OKTA - Earnings call transcript Q2 2025

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Dave Gennarelli

Hi, everyone. Welcome to Okta's Second Quarter Fiscal 2025 Earnings Webcast. I'm Dave Gennarelli, Okta's Senior Vice President of Investor Relations. With me in today's meeting, we have Todd McKinnon, our Chief Executive Officer and Co-Founder; and Brett Tighe, our Chief Financial Officer.

And around the same time that the earnings press release hit the wire, we posted supplemental comment on our IR website. much the would and customer of financial contains opening be a commentary our including commentary, commentary, results. posted of historically what the review This product-related news call. review information to listeners allows format before This this that

Today's meeting will forward-looking statements. include

future in events update as uncertainties beliefs factors Forward-looking our Risk to could date and them materially filings, last from assumptions actual of our risks statements Information These except to cause those performance to our in that obligation statements. Form including and new no on or light statements required that financial assume or information. represent results our the affect to we could section are differ subject XX-Q. by is and law, results Factors included our and management's SEC

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

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

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

Todd McKinnon

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

spend leading facing and record flow, profitability of strong by macro and Our while solid strength large to with customers QX challenging this efficiencies, all backdrop. cash continued a highlighted were results

critical meeting business manner. the threat fragmentation growing an today's imperatives of a organizations revenues while experience of Identity overall poor and in strategy against their a environment. way become technology stand compliant component organization's in and cyber defense cutting costs technology and customer has is security and of secure

that comprehensive through identity platform challenge identity. the vision free Okta of identity customer to advancing We're extending is our that product is today. and this technology. to has innovation technology everyone and for any Identity incredible solves safely in market solutions vision workforce use unmatched Okta's the portfolio the most and

Just this highly anticipated the X availability quarter, past we launched additions. of general

identity and The threat stack. from protection first insights security sharing with workforce post AI which identity organization detects across and response threat remediation identity Okta protection amplify for Identity customers, is security strategies. orchestrates detection authentication, during threat powered threats, an both to responds to signal continuously is and support by actions and

Also their launched and through customers identity analysis for empowers posture identity workforce insights take prioritized sprawl we their security solution posture of risk management, control and to security harden help focused identity that customers, this remediation. drive

customer identity innovation released our login. we controls the financial highly This security, sensitive beyond regulated market, identity. we're delivers identity That's UX and customers. with For elevated for operations tremendous to privacy delivering customer solution great

features and new about we'll strong that Oktane, XX We have takes October more XX. products which a pipeline of at place talk to

us join the Las year. the biggest Come identity event Vegas of in for

but and We'll myself, Operations; our strategy. and featuring and the for with of session analysts at Brett, hosting of discuss team, security not future hear also investors company's of a along line You'll COO. John [indiscernible], why first Business backbone President the fellow our the of event, defense leadership holistic experts the Okta's Addison, industry from identity just to it's Q&A be a

year priorities. priorities a priorities with I'll growth into touch X moment the we remain our started we half top the take on FY to and of first the As second security, head today: the 'XX, scale.

this Okta with to is the lead solutions, On the against the commitment, is world-class long-term attacks. progress Secure for establishing Identity partner. Okta security new are further commitment, in front, significant driving us security as identity and identity fight announcing in industry investments a we've which the in pledge delivering change the and made Since raising implementing bar identity solutions. security These addition trusted our to measures

traffic On we for detection security than stuffing front, product bot and across released customer malicious XX% cloud. credential largest attempts our customers. We've of some the enhanced identity features reduced more bought by

identity-based our triggered focus white paper a security Okta entire is of really helps how Secure customers prospects. Secure What's new type updated the Identity website was attacks. conversation on today unwavering against the for that just Identity out Our in and industry details. elevate more with on interesting Okta's our fight Commitment Check has published Commitment

our help we now customers take the these These the best be faster. incredible reaching own it ourselves, them practices best Okta understand to out of conversations and products secure Okta's with in environments. made are with their can long-term to types customers. Organizations so own to more improve we our helping implement our posture As practices, These are elevate for we've enhancements industry that security are building better do they and partnerships combined of trust

X a priority, several and for a prongs. including our approach, platform is over A access, great posture than passwordless of our governance, identity. privileged X,XXX success growth, for already Identity primary less Okta through has The and customer In includes management products reigniting initiative new story new threat growth existing uptake rapid product second Okta the years of offers OIG and customers. holistic identity offerings. Our is Governance. access customers management protection, solutions contribution

of our average direct we generated contribution. through we number revenue believe channel larger global higher. that can of deal. deals to channel our the average mix Furthermore, them In Today, partners, expansion. global our through QX, our top our XX deepening indirect leveraging Xx global partner growth XX% enhance conducted size relationships of deals partners than was systems X over key key Another initiative more especially with partners, and integrators than meaningfully drive had is is and

about our to solve we're Identity critical expanding To features. with products new an wrap drive things identity helping are unmatched platform identity and products of security, modern security excited our needs, array that is has Okta and customer experience in up, really to on while leader infrastructure optimize advance growth identity spend right a and customers. cash remaining and investing our We're steps for efficiencies market taking focused driving technology position the while the as flow. for

to forward at look Oktane seeing of X Las about you in I many weeks. Vegas in

we're about Now and the here's how commentary growth. Brett to profitable for long-term financial cover talk positioned

Brett Tighe

thank you, for and today. us joining Todd, Thanks, everyone,

my quarterly few highlights, of financials business but the getting we'll as our into financial the quick cover the Just most that Investor same website release. topics I'll my a the focus on a broader Relations time commentary reminder at typical of Okta's published on commentary on outlook. was before press

a business our The challenging to continues environment couple up ways. notable show of macro in in

resulting identity because X going business our the actions rationalizing our has scrutinizing are it's of through same organizations workforce spend, First, their of software years. been assumptions These relatable new over rationalizing budgets customer impacting lower weighted and fewer towards in seats identity within business upsells, versus are which own mix exercise our and remains Okta MAU our And second, upsells. in past the more spend business. software

trend this in continue the We to economy. expect current

strategy our more data products rates. tells including And that retention existing is platform Identity new positive and that the adopt like Okta We're Okta Privileged products customers, us customers products new our working. have and the Governance side, On selling highest our more to Access.

QX level into our similar review, security prior have the the our as Before could attribute not results. the the from key event to impact. I'll X had of impact getting financial we some on incident we while quantifiable, QX note quantifiable not analyzed likely quarters, metrics, that a And

continue the FY this will rest monitor to we move as We through 'XX. of

Moving highlights. on to some financial

X the build We implementing the to we've on been years. initiatives continue that efficiency over past

of by customers. again, profitability performance strength for highlighted was including first record QX well. the profitability, Cash primary GAAP as flow was financial with large the Once was operating Our time. strong achieving area

Our ACV $X customers. million-plus fastest-growing was cohort

of XXXX That's progress, Global proof within and count their a XXXX is where of accounts. a We Okta tremendous great but Global needs also the the footprint penetration challenging identity opportunity This as organizations. it complexity large customers. our these is expand group well to XX% success runway as Okta overall infrastructure. this over to of have lot another of of point increase typically shines because of now companies the with most our our great represents as

term That's also contract continued trends average which length signed We're customer contracts in great Okta. with a increased around customers. the quarter, for of new confidence weighted seeing positive particularly with sign year-over-year,

and 'XX. FY business let's to turn for Now outlook QX our

to always, approach. our made take approach we any changes prudent not have a forward guidance, As we in and

in factoring with are in we've environment QX. what consistent macro experienced challenging We a

incident. year to some conservatism of potential continue our from impacts remainder incorporate fiscal year's the also outlook last security We for related to this into

operating approximately we cash RPO 'XX, FY of XX%, of and of margin growth growth free XX% XX%. and quarter X% total third the of margin of For non-GAAP expect current revenue flow

raising board We the our flow are and growth of margin approximately expect outlook non-GAAP year of full We operating free XX%, FY XX%. 'XX. for margin a of total cash now revenue across XX% the

delivering we've to we over focused drive things To years, come. with operational model for the We've in exceptional and made X on demonstrated past profitable wrap up, the pleased remain we're progress efficiencies. to years growth leverage our

I'll Dave? With turn Q&A. for back it that, to Dave

Dave Gennarelli

[Operator Instructions] of we'll DiFucci question Guggenheim. John our first with that, take So with

John DiFucci

Thanks, everybody.

and we it the make the all you've job don't results guys want on don't it company. doing I to I bit. the laugh but quarter. results. to and listen, But We that's hope focused happened ago we -- to you good year laugh So like makes see like it nice what with is the things -- it cry. especially something a given on done a like little them things this, I like job, a in normally back are come guys a hear say look going But in say Brett field. not I good. how

to guidance people tell that the X about at your actually is one is going take for Dave you're But out -- I only I people there's affect XX many that of -- CRPO, again. that. don't to know results first look things not thing of and that your don't ever that companies so me X like

forward." to sue growth it companies explain you're think the at go you of indicator I And quarter, saying, pretty of it the they reconsider CRPO in that. and X don't be in to in single they other doesn't the either. that going I like, down why I So to only And that believe and of X to is X, are out every just in the the well, would There guys we're growth calls that those revenue much don't leading what is revenue." the but going going listen, over look X people "Oh, -- going "Hey, you next I year digits get on do work.

want because like -- here do don't I way. did little game. a I that does. job. really And bit sound I a do. to think So good one a know everybody But don't a don't of want business I you downer the to your really makes you And you run numbers I that, that think it's thing

that run it You way. shouldn't

Todd McKinnon

feedback, No, it's appreciate really good John. really feedback. I the

we term, There's think the new business, lots the we're really when things in the are going bullish and and guidance There's think there out enterprises is lots success and the the with products on. things opportunity right. I long of look look cohort. I going we going large think at super about where good of fastest-growing

of security we've there two positive security that. in terms we of to in in a up a think done some internally with quarter from work We've proactive next to of that really the to negative make and done incident. being about or have a or lot the lot customers, that work term sure a shore where I prudence and the take medium lap we

look I terms at conservative terms think in of in we're when to guidance. outlook, lapping going But you there that be our of

prudent a consistent there's seen second is And thing the challenges. in quarters the still and economy then just do. headwinds what that that's with still the is to think few there's we've is I thing past

to want raising guide. confident we more that we're stabilize that before So see with

John DiFucci

with you But all set at anyway, And guide a revenue think precedent. I'll... I Okay. CRPO. issues It's that because the no

Brett Tighe

I our back, debate. continued the understand. I forward No, do John. I appreciate look to

Dave Gennarelli

go Katari to Let's at Srina Baird.

Unknown Analyst

upsells. indirect this right, the Good still which kind more channel kind in is called to than on because but of new see contributing out business XX%. And of commentary the when impacting the you light partners of is the macro, your stable challenging, just and guys

the kind with curious Todd? in to Just of engaging deals say, GSIs, of place how kind relationship is mention what specific of initiates in of taking around be great. and how of like of insight you the about the lens right, And kind are the would those you place Any kind terms like number into you motion deals, just did can metrics, guys that those deal share GSI it, deepen sizes? cycle

Todd McKinnon

talked really are calls the the important in partner program. we've overall focus Partners about to the few last investments about the us. got We've and it on

Partner which Elevate they're on. about our making ago, that they ones quarters which have do and program of in a to equipped We channel sure last can we focus on making is post presales, servicing, few terms sure in and prioritizing -- partners our we're and end-to-end sales, all

really So the good. stats are on the partner overall

that, that we're about make We that. we have terms our of and think which is involvement their is happen. do hard warrants paper, of than We billing partners goes the better good. business to through We pushing in our on ecosystem XX% in think can

program, there's particularly out goes partnerships our security one ISV the where parts called particularly partner in. the ISVs, You ISVs, of of other

most our sourced of was ISV workforce quarter Fortune company important deal XXX this partner. a through that One and security deals transportation was

in this in. they're that identity that So us great go suite, brings there. zero a broad a That's to want deal partnership to trust. a plus and have saying, suite broad customer security wants I ISV we're

highlight We the about. that is we have But most about you excited can MSPs talk thing the GSIs. I'm

global really help they're momentum -- modernizing systems have it's technical we're with a customers' really infrastructure their story. and And to pivoting starting think strong I get identity seeing identity to better So the demand integrators.

you visions It's neutral stark see market. own And software and identity really we more quarters. working you buy I've and the high to the the see challenges and that think have They they excited everything progress priority make customer you're those then I a legacy have I'm that contrast. why GSIs quantitative share when companies you And progress them are platform see they platforms. like then around in. then several and are something see their Microsoft market, in pretty is on those And personally see you GSIs see their really the been it's what And into want that's from companies Okta -- look next that independent and locking stack. over a leading and on, on, to actually world,

Brett Tighe

entire would management offsite not to X of our it's Yes. team. couple would Todd that add those I just a A just good example working coming leadership actually it, on weeks be we the GSIs teams time of with align be spend obviously to partner say, us, is go to of better. where better have partners. real to this ago. able each hey, we can dedicated these X -- We how executive

And of, other the it's to do this, help both do that, to each you're deep and each make go trying other, in diving of really to tactical can how going going us okay, a money. through bunch so we we're

business. exists just across in the mean, we're Todd example about so but that that of the areas And was I that's -- GSIs, a giving talking for the lot

we're together that the serious and -- community we're investing this really together. and we're so forward just opportunity time about showing and the energy and partnering partner And diving driving deeper

Todd McKinnon

even hopefully, of lot on to the that about with And the and focus with work very read supporter call we Okta just partner and a stronger better the Okta that's notes folks I've and partner something on terms make know to community. Okta. make our picking Yes. of good on hear, to ability in continue better effectively even are I with to And the a the effectively sentiment of that ecosystem up

Dave Gennarelli

Jefferies. Baumann Anne [ ] have we up, from Next

Unknown Analyst

in to for on out? call as where any wanted quarter? the to lumen that And did your science this Joe in relates impact performance milestones journey call Gallo just you sales key to how I ask, it I'm today. are

Todd McKinnon

-- working we're think hard very I It's it's on still that. important.

productivity, means I it's go-to-market result say it's overall not better end that's from to to needs full sales that's I basically -- think we still in getting to it do productivity. marketing when sales could better, it's the -- where but And conversion really be. of still prosecution. which the sales really it's

we're I of like productivity think the turning in can levels right get still -- we're in direction, terms to the in still think but not better driving particularly efficiency also driving growth we I in And So it's business. we there. at and seeing overall of terms can the get

Brett Tighe

time Yes. the pipeline. the The participation is deals, by for track that long it that by a In one pipeline, tracked deals metric obviously a We field. the ] a on Siam and on we also have participation both as well. from workforce in [ closed

continues we've number into we trending. So to up we're the go about that see product quarters. talked track how something to by several for It's right. it

it Todd said, long to like we've it market. a be want be. execute been long implementing, can the you We the like to changes just feel short we've optimistic we're we despite massive us exactly could or from a these macro like the organized going very It's facing -- we're run market, headwinds help the in more But that enablement, the this in we perspective whether under that where we specialization, term. in that's way in farmer not and term. it's feel here better been that

Dave Gennarelli

Great.

Madeline Next have up, from we BofA. Brooks

Madeline Brooks

quick ones me. Great. Two for

the on not such rationalization workforce basic the I hearing about science security, more security, side, but we've big PAM AT&T first, as of notable I use [ ones enabled them having the side, just from Brett, Snowflake, been The news commentary. lot a rate. on like and understand breaches MFA guess in not pretty identity was your ]

little So rationalize like see companies I bit guess something workforce why spend. identity would to I'm a struggling

market rationalizing they're then or I and more you that. terms So just maybe also, a one more too, little us after could question just have bit give And mature the follow-up where more is if maybe of in saturated. color

Todd McKinnon

quick. could in jump real Brett, if I

when is about at think that's XX% them compromised of one interesting of really involved thing some identity, are of it. if First you that staggering overall all, which kind look is breaches, you

organization pretty a toward shore interesting. they're going to solving of company can is a very go which their identity all almost or if or way potentially security, long So up their breaches,

one of identity the modernizing upgrade. think past I the forklift is been things a that's that has been in challenge a

certainly a And think legacy too that the And it's organizations something the identity multifactor -- thing. easier over through. Okta for has made years still You true was on is adding modernize much like go to to to of technologies. I that had but whole authentication heavy lift with

of a And always -- return or have, these bit posture with have nothing the a is decision. to of management identity which risk-based we because basically, new bit governance so if happens, shorter things products the you the like kind identity little access security is a little or one ROI. -- to ROI Security challenging it's breach you like security sometimes it's is that is a justify is concrete to tricky the no time ROI, sometimes make have privileged

But for Posture these and products when security identity you your systems tells product, new vulnerabilities Security identity it you and providers. like, install multiple across stack Management, example, your this Identity

would time that the changed which even that's of to I security happening from quick identity-based one portfolio cycle. stacks think and risk breaches about upgrading And are the So -- like we've will have their it demonstration in drive the past our more very they in product growth, companies expect would. more to entire reduction the hasn't a buying security really and urgency, things and yet, the breaches more even seen though speed the you product seeing an more that's identity

Brett Tighe

I'm this you'd and reflected going we if stuff. upsell talking Right see current go higher, in that an of people, people's say, of let's another RPO, X, originally, to. XX% XX% rationalization more company had expectations go licenses. you're buy just XX% more all we're used So years that around like net What about X is on retention, aspirations ago, the do revenue, right? not And not And And good around hiring right? getting to now, They that hiring is upsell. really point.

they as So or they're buying yes, historically as much renewal. not they're done not declining, have mid-contract just but at

well. really we're user also what when side side the say identity I the on rationalizing licenses that's and And customer workforce saying side as so monthly active on on the the

macro are given too contractual the it bit much people feels at out a uncertainty that the cautious oriented economy. very agreements point out more So their getting with this and skis just there about over not little their

Todd McKinnon

of years more project going think data couple is we amounts. XX% ago, a XX%, to customer buy Yes, we'll grow this

XX%. grow Now it's -- we think it might

So we'll little those. XX%, if see we different it of see a and buy more bit if a need It's really and world. different grows X%

Madeline Brooks

all maybe right, the more one agree quick then And just positive federal. in as with really gears, one comments, it. I things to Got hear And kind we John's changing of channel.

I'm what this numbers outlook Is guess CRPO next which for I the federal more an normalized just of are that this federal kind what versus trying of of year. and those Was So outsized kind quarter. happened what pair more or to guide of quarter? business we've to seen previously? kind pointing

Brett Tighe

an outsized Federal more for not seen. normalized we've is thus impacting current RPO. like and definitely It's impact what

used But of factors be is one the others earlier, really to I companies, talk think macro, the in I talking bit, talked think Todd that's X RPO the not current average to which heavily. mind what thing when little with we not upsells on It RPO like I about. being guidance, much. there ultimately, with other we some think And pretty was license duration like but about weakness can inside fluctuate MAU think can there's is with count. count, they current that us, about a the very some the just just which keep about

about still it's of by be, incident. the New back to quantifiable then we performance logos as a by the believe Despite the We're is being And it incident. any component go challenging, that year. as we would in prudent the security we new has that impacted macro. found our second being been have the that have the like pressured half our haven't and we more customers although as security do not been through the the high net we better fact quarter, did still evidence impacted it's financials

Security hopefully, One largest today, you into because towards thing about was we're Identity the of becoming world's one we our high out ton what Okta a remains saw We're to world's most the to But us putting perspective. the We've updated investment talking the becoming the of top -- -- for right? about secure of over XX a done priority keep in of initiative. last earlier, a and from what progress Secure future. mind, an companies. a important we've very one lot goal as Commitment of Todd going days we then do view strategic as talked that resource into that made

Madeline Brooks

growth? drive To

Brett Tighe

of secure offset -- the Absolutely, one really we're That's an is obviously of there. identity. drive and growth, that obviously, security important, absolutely be identity -- company an companies as out most

we of So companies be secure the want there. one to one clearly most of world's most -- the

Dave Gennarelli

Okay.

Brian. Bedok on for I'm Let's at Charlotte go JPMorgan. to

Brett Tighe

running We are there. understand. guys you over Yes,

Unknown Analyst

forward? you guess, spoke enterprise. -- strength the know you're as towards speak market quarters SMB seeing I I in going questions. expectation what you Quick how about, about Can prior the

Brett Tighe

impacted I one. can SMB continues to be the take that by macro.

directly net at talk SMB you've guidance quarters, than for retention the the been have we here related SMB trend believe enterprise And embedded look enterprise as higher over the rate us below. and heard is is macro net overall has several in example, to last stronger. that the today. that's about is seen our you If and retention, we weaker, rate the

in stable our the same for and several stays all guidance, quarters been of now. to here is macro back macro embedded what today. it the believe environment, has the the over that's in the half, commentary We this continue We stays believe

Unknown Analyst

stay where it is? you the level like do to net retention And with that, much dollar expect pretty

Brett Tighe

of retention. reasons We Right expect a on now, really continue do call. decline not back factor times for rate on healthy. also to QX the this setup about first, remains there back most that And that where which cells The talked half, the the XXX%. on in are ticking the trend That on talked total. about the we've on let's and putting That's is retention. QX, the then little We XXX% it the macro and of net like important to is in do well, SMB couple start down see into reasons. with retention, net down see net pressure retention those a we some pressure we grocer

Dave Gennarelli

Van Joe to at Next, Drake let's ] go Scotiabank. [

Unknown Analyst

All for Colville. is right. Patrick Joe on This

reaching this the source congrats of to in new like expect continued to sales be and So it be a that GAAP fiscal declined profitability, looks going fiscal And Is marketing should forward the then we on in that quarter. normal 'XX? year? going and 'XX leverage

Brett Tighe

of the profitability, don't pleased to invest into So result GAAP like lower-cost be able GAAP to been doing overall it's first us Frankly, regions rationalizing question back over the the all last into people becoming the areas other several results very years around around profitability, but with work and rationalizing we've we're software allow security. we spend, guide costs, a moving profitable. GAAP real estate, to of

becomes a those one margins improve lot talk companies us one heard security most world's able there. these been out money We've about into secure to security of become great the You've while a putting security to of lot. also of

as X so way expectations don't the continue or go terms to to guidance, of we we have improve continuing I any And of are other forward, but terms GAAP in margins. in

FY see for increased can you 'XX. our guidance expectations we today, by As the

margin and In marketing sales also at but part a want doing now, the we improvements profitability able in GAAP responsible we've to be is look way to getting of of part has as to as definitely terms of for way. the drive we seen. percentage that be Right and yes, growth of to us created it leverage some invest as able revenue, a correctly to

profitable best as growth that driving can. we So

the and progress marketing and against the a for targets of pleased on So execute revenue, balance made we'll of with also and both we've sales margins as the year. percentage our

Todd McKinnon

that, Yes. add, our a think in then Rule planning of to way growth. the investment want XX. company we we -- I'll within and at we prioritize the assumptions it's target just plan of about and terms is it high level And

reigniting of One growth. top priorities our is

So important. that thinking dilution, about big that in invest driver between And how growth can reaccelerate difference in GAAP to that's that's a compensation and and of business. always we then framework we shareholder we're stock-based think and non-GAAP our about

end So is it's of framework the GAAP thing kind the on we're while over -- primary planning don't not we time. the result, profitability

Dave Gennarelli

Okay.

[ Let's at Belvi to ] Bernstein. Manraj go

Unknown Analyst

from This on is Bernstein. Manraj Weed Peter for

seems Firstly, grew congrats quarter. customer, that, and right? great challenging ARR the be to despite new it growing land on here. quick a wanted But And average it's macro. impute question growing a per and try that's

So just firstly, changing land ARR And follow-up the causing I of wanted a spear the is that one? number of land I question, what the expand, sir. to tip have kind to is understand, product or

Brett Tighe

Yes.

dynamics, you're doing. the In land run way math terms expand. here really I'm the of of But company the and we sure is the not what

first not strong customers the successful for years. in, we've company. making and driving the products licenses, we're them add the ultimately, then why they And land. We're we over as So time. that's had worried them the operate That's really, they value about really focused and such really on NRR add getting way over

And customers ultimately, get -- the So drive customers goal our on doing. I long-term they the success to is them. other ultimately, us. as can't will comment one your for become math for But many way or you're

Todd McKinnon

just think future. service. terms ones been those of XX% of the there because of very part scratching just -- we some budgets. enterprise be, It's have The you potential what -- XXXX in has kind of is could with you encouraging. IT things how a insight may But And give the the to it's somewhere large bigger is they're than organization. purchased of give organizations the SMB our Global more big other success big just Just they Okta the the to some big now internally. on about

mentioned Fortune within had I other a So we that them XX,XXX product. selling the could materially bigger capabilities the employees with them win the and identity quarter of customer transportation get in deal selling at XXX company

big. much accounts land true we those can enterprise, can getting So upsell say we I have as the be sell even so in big that and deals would on things overall potential X be; could large opportunity because more is to bigger

Unknown Analyst

And about right, see a CRPO one, trough CRPO, acceleration quick of as we acceleration people to when that yet we probably see before. can well? RPO it. this recently, in of Got in saw sort asked But

Brett Tighe

acceleration, RPO of above the right? current RPO. has the buy growth usually what excited talking We're been and little about, which we're they're strategic deals term really the term back the is longer And of they because longer from And enterprise the for with the total it duration mean that's contract we've a typically, growth seen RPO large I primarily on SMBs, of than below longer to about and current shorter. go organizations. which doing Todd

the overall the so effect in And numbers. see do you total RPO

Global greater You a XX% can see the of XX% about in it X the we of Global from Global earlier about talked now the ago. We're than XK than That's XK. less the numbers XK. up years

inside all opportunity. cases And identity a that more lot like the XX% alone Global saying, that Todd There's as use those right have in more let of solve to of we and lot a XK. those lot a deals was don't we now. of There's accounts, room run other starter are

a pleased it the we're in of getting the a here of trend duration perspective. a quarter contract And This in duration. outcomes contract from terms is seen third And you longer. the see total good we've with a the little in RPO bit so results row,

Unknown Analyst

up. average total in changing contract the So

Dave Gennarelli

Mark James. Raymond Go at to ] Cash [

Unknown Analyst

on Yes. This is Adam. Mark for

organizations plays Todd, you across for So you intact? Or some with outage, about consolidating platform equity while consolidation And concern do IT concerns been opportunity may demand considering identity do [indiscernible] now still you've into fully Okta's talking workforce, customer now. space? this the view the a have in potential think crossout

Todd McKinnon

Yes.

thousands talk stack. about a I has they know I across that question customers, they're they entire thousands dozen a even dose when it's really think miners. I to thinking their because good have company think and medium vendors I small mean a technology of

of can't So go they they down cetera, far would also lack some into dimension. choice, want lock-in -- that standardize too the because in et cetera. -- they to too And vendors that they on some know also few but areas know leave et they

making revenue, integration identity It costs, right the outcomes. increases et So It that identity, it et stack. decreases is you dimensions improves is of case across gives good we're security X cetera, that the cetera. your and

And with risk to the backup the and what and plans comes the reliability are on scores factor and our think associated that put record think the are how together a over of fallbacks how scores and history about. it on well demonstrated the how well And there. are the you sickle reliability the years. Okta is down that. the thing I people I think architected vendor products that how

sure reliability can be on sure we defined CIOs you we that's we're that and And rate these I to and and and trust CSOs investments to all in think say on on and asked regard our we're reliability, world-class on robustness both. the focused our security making answer making that to want that industry security. industry-leading we truly confidently that if put and why on Okta all-things XX our maintaining and

Dave Gennarelli

let's go Trevor up, Rambo ]X to Next BTIG. [ of

Unknown Analyst

Powell This is Trevor Gray of on BTIG. for

back X,XXX sales been switching help PAM the center train target access reps idea trying you your customers, is buying PAM parse OIG often So than out product? different would now products. versus up potential ramp to at Because management. guys OIG. the to great. core guys on maybe doing the What in thinking I about which said know have I'm you your the know is I just

color have for maybe initial some is color ITDR be on maybe on -- helpful. is also as demand more So going would how some more well how going and some PAM

Todd McKinnon

-- seems OIG how to out it PAM, a be is little playing different. On to similar

for and to is of take thing a So I don't OIG in team how how was taking OIG sales it enablement the out like very think in up. to salespeople very and up playing the market. take natural adjacent the exactly terms it's

when me it our long I we it of ago, selling as not of been was And authentication. And Okta. might time you of think first. PAM some offering. really we it years many a ago didn't so remember, started reminds more first part have introduced we Multi-factor authentication, multi-factor it's first security true

go the really that did sense like started way to a solution. try multifactor say and multifactor which the to it security they thing. directory. full It going the we're going And it We're was they as sell is like to selling sales you going user We're identity out sell bundle independent going whole capability, we're was makes or team it to the there and an a a -- the plus management to sell sell sold multifactor it, authentication.

way. So I the same out playing PAM see

transportation was this -- XXXX deal I Fortune a If with this a quarter, this mentioned it. that had you or XXX Global this in look at company, deal PAM

an workforce authentication. customer, So both and exciting [ it lot it was was it. fast included it It's through a a and silo a PAM new customer new of single the was ISV ISV OIG from and pass it and sourced -- and an things core ] about multi-factor

So things list a compelling PAM that's is as in Gartner to that we're a that and of for to rep part sales about down solution. complete us because the solution newer of the team because pretty going say, harder differentiated which where we're it it's sold PAM entrant as go

your hey, with better It's we management, it's we integrated it's integrated here's cetera. platform right you core have when much love, to it's much so much access governance, better the say, why that et with -- a win

out workforce of It's as playing from both is compellingly just market the suite it pure a the We're size making compelling differentiation differentiated. a see the ARR, way. optimistic it. same in I whole So about more also even very but

Unknown Analyst

Anything ITDR? Awesome. Thank the on else you.

Todd McKinnon

Yes.

for response I term this it's excited and threat we're think of security in our Z [ It from as about. is it's product identity -- Networks. it And entire identity think integrations, Alto Palo ITP. to ITDR, call like but there at not is it product threats detection the it protection, is industry to -- CrowdStrike, It's XX. -- very has we it. advanced continuously it's And It like deep Scaler ] just detects logging. times multi-factor Netskope authentication, after work integrations ecosystem doesn't login. threat with the

in So your way, your you're and on you working log on apps.

already detects And malware log all in, your Even CrowdStrike or you even detects you'd you that apps. log out if actually Alto an that signal to Palo you our in. product of logged and get -- about you weren't issue, if

during the session, a So like session, which kills very it powerful. is

say, I it's adjacency it's natural from And would there. upsell the very so very multifactor -- advanced this like next authentication is, and a to

getting of are Now too to think authentication I reality just world biometric many the and multifactor companies authenticator. resistant that is the fishing

security exciting be product But just of that there's threat most if to of impedes well-known think the I of of things some QX organizations. production the wins would companies. that going something maturity be the for is So in that ramp the one identity were that it

and the So they're most the security product that like I they companies because production about mean, security, buying enhanced well-known be they it so to advanced are were provides. going excited

Dave Gennarelli

Wilcox ] Cleveland. to go We'll Brian [ at

Unknown Analyst

had to year gives on from confidence not where Ben not security macro. and mentioned them Brian you for logos, that attributable largely the that's pressuring it's last exactly What you macro today. logos? it's And Thanks. for you the like to the incident Bollin the be Brett, and maybe new would new

Brett Tighe

with look said math associated Thank anything quantifiable indicators, the can't for security in we quarters. the see associated with question, last key all that and X Brian. we at the you the We've Look, a for the note incident.

all us, about to show all indicators at And upsells. different for that the look talked bunch look look create. at at does than macro We we a mean macro. math, pipe so there's all at rather incident. And look a few We've of security rates, point win -- it it points I We of to look lot there's that. we frankly, at quant, the things. the a

already an we something new talked we're quarters, a that very obviously that's this. here keeping XXX the quarter. than find will that the why a the guys. X several said, quarters. macro we facing about and quarters to new now environment, does logo talked to run a But that we've can been pop And all the it that we those close that about talked But for seem about new better today, it's way X accretive X we've products are hunter-farmer growth faster it's areas do in And with with grow whether you these if already, growth can't definitely in we of initiatives, improvement. field believe believe specialization long-term to in than side net we all partner you with we're Obviously, the want it We from up, on perspective. there's of model do now. eye yes, mean, Now main we inform And for it. yes, much challenging I we that be

Unknown Analyst

Great. could. follow-up, I One if

expanding, price? many seats on Just -- customers looks ability the the the like back what customers headwinds take not out with renewals and can back of from kind you hiring Are environment you on many to pushing price like as or the if on as pricing comment much -- adding as increases?

Brett Tighe

environment really The on side. changed hasn't pricing either

the So about identity from talking that we've real and in been counts headwind license side. both workforce customer is the

Dave Gennarelli

[ more have We from RBC. Richards Michael question at one ]

Unknown Analyst

for Hedberg. Maybe Matt hunter-farmer to back going On the model.

different business will to of Just than segments to is in of curious trended move other on expectations? your how this any And that's the relative the that expectation there customer terms parts SMB?

Brett Tighe

know, little the we're a getting is, stuff. new I mean, and you first only Yes. X quarter first that there's new territories of I as And now, quarters of all in. lot in right the teams with too quarter early a mean everybody to change tell. patches and it's guys sort and

couple has of a even help a little the less been we operating. believe been will really something been specialization really it in is how about only that long has term. than are under it's and But modeling optimistic functionally quarters So the probably us. that We farmer

we products successful quarters point. heard it's of through is and long-term those base is we take important, it's been, customer how call, over get Yes, another of right? believe how our year new that the but and it's as have. about many couple going length I at have realize drivers this growth one you mean big on of how just the information XX,XXX. specialization We Also, talk this think we we'll more of to we

Dave Gennarelli

Well, don't any Great. hands more see I raised.

also conference addition you before we'll bus just in want this hosting the Nashville the Citi XX mentioned, course, on-site October to got quarter, we've XX. in virtual Piper on JPMorgan be Conference the New So and San in as Conference I in Todd the to X, September Sachs Francisco know XX, form go, September X. on Conference October September to of York Vegas, And that, let Las the on XX, attending software Goldman in Napa with tours you that in several on Oktane

everyone. So of events. we hope Thanks, to see one those you at

Todd McKinnon

everyone. Thanks,

Okta (OKTA) 28 Aug 242025 Q2 Earnings call transcript