrition talked issues those billings, at the Look, in right? we've this we've We've or number baked about it's into at, the in looking about taken everything current of we even you're

a and have do in in Q&A So prudent approach of we the being we guidance and like very the End feel past. confident similar taking about that

Dave Gennarelli

before the tell we'll go, in I'll Brett. note be attending York on and conferences two about Okta Francisco want you be Thanks, our Goldman in Conference we mentioned, September right. this that to on X we're X. XX. Tech Inc New you hosting Global San as Day Investor to on September Citi quarter. All The at Tech November Todd Conference 'XX And going

So today. that's for it

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

Todd McKinnon

Thanks, everyone.

Brett Tighe

you. Thank

Frederic Kerrest

Thanks, everyone.

Okta (OKTA) 31 Aug 222023 Q2 Earnings call transcript