Q2 2024 Okta Inc Earnings Call

Speaker 1: employees and partners to seamlessly access company apps and systems while bolstering its security posture and improving compliance.

Closely access as company apps and systems, while bolstering its security posture and improving compliance.

Speaker 1: A global 100 consumer packaged goods company was an exciting new Okta customer identity cloud win. The company sought a flexible, developer-friendly solution that would help improve the experience of their digital customers. The company will be deploying Okta across multiple customer-facing web, mobile, and IoT applications, as well as across different brands. This is a great beginning with a customer that will have massive expansion opportunities over time.

Our global 100 consumer packaged goods company was an exciting new okta customer identity cloud when the company sort of flexible developer friendly solution that would help improve the experience of their digital customers. The company will be deploying okta across multiple customer facing web MAU.

<unk> and Iot applications as well as across different brands. This is a great beginning with a customer that will have massive expansion opportunities over time.

Speaker 1: Rider Truck Rentals was an exciting upsell. Rider has been leveraging Okta Workforce Identity Cloud, including Okta Customer Identity Solution, since 2019 to secure access for its employees and business partners. This quarter, Rider selected Okta Identity Governance to replace its legacy provider for identity governance, access request flows, and access certification.

Ryder truck rentals was an exciting upsell rider has been leveraging okta workforce at any cloud, including okta customer identity solution since 2019 to secure access for its employees and business partners. This quarter Ryder selected okta identity governance to replace its legacy provider for identity governance.

<unk> access request flows and access certifications.

Speaker 1: OIG was deployed in just weeks, and with the power of workflows, Rider will significantly improve the onboarding experience for new employees while reducing costs.

G was deployed in just weeks and with the power of workflows Ryder will significantly improve the onboarding experience for new employees, while reducing costs and.

Speaker 1: And here is an example of landing a new customer with OIG as the lead product. A leading global provider of customer experience solutions selected OIG for its extensibility and value. OIG will enable the company to streamline lifecycle management, ensure employees have the right level of access to their resources, and leverage the power of Okta's Workflows platform to customize complex identity governance requirements.

And here is an example of landing a new customer with O. I G is the lead product a leading global provider of customer experience solutions selected <unk> for its extensibility and value LNG will enable the company to streamline lifecycle management ensure employees have the right level of access to their resources and lever.

The power of Okta workflows platform to customize complex identity governance requirements and all we added 350, new customers in the quarter, bringing our total customer base to over 18400, representing growth of 12% new customer growth is an area that we believe is being impacted by the macro environment.

Speaker 1: In all, we added 350 new customers in the quarter, bringing our total customer base to over 18,400, representing growth of 12%. New customer growth is an area that we believe is being impacted by the macro environment, which results in a sales environment that is more conducive to expanding existing customer relations.

Which results in a sales environment that is more conducive to expanding existing customer relationships.

Speaker 1: The net customer ad also reflects increasing strength with larger organizations and public sector agencies.

The net customer adds also reflects increasing strength with larger organizations and public sector agencies.

Speaker 1: We continue to see strong growth with large customers for both workforce and customer identity. And we are proud to work with some of the most important organizations in the world, such as ADT, Mars, and General Services Administration. In Q2, we added 125 customers with $100,000 plus annual contract value or ACV. Our total base of $100,000 plus ACV customers now stands at over 4,200 and grew 19%.

We continue to see strong growth with large customers for both workforce and customer identity and we are proud to work with some of the most important organizations in the world such as ADT Mars and General Services Administration in Q2, we added 125 customers with $100000 plus annual contract value or <unk>.

Our total base of $100000 plus ACB customers now stands at over 4200 and grew 19% similar to last quarter, our fastest growing cohort was customers with $1 million plus ACD. In fact, we had a record number of $5 million plus total contract value.

Speaker 1: Similar to last quarter, our fastest growing cohort with customers with $1 million plus ACV. In fact, we had a record number of $5 million plus total contract value deals. And when you look at the total contract value of the top 25 deals in the quarter, the aggregate value was over $100 million.

And when you look at the total contract value of the top 25 deals in the quarter the aggregate value was over $100 million.

Speaker 1: Large organizations have incredibly complex environments that require greater flexibility. Yesterday we announced Okta for Global 2000.

Large organizations have incredibly complex environments that require greater flexibility yesterday, we announced okta for global 2000, which is the industry's first identity architecture that gives companies the flexibility to choose which business units processes and technologies to run centrally and which to decentralize flexibility.

Speaker 1: which is the industry's first identity architecture that gives companies the flexibility to choose which business units, processes, and technologies to run centrally and which to decentralize.

Speaker 1: Flexibility was built into Okta's core architecture from the beginning. Okta for Global 2000 makes it even more flexible with enhanced security controls and ease of use. It's a very powerful competitive differentiator against monolithic platforms that force companies to work only with their technology staff.

It was built into August core architecture from the beginning okta for global 2000, and makes it even more flexible with enhanced security controls and ease of use it as a very powerful competitive differentiator against mono with it platforms that force companies to work only with their technology stack. This solution has already been a critical component of large new and upsell.

Speaker 1: This solution has already been a critical component of large, new, and upsell transactions.

<unk> a great example of this is a longtime okta customer NTT data their hub and spoke deployment includes one central engine as the hub that powers, the various okta organizations and NTT Data's identity ecosystem Okta for global 2000 provides NTT data with the ability it needs to manage.

Speaker 1: A great example of this is a long time Okta customer NTT Data. Their hub and spoke deployment includes one central engine as the hub that powers the various Okta organizations in NTT Data's identity ecosystem.

Speaker 1: OctaForGlobal2000 provides NTT data with the ability it needs to manage a distributed set of users with separate domains and IT environments. Product innovation is long been core to OctaSuccess. And this is a BAM-

Distributed set of users with separate domains of 19 environments product innovation has long been core to okta success and this is a banner year for new products. We continue to be enthusiastic about the early customer reception and momentum of okta identity governance, we've been pleasantly surprised at both the size of the organizations purchasing OAG.

Speaker 1: We continue to be enthusiastic about the early customer reception and momentum of Okta Identity Governance.

Speaker 1: We've been pleasantly surprised at both the size of the organizations purchasing OIG, as well as the range of scenarios that OIG is brought on for.

As well as the range of scenarios that <unk> has brought on four from replacing homegrown solutions and competitive displacements to being deployed alongside an existing identity governance vendor, it's particularly encouraging to see that nearly half of the allergy business booked in Q2 came from customers that hadn't previously purchased okta lifecycle management.

Speaker 1: from replacing homegrown solutions and competitive displacements to being deployed alongside an existing identity governance vendor. It's particularly encouraging to see that nearly half of the OIG business booked in Q2 came from customers that hadn't previously purchased Okta Lifecycle Management or workflows, which were the building blocks of OIG. And we continued to see significant spend uplift with customers buying OIG.

Our workflows, which where the building blocks of AIG and we continued to see significant spend uplift with customers buying AIG as its typically a third or more of their total workforce identity cloud spend another notable <unk> customer win was with Grubhub a longtime workforce at any customer they added.

Speaker 1: as it's typically a third or more of their total workforce identity cloud spend. Another notable OIG customer win was with Grubhub, a longtime workforce identity customer.

Speaker 1: They added both Okta identity governance and advanced server access to their product suite to reduce manual upkeep and bolster security of servers and on-premise applications.

The okta identity governance, and advanced server access to their product suite to reduce manual upkeep and bolster security of servers and on premise applications. We also continue to look forward to the launch of okta privilege access or L. P. A later this year since our update on the Q1 earnings call Opa has moved from Bay.

Speaker 1: We also continue to look forward to the launch of Okta Privileged Access, or OPA, later this year. Since our update on the Q1 earnings call, OPA has moved from beta into early access.

Ada into early access.

Speaker 1: Octa Device Access is another product in Early Access that we're excited about.

Okta device access is another product in early access that we're excited about.

This extends okta seamless authentication experience to protect the first vulnerable user touch point the device logging. According to the 2022 Verizon data breach investigation report among security incidents associated with misplaced or stolen devices, 60%, our desktop or laptop computers. These device.

Speaker 1: This extends Okta's seamless authentication experience to protect the first vulnerable user touch...

Speaker 1: the device login. According to the 2022 Verizon Data Breach Investigation Report, among security incidents associated with misplaced or stolen devices, 60% are desktop or laptop computers. These devices remain the last frontier where access to corporate resources are protected by just the password. This means that sensitive information such as locally stored documents and logged in applications are at risk.

Does remain the last frontier, where access to corporate resources are protected by just a password. This means that sensitive information such as locally stored documents and logged in applications are at risk Okta device access enables identity powered MFA immediately when the device is powered up and when attempts are made to unlock the device.

Speaker 1: OctaDevice Access enables identity-powered MFA immediately when the device is powered up and when attempts are made to unlock the device.

Speaker 1: This has been one of the most highly requested capabilities by our customers in the last year. This is also timely as just last month, the White House held an MFA modernization event. Organizations desire this technology as an added layer of security, which, as an extra benefit, may help reduce their insurance risk premiums.

This has been one of the most highly requested capabilities by our customers in the last year.

This is also timely it's just last month, the White house held in MFA modernization event organizations desire of this technology as an added layer of security, which is an extra benefit may help reduce their insurance risk premiums.

Speaker 1: I mentioned NTT earlier as part of Okta for Global 2000, and I'm excited that they're also an early adopter of Okta Device Access as they continue to build upon their Zero Trust Security Strategy.

I mentioned NTT earlier as part of Okta for global 2000, and I'm excited that Theyre also an early adopter of okta device axis as they continue to build upon their zero Trust security strategy, we'll talk more about our products and our roadmap at octane, which we're hosting in San Francisco. The first week of October at the event will go into more detail about what we're working.

Speaker 1: We'll talk more about our products and our roadmap at Octane, which we're hosting in San Francisco the first week of October . At the event, we'll go into more detail about what we're working on in the biggest area of technology interest in decades, AI.

On and the biggest area of technology interest in decades.

AI is a paradigm shift in technology that is transformative opportunities for identity from stronger security and faster application development to better user experiences and more productive employees Act has been utilizing a after years with machine learning models for spotting attack patterns and defending customers against threats and we'll have more exciting AI news to share at all.

Speaker 1: AI is a paradigm shift in technology that has transformative opportunities for identity, from stronger security and faster application development, to better user experiences and more productive employees. Okta has been utilizing AI for years with machine learning models for spotting attack patterns and defending customers against threats. And we'll have more exciting AI news to share at Octane.

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Speaker 1: Just like how every company has to be a technology company, I believe every company must have an AI strategy. More companies will be founded on AI. More applications will be developed with AI, and more identities will need to be protected with a modern identity solution like,

Just like how every company has to be a technology company I believe every company must have an AI strategy more companies will be founded I E. More applications will be developed with AI and more identities will need to be protected with a modern identity solution like okta.

Speaker 1: A great example of this is how Okta's customer identity cloud is being utilized for the massive number of daily logins and authentications by OpenAI, which expanded its partnership with Okta again in Q2. And finally, I want to share some bittersweet news. My dear friend and co-founder Frederick Karas will continue to serve as vice chairman of Okta's board of directors but will not be returning to Okta in an operational capacity.

A great example of this is how octopus customer identity cloud is being utilized for the massive number of daily logins and Authentications by open AI, which expanded its partnership with Okta again in Q2.

And finally I want to share some bittersweet news my Dear friend and co founder Fred occurs we will continue to serve as vice chairman of <unk> Board of directors that will not be returning to okta and an operational capacity.

Speaker 1: His contributions to Okta cannot be overstated. Of course, we'll remain highly connected, and I'll continue to work closely with Freddie as he provides guidance and helps formulate our strategy from his board seat and remains committed to helping Okta achieve our long-term goals. We're all very happy for him and forever grateful for what he's done for Okta. I look forward to my continued partnership with Freddie in the years ahead. I look forward to working with Freddie to help him achieve his goals. I look forward to working with Freddie

His contributions to okta cannot be overstated of course will remain highly connected and I'll continue to work closely with Freddie as he provides guidance and helps formulate our strategy from his board seat and remains committed to helping <unk> to achieve our long term goals. We're all very happy for him and forever grateful for what he's done for Okta I look forward to my continued partnership with Freddie in the years ahead.

To wrap things up we're pleased with our overall performance in Q2 and the advancements we made in execution and efficiency. It's always a good reminder, that identity is a key building block for Zero Trust security digital transformation cloud adoption projects and now AI. These trends will continue in any macroeconomic environment as organizations look for.

Speaker 1: To wrap things up, we're pleased with our overall performance in Q2 and the advancements we made in execution and efficiency. It's always a good reminder that identity is a key building block for Zero Trust security, digital transformation, cloud adoption projects, and now AI.

Speaker 1: These trends will continue in any macroeconomic environment as organizations look for ways to become more efficient while strengthening their security posture. We're still very early in what we believe is a massive addressable market, and we're positioned to expand on our success because of Okta's independence, neutrality, and ability to deliver a unified platform covering customer identity, access management, governance, and privilege access.

Ways to become more efficient while strengthening their security posture.

Still very early in what we believe is a massive addressable market and we're positioned to expand on our success because of okta as independence neutrality and ability to deliver a unified platform covering customer identity access management governance and privilege access all while committing to delivering profitable growth over the long term.

Speaker 1: all while committing to delivering profitable growth over the long term. Now here's Brett to walk you through more of the Q2 financial results and are out.

<unk> now here's Brett to walk you through more of the Q2 financial results and our outlook.

Speaker 2: Thanks, Todd, and thank you everyone for joining us today. We're pleased with how quickly the actions we've taken to drive efficiency in our cost structure have taken root.

And thank you everyone for joining us today, we're pleased with how quickly the actions we've taken to drive efficiency in our cost structure if taken root.

Speaker 2: As Todd noted, we're achieving these results while investing in our platform and business to fuel our future growth. I'll review our second quarter results and our outlook for Q3 and FY24. But first, I'll start with some commentary on the macro and...

As Todd noted we are achieving these results while investing in our platform and business to fuel our future growth I'll review, our second quarter results and our outlook for Q3, and FY 'twenty four but first I'll start with some commentary on the macro environment.

Speaker 2: While macro headwinds, including a minor FX headwind to revenue, continue to impact our business, we believe the environment stabilized in Q2. Our view is based upon trend stabilizing or modest sequential improvements in contract duration, average deal size, the split between new business versus upsells, and seed expansion within upsells and renewals.

While macro headwinds, including a minor FX headwind to revenue continued to impact our business. We believe the environment stabilized in Q2, our view is based upon trend stabilizing or modest sequential improvements in contract duration average deal size the split between new business versus Upsells and seat expansion within Upsells and renewals.

Pipeline build was also healthy, but new pipeline continues to be skewed towards Upsells. We also experienced further improvement in metrics related to our go to market team, including average tenure ramp in the number of sales reps closing workforce identity and customer identity deals. While these are all encouraging data points. We believe it's prudent to maintain a cautious near term outlook.

Speaker 2: Pipeline build was also healthy, but new pipeline continues to be skewed towards up

Speaker 2: We also experienced further improvement in metrics related to our go-to-market team, including average tenure, ramp, and the number of sales reps closing workforce identity and customer identity deals.

Speaker 2: While these are all encouraging data points, we believe it's prudent to maintain a cautious near-term outlook. Turning to Q2 results. Total revenue growth for the second quarter was 23%. Driven by a 24% increase in subscription revenue. Subscription revenue represented 97% of our total revenue. International revenue grew 18% and represented 21% of our total revenue.

Turning to Q2 results total revenue growth for the second quarter was 23% driven by a 24% increase in subscription revenue subscription revenue represented 97% of our total revenue International revenue grew 18% and represented 21% of our total revenue looking at the ACB split between workforce identity and customer.

Speaker 2: Looking at the ACV split between workforce identity and customer identity. Workforce ACV grew 22% and represented 61% of total ACV. Customer identity ACV grew 29% and represented 39% of total ACV. Over the long term we expect the mix to trend towards 50-50 with healthy growth in both.

Identity workforce ACD grew 22% and represented 61% of total HCV customer identity HEV grew 29% and represented 39% of total HCV over the long term, we expect the mix to trend towards 50 50 with healthy growth in both.

R P O or subscription backlog grew 8% the general shortening of contract term lengths signed over the past several quarters has impacted total ARPA growth.

Speaker 2: RPO or subscription backlog grew 8%. The general shortening of contract term links signed over the past several quarters has impacted total RPO.

Speaker 2: However, in Q2, we are pleased to see a modest sequential increase in contract term limits.

However in Q2, we were pleased to see a modest sequential increase in contract term links.

Speaker 2: overall average term length remains just over two and a half years.

Our overall average term length remains just over two and a half years.

Speaker 2: Kern RPO, which represents subscription backlog we expect to recognize as revenue over the next 12 months grew 18% to $1.77 billion.

Current IPO, which represents subscription backlog, we expect to recognize as revenue over the next 12 months grew 18% to $1 $77 billion.

Speaker 2: Turning to retention. Consisting with prior quarters, gross retention rates remained strong in the mid 90% range. Our dollar-based net retention rate for the trailing 12-month period remained strong at 115% and was driven by both upsell and cross-sell activity. Similar to last quarter, the sequential downtick in the net retention rate was a result of the macro environment where customers are not expanding seats at the rate they have in recent years. We believe this trend will persist in this environment.

Turning to retention consistent with prior quarters gross retention rates remained strong in the mid 90% range. Our dollar based net retention rate for the trailing 12 month period remains strong at 115% and was driven by both upsell and cross sell activity similar to last quarter. The sequential downtick in the net retention rate was a result.

Of the macro environment, where customers are not expanding seats at the rate. They have in recent years. We believe this trend will persist in this environment.

Speaker 2: I'll reiterate that the net retention rate may fluctuate from quarter to quarter as the mix of new business, renewals, and upsells fluctuates. As I've noted previously, we've experienced a macro-related shift in our business mix to more upsell and cross-sell versus new business.

I'll reiterate that the net retention rate may fluctuate from quarter to quarter as the mix of new business renewals and Upsells fluctuate as I've noted previously we've experienced a macro related shift in our business mix to more upsell and cross sell versus new business.

Before turning to expense items and profitability I point out that I'll be discussing non-GAAP results unless otherwise noted.

Speaker 2: Before turning to expense items and profitability, I'll point out that I'll be discussing non-GAAP results unless otherwise noted.

Looking at operating expenses total operating expenses for the quarter were lower than expected the better than expected profitability is primarily due to revenue over performance and our continued focus on spend efficiency measures total head count at the end of Q2 increased slightly to approximately 5800.

Speaker 2: Total operating expenses for the quarter were lower than expected. The better than expected profitability is primarily due to revenue over performance and our continued focus on spend efficiency measures.

Speaker 2: Total headcount at the end of Q2 increased slightly to approximately 5,800.

Speaker 2: Q2 Free Cash Flow was $49 million, yielding a free cash flow margin of 9%. Free cash flow was significantly better than expected, driven by billings and strong collections.

Q2 free cash flow was $49 million, yielding a free cash flow margin of 9% free cash flow was significantly better than expected driven by billings and strong collections. During the second quarter, we opportunistically repurchased $142 million of our 2025 convertible debt notes and 242 million.

Speaker 2: During the second quarter, we opportunistically repurchased $142 million of our 2025 convertible debt notes and $242 million of our 2026 convertible debt notes. This resulted in a $42 million gap-only gain. Over the past two quarters, we have repurchased $750 million of debt resulting in a $73 million gap-only gain. We will continue to regularly evaluate our capital structure and capital allocation priorities.

Of our 2026 convertible debt notes. This resulted in a $42 million GAAP only gain over the past two quarters, we've repurchased $750 million of debt, resulting in a $73 million GAAP only game, we will continue to regularly evaluate our capital structure and capital allocation priorities.

Speaker 2: Our balance sheet remains strong, anchored by $2.11 billion in cash, cash equivalents, and short-term investments.

Our balance sheet remained strong anchored by $2 $1 billion in cash cash equivalents and short term investments.

Speaker 2: Now let's turn to our business outlook for Q3 and FY24, which factors in the current state of the macroeconomic environment. As a reminder, we've taken several actions to reduce our cost structure and increase our efficiency as an organization, which will benefit margins this year and beyond.

Now, let's turn to our business outlook for Q3, and FY 'twenty, four which factors in the current state of the macroeconomic environment. As a reminder, we've taken several actions to reduce our cost structure and increase our efficiency as an organization, which will benefit margins this year and beyond.

Speaker 2: With that as a backdrop for the third quarter of fiscal year 24, we expect total revenue of $558 million to $560 million, representing growth of 16%. Current RPO of $1.780 billion to $1.785 billion, representing growth of 13%. non-GAAP operating income of $53 million to $55 million, and non-GAAP diluted net income per share of $0.29 to $0.30, assuming diluted weighted average shares outstanding of $180 million.

With that as a backdrop for the third quarter of fiscal year 'twenty. Four we expect total revenue of $558 million to $560 million representing growth of 16% current RP of 1.780 billion to $1 785 billion representing growth of 13% non-GAAP operating income of 53.

<unk> million dollars to $55 million and non-GAAP diluted net income per share of 29 to 30 <unk>.

Assuming diluted weighted average shares outstanding of $180 million for FY 'twenty four we are raising our revenue outlook by $30 million at the high end of the range. We now expect $2.207 billion to $2 $215 billion representing growth of 19%.

Speaker 2: For FY24, we are raising our revenue outlook by $30 million at the high end of the range.

Speaker 2: We now expect $2.207 billion to $2.215 billion, representing growth of 19.000.

Speaker 2: We are raising our outlook for non-GAAP operating income by $50 million to $215 million to $220 million, which yields a non-GAAP operating margin of 10%.

We are raising our outlook for non-GAAP operating income by $50 million to $215 million to $220 million, which yield a non-GAAP operating margin of 10%.

Speaker 2: Non-gap diluted net income per share is raised to $1.17 to $1.20, assuming diluted weighted average shares outstanding of $179 million.

non-GAAP diluted net income per share is raised to $1 17 to $1 20, assuming diluted weighted average shares outstanding of $179 million.

Speaker 2: And we are raising our free cash flow margin outlook for FY 24 to 15% from 12% previously. On a dollar basis, that's a raise of approximately $70 million.

And we are raising our free cash flow margin outlook for FY 'twenty, 4% to 15% from 12% previously on a dollar basis, that's a raise of approximately $70 million.

Lastly, I want to provide a few comments to help with modeling okta, we are applying a static 26% non-GAAP effective tax rate for the fiscal year, we expect free cash flow margin in the low double digits in Q3 and to continue to grow into the mid teens in Q4.

Speaker 2: Lastly, I want to provide a few comments to help with modeling OCTA. We are applying a static 26% non-gap effective tax rate for the fiscal year. We expect free cash flow margin in the low double digits in Q3 and to continue to grow into the midteens in Q4.

Speaker 2: To wrap things up, we're optimistic going into the second half of the fiscal year. While the pressures of the macro environment remain, we are confident that we've set the path of profitable growth for years to come. We continue to focus on initiatives to drive the top line while making significant progress to drive improvements to our operating and cash flow margins.

To wrap things up we're optimistic going into the second half of the fiscal year, while the pressures of the macro environment remain we are confident that we have set the path of profitable growth for years to come we continue to focus on initiatives to drive the top line, while making significant progress to drive improvements to our operating and cash flow margins.

Speaker 2: And finally, we're excited to see everyone at Octane. In addition to all the great things we'll be talking about on the product side, we'll be hosting an executive panel session for analysts and investors with Todd, myself, and Eugenio Pace, our president of business operations. With that, I'll turn it back over to Dave for Q&A. Dave?

And finally, we're excited to see everyone at octane. In addition to all the great things, we will be talking about on the product side, we'll be hosting an executive panel session for analysts and investors with Todd myself and your hernia pace, our president of business operations with that ill turn it back over to Dave for Q&A Dave.

Speaker 2: Thanks, Brett. I see that there's quite a few hands raised already, and I'll take them in order. And in the interest of time, please let me limit yourself to one question so that we can get to everyone. And then you're welcome to queue back up with additional questions. So first up, we'll go to Rob Owens at Piper. Great, Dave. Thanks.

Thanks, Brett I see that there's quite a few hands raised already and I'll take them in order and in the interest of time. Please limit yourself to one question. So that we can get to everyone and then youre welcome to queue back up with additional questions. So first up we will go to Rob Owens at Piper.

Great Dave. Thank you and good afternoon, guys I was hoping you could talk a little bit or unpack for us The guide and just the sequential change when you're talking about the macro you're you mentioned stability, but still having a level of conservatism and so as we see this stability can you help explain just the sequential in the guide and.

Speaker 3: Was hoping you could talk a little bit or unpack for us the guide and just the sequential change. When you're talking about the macro, you mentioned stability.

Speaker 3: but still having a level of conservatism. And so as we see this stability, A, can you help explain just be sequential in the guide?

Speaker 3: and B, maybe speak to some of the metrics relative to customer count, large customer metrics. You'll win those in turn in the corner. Network tension rates, CRPO as well.

Be it maybe speak to some of the metrics relative to come.

Customer count large customer metrics, you know when those should turn the corner net retention rates CR P O as well thanks.

Speaker 1: Hey, Rob, we're really happy with the results in the quarter, particularly a couple of the things you mentioned, the large customer momentum. We had the top 25 deals were over a hundred million dollars of PCV in the quarter, which is...

Hey, Rob we're really happy with the results in the quarter, particularly a couple of the things you mentioned the large customer momentum.

We had the top 25 deals were over $100 million of <unk> in the quarter, which is Super Super strong. We also you mentioned the customer counts and it's definitely an area that we think is related to macro.

Speaker 1: super, super strong. We also, you mentioned the customer counts, and it's definitely an area that we think is related to macro. Our customer ads are really influenced by the small business part of our, part of our, the small SMB part of our business. And we looked into that, of course, and we, we managed that closely, and we look at the logo churn in that number. It's very consistent with the last several quarters.

Our customer ads and are really influenced by the small business part of our part of our the small SMB part of our business.

And we looked into that of course, and we manage that closely and we look at the logo churn in that number it's very consistent with the last several quarters.

Speaker 1: And I think what's happening is that smaller businesses aren't making new purchases and I think is the economy

I think what's happening is that smaller businesses arent, making new purchases and I think as the economy.

Speaker 1: picks up from here we think eventually it'll pick up or not sure when but as a pick is a pick up we believe that that part of the logo count will increase

Picks up from here, we think eventually it'll pick up we're not sure when but as it picks up we believe that that part of the logo count will increase on.

Speaker 1: On the high-end customers, the million dollar plus ACB cohort was one of our strongest quarter ever for that for that cohort, including some big new wins.

On the high end customers the million dollar plus ACB cohort was one of our strongest quarter ever for that for that cohort, including some big new wins, we had at one of the leading global companies and customer experience and support signed a completely new customer doctor over $1 million ACB deal and it was all around OID. So we're seeing.

Speaker 1: We had one of the leading global companies in customer experience and support signed a completely new customer to Octo over $1 million.

Speaker 1: ACV deal and it was all around OIG. So we're seeing a lot of new business momentum in the largest companies in the world which is pretty satisfying.

A lot of new business momentum.

In the largest companies in the world, which was pretty satisfying so.

Speaker 1: Yeah, a lot of good stuff to point you in the corner, but I think the macro environment is still...

Yeah, a lot a lot of good stuff.

To point you in the quarter, but I think the macro environment is still.

Speaker 1: while stabilizing it's still not as healthy as it could be for us and our business is reflecting that to some degree, especially the forward outlook. Yeah, I would just add to that Rob.

While stabilizing its still not as healthy as it could be for us in our businesses, reflecting that to some degree, especially the forward outlook.

Yeah, I would just add to that Rob.

We talked about the big deals, we actually had one of the biggest.

Speaker 2: We talked about the big deals. We actually had one of the biggest, one of the strongest big deal quarters ever in the company's history.

One of the strongest video quarters ever in the company's history. So we talked about some stats, but just in general it was a very strong big deal quarter, but not just.

Speaker 2: So we talked about some stats, but it's just in general, it was a very strong big deal quarter, but not just...

Speaker 2: That wasn't the only highlight. There's a bunch of highlights. I mean, Todd talked about it, about customer identity participation. That's up and to the right. So a lot of good things we're seeing in the business. A lot of great execution by the go-to-market team that we're really proud of. In spite of this.

That wasn't the only highlight there's a bunch of highlights I mean, Todd talked about about customer identity participation that's up into the right. So a lot of good things, we're seeing in the business a lot of great execution by the go to market team that we're really proud of in spite of this this macro headwind in terms of your question more specifically on the current RP O <unk>.

Speaker 2: this macro headwind. In terms of your question more specifically on the current RPO guidance itself, really, I mean that is a reflection of what we were just talking about with in terms of the macro headwind. Yes, it did stabilize in the quarter.

<unk> itself really I mean that is a reflection of what we were just talking about in terms of the macro headwind, yes. It did stabilize in the quarter, but we're being prudent with our outlook at this point.

Speaker 2: But we're being prudent with our outlook at this point, given it is still a significant headwind for the field in terms of growing the business. Thanks.

Given it is still a significant headwind for the field in terms of growing the business.

Thanks.

Alright next up musket ataxia drawn at Oppenheimer.

Speaker 4: Hey guys, the seller numbers. I guess God maybe could give us a little bit more color on OIG and maybe kind of partially by the customer base

Hey, guys are solid numbers, I guess I'll call them, if you could give us a little more color on <unk> and maybe kind of parse it by the customer base a horizontal just to clarify the supply supposed to workhorse customers correct me, if I'm wrong, but maybe you can dig in a little bit into the installed base what percentage of your base already had the first couple of module.

Speaker 4: First of all, just to clarify, this applies to workforce customers, correct me if I'm wrong, but maybe you can dig a little bit into the install base.

Speaker 4: What percentage of your base already had the first couple modules of the platform before and how adding the latest component changed the dynamics from a demand standpoint? I'm just trying to get a sense of how much of this was Greenfield versus there was already a pent-up demand for it, number one. Number two, with the incremental new module.

The platform before and how adding the latest component to change the dynamics from a demand standpoint, I'm just trying to get a sense of how much of this was greenfield versus there was already a pent up demand for it number one and number two with the incremental new module up what is the upside just is that incremental to the existing.

Speaker 4: What is the upside just that incremental to the existing base? I know the whole platform can add a lot, but it sounds like you already have a lot of customers on there. So trying to get to the delta here of upside.

Beth I know the whole platform can add a lot, but it sounds like you already have a lot of customers onto so trying to get to the tail taking care of our planet.

Speaker 1: The first thing you ask about, you said it applies to workforce?

The first thing you asked about you said it applies to our workforce.

Speaker 1: It's, I mean, OIG, we can sell OIG to any customers. So OIG is a great upsell for customers or to any customers.

Oh Gee, we can sell to any customer. So <unk> is a great upsell for customer are there any customers.

Speaker 1: It's not as directly integrated to that part of the business, because usually that's managed by a separate team and kind of a separate process, but we sell OIG to customer identity customers.

It's not as directly integrated to that part of the business because usually that's managed by a separate team in kind of a separate process, but we sell AIG two customer I didnt any customers.

Speaker 1: And that's a good expansion point in terms of increasing the value of the whole customer. But the real synergy is with the access management product. It just makes a lot of sense. If you think about.

And that's you know that's a good expansion point in terms of increasing the value of the whole customer, but the real the real synergy is with the access management product. It just makes a lot of sense. If you think about the system that is controlling and doing access management for which applications. You can access at work just makes sense that that that tightly integrated governed.

Speaker 1: the system that is controlling and doing access management for which applications you can access at work, just makes sense that that tightly integrated governance system, which actually does the approvals and the routing to your manager to approve, you can get a new application or new resource and then report to your auditors that you indeed have the right access. That just is a tight bundle and it's like technically integrated tightly with the access management. But when we look at our go-to-market and the ability to sell OIG, we have a bunch of customers that just have.

System, which actually does the approvals in the routing to your manager to prove you can get a new application or new resource and then report to your auditors that you are indeed have the right access that just has a tight bundle.

It's like technically integrated tightly with the excess management, but when we look at our go to market and the ability to sell <unk>. We have a bunch of customers that just have customer identity cloud and in many cases, we have the potential to land. The first workforce deal with <unk>. So it's an upsell to that customer identical customer, but it could be the first entry of the workforce.

Speaker 1: customer identity cloud and in many cases we have the potential to land the first workforce deal with OIG so it's an upsell to that customer identity cloud customer but it could be the first entry of the workforce suite. So in terms of like the penetration and so forth, the product is off to a very strong start. It's been generally available for a few quarters now. It's exceeding our expectations and not just in terms of numbers and revenue but also it's exceeding our expectations in terms of

Sweet so in terms of like the penetration and so forth that the product is off to a very strong start it's been generally available for a few quarters now it's exceeding our expectations and not just in terms of numbers and revenue, but also it's exceeding our expectations in terms of the.

Speaker 1: the companies that are deploying it alongside of legacy, legacy,

The companies that are deploying it alongside of legacy.

Our legacy or our governance.

Speaker 1: products, but also the competitive displacements. I think the competitive displacements are something that we didn't think would happen. This early to this degree, but we're seeing more of those than we...

<unk>, but also the competitive displacements I think the competitive displacements or something that we didn't think would happen. This early to this degree, but we're seeing more of those than we than we expected. There was a good win a ryder truck rentals, which is a fortune 500 Global 2000 company you've all heard of it was a they had a legacy product and they looked at.

Speaker 1: Then we expected there was a good win, a rider truck rental, which is a Fortune 500 Global 2000.

Speaker 1: company you've all heard of. It was a they had a legacy product and they looked at OIG because we're, it were the we have other workforce products in that account. We're helping them with those. They looked at OIG about a year ago and decided it wasn't feature rich enough or wasn't couldn't do what they needed to do. But they were struggling with some of the enhancements on their legacy product and they ended up bringing in OIG this past quarter to replace their legacy product. So that's that's a pleasant surprise as well.

<unk> because were.

We have other workforce products and that account were helping them with those they looked at <unk> about a year ago and decided it wasn't.

Feature rich enough or wasn't couldn't do what they needed to do but they were struggling with some of the enhancements on their legacy product and they ended up bringing in <unk> this past quarter to replace their legacy products. So.

That's that's a pleasant surprise as well so we feel really good about this product and we're also really excited about the next entry in the workforce, which is privileged access.

Speaker 1: We feel really good about this product and we are also really excited about the next entry in the Workforce Suite which is Privilege Access.

Speaker 1: So, Okta Privileged Access, which is on schedule, it's progressed from beta to early access. It's got a couple dozen customers using the product, having success with us. It's built out and it's on schedule for the general availability in Q4 of this year. So, lots of exciting stuff in the entire product suite. And then specifically on the workforce side, those two examples are pretty exciting.

Okta privilege access which is on schedule. It's progressed from beta to early access it's got couple of dozen customers using the product having success with us.

It's built out and it's on schedule for the general availability in Q4 of this year, so lots of exciting stuff and the entire product suite and then specifically on the workforce are those two examples.

Pretty exciting.

Speaker 2: And then one more thing you guys wanted to clarify. Hopefully you heard it earlier, but in terms of spend and upsell amounts that we're getting out of this, it's really about a third on average and the customers who have it, it's about a third of their total workforce spend right now. So it is a significant potential upsell in the entire 18,400 plus customer base. So we're excited about the opportunity as we move forward.

One more thing I, just want to clarify hopefully you heard it earlier, but you know in terms of spend and upsell announcer.

<unk> announced that were getting out of this it's really about a third on average and the customers who have it its about a third of their total workforce spend right now so it is a significant potential upsell.

And the entire 18400 <unk>.

Plus customer base. So we're excited about the opportunity as we move forward.

Speaker 4: If you tell us how penetrated argument you said that 18,000, like what percent already has this. There's still a lot of opportunity to go.

Can you tell us how penetrated are we set out 18000 like what percent already has us theres still a lot of opportunity to go.

Speaker 1: It's a new product. I mean, the component, it's as you, there's the life cycle management part of the product and there's the workflow as part of the product and then there's the, really what rounds it out is the access certifications and the access request.

It's a new product I mean, the component it's as you know the.

The lifecycle management part of the product and there is the workflow as part of the product and then there's the really what round it out as the access certifications in the access requests part of it the penetration rates in our installed base is the highest as you know for single sign on and Multifactor authentication and then the next highest but not.

Speaker 1: part of it. The penetration rates in our installed base is the highest, as you know, for single sign-on and multi-factor authentication. And then the next highest, but not nearly as close, nearly as penetrated as multi-factor or single sign-on is lifecycle management. Then the next highest is workflows. And then there's only a few, just the companies that have governance, the SKU governance actually have the certifications and the access requests. So there's a lot of room to run here and we're really excited about it. That's good. Thank you.

Nearly as close to nearly as penetrated as multifactor or single sign on is lifecycle management than the next highest is workflows and then there's only a few just the companies that have governance. The SKU governance actually have the certifications and the access request. So theres a lot of room to run here and we're really excited about it.

Thank you.

Got it Joe Gallo at Jefferies.

Hey, guys. Thanks for the question and nice quarter.

Speaker 2: Hey guys, thanks for the question. Nice quarter. You know, Siames held in really well with ACB growing 29% year of a year on tough comps. How should we think about the durability of that business? You know, is the sales force more at ease selling it now? And then you noted broad macro stabilization. Does that have an outsized impact on Siames? Thanks.

<unk> held in really well with ACD growing 29% year over year on tough comps how should we think about the durability of that business is the salesforce more at ease selling it now and then you noted broad macro stabilization does that have an outsized impact on xyrem. Thanks.

The.

Speaker 1: The data that we have for this quarter and the data we look at pretty closely in terms of that your question about the sales force is comfort with it with customer identity is that there's more reps doing customer identity deals. So that is at a healthy level, just the participation which conveys a lot of things. It can

The data that we have for this quarter and the data we look at pretty closely in terms of the your question about the sales forces comfort with it with customer identity is that theres more reps doing customer did any deals. So that is at a healthy level, just the participation, which which conveys a lot of things that conveys the the <unk>.

Speaker 1: the reps familiarity with it, their ability to prosecute the opportunities, et cetera, et cetera. So that we're comfortable with that. Overall, I think that the opportunity for customer identity is, it can be as ultimately, it can be as much contribution to the revenue as workforce.

Reps familiarity with their ability to prospect.

Execute the opportunities et cetera, et cetera, so that we're comfortable with that overall I think that the.

The opportunity for our customer identity is it it can be as it ultimately it can be as you know.

As much contribution of the revenue is workforce, we strive for a 50 50 split over the long term and we think they both should be growing the both markets are big and they both should be growing quickly. So we think it has a lot of durability. It is different in that it's more of a as we've talked about before it's more of a build versus buy the competitive dynamic is different it's not it really it's really a.

Speaker 1: We strive for a 50-50 split over the long term and we think they both should be growing. The both markets are big and they both should be growing quickly. So we think it has a lot of durability. It is different in that it's more, as we've talked about before, it's more of a build versus buy. The competitive dynamic is different. It's not, really, it's really the developers are choosing.

The developers are choosing to buy something versus open source or build something themselves.

Speaker 1: by something versus open source or build something themselves.

Speaker 1: versus the workforce that didn't decide has more established players legacy players

This is the workforce at any size has more established players legacy players.

Speaker 1: There's companies are more used to buying a solution there. And there's a different dynamic with the big platforms, offering workforce identity along with their apps and services and trying to get customers locked into their whole stack.

Companies are more used to buying a solution there and there's a different dynamic with the big platforms offering workforce identity, along with their apps and services and trying to get customers locked into their whole stock.

Speaker 1: So there's different dynamics that we think both are big and both have a lot of room to run. And if you look at our strategy, our strategy is we are the leader in identity and we're the only at scale independent and neutral player in identity. And so our strategy is to double down on that by first of all covering all the identity use cases. So it's really important that we cover customer and cause all the parts of workforce.

So there's different dynamics, but we think both are big in both or have a lot of room to run and if you look at our strategy. Our strategy is we are the leader in identity and we're the only add scale independent and neutral player in identity and so our strategy is to double down on that by first of all covering all the identity use cases, so it's really important that we cover.

Customer because of all the parts of work for US and go to the market and say listen identity is a key key part of your technology technological infrastructure. It's a key business driver for you and you should really bring up the level of your identity partner to some of the biggest clouds you spend money on and we do that by offering the full suite of products and plus.

Speaker 1: and go to the market and say, listen, identity is a key part of your technological infrastructure. It's a key business driver for you. And you should really bring up the level of your identity partner to some of the biggest clouds you spend money on.

Speaker 1: And we do that by offering the full suite of products and plus and very importantly, we're independent neutral. So we're not gonna foreclose choices of cloud infrastructure or security tools or collaboration tools because we have a horse in the race in terms of what we favor from our identity, we're gonna give customers choice. And that's resonating and that's especially with the larger companies which have very complex technological environments and a lot of people and a lot of, not to gain by getting identity right. And I think that's what you're seeing behind some of the results. Thank you.

And very importantly, we're independent neutral so we're not going to foreclose choices of cloud infrastructure or security tools or collaboration tools, because we have a horse in the race in terms of what we favor from our identity, we're gonna give customers choice and that's resonating in that especially with the larger companies, which have very complex technological environments.

A lot of people and a lot of lots of gained by getting that data you're right and I think that's what you're seeing behind some of the results.

Thank you.

Adam Tyndall at Ray Jay.

Okay. Thanks, Dave.

Speaker 5: Okay, thanks Dave. Todd, thanks for confirming the Prilis access product for GA and Q4. I'm wondering kind of a two part question. One, if you could give us maybe any feedback that you've gotten in that early access and if you could compare it to the OIG product, just to put it in context for us, that would be helpful. And then secondly, if we kind of zoom out to a bigger picture, you've often talked about a unified platform of identity. And if I fast forward, you're going to have.

Todd Thanks for confirming that privilege access product for GAA in Q4, I'm wondering kind of a two part question. One if you could give us maybe any feedback that you've got.

And that early access.

If you could compare it to the <unk> product just to put it in context for us that would be helpful. And then secondly, if we kind of zoom out to a bigger picture, you've often talked about a unified platform of identity theft.

Fast forward youre going to have workforce customer.

Speaker 5: customer, OIG and the PAM product, sort of a holistic platform. What are you with that enable? What are you with that enable?

And the Pam product sort of a holistic platform I'm wondering what that enables if you've considered and go to markets like bundling and any update on the head of our go to market alongside that would be helpful. Sorry, So many questions in there.

Speaker 5: If you considered new go-to-markets like bundling and any update on the head of go-to-market alongside that would be helpful. Sorry, so many questions in there. Hopefully, get them all. Yeah. If I can remember them all, I'm going to be very proud of myself.

Yes, if I can remember them all I mean, it would be very proud of myself.

Speaker 1: First question was comparing governance and privilege access. They're very similar in terms of the reception of the beta now with privilege access to move into early access. So the similarities...

First question was comparing comparing governance and privilege access they're very similar in terms of the reception of the of the of the beta now with privilege access to move into early access so the similarities are.

Speaker 1: that really the value of the big value driver of the solutions is how natural it is to be integrated to access.

The really the value of this that a big value driver of the solutions is how natural it has to be integrated to access management. So for example, with privilege access youre going youre using privilege access to manage access to these resources like servers and containers and root accounts on servers and the.

Speaker 1: So for example, with privilege access, you're using privilege access to manage.

Speaker 1: access to these resources like servers and containers and root accounts on servers. And the fact that that's integrated with the system for these companies that does all of their access management for all their employees for all their apps. And very importantly, the fact that it's tied into the governance system so you can actually do a workflow approval on who should get access to a container or server. The same way you do a workflow approval on who should get access to a container or server.

The fact that that's integrated with the system for these companies that does all of their access management for all of their employees for all their ops and very importantly, the fact that it's that it's tied into the governance system. So you can actually do a workflow approval on who should get access to a container or server. The same way you do a workflow approval on who should get access to.

Speaker 1: to a finance app or a collaboration app, and more and probably more importantly, your auditors can see a single report that attests to the fact that the following people have the right access to all the resources, whether they're servers, containers, collaboration applications or finance applications, that's really appealing.

Two of finance App or a collaboration App and more and probably more importantly, your auditors can see a single report that's that attest to the fact that the the following people have the right access to all the resources, where their servers containers collaboration applications or finance applications. That's really appealing is really appealing. So I think we talked about last call.

Speaker 1: really appealing. So I think we talked about last call that a little bit unfair to compare the

That it's a little bit unfair to compare the OID.

Speaker 1: early access to the privilege access because privilege access is coming second and it's benefiting from the fact that the OIG features are integrated on top of it.

Access to the privilege access because privilege access is coming second and it's benefited from the fact that the <unk> features are integrated on top of it.

Speaker 1: So that's really positive. I think that the privilege access is a little bit different in that I do think traditionally that a big decision maker for privileged resources and who controls them and who accesses them was the infrastructure team, which is a new audience for us.

So that's really positive I think that the.

Privilege access is a little bit different in that I do think traditionally the big decision maker for privilege resources, and what who controls them and who access of them was the.

Restructure team, which is a new audience for us the infrastructure team in the past has done a little bit with doctor, but it's a little bit of a new audience. So that's why we're really relying on our appeal to the residents with the Chief Security Officer and the CIO.

Speaker 1: The infrastructure team in the past has done a little bit with Octa, but it's a little bit of a new audience. So that's why that we're really relying on our appeal to the or our residents with the chief security officer and the CIO, which in more organizations as security, the security risks get more prominent and people and boards of directors and CEOs are really trying to lock us down. We believe that the strategy of appealing to the chief security officer.

Oh, which and more organizations that security the security risks.

Get more prominent in people and boards of directors and Ceos are really trying to lock. This down we believe that the strategy of appealing to the Chief Security officer to really have an umbrella approach across all of the company's security their infrastructure all the way to their employees systems will resonate so it's pretty exciting and we're we're off to a good start.

Speaker 1: to really have an umbrella approach across all of the company security, their infrastructure all the way to their employee assistance will resonate. So it's pretty exciting and we're off to a good start there, I think. Your question about the broad platform, the what we talk about workforce, and we actually, our parliaments, as we put governance and privilege under workforce, it's like one of the same umbrella.

There I think your question about the the the broad platform that we've talked about work for us and we actually are parlance is we put governance and privilege under workforce. It's all under the same umbrella.

Speaker 1: and then customer identity of course is our second major cloud you talked about what does it mean for go-to-market? I think our go-to-market structure is set up to take advantage of it. So we have one sales team that's

And then customer identity of course is our second major cloud you talked about was what does it mean for go to market I think that our go to market structure is set up to take advantage of it. So we have one sales team that's <unk>.

Speaker 1: The 10 year of our sales reps and their participation in deals in terms of both clouds is our at levels that we're happy with and comfortable with.

The tenure of our.

Sales sales reps and their participation in deals in terms of both clouds as are at levels that were happy with and comfortable with them, which is a great sign that the tenure the ramp and the experience of the ability to do broad deals across the suite is healthy.

Speaker 1: which is a great sign. The tenure, the ramp, and the experience of the ability to do broad deals across the suite is healthy.

Speaker 1: And which means that, you know, as the economy starts to improve and our message starts to resonate more, that's going to be really help us, you know, in the future, get back to really high levels of scale and growth that we think are possible in this big market.

And which means that.

As the economy starts to improve and our message starts to resonate more that's going to be really help us.

In the future get back to really high levels of scale and growth that we think are possible in this big market.

I had a go to market.

Speaker 1: I knew I forgot one. Sorry. That's different. Search for go to market president is progressing. It's we're meeting a ton of people. It's a really important search to get right. The next really three to five years of what we're trying to do is it's important that we find the right person that role. So we're meeting a bunch of candidates. We're not ready to announce anything, anything yet, but it's a super important thing for us to focus on and get right. And I can't wait to give you an update as soon as the, as soon as the

I knew I forgot one sorry.

Great.

Our go to market President is progressing.

We're meeting a ton of people, it's a really important search to get right. The next really three to five years of what we're trying to do.

It's important that we find the right person in that role. So we're meeting a bunch of candidates, we're not ready to announce anything anything yet, but it's a super important thing for us to focus on and get right and I can't wait to give you an update as soon as the.

As soon as the.

Events warranted.

Speaker 6: Thank you.

Okay.

Speaker 1: Right, next up, let's go to a new submetall at RBC.

Next up let's go to <unk> at RBC.

Hey, Thanks, Thanks for taking my question.

Speaker 7: Hey, thanks for taking my question. I'm the owner of the on-premise tech bird. I wanted to ask a question on the legacy replacement opportunity for access management. It feels like there are some large legacy replacements deals starting to come up for grabs. So how do you think about this opportunity? And what are some catalysts that can help shift customers away from these legacy vendors to be on top?

<unk> on for Matt Hedberg.

Wanted to ask a question.

Legacy replacement Opex any factors management. It feels like there are some large legacy placement deals starting to come up for grabs.

So how do you think about this opportunity and what are some catalysts that can help shift customers away from these legacy bank guys to be at that point.

Speaker 1: I think it's a really insightful question. I think it's, if you look at the

I think it's a really insightful question I think it's if you look at the the growth drivers and the potential the market potential.

Speaker 1: growth drivers and the market potential in the TAM being realized for AACDA. It's a really big factor. The fact that it's traditionally been the way you do identity is you have a big on-premise installation and you control it yourself and you, you know, it's in your data center, it's legacy software, it's really tightly coupled with a stack, whether it's Oracle or IBM.

And the Tam being realized for okta, it's a really big factor. The fact that it's traditionally been the way you do identity is you have a big on premise installation and you control it yourself and you.

It's in your data center and its legacy software, it's really tightly coupled with the stack, whether it's oracle or IBM.

Speaker 1: And that's on the workforce side and on the customer at any side, it's really build it yourself. Maybe it's open source, maybe it's just build your own password, checking and registration form and...

And that's on the workforce side and on the customer identity side, it's really build it yourself, maybe it's open source, maybe it's just build your own password checking and registration form and.

Speaker 1: roll your own. And so those two together are really, as we think about catalysts in the business and long-term drivers, those are really important. When we talk about in secular trends, cloud and digital transformation, we're really talking about these kind of things, like the...

Roll your own and so those two together are really as we think about catalysts in our business and long term drivers those are really important when we talk about and secular trends cloud and digital transformation, we're really talking about.

These kind of things like the peoples people have a bunch of on premise technology and they want to use on premise technology to manage it and the more of the move to the cloud the more likely they are to choose our cloud modern next generation solution like okta. So I think the there's two dimensions that you asked for catalysts I think there's really one dimension as always.

Speaker 1: people have a bunch of on-premise technology and they want to use on-premise technology to manage it. And the more that moves to the cloud, the more likely they are to choose a cloud, modern next generation solution like Octo. So I think there's two dimensions that you ask for catalysts. I think there's really...

Speaker 1: One dimension is what we talk about all the time. It's like more cloud technology, more. I was talking to a big customer earlier this week that the real catalyst for them to look at their workforce, re-evaluating their workforce identity platform was really that finally they're getting to public cloud. They're taking tons of workloads out of their own data center and moving to the public cloud. And that just changed a bunch of stuff where it didn't make sense anymore given that they were going to some fast applications and they were building some new applications. And

Talking about the time, it's like more cloud technology more.

So we're talking to a big customer earlier this week that the real catalyst for them to look at their workforce reevaluating their workforce identity platform. It was really that finally, there getting into public cloud, they're taking tons of workloads are under their own data center and moving into public cloud and that just changed a bunch of stuff, where it didn't make sense anymore given that they were going to some SaaS applications and they are building some new <unk>.

Obligations and the way the network is going to work and the way their security perimeter was going to work. It just didn't make any sense anymore to have the legacy solution.

Speaker 1: The way the network was going to work and the way their security perimeter was going to work just didn't make any sense anymore to have the legacy solution.

Speaker 1: So that's a catalyst. The second catalyst is the products are getting better. So it's the fact that we have privilege, the fact that privilege access come in GA and Q4, the fact that we have octide in any governance.

That's a catalyst the second catalyst is the products are getting better so.

It's the fact that we have privileged effects.

Privilege access come NGA in Q4, the fact that we have okta identity governance, starting to roll out. The fact that this is a big one okta is the only the only identity management provider and this is a workforce feature or workforce capability that can do fishing resistant.

Speaker 1: starting to roll out the fact that this is a big one. Octa is the only identity management provider, this is a workforce feature or a workforce capability that can do fishing resistant.

Speaker 1: authentication across every client device.

Not the indication across every client device across all applications and a comprehensive universal way that's a huge differentiator. So when you look at some of these big deals starting to move it's not enough to do it just on windows and just on some applications OXXO can do fishing resistance everywhere and a lot of the security breaches are just fishing.

Speaker 1: across all applications in a comprehensive universal way. That's a huge differentiator.

Speaker 1: So when you look at some of these big deals starting to move, it's not enough to do it just on windows and just on some applications, Austin can do fishing resistance everywhere.

Speaker 1: And a lot of the security breaches are just fishing. And it's like fishing, multifactor authentication methods that aren't fishing resistant. Like SMS, SIM, Swap, and you've heard of that. Or it's, they do fishing of a one time password number. There's all kinds of creative things. We have the only solution that's fishing resistant. And it's,

And it's like fishing multifactor authentication methods that arent fishing resistant like SMS Sim swap when you've heard of that.

They do fishing of a of a.

Onetime password number there's all kinds of creative things, we have the only solution that's fishing resistant and it's across all platforms and so the product is getting better too. So I think those two things are going to help us.

Speaker 1: And so the product's getting better too. So I think those two things are going to help us, you know, continue to take advantage of this big opportunity we have over time. That's helpful. Thank you. You're welcome.

<unk> continued to take advantage of this big opportunity we have over time.

That's helpful. Thank you.

Youre welcome.

Next up we have Eric Keith at Keybanc.

Hey can you hear me now.

It's unclear.

Speaker 1: Appreciate it. Todd, I guess just for you on the execution side, just curious where you think we are in terms of what I think on the execution side, maybe what's left to go. That's just the first part. And the second one, I just wanted to follow up on OIG. How much of the sales force at this point has kind of enabled to sell OIG? And are you starting to feel the confidence yet to kind of get more aggressive and kind of roll this into the playbook and start to do more displacements and go out to the enterprise install base?

Thanks, Dan.

Todd I guess, just just for you on execution side, just curious where do you think we are in terms of widening on the execution side.

Go.

That's just the first part and the second one just wanted to follow up on <unk>.

How much of the sales force at this point is kind of enabled to sell LNG and are you starting to feel the confidence yet to kind of get more aggressive in kind of enrollments into the play button and start to do more displacements and got to the enterprise installed base.

I'm assuming on the.

Speaker 1: on the first question, what any more in for execution. I'm assuming you meant kind of like customer identity cloud integration.

On the first question what inning, we're in for execution I'm, assuming you meant kind of like customer identity cloud integration Rep attrition some of the stuff we talked about in the previous quarters.

Speaker 1: repetitions, some of the stuff we talked about in the previous quarters. I think that is behind us.

I think that that is behind us.

Speaker 1: And I think when we look at the clarity of the message of our two clouds, the participation rate of reps in the customer identity cloud deals.

I think when we look at the.

Clarity of the message of our two clouds the participation rate of of reps in the customer identity cloud deals I feel comfortable with those things the overhang or the question. There is what is the macro impact and how long will last.

Speaker 1: I feel comfortable with those things. The overhang or the question there is is what is the macro impact and how long will last?

Speaker 1: because our overall we think our go-to-market and our sales team can be more productive. First of all, you can always get better. There's always things we're doing to increase productivity and get better and striving to be better tomorrow than we are today. But I think the macro is a question mark there. We have our thoughts and our assumptions in the forecast and in the models, but I think that that...

The cars are our overall, we think our go to market and our sales team can be more productive. We think it's a first of all you can always get better Theres always things, we're doing to increase productivity and get better and striving to be better tomorrow than we are today, but I think.

I think the macro is a question mark there.

We have our thoughts and our and our assumptions in the forecast and the models but.

That.

That the.

Speaker 1: the degree to which our productivity is trading off between macro and what the potential is, I think that's, we'll have to see how that unfolds. And I think frankly, we're taking a pretty conservative approach there, assuming that the macro is gonna be, kind of is what it is for a while. And we don't think it's gonna get any worse, but we don't think it's gonna get better tomorrow either. So we're being pretty conservative on that.

The degree to which our productivity is trading off between macro and what the potential is I think that's we'll have to see how that unfolds and I think frankly, we're taking a pretty conservative approach there assuming that the macro is going to be kind of is what it is for a while and we don't think it's going to get any worse, but we don't we don't think it's going to get better tomorrow either so.

We're being pretty conservative on that.

Speaker 2: I would just add on that, I think one of the highlights there, Eric is the cross-selling tailwind that we've been receiving.

I would just add on that I think one of the highlights there Eric is the cross selling tailwind that we've been receiving.

Speaker 2: So that really highlights the team is executing and be able to.

So that really highlights the team is executing and being able to deliver the value prop and deliver the value to the customers and I think that's a really good indicator of why things are working so well because we have been doing some great cross selling over the last three quarters. Thanks in part to what Tom has been talking about around releasing governance, obviously device access.

Speaker 2: deliver the value prop and deliver the value to the customers. And I think that's a really good indicator of why things are working so well. Because we have been doing some great cross selling over the last three quarters. Thanks in part to what Todd's been talking about around releasing governance, obviously device access. Came out this last quarter and is adding to that as well. But it's I think it's just a combination of the products continuing to roll off the assembly line, if you will. And also the improvements are making it a product plus.

It came out this last quarter and is adding to that as well, but it's I think it's just a combination of the products continuing to roll off the Assembly line, if you will and us and the improvements we're making other products plus the execution from the field just really improving thanks to those tenure.

Speaker 2: the execution from the field, just really improving things to those tenure statistics that Todd was matching as well as the ramp percentage now really at a very high level. So we're pleased with how the team has really been executing. We'll please put it. And you also asked about how much of the sales team is ramped on governance?

Our statistics that Todd was matching as well as the ramp percentage now really at a very high level. So were we.

We're pleased with how the team has really been executing replacement and you also asked about the.

How much of the sales team has ramped on governance.

Speaker 1: I think that it's like any new product and a product that is so early in its life cycle and go to market, but but exceeding expectations. There's still more ramping and more education and more comfort in how the sales team is comfortable. Qualifying the opportunities, executing them. They're still ramping that's left to do there. And I think that I think that I'll continue really at scale and continue to ramp through through next year.

And a governance I think that it's like any new product and a product that is still early in its lifecycle and go to market, but exceeding our expectations. There is still more ramping in more education and more comfort in how how the sales team is comfortable qualifying opportunities executing them, they're still ramping that's left to do there and I think that.

I think that'll continue really at scale and continue to ramp through next year.

Speaker 1: The reality is we have a good size sales team and a decent amount of sales capacity. And to get it as fully comfortable selling governance as they are with the rest of the products.

The reality is we have a we have a good sized sales team and a decent amount of sales capacity and to get it as fully comfortable selling governance as they are with the rest of the products.

Speaker 1: Is it is going to take several quarters, but once it does, we have a great at scale sales team to take it broadly to market. Thank you.

Is it is going to take several quarters, but once it does we have a great at scale sales team to take a broad way to market.

Thanks, Tom.

Next up let's go to Angie song at Morgan Stanley .

Speaker 8: Hi, thank you so much for taking my question. Just a quick one from me. Could you just remind us of how the Federal Vertical is for ATA and have even seen an uptake in momentum in this vertical in the last quarter as you achieved a sediment high? Thank you.

Hi, Thank you so much for taking my question just a quick one from me.

Can you just remind us of how big the better off our critical it's for Alta and have you been seeing an uptick in momentum in this vertical in the last quarter as we achieved hi, Thank you.

Speaker 1: The federal vertical is really key important part of our strategy. It's not just a bunch, it's not just a big IT spin, but it's also, they have very direct mandates.

The federal vertical is really key important part of our strategy is not just a bunch of is that there's a big spend.

But it's also they have very direct mandates to use multifactor and to invest in modern identity solutions I was spent.

Speaker 1: to use multi-factor and to invest in modern identity.

Speaker 1: solutions. I was I spent about a week in Washington

About a week in Washington.

During last quarter and one of the really interesting things I noticed about the.

As a reminder of it I've known it for a while but theyre probably of all of a lot of most industries are more most verticals theyre probably the most that the most formal programs around identity all the big agencies have.

The formal office or department around identity. So I think theyre, just mature and how they think about it and they're modernizing like everyone else. So it's a really big opportunity for us.

And in the certifications we did.

Last quarter.

Speaker 1: Actually two quarters ago we received our fedrat pie.

Actually two quarters ago, we received our federal Pi authorization, which is really exciting and we have a bunch of marquee customers that sponsor is that for that authorization.

We're excited to move forward with that we also have the ability to us on the military side, we have the ability to service IL five workloads, which opens up more of the department of defense.

Some of the more sensitive military sides.

We have great customers. There. So it's a really important part of our strategy and it's a.

Speaker 1: Big part of our focus. The other part of the business that's important is the state and local government. So between federal, state and local government, they need identity and we're doing very well in those verticals and it's a big area for our focus.

Big part of our focus the other part of the business that's important as to state and local governments, so between federal state and local government, they need identity and where.

We're doing very well in those verticals and it's a big area for our focus.

Speaker 2: And I would just add it's, you know, we're still in the early meetings. We saw a lot of opportunity there. So keep that in mind. Got it. Thank you so much.

And yes, I would just add it's worse.

Still in the early innings, we still have a lot of opportunity there so keep that in mind.

Got it thank you so much.

Let's go to Steph insurers that BTG.

It's wells Fargo actually monitor and England. Thanks.

Speaker 8: It's Wells Fargo actually. I'm on for Andy and Winsey. Thanks for taking my question. I want to ask about OIG first. Could you give us an update on how many customers you have using it now? And just if there's any color you could give on.

Thanks for taking my question wanted to ask about <unk>.

Firstly could.

Could you give us an update on how many customer he had using it now and just.

If there is any color you could give him.

Speaker 8: How they've been able, how the product's been able to surprise you in terms of competitive displacements that you mentioned you were an expecting and just your thoughts on how sustainable you think that has gone forward. Thank you.

They've been able to able to surprise you in terms of competitive displacements that you mentioned you weren't expecting and just your thoughts on how sustainable you think that had gone forward. Thank you.

Yes, that's.

Speaker 1: Yeah, the number of customers is exceeded our expectations significantly. Also the size of the deals, it's their their deal sizes are very positive surprise on the upside, which is great. The what we're seeing is that the, you know, it's usually a third of the, you know, increase of 30 plus percent on the workforce spend. Took your spend in a dollar on workforce.

The number of customers is it.

Exceeded our expectations significantly also the.

The size of the deals it's they're there they're.

Deal sizes are a very positive surprise on the upside which is great.

What we're seeing is that the it's usually a third of the.

Increases of 30 plus percent on the workforce spend so if you spend a dollar on workforce.

You add governance, it's you're paying $1 30 or more.

Speaker 1: You add governance, it's your paying $1.30 or more. So that's really.

So that's really encouraging.

Speaker 1: And I think, yeah, I mentioned the example of one of the other couple of surprises about we thought it would be mostly a greenfield thing. We think the market for governance is very underserved and because of solutions legacy solutions haven't been that good.

I mentioned, the example of one of the other couple of surprises about we thought it would be mostly a greenfield thing we think the market for our governance is very underserved and that because of the solutions legacy solutions haven't been that good.

Speaker 1: We think we have a better solution. It's super fast to roll out. It's very integrated with access management. It connects great Integrates great with the ecosystem like we're really well known for on the access management side And I think because of that we think we can make the market bigger But I mentioned the example of rider truck rental. That was a competitive displacement They they had a legacy provider. They looked at OIG a year ago. Didn't didn't think it was up to stuff They got kind of frustrated with the with the progress on their legacy But their legacy provider and they

We think we have a better solution at superfast rollout, it's very integrated with access management. It connects great integrates great with the ecosystem like we're really well known for on the access management side.

And I think because of that we think we can make the market bigger, but I mentioned. The example of Ryder truck rental that was a competitive displacement. They they had a legacy provider. They looked at <unk> a year ago didn't didn't think it was up to snuff they've got kind of frustrated with the with the progress on their legacy.

But their legacy provider and they displaced it with us and they were rolled out in and haven't seen value from a very quickly. So I think stores like that are really encouraging I think that being said, it's still pretty early both in terms of.

Speaker 1: displaced it with us and they were rolled out and haven't seen value from it very quickly. So I think stories like that are really encouraging. I think that being said, it's still pretty early both in terms of

Speaker 1: You know, the, the potential it could have and which makes it very exciting. As the strategy comes together on the workforce side. Thank you.

The potential that could have.

And which makes it very exciting is the strategy comes together on the workforce side.

Thank you.

Yes, that's got a shallower Gal Cohen.

Speaker 9: Thank you. Get off in folks, congrats. I want to double click on Brett's commentary on contact duration seeing sort of your stability.

Good afternoon, so congrats.

I wanted to double click on breath commentary on contract duration.

So that will be on stability.

Speaker 9: maybe even improvement. Is that driven by additional modules? Is that driven by pricing? And maybe Todd, just to order about the competitive landscape Microsoft, some other companies out there. Appreciate it. Thank you.

Maybe even improvement.

Is that driven by additional modules is that driven by pricing and maybe Todd.

What about the competitive landscape, Microsoft some other companies out there I appreciate it thank you.

Speaker 2: I'll take the first part and let Todd take the second part around the contract duration. Contracturation did take up slightly in the quarter. It's really a product of those big deals, right? So you heard about all the big deals we close in the quarter and, you know, bigger deals typically come with bigger, bigger duration. And so the success we had in enterprise and strategic and of those large deals that that's really lending itself to have a slide up picked to in that that contract duration in the quarter. So we're pleased with without things trended there.

I'll take the first part and let Todd take the second part around the contract duration contract duration did tick up slightly in the quarter.

It's really a product of those big deals right. So you heard about all the big deals we closed in the quarter and bigger deals typically come with bigger bigger duration and so the success, we had in enterprise and strategic in.

Those large deals that's really lending itself to have a slight uptick and that that contract duration in the quarter. So we're pleased with how things trended there.

Now on the competition question something we obviously think about a lot are I think every company in the enterprise market thinks about it.

Speaker 1: Now on that competition question, something we obviously think about a lot, or I think every company in an enterprise market thinks about it. And we analyze a lot of data and I'll give you the kind of that quantitative answer. The quantitative answer is that the competitive environment is very stable. Has been for, you know, a few years now. And I think.

And we analyze a lot of data in the I'll give you the kind of the quantitative answer the quantitative answer is that the competitive environment is very stable has been for for few years now.

And I think that you know.

Speaker 1: you know the numbers we look at are wind rates and so forth we also look at

The numbers, we look at our win rates and so forth. We also look at.

Speaker 1: The growth retention rate, which remains healthy, we look at...

The gross retention rate, which remains healthy.

Look at we look at you know you're always kind of looking around at the deals youre not in it's hard to get a it's hard to get a sense for.

Speaker 1: We look at you know you're always kind of looking around it at the deals you're not in hard to get a it's hard to get a sense for. The deals you're not in but what we're seeing is that. Based on all the numbers based on other numbers we see. You know, especially in large enterprises the pipeline's there were able to convert it were able to offer a broad solution that gets customers choice and flex. So those are all the numbers we look at on the qualitative side it's really a.

The deals are not in but what we're seeing is that.

Based on all the numbers based on other numbers, we see them.

Especially in large enterprises the pipelines there we're able to convert it we're able to offer a broad solution that gives customers choice in flex and so those are all those are all the numbers. We look at on the qualitative side, it's really a and this is more like when I have conversations with big customers Big government agencies.

Speaker 1: And this is more like when I have conversations with big customers, big government agencies, what they're trying to do, it's really two things are really important competitively. One thing is that

What they're trying to do that it's really two things are really important competitively, but one thing is that <unk>.

Speaker 1: companies and organizations are seeing identity as critical.

Companies and organizations are seeing identity is critical they are seeing it as the way they can get really tight on their cyber posture, they're seeing it as the way they can.

Speaker 1: They're seeing it as the way they can get really tight on their cyber posture. They're seeing it as a way they can innovate quicker, deliver better solutions on the customer side and it really matters.

Innovate quicker deliver better solutions on the customer side and it's it really matters.

Speaker 1: And when you're talking about being a strategic partner with a strategy to try to, you know, have a broad platform and deliver all these use cases, the first thing that has to happen is that the customers have to really think it matters. And because of all these trends we talked about in the value we can provide, identity really matters. The second thing is really important, which is...

When you're talking about being a strategic partner with a strategy to try to.

Have a broad platform and deliver all these use cases. The first thing that has to happen is that the customers have to really think of matters and because of all these trends, we talked about and the value. We can provide identity really matters and the second thing is really important which is is it is the how integrated the identity system is to the rest of the ecosystem do customers.

Speaker 1: is how integrated the identity system is to the rest of the ecosystem? Do customers perceive that as facilitating choice and flexibility?

Received that is facilitating choice and flexibility and that is the conversations are really positive on that they're really starting to see that we announced earlier. This week. This capability called okta for the global 2000.

Speaker 1: And that is, you know, the conversations are really positive on that. They're really starting to see that, you know, we announced early this week this capability called Octa for the global 2000.

Speaker 1: And this is a really, really important architectural advantage we have, particularly versus Microsoft. And this resonates very well with large companies, which is...

And this is a this is a really really important architectural advantage, we have particularly versus Microsoft.

This resonates very well with large companies which is.

Speaker 1: Microsoft built its identity technology as a part, as an integral bundled part of email in collaboration.

Microsoft built its identity.

Technology as a part as an integral bundled part of E mail and collaboration and so the result of that is if you want to have the flexibility that you can do with okta, where you can have okta for a business unit or.

Speaker 1: And so the result of that is if you want to have the flexibility that you can do with OCTA, where you can have OCTA for a business unit or a company you want to buy or a company you want to divest, or you want to have parts of OCTA that govern rules for the whole organization, and parts of it that govern rules just for a subdivision or a distributed part of the IT department, you can do that with OCTA. We have flexibility in our architecture and we have capabilities at scale customers like NTT and others doing this.

A company you want to buy a company you want to divest or you want to have parts of okta that govern rules for the whole organization and parts of it that govern rules just for a subdivision or distributed part of the I T Department.

You can do that with Doctor, we have flexibility in our architecture and we have capabilities, we have at scale customers like NTT and others doing this and okta for global 2000, really we've added some capabilities to make it easier to manage and do some better visibility across the different domains and it's really powerful with Microsoft If you do that you have to essentially have different.

Speaker 1: And Octave for Global 2000 really we've added some capabilities to make it easier to manage and do some better visibility across the different domains and it's really powerful. With Microsoft, if you do that, you have to essentially have different email systems because the way they bundled their email to their identity.

E Mail systems, because the way they bundled their E mail to their identity.

Speaker 1: So if you want to have a distributed rules about who can do what, you basically have to have two email domains, which, and you have to have two teams. So if you want to have a distributed rules about who can do what, you basically have two.

So if you want to have a distributed rules about who can do what you basically have to have two email domains.

And you have to have two teams domains, which doesn't make any sense you would never want to have for a company you buy you'd never want to have a different teams address for that those users and that's just the trade off they made when they decided to bundle their identity with their apps and I understand why they did it their strategy is hey use the whole bundle use Microsoft ops use Mike.

Speaker 1: which doesn't make any sense. You would never want to have for a company you buy. You never want to have a different teams address for those users.

Speaker 1: And that's just the trade-off they made when they decided to bundle their identity with their apps. And I understand why they did it. Their strategy is, hey, use the whole bundle. Use Microsoft apps, use Microsoft tech, use Microsoft security. We're all going to do all for you. And that certainly does appeal to some companies, but it's mostly the companies that...

Christophe Tech use Microsoft Security, we're all Gonna do all for you and that certainly does appeal to some companies, but it's mostly the companies that are super cost conscious don't don't see the strategic value of identity.

Speaker 1: are super cost conscious, don't see the strategic value of identity, or maybe are more reacting in their posture and their markets and their strategy versus being aggressive and building new things and trying to expand and grow. And we're able to provide that flexibility to give them that real, that business agility with our architecture. So that really resonates with particularly big companies and the flexibility and seeing identity as a thing that matters, independence matters.

Or maybe are more reacting in there and their posture in their markets and their strategy versus being aggressive in building new things and.

Trying to expand and grow and we're able to provide that flexibility to give them that really that business agility.

Our architecture so.

And that really resonates with particularly the companies and the flexibility and seen identity as a as a thing that matters independents matters and that's for long term as we're all we're all in the long we're all in this for the long term a doctor we want to build this important company that's going to.

Speaker 1: And that's what for long term is we're all, you know, we're all in the long, we're all in this for the long term in Okta. We want to build this important company that's gonna...

Speaker 1: provide value and really be an iconic company in the future. So to believe that's true, you have to believe a couple things. One is you have to believe that identity is going to matter and for the reasons we talked about it truly does. And the second thing is you have to believe that the independent and neutral company is going to win. And if you look at everything we do, whether it's...

Provide value and really be an iconic company in the future. So to believe that's true you have to believe a couple of things. One is you have to believe that identity is going to matter.

And for the reasons, we've talked about it truly does and the second thing is you have to believe that the independent neutral company is going to win.

And if you look at everything we do whether it's broad.

Platform capabilities different identity markets, whether it's focusing on the ecosystem integration and the flexibility. That's why we're that's why what we're doing is resonating and that's why we think it's pretty different from from some of the big cloud platforms and some of the other legacy players out there as well.

Speaker 1: Platform capabilities, different identity markets, whether it's focusing on the ecosystem integration and the flexibility, that's why what we're doing is resonating and that's why we think it's pretty different from some of the big cloud platforms and some of the other legacy players out there as well. Thank you so much, appreciate it. Happy to.

Yeah.

Thank you so much I appreciate it.

Happy to help.

Next up we have scotiabank.

Speaker 10: Okay, you got Joe Vanderthorne for Patrick Colville. So just looking at the CRPO guide, it calls for 13% growth next quarter. How should we think about how that will translate to a physical 25 revenue growth? Yeah, it's a good question.

Okay.

Dr. Don Kirkpatrick Cologuard.

We're just working on our ERP our guide of cost.

Next quarter.

How should we think about how that would translate first of all 25 revenue growth.

Yes, it's a good question. Thank you.

Speaker 2: I would actually correlate a couple of things. Well, first and foremost, like before I get into the correlations the way you should look at a reminder at Q3 earnings, we're gonna stick with our historical precedent and we're gonna give you an early look on FY25 revenue. There'll be a prudent look at this five quarters out, so just a reminder we'll do that. But in the meantime, if you wanna bridge that gap between now and then I would look at a couple of things. Yeah, I would look at the dollars of current RPO. Go that way.

I would actually correlate a couple of things well first and foremost like before I get into the correlation is the way you should look at a reminder, at Q3 earnings we're going to stick with our historical precedent and we're going to give you an early look on FY 'twenty five revenue there'll be a prudent look at those five quarters out. So so just a reminder, we will do that but in the mean.

Tom If you want to bridge that gap between now and then I would look at a couple of things, yes, I would look at the dollars of current RPF.

Speaker 2: Right, and they will roll off into subscription revenue over the next 12 months. You can look at historical correlation and figure that out. And then I would pair that with the trend of revenue in FY 24, 23%.

And they will roll off into subscription revenue over the next 12 months you can look at historical correlation and figure that out.

And then I would pair that with the trend of revenue in FY 'twenty four 'twenty.

23% growth that we just.

Speaker 2: growth that we just produced in Q2, $560 million and 16% growth in Q3. And then Q4, you can apply that based on our fiscal year guide. That's about 14% year of growth. So I would combine that trend with the current RPO, historical correlations to get you.

Produced in Q2 $560 million and 16% growth in Q3, and then Q4 you can imply that based on our fiscal year guide that's about 14% year over growth. So I would combine that trend with the current IPO historical correlations to get you in the rough area for FY 'twenty five but we.

Speaker 2: in the rough area for FY 25, but we will come out with a, you know, our first look, like I said, in the Q3 earnings at about 90 days time on FY 25.

We'll come out with a <unk>.

Our first look like I said in the Q3 earnings in about 90 days' time on FY 'twenty five.

No problem.

Ray at Guggenheim.

Speaker 4: Great, thanks. Todd, you mentioned a couple times that you continue to be surprised by the types of accounts that were deploying the governing solution. And last quarter, we talked about OIG potentially accelerating PAM adoption. So as you think about the general availability of PAM later on in 4Q,

Great. Thanks, Todd.

Todd You mentioned a couple of times that you continue to be surprised by the types of accounts that were deploying the governance solution and last quarter, we talked about OTT potentially accelerating Pam adoption. So as you think about the general the general availability of Pam later on in <unk> do you see the same potential with that.

Speaker 4: Do you see the same potential with that product and potentially displacing existing solutions of penetrating larger accounts? Or do you still expect the PAM solution to kind of attack this mean field opportunity, more down more?

Product and potentially displacing existing solutions are penetrating larger accounts or do you still expect the Pam solution to kind of attack this greenfield opportunity more more down market.

Speaker 4: Yeah, I don't, I don't necessarily agree or

Yes, I don't.

Don't necessarily agree or.

Speaker 1: Sounds like we're arguing, we're not arguing. I don't know if the green field is really a down market thing. I think there's big companies that it's green field as well.

It sounds like we're arguing we're not arguing.

I don't know if the greenfield.

Really a downmarket thing I think theres big companies that it's greenfield as well.

Speaker 1: See different maturities on different, especially parts of big companies. And so I think that one of the things, one of the lessons that my IG is that I think that the segmentation of what we thought would be the applicability of solution was pretty awful. Like we thought it would be mid-market in Bala, we've seen success in really large companies, organizations like Kendral. And for, and the global company I mentioned with.

Different maturities on different, especially parts of big companies and so I think that one of the things one of the lessons of <unk> is that I think that the segmentation of what we thought would be.

The applicability of solution was pretty awful and we thought the kind of mid market below we've seen success in really large companies organizations like Kendall.

For and the Global company I mentioned.

With in terms of the leading the the one of the leading customer experience and support solutions standardizing on OID is a net new customer.

Speaker 1: In terms of the leading, one of the leading customer experience and support solutions, standardized in an OIG as a net new customer. On the privilege side, I think that, and also on the governance side, it's like that I always get surprised when companies...

On the privilege side I think that <unk>.

And also on the government side, it's like I always get surprised when <unk>.

Companies take out a big piece of technology that they invested and that's working.

Speaker 1: take out a big piece of technology that they invested in that's working. And the secret about some of these big governance deployments is they're actually not working that well.

And the secret about some of these big governance deployments as Theyre actually not working that well.

Speaker 1: And they kind of went into it with this broad view of all the functionality they would need and how everything they wanted to hook it up to and what they're seeing after several years is that they're kind of really only using part of it. And then when you compare what we have to that, it's sometimes we exceed what they're actually using. So then the decision to actually swap it out is kind of beating our expectations. My guess is that it could, the same thing could happen in privilege. I would guess that it's...

And they kind of went into it with this broad view of all the functionality they would need and how.

They want to hook, it up to and and what really what Theyre seeing after several years is that they are kind of really only using part of it and then when you compare what we have to that it's sometimes we exceed what theyre actually using so then the decision to actually swap it out as is kind of beating our expectations.

My guess is that it could the same thing could happen and privilege.

I would guess that it's.

Speaker 1: it's probably not just a conservative guess would be that it's going to be where we have success is going to be where they don't have a solution and it's

It's just a conservative guess would be that it's going to be where we have success its going to be where they don't have a solution and it's they want to extend the benefits they've seen with okta access management and governance into those privilege resources and I think that probably means coexistence.

Speaker 1: They want to extend the benefits they've seen with AQDA, access management and governance into those privileged resources. And I think that probably means coag-

Speaker 1: But I still continue to black stuff this over and over to many people that we've talked, you know, we've talked before. It's like, I think that we're really in almost a different market, the company that had Oracle and sun servers in their own data center and they put cyber arc in there. They're not going to take that out for rock.

But I still continue to Blackstone this over and over to many people that we've talked.

We've talked before it's like I think that we're really in a almost a different market. The company that had oracle and sun servers in their own data center and they put cyber Ark in there, they're not going to take that out for okta privilege, but I do think that that same company may have a division that's doing more cloud development they have containers.

Speaker 1: But I do think that that same company may have a division that's doing more cloud development. They have containers and they want to get quickly some, the same benefits they have for their active deployment on top of some of those resources. You can get the auditing capabilities and the workflow capabilities and the access control capabilities. But I just don't see them taking out a legacy cyber active deployment that's kind of working and protecting their Oracle database in their own data center.

Want to get quickly some the same benefits they have for their active deployment on top of that some of those resources and get the auditing capabilities workflow capabilities in the access control capabilities, but I just don't see them taken out the legacy cyber Ark deployment, that's kind of working in protecting the Oracle database in their own data center.

Great. Thanks for the color that makes sense.

Yep.

Hey, let's go to I believe is Carolyn.

Speaker 1: Let's go to who I believe is Carolyn, our golden.

And sacks.

Speaker 7: Yes, thank you. Quick one from me is this on, off this new partner program, and if you launched that in April of this year, just curious what the initial reception to that has been, and then also giving the differences and go to market and workforce and customer, kind of how does that translate to the partner strategy in each of those clubs?

Yes. Thank you.

Quick one from me is just on off this new partner program. I think you launched that in April of this year just curious what the initial reception to that has been and then also given the differences in go to market and workforce and customer kind of how does that translate to the partner strategy in each of those clubs.

Speaker 1: Yeah, the partner revamped the purposes behind it where the fundamentals were super sound. We wanted to get more focused on the most valuable partners.

The partner the partner revamped the purposes behind it.

The fundamentals, where supercenter, we wanted to get more focused more focus on the most valuable partners and it's a we've had that launched for a couple of quarters now it's going well I think we're seeing good partner contribution in the pipeline, which is a good thing overall, it's not specific to that program.

Speaker 4: And we've had that launch for a couple quarters now. It's going well. I think we're seeing good partner contribution in the pipeline, which is a good thing. Overall, it's not specific to that program, those program changes, but overall, partners continue to be super important for OCTA.

Program changes, but overall partners continue to be Super important factor, particularly excited about the partnership with Google Workspace for their go to market the Google workspace sellers around the world and in public sector can can sell okta and that's a natural.

Speaker 4: Particularly excited about the partnership with Google Workspace for the Google Workspace sellers around the world and the public sector can sell OCTA. And that's a natural, really natural alignment there with...

Really natural alignment there with.

Speaker 4: uh... you know we're trying to give the google customers a bunch of choice in technology and google is trying to give the same message cross-an you can use

Trying to give the Google customers, a bunch of choice in technology and Google is trying to give the same message kind of saying you can use.

Speaker 4: Work space and the Google tools to collaborate with anyone cross company boundaries no matter what you use for the rest of your Tech your communications and collaboration infrastructure. So it's a very aligned go-to-market that we're excited about that one We're excited about the cloud service provider marketplaces

Workspace and the Google tools to collaborate with anyone Cross company boundaries no matter, what you use for the rest of your.

Your communications and collaboration infrastructure. So its a very aligned go to market that we're excited about that one we're excited about that.

The cloud service provider market places.

Speaker 4: That's a new channel that's really emerging and been strong for us. We've mentioned the AWS marketplace for a couple, you know, few quarters in a row. It continues to grow very quickly. Customers want to that they really have big investments with Amazon. They want to retire and pay down some of their their AWS credits. And they can do that on Octa through the marketplace, which is great.

That's a new channel, that's really emerging and been strong for US we've mentioned the AWS marketplace for a couple of few quarters in a row. It continues to grow very quickly customers want to.

That they really have to big investments with Amazon They want to.

Retire and pay down some of their.

Their AWS credits and they can do that on okta through the marketplace, which is great.

Speaker 4: So partnerships are really important. I think one of the biggest opportunities is something we're really focused on and trying to, trying to,

Partnerships are really important I think one of the biggest opportunities and something we're really focused on.

I'm trying to trying to really mature as the as our motion with the global systems integrators Global systems integrators are especially in large enterprise on workforce. They do a lot of business and they're going to be really key as we start to.

Speaker 4: really mature is our motion with the global systems integrators.

Speaker 4: Global systems integrators are especially in large enterprise on a workforce. They do a lot of business and they're going to be really key as we start to rip and replace some of these legacy technologies, especially on the governance side. So the relationship and the partnerships of the global systems integrators is super important or focus on that. And very interesting on the customer side, it's natural.

Rip and replace some of these legacy technologies, especially on the governance side. So the relationship and the partnerships with the global systems integrators is super important and we're focused on that and very interesting on the customer identity side, it's natural.

Speaker 4: It's very naturally appealing to global systems integrators because they're trying to, they want to develop solutions and do digital transformation for these companies.

Naturally appealing to the global systems integrators, because they are trying to they want to develop solutions and do digital transformation from transformations for these companies.

Speaker 4: and customer DNA plot can help them do that. They can help them.

<unk> customer identity products to help them do that they can help them.

Speaker 4: build some of the other differentiating capabilities and not have to recreate the

Some of the other differentiated capabilities and not have to recreate the.

Speaker 4: you know, some of the identity parts that we already do in customer data cloud. So it's an important part of our business. We're kind of a, we've always, actors like very good at partnering just because it's been so important to us from the beginning. We had to partner with ISVs and apps and in the channel and so forth. And we're pretty proud of our ability to partner but we're continued to double down on it because it is an important part of the ecosystem part of our business.

Some of the identity parts that we already do in customer do they call. It. So it's an important part of our business, we're kind of we've always.

Okta is like very good at partnering just because it's been so important to us from the beginning we had a partner with <unk> in apps.

Certainly in the channel and so forth.

Pretty proud of our ability to partner, but you know, we're continuing to double down on it because it is important part of the ecosystem part of our business.

Okay. We've got we're up on time, but let's go into overtime here, we've got five more hands raised.

Speaker 1: Okay, we've got we're up on time, but let's go into overtime here. We've got five more hands raised. Let's go to we have to start scheduling these longer. Yeah. Let's go to I think Patrick at will. Yeah, hey guys.

Let's go to we have to start scheduling these longer.

Yeah.

Let's go to I think Patrick at Wolf.

Yeah, Hey, guys Patrick on for Josh.

Hey, Patrick.

Congrats on the quarter. Thanks for taking my question here and overtime. So you mentioned that open AI expanded their relationship.

Speaker 11: Congrats on the quarter. Thanks for taking my question here and over time. So you mentioned that OpenAI expanded the relationship, and I think that's not the first time, maybe the second or third time that you've actually called that out.

That's not the first time, maybe the second or third time that you've actually called that out.

Speaker 11: Is that kind of coming from the customer side or the workforce side? I'm just curious if you can talk a little bit more on what products they're spanning with and things you've assessed with. And then also, was that any meaningful contribution to growth in the quarter from OpenAge specifically?

Is that all coming from the customer side or the workforce side. Just curious if you can talk a little bit more on what products, they're expanding with an <unk> SaaS West and then also was that any meaningful contribution to growth in the quarter from the open AI specifically.

Speaker 4: Hey, Patrick, I lost you for a minute there. So if the question was for me, I needed to repeat the first 20 seconds. Yeah, so yeah, I lost you as well. Okay, can you hear me? Yeah, you can. Yeah, you can't back to my hop with you. Sorry about that. So was asking about opening eye. I think this is like the second or third time that you've called out.

Hey, Hey, Patrick I lost you for a minute there.

So if the question was for me I need you to repeat like the first 20 seconds, yes.

Last year as well.

Can you hear me.

Yeah, Yeah, you can't back about halfway through okay, sorry about that so was asking about open AI I think this is like the second or third time that you've called out Cigna.

Speaker 11: significant expansion with them in a quarter in a relatively short time. Is that kind of coming on the customer side, the workforce side, what products are they using in things success with? And then was there any meaningful contribution to growth from them in the quarter?

Significant expansion with them in a quarter and a relatively short time.

Is that kind of coming out of the customer side, the workforce side what products. They are using and seeing success with and then was there any meaningful contribution to growth from them in the quarter.

Speaker 4: with that expansion? Yeah, so OpenAI is super interesting. So there OpenAI is a customer identity cloud customer. So when you log in to chatgpt, you log in through Okta.

With that expansion yeah. So open eye opening as it's Super interesting so they're opening a as a customary identical customer, which so when you log into chat GPT you're logging through October .

And.

Speaker 4: It's interesting because a developer inside of OpenAI three years ago

It's interesting because a developer inside of opening I have three years ago picked our customer identity cloud because it had great developer experience and from the website and started using it.

Speaker 4: picked our customer at any cloud because it had great developer experience and from the website and started using it. And as chat, and at the time it was the login for their APIs and then chat GPT took off. And now as you mentioned, we've had really pre-sizable transactions with them over the last couple quarters.

And as Chad and at the time. It was it was the logging for their API is in.

Then chat GPT took off and now as you mentioned, we've had really pretty sizeable transactions with them over the last couple of quarters.

Speaker 4: And it's, so it's a great testament to our strategy on customer identity, having something that appeals to developers.

And it's so it's a great Testament to our strategy on customer identity, having something that appeals to developers and you saw they did something pretty interesting. So this is really a BDC up right opening a tragedy.

Speaker 4: And you saw they did something pretty interesting. So this is really a B2C app, right? Open a chat GPT, but they now they recently launched their enterprise offering and they want to connect.

Now they.

Recently launched their enterprise offering and they want to connect.

Speaker 4: Chaggy BT enterprises. So this is, you know, octaves really good at this too, because our customer at any cloud connects.

Chat GBT to enterprises. So this is okta is really good at this too because our customer identity cloud connect our customers to consumers, but also connecting our customers to Workforces. So then you have to start supporting things like single sign on and assemble and open I D and authorization.

Speaker 4: our customers to consumers, but also connects our customers to workforces. So then you have to start supporting things like single sign on and SAML and open ID and authorization. And so it's just, you know, open API continues to get the benefits of being able to focus on what they want to focus on, which is

So it's just open eye open API continues to get the benefits of being able to focus on what they want to focus on which is obviously their models.

Speaker 4: Obviously they're their models and the are in the LLMs and the capabilities and and we can focus on the identity plumbing that wires it together. So the transaction was it was one of the top, you know, I mentioned the top 25 transactions.

And Oh lens and the capabilities and we can focus on the identity plumbing that wires. It together so that the transaction was it was one of the top.

You mentioned the top 25 transactions.

Speaker 4: The total TCV of all those transactions this quarter was $100 million. It was one of those top 25 transactions, but I haven't done the math on the TCV for how much of the 100 million it was, but it was on the larger side this quarter.

The total <unk> of all this transaction was this quarter was $100 million. It was one of those top 25 transactions, but I.

I don't I haven't done the math on the TCE for how much of the 100 million. It was but that was one of our it was on the larger side this quarter.

Alright, let's go to Shrek at Baird.

Speaker 12: Yeah, thanks for prolonging the q&a. I think it's a good idea. So Todd, Brad, great to hear the process of momentum. This is about OIG and MFN.

Yeah, Thanks, Zafar prolonged in the Q&A.

Good idea.

Dog, Brad Great to hear the cross sell momentum from let's speak about the Waikiki and I'm a fan.

Speaker 12: and Pam, of course, the early traction, so the device access, on the commentary on off top for global 2000, I think that you expanded upon it.

Bob of course early traction device access.

On the commentary.

On Oct up our global 2000, I think that I'm talking about the expanded upon it.

Speaker 12: like an architecture differentiator and then a competent advantage. And it was quite interesting. You mentioned that the solution has already become a critical component of your sort of large new upsell transaction. So just curious, like, is that becoming or potentially will become a driver? Is it still just like an add on to the bundle at this point? So just curious in terms of its contribution in terms of the upsell and the uplift.

Architecture differentiator in an apartment and want it and I guess on <unk>, you mentioned that the solution has already become a critical component of your kind of large new upsell transaction. So just curious like is that becoming a R. R.

They'll become a driver is it still just like an add on to that with a bundle at this point. So just curious in terms of its contribution in terms of the upsell and the uplift.

Speaker 12: momentum and how are you and Brad as well, practicing it in going forward really, really.

And how are you and Brad as well kind of factoring it in going forward.

Really helpful.

Speaker 4: that Octa for global 2000, it's, you mentioned the competitive differentiation, which is true, what I would explain about that is relevant. It's also, there's also something more important about it, which is if you think about what Octa's trying to do, we are, we're the leader in identity, we wanna make sure everyone in the world knows how important identity is.

The okta for global 2000, it's you mentioned the.

Competitive differentiation, which is true, but I would I explained about that is relevant. It's also there's also something more important about it which is if you think about what AGA is trying to do where we are we're the leader in identity, we want to make sure everyone in the world knows how important identity is.

Speaker 4: And because traditionally identity has been sold as part of other platforms. You kind of got it when you bought the Windows network. You got it when you buy Oracle. And some junior person in IT made the decision. But it's so important now with all the things it can do for companies. And one of the most important parts about Octa for Global 2000 is what we're saying to the world is

And because traditionally identity has been sold at AR.

As part of other platforms, you kind of got it when you bought the Windows network, you've got it when you bought Oracle.

Some.

Junior person and it made the decision, but it's so important now with all the things that can do for companies and one of the most important parts about occupancy global two thousands it's worth saying that the world is identity can actually impact your business strategy as a CEO I know this is the CEO I think about all the time like what things I want to do centrally like do I want to do function centrally do I want to have.

Speaker 4: Identity can actually impact your business strategy. As a CEO , I know this, as a CEO I think about all the time like what things I want to do centrally like do I want to do function centrally? Do I want to have the HR team be central or do I want to decentralize it? Do I want to buy this company? Do I want to take part of a group that is centralized and decentralize it? And those are strategic decisions and CEOs and boards care about those and you can't make one of those decisions today.

The HR team be central or do I want a decentralized I do want to buy this company do I want to.

Take part of a group that is centralized and decentralized it and those are strategic decisions and Ceos and boards care about those and you can't make one of those decisions today.

Speaker 4: Unless you're also making the technology decision because when you decentralize that HR department or you buy that company you're making a decision about how the technology is going to work what how the apps are going to work how the security is going to work on that

Yes, Youre also making the technology decision because when you decentralize that HR department or you buy that company you are making a decision about how the technology is going to work what how the apps are going to work how the security is going to work on that and to do that effectively you have to have an identity system is flexible unless you rollout things quickly across the whole company make policies across the whole company when you really want to lock down.

Speaker 4: And to do that effectively, you have to have an identity system as flexible and let you roll out things quickly across the whole company, make policies across the whole company when you really want to lock down security.

Security free up parts of the organization do their own things that can use their own HR system. They can use their own rules and they can use their own platforms to be effective that those are identity decision. So I would say that is more important our message and when we say we have okta for the global 2000, we want to make sure that message gets across the actually what you buy.

Speaker 4: free up parts of the organization, do their own things. They can use their own HR system, they can use their own rules, and they can use their own platforms to be effective. Those are identity decisions. So I would say that is more important in the message. And when we say we have Octa for the global 2000, we wanna make sure that message gets across. The actually what you buy, you actually buy Octa's products. So you buy Octa's products, they're licensed in a way that

Bye you actually by August products. So you by August products Theyre licensed in a way that's that's that's.

Speaker 4: that's convenient and works for all of these capabilities working together. But the way I would think about the business driver is Okta identity is more relevant, people know about the relevance of it, we can differentiate it effectively, and the overall workforce and customer product suite will be sold more effectively at scale than any of the biggest companies in the world.

That's convenient and works for all of these capabilities working together, but the way I would think about the business driver is okta identity is more relevant people know about the relevance of it we can differentiate it effectively and the overall workforce and customer product suite will be sold more effectively at scale to the biggest companies in the world.

Got it.

Thanks Scott.

Yeah, Let's go to Peter Reed at Bernstein.

Speaker 4: Thank you, appreciate you going and over time here. You know, I'd love to go back to kind of start of the conversation emphasizing the strength with some of your orange's customers obviously frustrating that, you know, maybe the SMB side hasn't been as strong and you know that that sits in the logo of the hopefully that comes back.

Thank you I appreciate you are going to overtime here.

Yes, I'd love to go back to that kind of.

Part of the conversation emphasizing the strength with some of your largest customers, obviously frustrating that maybe the F&B side hasn't been as strong in that system algorithm hopefully that comes back.

Speaker 4: A little bit to dig in on those large customers a little bit more and understand where the growth is coming from or are we hearing about sheet re-exceleration there? Or is this mostly about the kind of excitement of the broader ought to platform and selling through more functionality? And we may even get a bigger boost from sheet re-expansion in the future.

I'd love to dig in on those larger customers a little bit more.

And understand where the growth is coming from or are we hearing about seat re acceleration there or is this mostly about the kind of the excitement of the broader okta platform and selling through more functionality.

And we may even get a bigger boost from sheet re expansion in the future.

Speaker 4: And then kind of like when you look out at the pipeline, you know, obviously the sales team is kind of stacking up stuff, coming into the future, like how unusual is this quarter? Is this like a big bubble on the pipeline? Are you seeing similar type of setup and the next couple of quarters where we can see really good expansion on kind of similar types of execution?

And then kind of like when you look out at the pipeline.

Obviously, the sales team is kind of staffing up stopped coming into the future like how unusual is this quarter is this was this like a big bubble in the pipeline are you seeing similar type of setup in the next couple of quarters, where we could see really good expansion on kind of similar types of.

Execution.

Speaker 1: On the seat expansion question, I think seat expansion definitely is muted with the macro. So I think the success in large enterprises more products.

And on the seed expansion question.

I think seat expansion definitely is muted with the macro so I think the success in large enterprise is more products and I mentioned the OID.

Speaker 1: And, you know, I mentioned the OIG, new business land at the Global Customer Experience Company. You know, we have another example I can think of. And it was a big transaction in well known.

New business land at the global customer experience company.

We have oh.

Another example, I can think of and it was a big transaction in.

Well known.

Speaker 1: online real estate company that was an addition of customer identity cloud. So selling the customer identity cloud to what was already a workforce customer. And then there's examples in the customers and large customers of selling expansions of products, whether it's upsells to advanced multi-factor authentication on the workforce side. So it's more use case expansion versus seed expansion.

Online real estate company that was the addition of customer identity cloud so selling the customer identity cloud to what was already a workforce customer and then there's examples in the customers and large customers are selling expansions of products, whether it's upsells to advanced multi factor authentication on the workforce side. So it's.

I would say it's more.

Use case expansion versus seat expansion.

Speaker 1: The pipeline is interesting. The pipeline for the current quarter were in the fourth quarter are very strong.

The pipeline is interesting.

The pipeline for for the current quarter ran in the fourth quarter are very strong and I think the thing we have to really think about is in this macro environment, how that's going to translate we've seen in the past few quarters that the typical conversion rates and the.

Speaker 1: And I think the thing we have to really think about is

Speaker 1: In this macro environment, how that's going to translate. We've seen in the past few quarters that

Speaker 1: the typical conversion rates and the close rates, not the competitive rates, but the close rates, how much the pipeline goes into actual closed deals has changed since the economic times of a few years ago. So that's the part we have to be prudent about.

Close rates not the competitive rates, but the close rates.

How much the pipeline goes into the actual closed deals has changed since the economic times of a few years ago. So that's the part we have to be prudent about.

Speaker 1: There's stabilization in the macro. We've talked about the numbers, but I think we're taking a little bit of a weight and see approach before we assume that those pipeline numbers are gonna fall down into the closed business category at the rates that were maybe saw a year or so ago.

But there's stabilization in the macro we've talked about the numbers.

But I think we're taking a little bit of a wait and see approach before we.

Assume that those pipeline numbers are going to fall down into the closed business category at the rates that were maybe saw you know a year or so ago.

Yeah.

Speaker 4: Well, that's exciting. Well, hopefully, you know, signals of notes, sharn and sales people and these types of things mean people think they can hit their quota numbers, which will turn into some results for us. Yeah, no, I agree with you there. Great, let's go to Matt.

So that's exciting hopefully.

Signals of no churn and salespeople in these types of things means people think they can hit their quota numbers, which will turn into some results for US yeah, No I agree with you there.

Alright, let's go to Madeline Brooks at Bofa.

Speaker 13: Hi, can you hear that, Timmy? Can, we can't allow you to clear a matter of one.

Hi can you guys tell me, Ken we cannot declare Madeleine.

Speaker 7: Sorry, it would start my video, but we're moving floors in our office. I don't have a camera currently. So I'm just gonna do the app video. But I guess I could go back to, and I'm not gonna ask for any floor looking guidance. But I'm just trying to think about floor as we go into next year, what would need to change for CRPO growth to be maybe high single digit? Is that, you know, wind rate top to really drastically because is that more of a factor of macro?

Sorry, what's that means it out, but we're moving floors in our office I don't have I cannot currently.

Yeah Yeah.

But I don't think that it can go back and I'm not going to ask for any forward looking guidance I'm just trying to think about no floor. As we go into next year, what would need to fall for the Rps.

<unk> kept all of the high single digits is that win rate capture really drastically because is that more of a factor of macro.

Speaker 2: Yeah, I mean, yeah, we're definitely not going to give a guidance today for next year for current RPO. So thank you for saying that. But ultimately, you know, when we're thinking about next year, really, we're focused on the second half of this year.

Yeah, I mean, yeah.

Yes, we're definitely not going to give a guidance today for next year recurring IPO.

So thank you for saying that.

Yeah.

Similarly.

We're thinking about next year. It really we're focused on the second half of this year. If you think about current IPO, even I am even more important to revenue is really the second half of fiscal year 'twenty forward, given our subscription model. So.

Speaker 2: If you think about current RPO, even more important to revenue is really the second half of Fiskator 24 given our subscription model. So

Speaker 2: You know, we're obviously excited and optimistic about the second half, but we need to execute inside this macro headwind. I think the biggest factor in this

We're obviously excited and optimistic about the second half, but we need to execute inside this macro headwind I think the biggest factor in this.

Speaker 2: you know, next half or even if you stretch out even the next year, it's really, what does the macro do? Because we do believe that the broader go to market team and the total company is really executing well both on the top line and on the bottom line. So really pleased with how everyone is performing at this point through Q2 and as we enter into the second half of the year.

Next half or even if you're stretching out even in next year, it's really.

What does the macro do because we do believe that the broader go to market team and the total company is really executing well both on the top line and on the bottom line. So.

Really pleased with how everyone is.

Is performing at this point through Q2, and as we enter into the second half of the year.

Speaker 7: So just a quick follow up to that, if I may. So if I think about.

So just a quick follow up to that if I might.

So if I think about.

Speaker 7: just thinking into next year the growth though. And for the fourth quarter as well, just in terms of translating to historical, maybe like seasonal norms of budget blush, what are the thoughts still that this year maybe budget blush is gonna be stabilized? And if I think too, like taking down CRPO guidance 5% from this quarter to next quarter, versus your common sense stability, how do we kind of marry those two?

Alright, just.

Just thinking into next year I think right now.

And for that.

For fourth quarter as well just in terms of translating to historical and maybe like seasonal budget flush what are the thoughts tell us that there may be budget flush is going to be stable I think okay. Thank you.

Went down.

<unk> guidance, 5% from this quarter to next quarter versus your comments on stability you know how do we kind of marry those two.

Speaker 2: Yeah, it's purely the, even though the macro is stabilizing, it is still a significant headwind. And so we're factoring that into Q3. And in terms of the budget flushing Q4, obviously we'll update you guys.

Yes, it's purely.

Even though the macro is stabilizing it is still a significant headwind and so we're factoring that into Q3 and you know.

In terms of the budget flush in Q4, obviously, we will update you guys.

Speaker 2: with a Q4 guidance the next earnings call and not obviously how the results go at the end of Q4 but we are expecting the macro to still be a considerable headwind of the second half and so we are adjusting our expectations or giving you expectations accordingly.

With our Q4 guidance at the next earnings call and then obviously, how the results go at the end of Q4, but.

But we are expecting the <unk>.

Macro to still be a <unk>.

Considerable headwind in the second half and so we are adjusting our expectations or.

Giving you expectations accordingly.

Speaker 7: Great. Thanks so much. From last but not least we got Brian S. Exit JP Morgan.

Okay, great. Thanks, so much and from and last but not least we got Brian Essex at J P. Morgan.

Speaker 14: All right, great thanks guys and thanks for, for squeed to me in here. Maybe you brought on that, on that last comment. Maybe you just clarified so I might have missed it during the prepared re-barks, but are you thinking about the macro deteriorating in the second half of the year? Is it staying the same and then just have a quick follow up for top? Yeah, we view it as stabilizing. So in other words, what we saw in Q2, we believe it, it stays that way in Q3Q.

Alright, great. Thanks, guys and thanks for squeezing me in here.

You're right on that on that last comment can you, maybe just clarify because I might have missed it during the prepared remarks, but.

Are you thinking about the macro deteriorating in the second half of the year is it staying the same and then I just had a quick follow up for Todd.

Yes, we view it as stabilizing so in other words, what we saw in Q2, we believe it.

It stays that way in Q3 Q4.

Speaker 14: And then, and then maybe Todd just, I think last quarter you noted and it was just a couple of questions ago that, you know, just better sales retention. Is this the fourth quarter of better sales force retention and what are the plans for, you know, hiring productivity and any kind of executive changes on the sales force front through the rest of your years? Trying to get a sense of what's the overall kind of...

And then maybe just.

I think last quarter, you noted and it was just a couple questions ago.

Just better sales retention is just the fourth quarter of better sales force retention and what are the plans for <unk>.

Hiring product.

Activity in any kind of executive changes on the Salesforce front through the rest of the year, just trying to get a sense of what the overall.

Speaker 14: you know cultural environment is like there from the sales perspective. Yeah, it's a great question. The attrition has been a healthy level for a couple quarters now. And then obviously if attrition is a healthy level, you get ramped.

Cultural environment is like there from a sales perspective, yes, it's a great question that the the attrition has been a healthy level for a couple of quarters now and then obviously.

If attrition is a healthy level you get ramps.

Speaker 1: People start to ramp and the data we see that, you know, one of the points we look to is the participation in customer or any cloud deals and...

People start to ramp in the data we see that one of the points. We look to is the participation customer did any cloud deals and I'm not that's at a healthy level as well, but the productivity you can still be better and we think the productivity is that really macro related.

Speaker 1: That's at a healthy level as well, but the productivity can still be better and we think the productivity is the really macro related

Speaker 1: And so I think the last thing that could improve is productivity, but we have to see what the macro does. But we are working very hard to get better. It felt like we're just waiting around, waiting for the macro to get better. We're, as we always do, we're enabling, we're making sure that people, the processes and the handoffs and the marketing funnel is running well. And so we're doing a lot of stuff. And it's really a testament to, I think, have succeeded in having a professional Federer project to contribute.

And so I think the last thing that could improve as productivity, but we have to we have to see what the macro does but it's where we are working very hard to get better. It's not like we're just waiting around waiting for the macro to get better or as we always do we're enabling where.

We're.

Making sure that people the processes and the Handoffs and the marketing funnel is running well and so we're doing a lot of stuff and it's really a testament to I think the.

Speaker 1: The leadership we have on the sales side, we have John Johnson is running the sales team globally on an interim basis. We have a search out for a new president go to market and we're going to get the right. It's very important we put the right person in that job because that's going to be the person that takes us over the next three to five years. to new heights and we're going to get the right.

The leadership the leadership, we have on the sales side, we have John Cena is running the sales team globally on an interim basis.

We have a search out for a new president go to market and we're going to get the right. It's very important we put the right person in that job because that's going to be the person that takes us over the next three to five years.

To new Heights, and we're going to get the right person there.

Speaker 1: So I think overall the vibe is positive and ultimately I think the attrition is kind of a good metric for that. But even beyond that, I think just the anecdotal when you talk to people and see how people are feeling and seeing success in how they're seeing success at the positive vibes. So that's good. It's good. Portans well for the second half of the year.

So I think overall the vibe is positive and ultimately I think the attrition is kind of a good metric for that.

But even beyond that I think just anecdotally when you talk to people.

See how people are feeling and seeing success and how they are seeing success at the positive vibes, so that portends well for the second half of the year and beyond.

Speaker 2: Yeah, I'm Brian . I might be an easier grade than my boss, but I would have put it as four quarters in a row, but he's saying too. So yeah, I think we've definitely strong a bunch of quarters together, a really healthy attrition. And I think to what Todd was saying, it comes through in the results. All right, sounds.

Great.

Brian I might be an easier than my and my boss, but I would have had four quarters in a row, but is he saying too so.

Yes, I think we've definitely stronger bunch of quarters, you've got a really healthy attrition I think what Todd was saying it comes through in the results.

Alright, it sounds good thank you so much.

Speaker 1: All right, thanks everybody. I hate before we go, just want to let you know that we'll be attending several conferences this quarter, as well as bus tours. We'll be at the Goldman Sachs Conference in San Francisco on September 5th. Wolf TNT Conference in San Francisco on September 6th. Also at the city conference in New York on September 6th. And the Piper Sandler Growth Conference in Nashville on September 13th.

Alright, Thanks, everybody before we go just wanted to let you know that we'll be attending several conferences this quarter as well as bus tours will be at the Goldman Sachs Conference in San Francisco on September 5th Wolf TMT Conference in San Francisco on September 6th also at the Citi Conference in New York on September six and the Piper Sandler growth Com.

In Nashville on September 13th.

Speaker 1: And of course, we hope to see you in San Francisco for Octane and our Executive Panel Summit on October 4th. So that's it for today's meeting. If you have any follow-up questions, you can reach us at investoratocde.com. Thanks everybody.

And of course, we hope to see you in San Francisco for Octane and our executive panel summit.

Tober fourth so that's it for today's meeting if you have any follow up questions you can reach us at investor at <unk> Dot com. Thanks, everybody.

Yeah.

Yeah.

Speaker 15: Yo mama can't say

That's it.

Okay.

As a driver.

Yes.

Thank you.

Panamax spot.

Okay.

Okay.

Speaker 16: I'm not a mom, I'm a mom, I'm a son, I'm a dad I'm not a mom, I'm a dad, I'm a dad

Okay.

Thanks, Doug.

Thank you.

Thanks, Tom.

Okay.

Fine.

Is there any longer.

Tom.

Great.

Thanks, Tim.

Okay.

Spring anymore.

Samsung.

With me anymore.

Fantastic.

Yes.

The main model.

Thanks.

Okay.

Plant.

Okay.

Okay.

Okay.

Thank you Manuel.

Thanks again.

Good morning anymore.

Thanks, Tom.

Okay.

Thank you.

Okay.

Thanks, Tom.

Got it.

Yes.

Dan.

Okay.

Speaker 17: You you