Brett Tighe: Yeah. Thanks, Gray. Som from a sequential perspective, I think I wouldn’t do that math in terms of backing into the impact associated with the incident. I would more think about renewals timing, that can have a heavy impact on cRPO quarter-to-quarter. So, we feel we had a really nice quarter in terms growing 16%, $1.83 billion in current RPO. So, I wouldn’t read too much detail into that. In terms of Q4, all of it’s baked in, all of what we think the potential impact is associated with the security incident, that is in the guidance that we’ve given you here today, 11% to 12% and $1.88 billion at the top-end of the range. So that’s kind of how we think about things.
Gray Powell: All right, fair enough. Thank you.
Brett Tighe: No problem
Dave Gennarelli: We’ll go to Peter Weed at Bernstein.
Peter Weed: Thank you. It looks like the change in your anticipated growth in quarter four came down relative to what you implied last quarter by almost 3 percentage points. And I think you’ve said that this is the impact of the outage. Is that experiential? In other words, like there are some things that you’ve already seen occur that are leading you to believe that you will definitely see that? And is that turning up in customers that are kind of showing that they’re going to leave? Is it people are failing to upgrade at the pace that they have been before? Is that it’s harder to win new customers? You anticipate — you had a really nice quarter actually, getting new customers, sequentially up. Do you anticipate that to take a dive?
I’m trying to figure out like where that shows up kind of in the stack of where you would have normally thought that kind of sequential growth quarter-over-quarter, that seems to have been kind of eliminated as a result of the outage — not the outage…
Todd McKinnon: Yeah, the incident. So, if you look at every quarter, Peter, there’s always deals that push from quarter-to-quarter. It’s just a natural part of our business. We saw an elevated level of that, and we ascribe that potentially could be related to the security incident. So, we’re taking that into our guidance when we think about Q4 and thinking about it from a prudent perspective, especially given how big the number can be in Q4 and setting the trajectory for fiscal year ’25. So that’s how we’re thinking about things.
Peter Weed: So it’s actually more just, there are deals that stayed in the pipeline, but you just anticipate they may push out of this quarter into the next quarter…
Todd McKinnon: Yeah. I mean we did see…
Peter Weed: [indiscernible] already from Q3 into Q4, wouldn’t that like give you deals that would be closing in this quarter that should plug some of that gap. So, you’d have to really push out a lot of deals out of Q4 and to Q1 at that point.
Brett Tighe: Yeah. You’re right, we actually have already seen some of those deals close in Q4, which is a good sign, but we’re being prudent given the environment out there today, given both the macro and the impact associated with the security incidents. So, we’re just being thoughtful.
Todd McKinnon: Yeah. I mean if you think about the chronology of it, it’s 11 days left in the quarter and then we’re only just a month into the fourth quarter. So, in terms of the window to see the impact, we’re a little bit limited on a window to see the impact. So I think that drives some of the pragmatism in the guide.
Dave Gennarelli: All right. Let’s go to Adam Borg at Stifel.
Adam Borg: Awesome. Thanks so much for the question. Maybe a bigger picture question here. So, international is still about 20%, 21% of the mix. And just given the size of the company, it just seems like there is a lot of international opportunity ahead. So just as you think about the channel investments and you think about the new CRO and CMO in place, what are the thoughts about kind of accelerating opportunity in the international theater to potentially help accelerate growth? Thanks.
Todd McKinnon: I think it’s a big opportunity. I do think from a macro perspective in terms of the stabilized macro but still a challenging macro. I think the macro impact internationally has probably been more pronounced from my observation than in North America over the last year or so. We also have — in terms of the interim to permanent CRO with Jon, that also gives us the opportunity to backfill Jon as the General Manager of Europe, and we have some candidates in the late-stage pipeline for that. So that’s more leadership stability internationally. Couple that with a great leadership team in Asia Pacific, which is performing well, you have a really good opportunity for solid performance internationally, which is — has to be an important part of our future.
If you just look at the numbers, the market is — half the market is probably outside the U.S. over time in terms of identity management, we’re using rough numbers. And over the next five to 10 years, we’re going to make sure we get that mix higher than it is now in terms of a percentage of revenue.
Brett Tighe: I’d also add, just Jon, being an international person himself, like he brings that lens, right? And so, we’re really excited about that and the opportunity out in front of us. Because I agree with Todd, we’ve got a lot of opportunity internationally.
Adam Borg: Awesome. Thanks so much.
Dave Gennarelli: Okay. Next up is Matt Hedberg at RBC.
Matt Hedberg: Great. Todd, a product question. In your prepared remarks, you noted you’re pleasantly surprised, I think, by the size of organizations adopting your identity governance products. I think a year ago, it probably would have surprised a lot of us. I think we would have thought maybe some of the traction would have been from smaller organizations or midsized organizations. So, I guess maybe why the success up market, do you think at this point? And then Brett, when you think about the impact to — from governance in your ’25 outlook, I assume you’re taking a very modest approach, but just thoughts on how you’re thinking about that product next year?
Todd McKinnon: The — I just think that large organizations have — there’s a lot of complexity. And I think maybe we underestimated the ability — I think we looked at some of these larger organizations and what they were doing with the existing governance solutions, and we assume that they were — these solutions were covering the SAPs, the Oracle apps, the legacy apps and assuming that they would also be covering all the cloud stuff and all the new stuff, I think that assumption is just proving to be maybe not as accurate as we thought. I think a lot of these legacy products aren’t covering where the center of gravity is moving, which is cloud-centric application workloads and cloud infrastructure. And so, the product is a better fit for these large companies than we thought.
