Todd McKinnon: One thing that is I think when you look at the income statement and expenses on R&D, one part of our strategy is really critical is that Workforce Identity Cloud, Customer Identity Cloud, we strongly believe that these are both important markets that — to own the — and provide value across an entire identity platform. We have to be the leader in both. So, we’re investing in terms of R&D commensurate with it. We think we could take the two R&D teams and try to get more efficient and try to combine them all, but we don’t think that’s the right approach. We think the right approach is build the best-in-class clouds for both of these use cases. And over time, with our Okta Identity platform, bring together things that are common.
We’ve talked about common platform services that can get shared value across both. So, it’s a short — it’s a long way of saying, we think it’s worth the increased R&D investment now to lead this market. And over time, you are going to see more shared services and more R&D efficiency over the next several years.
Peter Weed: I think what I’m hearing you say though, is that while you’ve gotten more leverage out of R&D, that is — it feels appropriate to you that level and you’re thinking about kind of holding it there. It’s not something where you might increase spend going into next year as you get say more efficiency out of sales and marketing and rotate some of that cost savings into kind of increased R&D spend as a percentage of revenue.
Todd McKinnon: It’s accurate. Yes, it feels right to us at this level.
Dave Gennarelli: Next, we’ll go to Alex Henderson at Needham.
Alex Henderson: Can you hear me?
Todd McKinnon: Hey Alex. Nice to see you.
Alex Henderson: So, I wanted to dig into the exact subject that we were just talking about. Your headcount was up 32% year-over-year, but only 4.5% quarter-to-quarter. If you’re going to get leverage next year, that would require the headcount growth rate quarter-to-quarter to actually flat, now — considerably from here. So, when we think about that 16%, 17%, 18% type top line growth rate, are we now talking about headcount growth in 5% to 10% range? And if that’s the case, how do you allocate that headcount additions? And underneath the surface of that, can you give us a little bit more granularity on the degree of attrition and the wage rates?
Brett Tighe: Yes. I mean, when we look at the cost structure, Alex, I mean, it’s really majority is headcount, right? I mean, we’re a typical software company. You guys probably know the standard ratios, right, of how much of that is headcount. So yes, obviously, when we look into next year, we’re evaluating what the right thing to do is from a headcount growth perspective. We’re still early in the planning process. We still have a few months to go on that. But ultimately, we’re evaluating the cost structure, and we’ll let you guys know more in next year when we get into, obviously, the Q4 earnings. But ultimately, not just evaluating headcount, we’re evaluating all the other spend as well to be able to make sure that we can grow these margins in the right direction.
Alex Henderson: Well, if we’re not going to go in that direction, maybe you could just give us some sense of the differential between domestic and international growth, which is kind of hard to evaluate over the last couple of quarters because of the M&A, so we can get there.
