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Okta, Inc. (OKTA) CEO Todd McKinnon on Q3 2019 Results – Earnings Call Transcript


Okta, Inc. (NASDAQ:OKTA) Q3 2019 Earnings Convention Call December 5, 2018 5:00 PM ET


Catherine Buan – VP, IR

Todd McKinnon – CEO

Invoice Losch – CFO

Frederic Kerrest – COO


Sterling Auty – JP Morgan

Terry Tillman – SunTrust

Alex Henderson – Needham

Richard Davis – CG Monetary

Heather Bellini – Goldman Sachs

Shaul Eyal – Oppenheimer

Pat Walravens – JMP Securities

Grey Powell – Deutsche Financial institution

Jonathan Ho – William Blair

Rob Owens – KeyBanc Capital Markets


Good day, and welcome to the Okta Third Quarter 2019 Earnings Call. At the moment’s convention is being recorded.

Right now, I might like to show the convention over to Ms. Catherine Buan, Vice President of Investor Relations. Please go forward, ma’am.

Catherine Buan

Good afternoon and thanks for becoming a member of us on immediately’s convention name to debate Okta’s Fiscal Third Quarter 2019 Monetary Results. My identify is Catherine Buan, VP of Investor Relations at Okta. With me on at the moment’s name are Todd McKinnon, Okta’s Co-Founder and Chief Government Officer; Invoice Losch, the Firm’s Chief Monetary Officer; and Frederic Kerrest, the Firm’s Co-Founder and Chief Working Officer.

Statements made on this name embrace ahead-wanting statements pursuant to the Protected Harbor provisions of the Personal Securities Litigation Reform Act of 1995, together with however not restricted to, statements relating to our monetary outlook, our market positioning and advantages that could be derived from our current acquisition. Ahead-wanting statements contain recognized and unknown dangers, uncertainties and different elements which will trigger our precise outcomes, efficiency or achievements to be materially totally different from any future outcomes, efficiency or achievements expressed or implied by the ahead-wanting statements. You shouldn’t depend on ahead-wanting statements as predictions of future occasions. Ahead-wanting statements symbolize our administration’s beliefs and assumptions solely as of the date such statements are made.

As well as, throughout immediately’s name, we’ll talk about non-GAAP monetary measures. These non-GAAP monetary measures are along with and never an alternative to or superior to, measures of monetary efficiency ready in accordance with GAAP. There are a selection of limitations associated to using these non-GAAP monetary measures versus their closest GAAP equivalents. For instance, different corporations might calculate non-GAAP monetary measures in a different way, or might use different measures to guage their efficiency, all of which might scale back the usefulness of our non-GAAP monetary measures as instruments for comparisons. A reconciliation between GAAP and non-GAAP monetary measures is obtainable on our earnings launch.

Additional info on these and different elements that would have an effect on the corporate’s monetary outcomes is included in filings we make with the Securities and Change Fee, the SEC, from time-to-time, together with the part titled Danger Elements within the Quarterly Report on Type 10-Q beforehand filed with the SEC. You may as well discover extra detailed info in our supplemental monetary supplies, which incorporates trended monetary statements and key metrics posted on our Investor Relations web site.

Now, I’d like to show the decision over to Todd McKinnon. Todd?

Todd McKinnon

Thanks, Catherine and thanks everybody for becoming a member of us right now. Earlier than we start the decision, I want to take a second to acknowledge today of memorial for the late President George H.W. Bush. We honor his presidency and lifelong of public service to our nation and our ideas are together with his household at the moment.

Our third fiscal quarter was one other excellent quarter for Okta with complete income and calculated billings each up 58% yr-over-yr. We continued to take a position throughout our enterprise, whereas enhancing our backside line. Working margin improved over 22 factors and free money move margin improved greater than 18 factors yr-over-yr, making us free money stream constructive for the primary time. We additionally had a document quarter when it comes to buyer progress. We added over 450 new clients in Q3, bringing our complete to over 5,600 clients. Much more thrilling is the momentum with our largest clients.

We noticed 55% progress in clients with over $100,00zero in annual recurring income, which represents a document 100 internet new provides in 1 / 4. This momentum is an indicator that id is an more and more strategic crucial for organizations in each business and validates Okta’s strategy to serving to organizations handle all their identities by means of our unbiased cloud platform. As a reminder, we handle two markets, workforce id, the identities of staff, contractors and companions; and buyer id, the identities of our clients’ clients. We closed quite a lot of vital offers within the quarter. I am going to spotlight a couple of of them.

First, Hertz International Holdings, a automotive rental firm that operates in 150 nations, is an thrilling new deal for us. The corporate selected Okta to securely join all of its staff to the a whole lot of purposes they use to run their enterprise. Hertz will use our workforce id merchandise specifically Okta’s single sign-on, common listing and multi-issue authentication to offer a greater and safer consumer expertise for its associates all over the world and scale back IT helpdesk administration prices.

Subsequent, a world monetary providers firm with over 750,00zero members, was a brand new buyer id and workforce id win for us within the quarter. The corporate acknowledged that its outsourced id answer lacked a full view of its clients and didn’t help its digital initiatives. They labored with Deloitte to discover a single id platform that would handle and safe each its members and staff. They chose Okta’s buyer id merchandise to offer personalised experiences for its members and our workforce id merchandise, together with single sign-on, common listing, lifecycle administration and adaptive multi-issue authentication to streamline worker entry to workforce purposes.

A noteworthy up promote within the quarter was the US Division of State, who had initially bought Okta for authentication for its greater than 100,00zero exterior business companions, however will now broaden to its complete workforce. The State Division evaluated a number of id options to strengthen its safety posture and help its transition to the cloud. We consider the State Division chosen Okta as its enterprise broad workforce id answer due to our credibility throughout the federal government sector to safe identities and digital belongings throughout all kinds of customers and applied sciences.

Okta’s single sign-on, common listing, lifecycle administration and adaptive multifactor authentication merchandise will present 170,00zero State Division staff, contractors and company companions with safe, seamless entry to net and cloud based mostly purposes, akin to Workplace 365, ServiceNow, Field and AWS. We’re very excited concerning the buyer momentum within the quarter. Not solely are we seeing extra offers, we’re additionally seeing broader adoption of our know-how and we’ll proceed to innovate and broaden on our platform.

There are a few overarching takeaways I need to spotlight from the third quarter. First, we’re seeing traction with the investments we have made in our associate technique, particularly, our companion ecosystem is rising considerably as the notice round id is growing and the area is turning into higher outlined. In the meantime, giant gamers resembling Deloitte and VMware have acknowledged Okta as a vendor of selection for id options, which additional enhances our positioning in these companion alternatives. We’re happy with our momentum and companion offers within the quarter, together with the US Division of State and consider we’re within the early innings of seeing upside from these relationships.

And second, we have continued to construct out our Zero Belief safety framework. Final quarter, I talked about our acquisition of ScaleFT as an necessary step in furthering our place in Zero Belief safety. We consider that id is the inspiration for enabling Zero Belief safety and we’re inspired to see that that validated each by our clients and the business. Final month, Forrester Analysis revealed its first ever wave analysis of the Zero Belief safety framework during which Okta was acknowledged as a robust performer and earned the very best potential rating within the standards, individuals workforce safety, imaginative and prescient and technique and market strategy.

We’re very happy with our persistently robust outcomes and the momentum we’re seeing and we expect it is being pushed by a number of elements. We consider vital know-how transitions are pushing the market in our course. First, each group we speak to is on a journey to the cloud. Second, they’re enthusiastic about methods to grow to be know-how corporations and higher interact with clients on-line or by way of customized and cellular purposes. And third, safety has turn out to be a precedence on the highest degree. As these transitions unfold, organizations are recognizing the crucial position that id should play of their environments and whereas cloud, digital transformation and safety are prime priorities, most organizations are nonetheless comparatively early of their journeys to comprehend their full potential.

We consider Okta’s alternative will develop alongside all three of those transitions, as they proceed to mature over time. The market is validating our perception that id is the inspiration for securely connecting individuals and know-how and we consider that Okta is main in id and profitable for a couple of essential causes. First, we have now a basically totally different strategy to the area than our rivals. The Okta id cloud is a totally unbiased and impartial cloud platform for id. As a result of our enterprise is not tethered to the success of particular purposes, clients recognize that Okta will allow them to select and constantly undertake the perfect applied sciences for his or her enterprise.

Our clients consider Okta as an unbiased platform that helps them futureproof their know-how investments. Second is the Okta integration community. Due to the central position Okta performs for our clients, we attempt to combine to each know-how these clients need to use with greater than 5,500 pre-constructed integrations to cloud and on-premise purposes and superior integrations, the community safety suppliers like Palo Alto Networks, safety analytics suppliers like Splunk and IT operations suppliers like ServiceNow, we consider the Okta integration community is our single largest differentiator out there. The breadth and depth of our integrations are important, particularly on this business as a result of the sorts of capabilities that we provide are solely as helpful because the applied sciences they combine with.

Most of the causes our clients love Okta are the results of our long run and continued investments in innovation and Okta integration community. Causes, such because the velocity of implementation, the power to rollout purposes in days or perhaps weeks versus months or years, the power to deal with a really complicated set of issues with a easy and intuitive answer and the power to maintain tempo with know-how. And what we have seen, consequently, is a strong community impact that’s producing a ton of worth for Okta, our clients and our ecosystem of companions. As we combine to extra applied sciences, we turn into extra useful to our clients. As we appeal to extra clients, know-how suppliers turn into extra incentivized to combine to Okta.

The third cause we’re profitable is that we’re uniquely capable of function the id commonplace for our clients, as a result of we provide a single id platform for each sort of consumer in a corporation’s ecosystem, from their staff and contractors to their companions and their clients. More and more, we’re seeing clients undertake Okta as this single normal and retired legacy infrastructure alongside the best way, together with each lengthy-time clients like Experian, Allergan or Adobe and newer clients like Main League Baseball who lately introduced at our Investor Day. They’re capable of handle and safe all of their identities in a constant means from a single platform.

The very last thing I need to name out that units us aside is our buyer first focus. We consider buyer success in a wider approach than most know-how corporations, even most cloud know-how corporations. For many, buyer success is about ensuring clients are profitable on your platform that they are capable of efficiently implement it and use it. That is in fact true for us as nicely. Nevertheless, since Okta is an enabling platform for individuals and know-how, it needs to be extra. Our clients purchase Okta to make the remainder of their know-how even higher.

For instance, many use Okta to automate provisioning from their HR techniques to downstream purposes, much more use Okta to roll out purposes like Workplace 365 for extremely distributed environments. Their metrics for fulfillment aren’t nearly being profitable with Okta, they’re about with the ability to automate provisioning via Workday to enhance worker on-boarding and off boarding or with the ability to rollout Workplace 365 to giant international organizations in a matter of weeks. These are the sorts of success tales we care about most and since we have finished these sorts of implementations numerous occasions, our clients are capable of lean on our expertise and experience to make sure they’re profitable with Okta and the applied sciences we hook up with.

In abstract, the market is being pushed our means, as momentum in cloud, digital transformation and safety are all converging on id and we’re profitable due to our unbiased impartial strategy, the breadth and depth of the Okta integration community and our capacity to supply one platform for each use case and our buyer first focus.

Thanks once more on your time at this time and I am going to now flip it over to Invoice to stroll via the monetary outcomes.

Invoice Losch

Thanks, Todd and thanks once more to everybody for becoming a member of us. I’ll first undergo our outcomes for the third quarter of fiscal yr 2019 earlier than discussing our outlook. We had one other robust quarter with income totaling $105.6 million, rising 58% yr-over-yr. Subscription income totaled $97.7 million within the third quarter, a rise of 58% yr-over-yr, representing 93% of our complete income, up barely from 92% in Q3 final yr. Skilled providers income was $7.9 million, a rise of 56% over the identical interval final yr. Income from outdoors of the US grew 58% yr-over-yr and represented roughly 16% of our third quarter income, in keeping with Q3 final yr. We proceed to view our worldwide enterprise as a long run progress driver and we’re investing strategically to foster this incremental progress alternative.

Shifting on to billings, the present portion of calculated billings progress for the quarter was 57% yr-over-yr. Complete calculated billings for the third quarter totaled $124 million, a rise of 58% over Q3 final yr. We’re very happy with our calculated billings progress and the underlying demand that continues to drive our enterprise. Contributing to our excessive billings progress fee was higher than anticipated bookings linearity within the quarter and the useful timing of sure invoices.

Our progress has benefited from momentum of latest buyer additions in addition to upsells inside our buyer base, throughout all of our segments. The full variety of clients on the finish of the quarter was over 5600, up 42% yr-over-yr, a slight acceleration from Q2. We noticed broad additions throughout our enterprise buyer base and added a document variety of internet new clients with a annual recurring income larger than $100,00zero, up 100 from the earlier quarter to 937, representing a 55% yr-over-yr progress. Our greenback based mostly retention price for the trailing 12 months ended October 31 stays robust at 120%, demonstrating the continued success we’re having increasing inside our present buyer base.

Earlier than turning to expense gadgets and profitability, I want to level out that I might be discussing non-GAAP outcomes going ahead. Our GAAP monetary outcomes together with the reconciliation between GAAP and non-GAAP outcomes could be present in our earnings launch in addition to the supplemental supplies posted on our Investor Relations web site.

Subscription gross margin continues to be robust at 82.2%, up 180 foundation factors versus the third quarter final yr. Our skilled providers gross margin was adverse three.2% in comparison with unfavorable 30.6% within the third quarter final yr, primarily as a result of robust utilization and enhancing operational leverage. Complete gross margin was 75.eight% within the third quarter, up 380 foundation factors yr-over-yr. Gross revenue was $80 million, up 66% yr-over-yr. Our gross margin represented a brand new document excessive, as we proceed to scale our platform.

Turning now to working bills, gross sales and advertising expense for Q3 was $50.7 million in comparison with $43.7 million in Q3 final yr. This represents 48% of complete income, an enchancment from 65% within the third quarter final yr. This yr-over-yr enchancment was aided by the expense influence because of the timing of Oktane, our annual buyer occasion, which was held in Q3 of final yr, however in Q2 this yr.

R&D expense in Q3 was $21.three million in comparison with $14 million in Q3 final yr. This represents a progress fee of 52%, as we proceed to take a position considerably within the Okta id platform and our Okta integration community. On the similar time, R&D as a proportion of income remained pretty constant at 20% in comparison with 21% in Q3 final yr. G&A expense was $14.5 million for the third quarter, in comparison with $9.9 million within the third quarter of final yr. G&A was 14% of income, an enchancment from 15% for Q3 final yr.

Our complete headcount was 1,473 as of October 31, rising 29% over Q3 of final yr. We’re including headcount throughout the board to help the expansion of our enterprise and anticipate headcount progress to proceed to speed up within the fourth quarter, as we additional spend money on our go-to-market initiatives and innovation throughout our platform capabilities. We stay targeted on sturdy progress and consequently, we have seen continued enchancment in our working margin, whereas sustaining robust prime line progress.

Working loss within the quarter was $6.5 million, which is a margin of damaging 6.1%, in comparison with a damaging 28.9% in the identical interval final yr, a big enchancment of over 22 factors. Internet loss per share in Q3 was $zero.04 with 109 million primary shares excellent. This compares to a internet loss per share in Q3 final yr of $zero.19 with 95 million primary shares excellent on the time.

Working money circulate was constructive $6.four million in Q3. Working money circulate margin was 6.1% in comparison with adverse 14.2% in Q3 final yr, an enchancment of over 20 factors. Our prime line outperformance and continued margin enchancment resulted in constructive free money stream within the quarter for the primary time. Free money movement got here in at a constructive $1.four million within the quarter. Free money move margin was 1.three%, an enchancment of over 18 factors in comparison with a unfavorable 16.eight% for Q3 final yr.

We’re notably happy with this, given the impression we noticed with CapEx within the quarter on account of our ongoing headquarter workplace enlargement. Whereas we’re inspired by our robust money movement efficiency within the quarter, we proceed to anticipate to see variability in free money circulate margin as a result of this enlargement together with ongoing fluctuations in working capital.

Turning to the stability sheet, we ended the third quarter with $546 million in money, money equivalents and brief-time period investments. This consists of the web proceeds of $307 million from the convertible senior notes we issued in Q1.

Shifting on to steerage, for the fourth quarter of fiscal 2019, we anticipate complete income of $107 million to $108 million, representing a progress fee of 39% to 40% yr-over-yr, non-GAAP working lack of $12.5 million to $11.5 million, non-GAAP internet loss per share of $zero.09 to $zero.08, assuming shares excellent of roughly 110 million.

For the complete yr of fiscal 2019, we now anticipate complete income of $391 million to $392 million, representing a progress fee of 52% to 53% yr-over-yr, non-GAAP working lack of $49 million to $48 million, non-GAAP internet loss per share of $zero.37 to $zero.36, assuming shares excellent of roughly 107 million.

Though we’re nonetheless early in monetary planning for fiscal 2020, I want to present a preliminary view, as you take a look at your fashions for subsequent yr. We at present estimate income for fiscal yr 2020 to be between $510 million and $520 million, representing a progress price of 30% to 33%.

In abstract, I am happy with our constant execution and the outcomes we reported this quarter. We stay dedicated to sturdy progress as outlined at our Investor Day in October. We see this progress coming from buyer momentum, companions’ channel traction, worldwide enlargement and innovation in our platform and community. Particularly this quarter, we’re excited concerning the continued traction we see throughout our companion ecosystem. We stay assured in our positioning and lengthy-time period technique.

As Todd talked about, we see profit from the market tailwinds which are elevating the necessity for id. These tailwinds, along with the success we have seen with our main platform integration community and buyer-first strategy, proceed to place us in a profitable place. We’re excited concerning the alternatives forward and sit up for closing out the yr on a robust observe.

With that, Todd, Frederic and I’ll take your questions. Operator?

Query-and-Reply Session


[Operator Instructions] And we’ll take our first query in the present day from Sterling Auty with JP Morgan.

Sterling Auty

Yeah. Thanks. Hello, guys. I consider, Microsoft Azure Lively Listing had a few notable outages within the current previous yr, and I am simply questioning if that is truly modified the sort of conversations or the variety of discussions driving extra curiosity in your answer or is it even having an hostile impact the place corporations are maybe nervous about id within the cloud?

Todd McKinnon

Hey, Sterling. It is a good query. We’re having so many conversations with so many purchasers they usually all comply with sort of the identical key huge tendencies. One is simply clients need assistance adopting extra cloud. They’re occupied with apps, Workplace 365, Google Apps or serious about infrastructure, Amazon, Azure, they’re eager about enterprise app, Salesforce, Workday, ServiceNow, and there is numerous totally different — the reliability, as you talked about, is one factor, however there’s only a entire host of issues they’re making an attempt to determine.

They usually’re making an attempt to determine safety to ensure these apps are accessible and safe, they’re making an attempt to determine easy methods to get probably the most enterprise advantages out of it, and they’re more and more realizing that id is the important thing to plenty of that, if you wish to do safe deployments, if you wish to do fast deployments, if you wish to do deployments that may get the enterprise advantages, you need to have your id story straight.

Vis-a-vis Microsoft particularly, one factor that is fascinating is that, due to our breadth of consumers, now over 5,600 clients and lots of, lots of these clients utilizing some know-how from Microsoft, we truly get visibility into the reliability of Microsoft’s merchandise. So we truly — it isn’t simply in conversations with clients, it is truly in conversations with the potential clients, nevertheless it’s conversations with present clients speaking about what was the extent of this outage, are you able to perceive how broadly the impression was.

So we’re capable of assist clients perceive the breadth of a few of the know-how decisions they’re utilizing and the professionals and cons, and that is the good thing about being this unbiased and impartial platform. So it’s — I might say, it’s one thing we see, however within the grand scheme of issues, it is one of many many conversations we’re having.

Sterling Auty

All proper. Nice. After which one fast comply with-up on Zero Belief. How ought to we take into consideration what portion of the Zero Belief structure that Okta will finally present? And I assume what I am eager about is, it looks like in a few of these fashions, you will have a number of the cloud gateway corporations enjoying a task as properly. So is that an space the place we should always search for elevated partnership from Okta shifting ahead?

Todd McKinnon

It is a good query. So Zero Belief is the time period within the business nowadays. It is a pretty current time period within the business, which principally means do not belief the community, give the consumer the identical expertise no matter whether or not it is an inner community or a community from residence or a community from a espresso store, give them the identical expertise, similar grade ease of use and most significantly similar grade safety. So many occasions, clients aren’t asking for Zero Belief per se, they’re asking for a way do you make this all safe. They usually’re saying, we love the cloud, we’re making an attempt to construct higher buyer dealing with purposes, however safety is paramount and we’d like assist securing that each one. And what they’re more and more realizing is that id is the important thing to that. It’s a must to management id to provide a very nice consumer expertise and a safe consumer expertise.

So now Zero Belief is the business making an attempt to place a design sample in place round what this really appears like and what are the totally different elements you want and what do you want on the shopper, what do you want on the system, what do you want when it comes to, as you talked about, gateways and different issues. And there is — individuals have totally different opinions, however one factor that is turning into very clear is that you need to have id coated properly and you need to have a superb id spine to do safety and to do Zero Belief.

So I feel what you will see is, and also you see it in our outcomes that id is prevalent and pervasive and particularly as clients do extra cloud, do extra and need to be safer after which the precise particulars of that, whether or not you want a gateway or whether or not, how the VPNs slot in, these particulars shall be found out over time, however id goes to be on the core.


Subsequent we’ll hear from Terry Tillman with SunTrust.

Terry Tillman

Hey, good afternoon, everybody. Thanks for taking my questions and nice set of outcomes. Perhaps the primary query, as a result of we heard lots in your ready remarks about companion momentum. I do know earlier within the yr, it sounded — it seemed such as you all sort of refined your associate program with Associate Join and perhaps redesigned it. So I do not know if a few of that is behind, type of, this amped up success with companions, however perhaps you’ll be able to simply speak about a few of the issues structurally you’ve got been doing round partnering after which perhaps extra particularly VMware and Deloitte, somewhat bit extra specificity when it comes to the momentum with them?

Frederic Kerrest

Yeah, completely. Hello, Terry, that is Frederic. Glad to speak about that. I feel you deliver up an important level, which is the significance of companions in our enterprise, it is one thing we have clearly been working on for a lot of years. This stuff aren’t issues which you could simply flip on in a single day. I feel you highlighted a few examples of a number of the massive classes that I might level to and that we see a variety of momentum rising in our enterprise.

The primary one are the worldwide system integrators, you talked about Deloitte, but in addition a number of the folks which are on the market as strategic advisors and implementers to giant enterprise and public group. Deloitte is doing very properly. I used to be simply truly in Europe final week with quite a few our clients opening up our France workplace and had a chance to talk with a number of the senior companions there and they’re as excited in Europe as they’re in North America to work with us, each on the safety implementation aspect, but in addition on these giant digital transformation tasks that they need to be concerned with.

The second piece are very giant know-how partnerships which might be beginning to come into play. Once more, you talked about an important one, VMware. For these of you who won’t keep in mind all the small print, we introduced an essential partnership that we began final Might at Oktane with VMware with first know-how and enterprise integrations between our groups. We furthered that VMware’s VMworld and VMworld Europe, Barcelona, in early November the place we talked concerning the second degree of now know-how integration in addition to extending that partnership out to VMware’s channel. And once more in Europe final week, I heard from loads of people in VMware channel who’re very enthusiastic about this partnership in addition to clients and prospects excited to seeing us work with such a big essential firm and essential piece of know-how for them.

After which, lastly, I might simply level to the Okta Integration Community, which continues to be the de facto commonplace within the business for the perfect and broadest, deepest integrations throughout hundreds of not solely purposes, however items of infrastructure, networking gear and every thing else with dozens of superior integrations which might be actually benefiting our clients the place they discover these options finish to finish, drive plenty of worth. So, we’re seeing so much throughout all of the totally different items of our associate ecosystems, which we proceed to spend money on, however, like our enterprise, these are early days and the alternatives forward are very giant and we’re excited to maintain constructing upon these outcomes.

Todd McKinnon

Yeah. And I might add, Terry, that the programmatic issues that Frederic talked about are essential. However one factor I’ve observed is that, the enterprise outcomes we’re displaying are actually motivating the companions. So when you speak about hundred new offers over $100,00zero in ARR, companions discover that as nicely they usually need to be on-board with this, the newest tendencies, and the chief on this business and that is the enterprise success and the momentum out there has pushed the associate momentum as a lot as anything we have finished programmatically.

Terry Tillman

That is nice. Because of each of you for the reply. And I assume simply my fast comply with-up is on menace insights. Todd, I do know earlier within the yr, you all sort of unveiled type of the place you might go together with all of the analytics horsepower, it seemed like the best way a few of this could work is, it’s a must to purchase the upper worth level to SSO or the MFA product to get entry to it. However what are you able to simply do when it comes to an replace on menace insights. The way it’s being acquired and simply the place you’re with that? Thanks, once more.

Todd McKinnon

Menace insights is actually — it is actually necessary for the worth it delivers to clients and it delivers worth in a approach that is fairly particular, as a result of we see so many purchasers and so many logins, we will detect threats throughout your complete ecosystem after which we will expose that menace intelligence again to particular person clients and allow them to configure insurance policies in Okta that might make a sure choice based mostly on these threats which are related to a person buyer, so it is — as a result of we see the info, we will make the product extra useful for particular person clients and it is one of many advantages of being on the cloud platform.

Menace insights goes very properly. We’re persevering with to roll it out and uptake has been very constructive. We’re working with — getting a variety of suggestions from clients, not simply in menace insights, however within the general coverage engine and constantly innovating across the capabilities, as we do for all of our options. We have now this mannequin, this cloud mannequin, which permits us to constantly launch options and features, but in addition the info modifications on a regular basis. In order threats emerge, it is up to date actual time in menace insights, so it is a very highly effective functionality that’s been properly acquired by the client base.


We’ll now hear from Alex Henderson with Needham.

Alex Henderson

Nice. Thanks very a lot. I hoped you would speak just a little bit concerning the aggressive panorama relative to Cisco’s acquisition of Duo and to what extent you are seeing any change within the conduct of consumers that they’ve been related to or to what extent, as you are going via your aggressive processes, you’re taking extra enterprise from that channel or what — any change in that dynamic?

Todd McKinnon

We’ve not seen a change. The large image is that there are plenty of offers. I imply, the market is basically accelerating. There are lots of offers. And we — the general aggressive tendencies are very according to what we have seen. Our win charges have been constant for a number of years with respect to all of the rivals. After which the rivals are totally different, prefer it’s very totally different if you’re competing with somebody like a Microsoft, the place the dynamic is, clients, they actually do not need to be locked into Microsoft.

They’re fearful about lock in to a sure platform, notably Microsoft, so there, it is about this broad id platform that may help a number of applied sciences, give the client selection freedom from type of being pushed down a sure path, that is highly effective to them. Totally different rivals are totally different. So perhaps a legacy competitor, it is all a few product set that is not being up to date or not being migrated to the fashionable setting they usually see us as their pathway to the longer term, the pathway to the cloud, the pathway to digital transformation or some extent competitor perhaps that simply does not have the breadth of protection and may’t get in offers and may’t cowl the sector or perhaps it is simply extra of a distinct segment answer not a broader platform.

So I feel again to your query about Duo and Cisco, to begin with, you’ve got requested the query about aggressive, however I might first say is that, we’re very robust companions with each Cisco and with Duo. Duo, we now have a seamless integration with Duo on our platform. We’ve got a really seamless integration with Cisco, their firewall merchandise. So, we’re very, very proud of these partnerships and people proceed to be very productive.

On the aggressive aspect, we do have some product overlap with Duo and we proceed to compete with them and I feel it is pure that you’ll see any time there is a huge acquisition like that, you are going to see some disruption when it comes to the execution of them independently and I feel we’re seeing that to a point, however we expect that the partnership will proceed and the place we compete we’ll compete and the surroundings can be constant over time and the large image is, it is — there’s a number of worth to be created for patrons and we’re busy making an attempt to seize and ship that as a lot as attainable.

Alex Henderson

So, one broader query. So clearly, as we’re shifting to a world the place the middle of gravity of safety is shifting out of the enterprise and into the cloud, the structure of safety supply has to vary and I assume that no single firm goes to have the ability to present the complete platform. In that surroundings the place we’re federating a number of safety clouds collectively, does Okta find yourself being the first connective tissue between them? And if that is the case, what position do you play within the coverage piece of that?

Todd McKinnon

Properly, I feel, if you consider the definition of the phrase platform, a minimum of, how we give it some thought, a platform by definition is a set of underlying capabilities that then different individuals construct on prime of to offer the complete set of worth to the ecosystem. So in the event you consider like Home windows, Microsoft could not construct each software, in order that they’ve constructed the Home windows platform after which the app developer group constructed all of the purposes. If you consider — there’s different instance, iOS, proper, Apple could not construct all of the apps into IOS, in order that they opened up this platform, the App Retailer, after which builders construct it.

So we consider — if you say all the safety ecosystem, we completely agree. We expect that nobody firm can construct all of it, it is all about selection for the purchasers, however you then get again — down to love, what’s the platform and what’s the proper factor to pivot off of to be the essential factor that you must have a deal with on that then different individuals can construct round, for us that is id. We expect by being a system of report for id, we could be that foundational platform and different individuals can construct round us. So the best way we take into consideration the world is, we are the id platform after which all these different adjoining classes will plug into us and supply the appliance for our platforms. In order that’s how we take into consideration the world and I feel it is — if you consider taking a look at how we’re investing within the product, it is in line with that.

Frederic Kerrest

I feel, Alex, simply so as to add on that, you see that additionally from a buyer perspective, I imply, what they are saying is, they’re very enthusiastic about plenty of the superior integrations that we now have within the Okta integration community, as a result of it permits them to leverage the investments that they’ve made, for instance, in Palo Alto Networks, get it pre-built-in with Okta, in that method, they will get extra worth out of each of the options, the Palo Alto Networks’ Firewall can speak to Okta and forwards and backwards. So, you truly get extra info by connecting them. Actually, we’ve got a lot of — and I see this increasingly more with our giant enterprise clients.

An excellent instance is a big monetary establishment, I feel in Texas, was the primary one to do that, they’re now truly writing into all of their new know-how contracts that the options they’re shopping for have to be pre-built-in to Okta. So what you are getting is just not solely the prevailing know-how distributors know that they should associate, however the subsequent era of safety distributors are coming to us and saying clearly, you’re the new id normal, the only id platform, it is foundational, we need to make sure that we’re pre-built-in to it and you actually see that flywheel spinning, which I feel goes to be very thrilling for buyer success within the occasions forward.


Subsequent, we’ll hear from Richard Davis with CG Monetary.

Richard Davis

Hello. Thanks. So perhaps I am going to take a remix on Sterling’s query just a little bit. So when do you guys assume we will get to the purpose the place you and perhaps one other trendy safety vendor or two will permit Chief Safety Officers to economize and sort of de-provision or cease spending on safety techniques that — once I speak to those guys, they’re identical to, we all know we’re over making certain with stuff that is repetitively redundant, so to talk. Do you assume there’s a level the place we get to that time the place you’ll be able to stroll in and go look, it is a onerous greenback ROI, you possibly can like minimize off six various things? Thanks.

Todd McKinnon

I feel that it is an fascinating query. From our perspective, it is concerning the selection, proper, and it is concerning the selection to select the apps, the infrastructure to the platforms, the safety instruments which might be greatest for the client. I feel in some instances, that is a consolidation of spend round sure distributors, however in some instances, it is branching out into new areas for some enterprise drive or enterprise progress. I feel within the flexibility the purchasers want, I feel as many purchasers I speak to that need to consolidate and minimize down on distributors, many extra are branching into new areas and need to broaden.

So, I feel it is received to have flexibility to exit each methods, however I do assume that you need to — and I feel you see this in all the tremendous profitable corporations, you need to handle one thing that the client can pivot round, whether or not it is — with us, it is the individual and the id, with different distributors, it is various things, however we’re very assured that our technique of being the system of report for id is the fitting technique and can give clients the pliability to take the know-how in the best way it must be greatest for them.

Richard Davis

Acquired it. After which only a fast comply with up. So look, we’ve seen id administration sort of evolve from password reset corporations to multifactor to adaptive MSA. So have you ever guys ever stated like how a lot penetration the — regardless of the highest a part of the Maslow’s hierarchy of identification is there, is it 10%, is it 5% of — I imply, I do know you are on the foothills, have you ever checked out that on that foundation in any respect or not?

Todd McKinnon

I feel, it is — I haven’t got the numbers. I feel, it is — my impression from clients I speak to and so forth, it is — the tremendous refined machine studying pushed could be very, very uncommon. I feel most clients try to get issues built-in and get the appropriate safety coverage on the correct assets. I feel the promise is long run, extra autonomous, extra machine studying sort issues which are type of the really adaptive for every little thing, however most clients simply need the pliability to attach different know-how after which do insurance policies applicable for the best assets based mostly on the danger degree.

And I feel that it is sort of — and other people know it is a good suggestion, the rationale it is exhausting is as a result of the stuff just isn’t built-in, and one of many issues we’re doing is making an attempt to deliver that pre-built-in strategy to it with our — the Okta integration community and we expect if we will combine every little thing, we may give clients this — principally a preventing probability to do the correct coverage on the suitable assets and that is going to make issues a lot better when it comes to ease of use for the customers, but in addition for safety.


We’ll now hear from Heather Bellini with Goldman Sachs.

Heather Bellini

Nice. Thanks a lot for the query. I had two for you guys. I assume the primary one can be, you proceed to only have a very good enchancment within the internet new buyer rely with over $100,00zero in spending 90 final quarter or 100 this quarter. Is one thing altering when it comes to the variety of merchandise that they may be buying upfront for the primary time? Is it probably that they are simply including — they’re doing bigger deal sizes of a single product than perhaps what you have been seeing earlier than? I simply was questioning in the event you may give us some colour there.

After which I had a query, I do know that somebody requested about a number of the points that Microsoft had over the previous few months, however I used to be extra questioning once you see headlines, just like the one with Marriott final week, does that ever — do you see breaches like that ever inflicting sort of a spike in deal exercise or at the least type of RFPs for you guys? Thanks.

Todd McKinnon

Thanks, Heather. I’ll take the primary query relating to what we’re seeing in that momentum. I feel it is a few issues. To begin with, clearly, we’re very lucky proper in that we’re addressing two giant markets; workforce id administration and buyer id administration. So what you see is, you see clients that may now begin in both of these giant two markets with any of our 5 totally different merchandise. And as you begin working with bigger and bigger organizations, whether or not they’re governmental organizations or personal corporations, they discover increasingly methods to make use of the product, so they might begin, for instance, with multifactor Authentication for a buyer state of affairs after which they will discover methods to deploy it internally for workforce. So, there’s numerous factors the place they will land and broaden.

Quantity two, I feel you are beginning to see us simply, there’s a pure momentum between as we roll out 40 new releases a yr in our Agile software program improvement mannequin, there’s much more options and features coming on a regular basis and there are increasingly more superior use instances we will help clients handle. On the similar time, you are beginning to see bigger and bigger enterprises turning round and saying we’re going to have a cloud-first strategy.

Final week once I was in Europe, I keep in mind assembly with a big utility a few years in the past they usually stated, we’re by no means going to have something within the cloud. And that very same utility, one of many largest utility corporations in Europe, began the dialog final week with, we now have a cloud-first mandate throughout the enterprise. And so, you are simply seeing a lot bigger organizations saying, we now have to get on this journey to the cloud, we’ve to undertake a digital transformation and so the convergence of us with the ability to present extra options for them and the enterprise discovering increasingly methods to leverage the service, I feel, is what you are beginning to see drive these outcomes.

By the best way, that is the identical cause that organizations like Deloitte are discovering increasingly more curiosity in working with us, as a result of clearly they’re working with the most important organizations on the planet. What I might say although is it’s very early. So I feel that on this transformation, our greatest days by far are forward of us in serving to these giant enterprises. We’re very proud of the outcomes we’ve, however I feel that it should be very thrilling within the occasions forward.

After which, on the second piece relating to Marriott particularly, we will not level to something this week the place there are extra inbound telephone calls from organizations on the lookout for that. Definitely, it’s unlucky everytime you learn a type of headlines for these organizations, as a result of it is a very robust place to be in. However sure, I feel it highlights a few issues. To start with, it highlights the truth that each firm has to consider how they will modernize their know-how and the way they will prioritize safety in a brand new method, whether or not you are a excessive-tech firm, whether or not you’re a retail firm, whether or not you are within the hospitality business, it applies to each group.

Quantity two, I feel it additionally highlights what everyone knows, which is there’s a vital dearth of superior software program builders on the earth, in North America and particularly in safety and you may think about that for lots of those giant corporations, it is arduous simply to draw all of those superior safety software program builders to their corporations.

After which lastly, id is simply now beginning to turn into the middle. Individuals at the moment are beginning to come round to the truth that it’s so essential, nevertheless it’s taken some time and positively a variety of these corporations have had these assets out there. So Marriott has been on the market with their packages for a lot of, a few years, now it is time to modernize them. I feel I might simply level to what we simply did with the Albertsons buyer press launch that went out immediately as properly.

An excellent instance of an organization that is been round 80 plus years, they’ve had loyalty and rewards packages for a very long time, however they understand it is time to modernize and they also began working with us a few quarters in the past, and in the present day there’s 30 million shoppers accessing Albertsons’ Safeway and all of their buyer id administration assets on a weekly foundation. I feel these are the sorts of developments that you’ll see increasingly more of within the occasions forward and positively we expect that we’re very excited concerning the alternative to assist a variety of clients with these alternatives of their companies.


Subsequent, we’ll hear from Shaul Eyal with Oppenheimer.

Shaul Eyal

Thanks. Good afternoon, guys. Congrats on one other set of robust outcomes. I needed to ask about a number of the shoppers and contract bulletins you’ve got made, in all probability beginning with Albertsons. It seems to be a large buyer, I feel you’ve got indicated 30 million clients/customers from their perspective interacting on a weekly foundation. Was that a displacement, in all probability not, however simply need to hear your fascinated with it?

And in addition perhaps speak to us, Todd or Freddie, concerning the course of, perhaps the timeframe it took from POC to PO and doubtless what are the opposite lengthy-time period alternatives you possibly can see with this particular shopper? After which I’ve a query on the State Division contract? Thanks.

Todd McKinnon

Yeah, completely. Thanks for the questions, Shaul. I am going to begin with Albertsons. So your first query was about what we displace there. I imply Albertsons, like loads of giant organizations, has been constructed up through the years, via M&A, proper. So when you look, they’ve immediately dozens of various properties in meals and drug retail. And so, as these totally different organizations have advanced and as Albertsons has rolled out increasingly more of those totally different manufacturers, every of these totally different corporations have include their very own set of infrastructure. So, the truth is, there was legacy infrastructure, however not simply at Albertsons correct, at Safeway and in any respect the opposite manufacturers.

And so, what you might have is that this sprawl the place they’ve many various installations, a few of them may be residence-grown, some could be of CA, some is perhaps of Oracle or IBM, and so what occurs is, you as an finish buyer, it is a dangerous expertise for you, since you may need an Albertsons’s login and a Safeway login, you aren’t getting the worth throughout each of them, they do not know what you are doing after which at Albertsons clearly they need one view of you. In order that they know the place you are buying throughout all their properties, each on the online, on the cellular, bodily contained in the shops.

And so by reworking throughout all these totally different items of on-prem infrastructure, shifting to a centralized cloud platform just like the Okta id cloud, placing all of these totally different assets inside one central database, they’re utilizing our Okta common listing and permitting their clients to have a way more seamless expertise, it is enhancing the client expertise, nevertheless it’s additionally clearly on the again finish offering Albertsons with a lot better visibility into what their buyer is doing throughout all these totally different properties and that’s the true worth.

So completely we did displace legacy applied sciences, nevertheless it wasn’t only one piece, it was undoubtedly many items that they have been having numerous hassle federating, as a result of they have been round for 10,15, 20 years inside totally different knowledge facilities they usually get very, very difficult.

In your second query across the time to work with the client, I feel you will in all probability be pleasantly stunned, Albertsons has been a buyer of ours for lower than 4 quarters. I can return and look precisely, however definitely I feel it was because the starting of this fiscal yr the place they signed up and I feel that point to worth is one thing that you simply actually solely get with a contemporary cloud platform. The truth that they have been capable of rollout 30 million buyer visits on a weekly foundation throughout all these totally different myriad properties, each bodily, each on the online, on cellular purposes and the very fact they have been in a position to try this in a matter of a few quarters, that is the way you get this buyer success.

And it is due to the foundational platform that we now have in there that you simply begin seeing they get very fast ROI, the TCO is definitely comprehensible and really shortly they go from us serving to them clear up one particular drawback the place we turn into then the id commonplace and we grow to be pervasive throughout their whole group and id actually turns into this foundational platform, they get lots of consolation round they usually can construct on. And in order that’s particularly round Albertsons.

I consider you additionally had a query, you stated a comply with-up query across the State Division?

Shaul Eyal

And doubtless on the State Division, that comes beneath the federal verticals, speak to us slightly bit, perhaps particularly about this undertaking, this idea, but in addition how do you see the chance on the federal vertical? And what are you guys doing to in all probability speed up that? For sure, I might think about such a contract ought to entice and speed up the urge for food to do rather more, you get the State Division, you recognize, these guys, all of them speak to one another, you will get an amazing reference right here and the sky might probably be the restrict listening to that within the federal vertical?

Todd McKinnon

I definitely hope that you simply’re proper, Shaul, so we’re working on that each day. Within the meantime, I am going to offer you some particular particulars round that. Look, I feel, public sector very very similar to the query round companions earlier on the decision, this isn’t one thing you possibly can flip on in a single day. I imply that is one thing we have been working on with the federal staff in place, I feel, for coming over three years now. It isn’t simply on the federal degree, however we do very nicely at state and native, and once more, you see all types of organizations seeing these main imperatives of the journey to the cloud and the way they will turn out to be know-how corporations.

I feel when you consider public sector and the US State Division is one instance. It is a good one, however it’s only one instance. Definitely the federal fiscal yr ends in September, which coincides with our Q3, which is why we aren’t terribly stunned to see some good enterprise from the federal sector as they wrap up their yr they usually look to the yr forward.

However I might spotlight that we have been working on a whole lot of the underpinnings for our platform and to make it viable and a very good, robust, viable, safe, dependable, scalable efficiency answer for the federal government businesses for a very long time. For instance, we’ve got been HIPAA-compliant for fairly a while. We at the moment are already FedRAMP average, licensed on the platform, and we even have native help for issues like [indiscernible], which permits the federal government to make use of loads of our Okta workforce merchandise.

After which, lastly, you see plenty of massive initiatives which might be occurring inside the federal government. For instance, they’ve the Modernized Authorities Know-how Act, which establishes funds to enhance federal know-how. You even have the White Home, which is pushing this cloud sensible technique with something that may go to the cloud ought to go to the cloud. And I feel these are simply a few of the examples of what you see and, clearly, we’re very lucky that we might assist these organizations make these strikes and we’re very proud of the success we have had. However, once more, I feel the chance within the occasions forward is excellent.

During the last couple of years, you’ve got seen us work increasingly more with authorities businesses, organizations just like the Division of Justice, the Middle for Medicare and Medicaid Providers, and now the State Division, so definitely we’re beginning to get good traction, it is necessary to make these clients profitable, which we do, however we’re very excited concerning the alternative forward. And I feel it is once more very early days and we’re enthusiastic about what we will probably do on this phase.


Subsequent, we’ll hear from Pat Walravens with JMP Securities.

Pat Walravens

Oh, nice. Thanks very a lot and let me add my congratulations. Hey, Todd, are you able to stroll us via simply kind of at a excessive degree, the steps that you take to ensure dangerous guys do not breach the Okta Community?

Todd McKinnon

Yeah, I imply, it is a huge focus for us. We — to start with, the primary factor that clients — when clients take into consideration Okta, the primary factor that they’re making an attempt to unravel for is combining each ease of use for his or her finish-customers and safety for their very own software and providers. In order that they see Okta as a approach to make their very own know-how safer and whether or not it is ensuring that accounts our provision on the proper time, ensuring that the best individuals even have entry to the correct providers on the proper time, ensuring that there’s the correct quantity of authentication, whether or not it is a single password, whether or not it is multifactor, whether or not it is a sure coverage, all that makes an incredible quantity of enchancment in how issues are straightforward to make use of after which how issues are safe.

And in the event that they’re constructing a buyer dealing with website or cellular app, you are doing all that, whereas on the similar time growing their time to worth and their productiveness of their builders that they should spend to construct, I feel. So clearly the inspiration of all that’s that, Okta service itself is safe and that is what we have hung our hat on and by investing an incredible quantity within the primary structure, the processes and procedures, the know-how critiques, the redundancy, it is one thing that it needs to be inbuilt from the bottom up, it needs to be persistently adopted for years and years and years, it needs to be a part of the tradition, it is one thing that could be very, very exhausting to duplicate.

And it isn’t solely a technical factor, nevertheless it’s additionally a communication factor and we now have this dialog with clients and whether or not it is a buyer that is studying about us for the primary time or whether or not it is a buyer that is increasing their utilization with us, we’re excellent at speaking to them about this in a really open and clear means, to allow them to perceive what we do, they will perceive how we mitigate danger they usually can perceive why it is sort of onerous to duplicate and one thing that is very invaluable to them as they attempt to rework their know-how.


Subsequent, we’ll hear from Grey Powell with Deutsche Financial institution.

Grey Powell

Thanks. Yeah. I’ll be fast. So undoubtedly it looks like you all seeing an uptick within the adoption of MFA this yr. Simply ballpark, the place do you assume general business adoption is or what stage you assume it is in? After which, how do you are feeling concerning the progress of the product set over the subsequent 12 months versus the final 12? Thanks.

Todd McKinnon

I feel multifactor authentication is, the stage it’s, as everybody is aware of, it is a good suggestion. I feel it is nonetheless too exhausting to rollout typically. I feel we’re making an attempt to make it simpler by making it pre-built-in by connecting into our coverage engine, by delivering as a cloud answer. So, we’re getting higher, however I feel there’s a variety of — the business, as an entire, has to maneuver from everybody is aware of it is a good suggestion to having a type of this broadly deployed multifactor related to coverage engine and we’re making an attempt to assist.

I feel product innovation is essential to us and we’re very enthusiastic about what’s forward for us when it comes to product innovation in releasing new capabilities and we’re going to have — I encourage everybody to remain tuned, we have now a buyer convention arising in simply three and a half months, loads of time for bulletins there.


We’ll now hear from Jonathan Ho with William Blair.

Jonathan Ho

Hello, good afternoon. I simply needed to start out out with, perhaps the worldwide alternative and perhaps the place you see probably the most alternative to leverage investments in addition to perhaps how the challenges differ within the worldwide markets?

Todd McKinnon

Yeah, positive. Hello, Jonathan. Good to listen to from you. Joyful to inform just a little bit about that. I feel the very first thing is, we’re very excited concerning the alternative in worldwide and I feel that you simply’re beginning to see the outcomes converse for themselves. That enterprise is rising and it is rising quick. I feel there’s a number of alternative when it comes to not solely the client curiosity for what we do, but in addition in working with a variety of these channel companions, as a result of these markets are rather more fragmented, clearly you’ve got dozens of nations in Europe, Asia Pacific is identical.

And so to the query about companions that we had earlier, one of many issues that we have spent loads of time on during the last 12, 24 months, is admittedly ensuring that we now have the correct associate packages with the suitable incentives making it very straightforward for our companions to undertake our merchandise and assist distribute them out there. I feel you are going to see increasingly of that. We have additionally traditionally made the best investments forward of time that I feel at the moment are bearing fruit.

So, for instance, we’ve got had knowledge facilities in Europe the place they will promote over knowledge to a second knowledge middle in Europe with out ever coming to North America, that is an answer that is been on the market for fairly a while. We’re within the strategy of implementing the identical in Asia Pacific to, once more, give clients the consolation that they will maintain their knowledge in area in the event that they’re and, once more, with very excessive ranges of management, safety, reliability, availability and I feel a few of these issues are essential.

On the similar time, you’ve got additionally seen us proceed to spend money on enlargement of our workplaces. Our workplace in London has continued to develop during the last 4 or 5 years, and we have continued to take on extra workplace area there with alternative. I discussed that we opened formally our Paris workplace final week. We have had an workplace in Sydney for a while and we’re persevering with to take a position there. So I feel the alternatives in worldwide are early, they’re thrilling, they’re huge and there are large alternatives for us within the years forward.


Our last query will come from Rob Owens with KeyBanc Capital Markets.

Rob Owens

Good afternoon, guys. Need to drill down somewhat bit into the worldwide monetary providers win, each on the workforce ID aspect and the client ID aspect, simply comparatively the place do you get extra dollars? Is it on the workforce aspect or the client aspect as you see a few of these guys chew on each side of the apple?

Todd McKinnon

Yeah. Comfortable to speak about that, Rob. I feel one factor we should always speak about is what’s occurring at the moment. After which I feel we should always speak concerning the tendencies and what we see occurring sooner or later. Look, at this time, and as evidenced by our enterprise, we began with Workforce Id Administration. So at first, we’re arising on wrapping up our 10th yr enterprise, which is nice. Our first 5 years of enterprise, we principally solely had our Workforce Id Administration product.

Now why is that? Nicely, Workforce Id, previously generally known as Enterprise Id, is one thing that is well-known. It has been within the business for 20, 25 years, legacy software program distributors Oracle, IBM, CA have had options right here for the times of homogeneity if you find yourself in IBM store or an Oracle store. And so, it was a nicely understood sort of want as we got here into the market. So in case you take a look at our first thousand clients, all they might purchase truly was Workforce Id.

Now that is nice and that is going to proceed to develop and that is an enormous market and we’re barely scratching the floor and you are going to see increasingly more workforce id enterprise within the years forward. What’s occurred over the previous few years is, our clients have began to say, hey, I’ve constructed this buyer id administration infrastructure myself prior to now, it is getting difficult. We talked about examples like Marriott.

Safety is essential, password reset flows, registration throughout units, a number of e-mail addresses, these are very complicated items of know-how for corporations to construct themselves, in order that they have began utilizing options like what we’ve within the buyer id and entry administration within the Okta id cloud. So, it’s a newer a part of our enterprise, proper, additionally rising in a short time. However what’s thrilling is within the occasions forward, if you consider a big group like Dignity Well being, which is a buyer of ours, we may also help them with their workforce, clearly, which is tens or perhaps tons of of hundreds of staff in sure instances.

We’ve not set our merchandise. They’re very nicely suited, there’s a variety of use instances for them, however in — on the client id aspect, as they put increasingly on-line, as they digitize increasingly more of their enterprise, there’s increasingly more constituents that at group like Dignity Well being must work together with.

For instance, they might have affected person portals that you simply and I’m going and pay our payments on, they might have doctor portals the place physicians come and get info on sufferers, they might have vendor or a provider portals the place they speak about their provide chain. So whereas a corporation might have one giant workforce alternative for us to assist them with, they might begin to develop increasingly more of those buyer id administration alternatives as properly. And that is why I feel you see that individuals are — have excellent concepts on how giant the market is for workforce, which could be very giant they usually’re beginning to develop these concepts round buyer id administration.

In order that’s a longwinded method of claiming, at the moment, clients can land with both a workforce or buyer id with both of our 5 merchandise. They discover methods to crosssell and upsell themselves, due to our very excessive buyer greenback based mostly internet retention fee of 120%. However within the occasions forward, I feel it is a toss-up on which of those two giant markets are going to proceed to develop quicker, lot of alternative, and clearly we need to be there to assist the purchasers with both one. I imply, it is definitely one thing that we will proceed to maintain an eye fixed on it within the occasions forward.


That may conclude at this time’s query-and-reply session. I’ll now flip the convention over to Todd McKinnon for any further or closing remarks.

Todd McKinnon

So, we recognize the time as we speak. We’re enthusiastic about our progress this yr and, however probably the most thrilling factor for us, I feel, is that, we’re nonetheless very early in these huge tendencies the place this development of cloud adoption, we have been speaking about it for a very long time, however whenever you take a look at organizations all over the world, the place the massive corporations, governments, worldwide markets, cloud is an enormous transformation that is going to take many, a few years forward and we will be there to assist clients alongside the best way.

Similar with digital transformation, that is a constantly evolving factor and we’re very excited that id is the core of that and it will be a progress driver for years forward. And, lastly, safety is simply timeless. So, whereas we’re excited concerning the outcomes, we’re extra excited concerning the future potential and dealing onerous daily to ensure we capitalize on this. So, thanks very a lot on your time and we look ahead to seeing you on the street or speaking to you within the subsequent quarterly name.


That may conclude in the present day’s convention name. Thanks in your participation. You could now disconnect.


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