Okta, Inc. (NASDAQ:OKTA) Q4 2025 Earnings Call Transcript

Okta, Inc. (NASDAQ:OKTA) Q4 2025 Earnings Call Transcript March 3, 2025

Okta, Inc. beats earnings expectations. Reported EPS is $0.78, expectations were $0.73.

Dave Gennarelli: Hi, everyone. Fiscal 2025 earnings webcast. I’m Dave Gennarelli, senior vice president of investor relations at Okta, Inc. With me in today’s meeting, we have Todd McKinnon, our chief executive officer and cofounder, and Brett Tighe, our chief financial officer. At around the same time that the earnings press release hit the wire, we posted supplemental commentary to the IR website. And now I’d like to turn that meeting over to Todd McKinnon. Todd?

Todd McKinnon: Thanks, Dave. And thanks, everyone, for joining us this afternoon. We are really pleased with our strong Q4 results and the finish of FY 2025, which includes accelerating RPO and CRPO, and record profitability and free cash flow. Demand for both workforce and customer identity products was strong, and our growing portfolio of new products is starting to make an impact. Brett will cover more of the Q4 highlights, and I’m going to cover why Okta, Inc. is best positioned to capture more of the massive market opportunity in front of us as we go into FY 2026 and beyond. As you know, two of our top FY 2025 priorities were, one, transform Okta, Inc. to become one of the most secure companies in the world, and two, reignite growth through prioritizing our partner ecosystem, turning up the dial on product innovation, and increasing go-to-market specialization.

These priorities and purposeful investments built momentum as we progressed through the year and really paid off in Q4. One year ago, we introduced the Okta Secure Identity Commitment. We’ve made incredible progress on this top priority and have become a trusted and leading voice for security best practices in discussions with customers and prospects. The work around security advancements will never be done, but it’s a strong start. Later, Brett will cover some of the achievements with our partner ecosystem, and I’m going to dive deeper into product innovation and go-to-market specialization. Our relentless focus on product innovation has been resonating with our customers as over 20% of Q4 bookings were from new products, such as Okta Identity Governance, privilege access, device access, fine-grained authorization, identity security posture management, and identity threat protection with Okta.ai.

Okta Identity Governance has been a huge success. What we hear repeatedly from customers is the amazing time to value with OIG. Customers are getting up and running just a few short months after signing. Since launching OIG just two years ago, we now have over 1,300 customers contributing over $100 million in annual contract value. That’s great progress, and the product is only getting better as we continue to add more functionality. In addition to OIG, we have another approximately $300 million of business with Okta Lifecycle Management and Okta Workflows. Combined, that’s over $400 million in governance-related business, and we’re just getting started. We know that customers that adopt more products have the highest retention rates, so we’re excited about the trends here and the long-term contributions to the business.

Product innovation continues to be a key investment area in FY 2026. To get security right, organizations need to get identity right. With the steady rise of cloud adoption, machine identities, and now AI agents, there has never been a more critical time to secure identity. Last week, we held our annual launch week event where we highlighted our latest innovations. Here are just a few. On the Okta platform, customer identity for the US public sector is now even better. New features, including passwordless, enhanced security, and streamlined user experience, help agencies meet strict compliance needs. We also announced workforce identity suites, our new pricing packages designed to provide a simple and unified solution tailored to our customers’ security needs.

Q&A Session

These suites will provide even faster time to value outcomes for our customers. On the Auth0 platform, we announced Auth for Gen AI, which began early access this month. We already have a waitlist of eager customers ranging from early startups to Fortune 100 organizations. Auth for Gen AI is developed to help customers securely build and scale their Gen AI applications. This suite of features allows AI agents to securely call APIs on behalf of users while enforcing the right level of access to sensitive information. We held our annual sales kickoff meeting a couple of weeks ago, and our go-to-market team is really excited about all the new product innovation. In part, our rapidly expanding portfolio of identity security solutions is what led us to the shift we’re making in our go-to-market strategy to further specialize.

Customers need us to meet them where they are, and to address this, we’re expanding our specialization into Okta sellers and Auth0 sellers. Okta sellers will focus engagement on IT and security buyer needs, including all workforce identity products, as well as Okta customer identity. Auth0 sellers will focus on meeting the unique needs of developers, which include highly technical customer identity customizations and flexible deployment models. The success we’ve had with sales specialization in other parts of the business gives us confidence that this is our opportunity to better serve our customers via further focus and to better drive Okta’s growth. And finally, I want to share our FY 2026 priorities, which build upon the great progress we made in FY 2025.

The first priority is to elevate the industry with the Okta Secure Identity Commitment. This initiative underscores our dedication to being the trusted leader in combating identity-based threats. I cannot tell you how much this resonates with our customers and prospects, who now seek Okta’s advice and guidance on hardening their IT security environments. Next is to win IT and security with Okta. Identity has become fragmented, and customers are increasingly interested in unified platforms that deliver integrated security outcomes before, during, and after authentication. Identity investments have become more strategic with the security buyer front and center. Okta’s market-leading and expanding product portfolio makes us uniquely positioned to capitalize on this opportunity.

And the third priority is to win developers with Auth0. This focuses on further strengthening Auth0’s market presence through strategic investments in product innovation, brand, and marketing. Seminal customer wins like the global 2000 food and beverage retailer that purchased Auth0 in Q4 to replace their aging homegrown system give us increased confidence in our ability to capture more of this huge market opportunity. Before wrapping up, I want to congratulate Eric Kelleher on his promotion to chief operating officer. Eric has been part of our leadership team since 2016 and will be focused on reigniting growth, championing the Okta Secure Identity Commitment, and building on Okta’s reputation as the world’s identity company. I also want to thank and congratulate Eugenio Pace, who will be retiring this month.

As a cofounder of Auth0, he helped build an incredible platform, and his contributions to Okta over the past four years cannot be overstated. He will be missed. To wrap things up, we’re excited about the momentum we’ve built going into FY 2026 and are taking the right steps to advance our position as the leader in the identity market. More and more customers are looking to consolidate their disparate and ineffective identity solutions, and Okta is there to meet them with the most comprehensive identity security platform in the market today. I want to thank the entire Okta team for their tireless effort and also thank our loyal customers and partners who put their trust in us every day. Now here’s Brett to cover the financial commentary and talk about how we’re positioned for long-term profitable growth.

Brett Tighe: Thanks, Todd, and thank you everyone for joining us today. Like Todd, I’m pleased with the top-line results, which stem from the hard work and investments we’ve made transforming the business around security, partners, go-to-market changes, and product innovation. I’m especially proud of the incredible progress we’ve made building on the efficiency initiatives we started over two years ago. This is best illustrated by the approximately nine points of operating margin growth and six points of free cash flow margin growth we achieved for FY 2025, all while making the right investments for future growth. We’re proud to once again finish the fiscal year above the rule of forty, which we’ve achieved every year since going public in 2017.

My commentary will provide insights into our Q4 financial performance and then move on to our outlook for Q1 and FY 2026. Underpinning our overall strength in Q4 was sales productivity that reached a multiyear high. Notably, Auth0 had its best bookings quarter in history, which is another testament to the hard work that the team has put in all year. We also experienced particular strength cross-selling workforce into existing SIEM customers and cross-selling new workforce products to existing workforce customers. The strong Q4 results were highlighted by RPO that increased 25% and crossed the $4 billion mark. Driving acceleration in RPO growth was the increase in weighted average term length for Q4 deals, which reached a multiyear high. We achieved record bookings in Q4, which crossed $1 billion in total contract value for the first time.

Large deals and large customer customers continue to be the driving force behind our success. A great illustration of our success with large customers is that the total contract value of our top 25 deals in Q4 was over $320 million. Additionally, we added 25 customers in Q4 with $1 million-plus ACV in the quarter. Our total base of $1 million-plus ACV customers grew 22% to 470. The $1 million-plus cohort represents over $1 billion in total ACV. Our focus on deepening our relationship with our partner ecosystem as part of our growth initiatives is really paying off. In the fourth quarter, over 70% of deals were partner-influenced. That includes 18 of our top 20 deals closed in Q4. We were recently honored to be named partner of the year by AWS Marketplace.

Our partnership with AWS Marketplace has been a tremendous success. The best demonstration of that success is that in Q4, we surpassed over $1 billion in aggregate total contract value since the partnership was announced just four years ago. In FY 2025, revenue from AWS Marketplace grew over 80%. Now let’s turn to our business outlook for Q1 and FY 2026. The headcount reduction action we took last month was part of our ongoing assessment to optimize our cost structure. The action is intended to reallocate dollars and resources toward priorities to drive growth and was factored into the preliminary FY 2026 guidance we provided last quarter. We’re taking a prudent approach to forward guidance that factors in our previously announced go-to-market specialization.

For the first quarter of FY 2026, we expect total revenue growth of 10%, current RPO growth of 12%, non-GAAP operating margin of 25%, and free cash flow margin of approximately 25%, inclusive of the expected cash impact of approximately $11 million related to the headcount reduction expected to be paid out in the first quarter. For the full year FY 2026, we are raising our outlook across the board. We now expect total revenue growth of 9% to 10%, non-GAAP operating margin of 25%, and a free cash flow margin of approximately 26%. To wrap things up, we remain focused on reigniting growth and driving spend efficiencies and cash flow. We’ve demonstrated exceptional leverage in our model and are positioned to deliver profitable growth for years to come.

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

Dave Gennarelli: Alright. Thanks, Brett. I think our attendees are gonna be moved over as panelists now, and I’ll take the questions as the hands get raised in order. And in the interest of time, please limit yourself to one question so that we can get to everyone. And then you’re welcome to queue back up when we get to additional questions. So with that, I’ll take the first question from John DeFucci at Guggenheim. John? Thanks, guys.

John DeFucci: Thanks. I don’t normally say this, but nice job, guys. Listen. You talked in the past, and I think this is for Brett, but maybe Todd too, about your prudence in giving guidance. And you mentioned it again in your prepared remarks. I just want to kind of gauge that a little bit because has that changed at all, especially your annual guidance, which was a pretty big uptick from the previous numbers? You know, or is something changed in the business or even the macro backdrop? Todd, I think you were the first guy to say, hey. Listen. This is a new normal out there. Is there any changes out there that gives you more confidence that you don’t have to be quite as prudent in giving guidance, I guess, is what I’m saying.

Todd McKinnon: For Q4, John, thanks for the question, and thanks for the compliment at the beginning. Q4 was a blowout. We really, really had a great, great quarter. And when we talked three months ago on the call, I mentioned we talked about guidance and the initial guidance you gave, and I said the year FY 2025, the earliest finish was pretty back-end loaded. And the team really delivered. It was a blowout quarter, and some of the stats, it was the first time ever we had over a billion dollars of bookings in a quarter. Record quarter for Auth0. And, you know, the top million-dollar deal cohort grew 22% year over year. So the records and the big stats go on and on. So that informs there’s that’s part of the equation for the guidance for next year.

You see the raise. We do have the guidance. But just zooming back a little bit in terms of macro and what’s going on, I think the macro is consistent. I think maybe the difference is that this idea that identity is this really important foundational layer, particularly for big companies, and they can modernize the disparate systems they have, and they can invest in this layer, it’s gonna really lead to better security outcomes. Gonna get a handle on their various identity silos. They’re gonna be able to do governance, privilege, and customer identity with one vendor. Gonna lead it’s gonna help them with AI and agented workloads. People are trying to stitch together agentic platforms and write their own agentic systems, and what they run smack into is, wait a minute.

Am I gonna give these agents access to all these systems if I don’t even know what’s in these systems that I know don’t even know the access permissions that are there and how to securely authenticate them? So that’s driving the business. But great quarter. We’re very bullish. But, you know, we have we’re, you know, Q1 is just halfway over, and we’re making sure that we’re prudent in our guidance going forward as well.

John DeFucci: So it sounds like things are pretty much the same. You guys are executing. Things are coming together for Okta, Inc.

Todd McKinnon: Absolutely. Yeah. We’re very excited.

Dave Gennarelli: Awesome. John, I can answer a little bit on the philosophy. I think if you remember last quarter,

Brett Tighe: we talked about reducing the conservatism in the model that we’ve talked to you know, that we’ve issued here. Same program. We’re gonna continue to do that for the balance of FY 2026. The only line item in there is something we talked about earlier, which is further specializing the field.

Dave Gennarelli: But

Brett Tighe: yeah, that’s really that’s it. But before I get off, I should just say congratulations to the entire go-to-market team. They did a heck of a job in the quarter. Hope all of you guys appreciate that. And see it in the numbers because we’re really pleased with how they executed, and looking forward to a strong FY 2026.

John DeFucci: We can see it. Thanks, guys.

Dave Gennarelli: Yeah. Let’s go to Eric Heath at KeyBank.

Eric Heath: Great. Thanks, guys, and really great quarter. Great to see. Two for me, Brett. Just start with you quickly on the CRPO guide for Q1. It looks like it’s down a few points sequentially. So anything to call out regarding that seasonality? And then, Todd, I wanted to ask you a little bit more on the specialized sales model for this year. Can you just elaborate a little bit more on the existing data points that you’re seeing or you’ve implemented already that’s given you confidence in that strategy? And just help us understand maybe the degree of change as it entails. Thanks.

Todd McKinnon: That makes sense. Hey. Hey, Brett. Maybe you go first on the yeah. Yeah. It’s a real short answer there.

Brett Tighe: The seasonality of our fiscal years is fairly back-end loaded, just like Todd spoke about. So, Q1 just has that lowering of expectation, if you will, in terms of the growth. So, you know, it’s obviously very early in the year, and Q1 is, like I said, seasonally our lowest quarter typically.

Todd McKinnon: Specialization has been the trend for a little bit over a year now. At the beginning of FY 2025, we specialized the corporate team in terms of hunter-farmers. And we learned a lot from that. We learned that the transition into that model took a couple of quarters. A little bit slow out of the gate, but then paid off in the second half in a strong way. And so when we think about further specialization, it makes sense for a lot of reasons. And the biggest reason is that the products are a lot more detailed. They’re in a lot more submarkets. You’re an Okta seller today, you’re selling really an integrated workforce suite that creates an identity fabric for our customers across many categories, access management, identity governance.

But these are all traditionally, were all separate companies. Privilege access management, identity security posture management, identity threat protection with Okta.ai. And so these are all different subcategories that we have a very unique position we’re in. We’re trying to bring those together into one platform, and go to a big customer like we closed a big deal in Q4. It was a really, it was a big upsell on a deal we talked about in Q3, which was a global technology company, Fortune 500 company. And they really went all in with this end-to-end workforce identity suite. All of our products retiring, ten legacy applications for just a massive, you know, it’s one of those big deals that put that over $1 billion of TCV on the board in Q4. I’m not saying this one deal was a billion dollars in TCV, but I’m saying that these kinds of deals led to that kind of number as they added up in the quarter.

And so and then when you go on the Auth0 side, you’re talking about selling a platform to developers, people building technology, it’s quite broad. It’s got the core authentication and things like that, but it also has identity fine-grained authorization, which is, like, how do you actually get domains of permissions inside your applications are highly regulated identity, which is advanced capabilities to do step-up authentication and so forth. And so now with we have on the Auth0 side, we have Auth for Gen AI. It’s like, how do you actually stitch this together if you’re building agentic applications and make it all secure and make sure that agents don’t attack and make sure the agents have the right authentication, etcetera, etcetera. So that’s a lot to understand as a seller.

And so we’re on this arc of specialization, which is gonna really lead to long-term growth because these products have become so powerful. And these awesome people in our go-to-market team, the most talented people in the industry, they can really drill in and understand what these products do. And when we look at, like, success metrics, we talk to customers and we talk to prospects and we ask them, how are these leading to the great outcomes for you? How are you in the sales process understanding these things? Because identity is complicated, and if our seller can go in there and really understand the details of what these products are doing, it further differentiates us. We’re already differentiated because you know, we’re basically competing against a large monolithic platform that kinda says, hey.

Everything in our stack, and we’ll do it all for you, maybe, except no one really has everything in one stack. It doesn’t really work. Or you’re talking to point identity vendors, which don’t have the whole platform we have. They don’t have customer identity, and they don’t have privilege and governance. And data security posture management and threat protection. And so if we come to a seller that knows the details of these products and can really speak the customer’s language, that just further differentiates us and leads to better win rates. So that’s the metric we’re watching. We transition into this, and it’s off to a good start. People are pumped about it. We saw the success in a little you know, this what we did last year with Hunter-Farmer and it’s really we’re excited about this year and working hard to know, even go faster and grow more and do even better than Q4.

Q4 was great, but we have big ambitions here. We’re trying to do a lot more, and the team is fired up to do that.

Eric Heath: Thanks, Todd.

Dave Gennarelli: Let’s go to Brad Zelnick at Deutsche Bank.

Brad Zelnick: Great. Thanks so much, and congrats on the blowout Q4. I don’t know if this is better for Todd or for Brett, but if I reflect over the last couple of years, Okta, Inc., like many other companies in the software industry, we were talking about seat-based headwinds. And if I think back to the comments that you made at Optane, you talked about an expectation that that would continue. You expected that that would persist through the first half of next year. And I’m just wondering as we think about the puts and takes of the business, where your head is now, and is what we’re just seeing here in these results and the guidance that you’re providing us tremendous success in governance and OPA that’s more than offsetting that, or do you have a change in what your expectation is? And I think, Brett, you had said, if the macro were better that maybe we’d see improvement sooner than the midpoint of next year. Thanks.

Brett Tighe: Yeah. Maybe I’ll Brett, I’ll maybe I’ll start and then, Brett, you can join in. But on the seat-based headwinds, I think the macro condition we’ve seen has been fair it’s been consistent for a while now. I would say a couple of years. And we think it’s gonna be the same going forward. I think the big difference, as you mentioned, is that in contracts we signed and call it, you know, first quarter of 2022, and then in calendar 2021 before, it was the zero interest rate era, and people were, you know, buying a little bit. You know, they just bought a lot, and they overforecast what they’re gonna need. And if you needed a thousand things, you bought fifteen hundred. And now the world is different in the last two years.

Now if you need a thousand, you buy seven hundred. And then you wait to see when you go seven zero one, then you buy that last seat. So it’s a very different world. But as those things average contract length is two and a half years. So as those contracts come up for renewal, they don’t get renewed at fifteen hundred. Get renewed at a right size level. So you’re seeing that headwind of bait. It doesn’t mean the macro is changing. It just means that contracts are rolling off from that, I think, unsustainable period before.

Brad Zelnick: Yeah. I would just add, Brad, to that question. We just do your you had two options, buying more products or the headwinds abating? It’s buying more products. We saw that in the new product percentage we gave you guys. So those headwinds are still there. It’s just the team executed really well, and new business, upsell, upsell or renewal. I mean, they just had a heck of a quarter and so I congratulate him at the beginning of the core at the beginning of this call. Really excellent execution from the sales team.

Brad Zelnick: They all deserve it. Thank you.

Brett Tighe: Well, they have a lot of money, Brad. They all made a lot of money. So that’s good to know. Thank you.

Dave Gennarelli: Next up is Joe Gallo at Jefferies.

Joe Gallo: Hey, guys. Thanks for the question. It was awesome to see the $1 million cohort represent over $1 billion of total ACV. Can you just talk about how much opportunity remains with those largest customers? How are the net revenue retention rates there? And is that where we should expect the bulk of growth this year to come from? Or should the mid-market rebound a little bit? Thanks.

Brett Tighe: Yeah. So I think it’s a real insightful question. So I think that the maybe not so secret secret is that even with our success, we are really just scratching the surface. You look at IT spend. If you look at the just that’s kinda quantitatively. You can look at total IT spend and kinda try to extrapolate what that would mean for us. But I think the more powerful thing is just talk to customers and get to know them and work with them through this journey. I told the story of that, you know, Fortune 500 tech company last quarter. We did a big deal with them in Q3. And now this quarter, we did another deal that’s even bigger, and that first deal seems huge, but you compare it to what they’re saving and the value they can get from that and what they can take out of the environment in terms of reducing complexity and streamlining effectiveness.

So their security operations are more effective. They kinda have one view of all their identities across privilege and governance and access management. It’s very powerful, and they haven’t even done the customer identity deal yet. That might be bigger than the whole thing. So it’s like one anecdote, but I think there’s hundreds and hundreds and hundreds of these companies out there that are just starting to get on this bandwagon. So the potential is massive. That being said, also Okta’s bread and butter growing up was kind of mid-enterprise or lower enterprise success. And with all our investments in the partner ecosystem and the hunter and farmer, you know, we’ve crossed the billion-dollar threshold with Amazon. This was, like, the quarter of billion-dollar thresholds.

Through the marketplace, billion dollars of TCV, which is a lot of that’s in the enterprise, but some of you know, a big part of that too is in the mid-market. So and then on the low end, our self-service business, we’re on the Auth0 side, we’re doing more and more there that never even touches a salesperson. And by the way, once that gets to a certain point, it can be upsold in an enterprise plan. So we have this strategy where we’re going from top global 2000 with these large platform deals. You know, we mentioned the top 25 deals were $320 million of bookings in the quarter. All the way down to the bottom with the self-service plans. And, yeah, it’s robust strength across the board.

Joe Gallo: Welcome to hear. Nice job, guys.

Dave Gennarelli: Nice job. Next up is Gabriela Borges at Goldman.

Gabriela Borges: Hi. Good afternoon. Thank you. Todd, I wanted to follow-up on your comments on Auth0 and some of the nuances to the go-to-market this year. Maybe just remind us, I know you’ve experimented with Auth0 go-to-market in the past. What have been your learnings from the prior iterations of go-to-market? And just crystallize for us, what’s different with how you’re approaching the Auth0 go-to-market this year versus some of the other ways of selling that you’ve experimented with in the past?

Todd McKinnon: Yeah. It’s yeah, it’s real simple. When we bought the company, it was two separate sales teams. And then we combined it into one generalist sales team, so everyone sold both products. And we did that in 2021, right at the end of 2021, so right at the beginning of 2022. Because we wanted coverage. We wanted to get the product out there. The product was on fire. It was growing super fast. We wanted to get to as many people as possible as fast as possible. And what we learned over the last two years is that works. Especially in Q4. It worked well. Record quarter ever for Auth0. What we also learned is that this is complicated stuff, and the product over the last two years has expanded and got more powerful with fine-grained authorization and highly regulated identity and other capabilities inside of Auth0, just features and enhancements and how people use it and the SDKs. The same things happen on the Okta side.

So it really got to a point where we were seeing that people that were tended to focus on one area were more productive. We saw conversations with certain buyers around product officers or technical buyers versus IT and security. They were more it’s kinda differentiated conversations. And so when we look out the next five years as we go from where we are now, you know, $2.6 billion in revenue last year, reaccelerated growth, building, you know, this massive company we’re trying to build over time, think the right way to do it is to have specialized sellers, specialized marketers, specialized, you know, demand generation to speak to those value props, those buyers. We’re gonna serve multiple buyers over time. We’re gonna serve every buyer in the C-suite ultimately.

Identity touches everything, and this is a good step in the right direction.

Brett Tighe: I would also add one of the things that we’ve done in terms of taking the field and putting them either on Okta or Auth0 is putting them in places that they’re comfortable. Right? Where they have the skill. They’ve got the specialism already. And so that’s why we’re excited about this because we look at the results like you just saw in Q4, record Auth0 bookings, put a lot of those people on the Auth0 side of the house. And see how well they can do with all these great new products that are coming up.

Gabriela Borges: Thank you.

Dave Gennarelli: Next up, we have Adam Borg from Stifel.

Adam Borg: Awesome. And thanks a lot for taking the question. Todd and Brett, so, obviously, like you said, really strong quarter here. Look to be broad-based. But is there any geography or vertical that stood out? And maybe as you think about kind of the setup into fiscal 2026 versus 2025, at least qualitatively, Brett, can you talk about the size of the pipeline, the quality of pipelines, this year, relative to last? Thanks so much.

Todd McKinnon: I think the strongest geography was North America. Like you said, strength across the board. But in terms of, like, being exceeding expectations and really blowing out their plan, North America was top of the list there. And that, you know, I think long-term, a big growth opportunity is for us as we’ve talked about a lot is international. It’s still, you know, right around hovering right around 20% total revenue. And over time, that needs to be higher as we drive broad-based expansion around the globe. The problem is North America won’t slow down. We gotta figure out how to do both at the same time.

Brett Tighe: Yeah. I would say EMEA also had a really good quarter. Public sector had a really good quarter. I mean, Adam, it was a really strong quarter across the board. I don’t think you could find an area of weakness, frankly. I mean, new business, upsell, renewal, cross-sell, everything really well. The team executed really quite well. But prior to the effort.

Adam Borg: Great. And maybe just comment just on the quality of the pipeline entering this year versus last size or anything you would comment there.

Brett Tighe: Yeah. Yeah. We’re comfortable with the pipeline based on the guidance we gave you guys today. So we’re comfortable with where we’re at. Excited about executing in FY 2026.

Adam Borg: Nice work. Thanks again.

Dave Gennarelli: Okay. Next up, Jonathan Ho at William Blair.

Jonathan Ho: Let me ask you my congratulations as well on what appears to be a good reflection in the business. Can you help us understand the opportunity for agentic AI and maybe how AI could play a role in the increasing number of identities out there, and particularly how Okta, Inc., you know, potentially benefits from that?

Todd McKinnon: Yep. Jonathan, I’ll focus in on the AI. AI is a pretty big topic. And I know there’s a lot of people out there in the world trying to give everyone broad-based lessons about it, so I’ll spare you that, and I’ll focus on the agentic part of the act. That’s probably the most in the medium term, that’s probably the most applicable to our business. And I think the way to think about it is an important challenge of identity and security for a long time has been machines. Or another way to call them is service accounts. You have all these systems, and you have all these networks, and you have all this infrastructure, and there’s people that log into it, and we have ways to manage that and have biometric authentication, and we have single sign-on systems.

And then there’s machines that log in to that stuff. And, you know, if you look at a server maybe, you know, probably 99.9% of the connections to that server are probably other machines. And so this challenge of machine identity has been with us for a long time. There’s been different strategies on how to manage it and different approaches, different protocols. We’ve gone through different waves in the industry. We had, you know, firewall-based where we try to lock everything. We had no lateral movement. Data center technologies where you tried to control machine account access inside the data center in the fabric of the network. We’ve had PKI, which, you know, 20 years ago, 15 years ago was the way gonna give every machine a public certificate, and we’re gonna manage that all in a certificate authority.

That kinda never really took off except in some narrow cases. And now here we are today, with this agentic revolution is real, and the power of AI and the power of these language models, the interaction modalities that you can have with these systems, these machines doing things on your behalf and what they can do and how they can, you know, infer next actions, etcetera, etcetera. All know it’s really real. The way to think about it from an Okta perspective, it is like machine identity on steroids, turbocharged. To, like, two orders of magnitude higher. So that’s, like, really exciting for us because what do we do? A good part of our business is actually logging in machines right now. Auth0 has the machine-to-machine tokens where people, if they build some kind of web app that services other machines, they can use Auth0 for the login for that.

Okta has similar capabilities. And now you have not only that basic authentication challenge, but you have all of these applications as you get, you know, two orders of magnitude more things logging in, you have to really worry about the fine-grained authorization into your services. So if you’re in an enterprise, you’re building a system that is gonna be an API that the agents talk to, by the way, that is an under that is a misunderstood thing or not a not a well-understood thing. You wanna get agentic AI in your enterprise, yeah, one solution is you can do everything in Salesforce or you can do everything in ServiceNow, but that’s pretty impractical for most organizations. So what they’re doing is they’re building an AI wrapper around a bunch of stuff.

And now once they get that a oh, sorry, an API wrapper around a bunch of stuff. And once they get that API, they need a system like fine-grained authorization from Auth0 to make sure that it’s easy to express the rules on who and what agents and what roles and what’s group can access which parts of the information inside that API. It’s you wanna see Jonathan can access these records. But John can access these other records, and Gabriela can access these others. You could do that with FGA. And then when you put these APIs in front of all your systems, you have a nice fine-grained authorization model. So now when you start building your agents that talk to these APIs, those agents are only seeing what they can see because you don’t wanna open the whole world to those agents if that thing goes awry or that thing gets hacked, then all of your data is exposed versus exactly what the agents should see.

So it’s least privileged, very important. Now on the agent side, the equivalent of a lot of these deployments have, like, passwords hard-coded in the agent. So if that agent gets compromised, it’s the equivalent of your monitor having a bunch of sticky notes on it with your passwords before single sign-on. So Auth for Gen AI gives you a protocol and a way to do that securely so you can store these tokens and have these tokens that are secured. And then if that agent needs to pop out and get some approval from the user, Auth for Gen AI supports that. So you can get a step-up biometric authentication from the user to say, hey. I wanna check Jonathan’s fingerprint to make sure before I book this trip or I spend this money, it’s really Jonathan.

So those three parts are what Auth for Gen AI is, and we’re super, super excited about it. We have a waitlist over, you know, 200 plus Fortune 100s and startups around that thing. They want this product, and it’s going into early access this month. So we’re really it closely to see how well it can do.

Jonathan Ho: And thank you.

Dave Gennarelli: Alright. Next up is Itay Kidron at Oppenheimer.

Itay Kidron: Hey, guys. Again, congrats on a great quarter. Couple from me. Brett, on the CRPO, you gave guidance for the first quarter. And for the fiscal year. To a previous question, you said you’re is beginning of the year, so you’re a little bit conservative on the CRPO. So I guess we should assume it only accelerates from here till the end of the fiscal year in growth. Help me get some color on that. And then for you, Todd, did you talk about PAM and the progress that you’ve had with that and how much that’s contributing to your business. Maybe you can share some data points on progress there. Thank you.

Brett Tighe: Sure. Hey. Hey, Kyle. I’ll just take it. It’s a quick one. We only guide one at a time. One quarter time, we never done a year out. So, let us get through Q1, and then we’ll give you a guide for Q2 and go from there.

Itay Kidron: Sounds good.

Todd McKinnon: Yeah. PAM is doing great. I mentioned the new products, the total new products, were 20% of the bookings in the quarter, which is great. The standout there, I think, in terms of size and maturity is Okta Identity Governance. I mentioned that over 1,300 customers, $100 million of just OIG bookings when you add in the other lifecycle and workflow, which is really what you would include if you kinda looked at all the parts of governance for our business. Over $400 million of bookings, which is great. PAM’s not at that scale yet, but it’s off to a really good start in the quarter. We signed a deal with a really brand name financial services company, a Fortune 2000 company that bought there’s existing Okta customer upgraded in the quarter to not only the access management product they had before, but they added identity security posture management, identity threat protection with Okta.ai, and Okta Privilege Access.

So they added those three products, and it increased the ARR on that account, you know, north of 30%. So that was pretty significant. So on the stories like this, on and on, and I think that product Okta Privilege Access, is think it’s it’s getting really good and really mature and routing more capabilities. We’ve got a great engineering team moving quickly. It’s it’s really a modern product integrated great with SaaS applications. It’s kind of a rethinking of how the privilege access management market is. And I think in, you know, the next few years as we have these conversations more, think what you’re gonna hear more and more is it’s just not as it’s like a just part of the whole suite. Then you buy it as part of because you want it with your access management.

And I think a lot of the vendors in our space agree with this. Like, they had see the vision that this is all gonna be one thing. You’re not gonna be buying separate governance and separate PAM and separate posture management. You’re gonna buy an identity platform. And we’re we’re we’re in a great position to deliver that. If you look around, if you want an independent neutral identity company, no one else has the pieces we have. No one has the privilege and access management. No one’s at near our scale. No one has the pure the pure SaaS heritage and can do these integrations. And doesn’t have to manage a complex combination of customers that are kind of somewhat upgrading to their SaaS solution, but not really in the customers don’t wanna do it, and they’re kinda managing multiple things.

Don’t have those problems. And so this market is ours to take, and we have a we have a lead. You know? The scale we’re operating at is, you know, you know, you have to combine, like, two or three of the other companies and independent identity to close to the scale we have. And we can bring that all to bear with our leading customers and our great engineering team to keep innovating, and we’re gonna see results like we just saw. I think, Jonathan, you you used the word before. On previous question about inflection. I really think this is an inflection, and I’m I’m really excited. We have we have work to do to back it up and keep going, but really excited about what the future brings for Okta, Inc.

Brett Tighe: Good stuff. Thank you. Just one point to clarify, Itay. You were saying $100 million and $400 million, that’s annualized contract value. So that’s the total book of business. Okay? Just not bookings. You said bookings. So I just wanna make sure we’re all on the same page.

Itay Kidron: Sorry, Brett. Sorry. No. It’s okay. Just wanna make sure we got the facts straight. They’re huge businesses. They’re massive. I’m really proud of where they’ve gotten to, but we got a lot of opportunities as we move forward.

Itay Kidron: Sounds good. Thank you.

Dave Gennarelli: Let’s go over to Shrenik Kothari here.

Shrenik Kothari: Yeah. Awesome. Thanks for taking my questions. Congrats on great execution. Just a quick couple from me. So, you’re capitalizing on cross-selling, which is great. And what stood out, Brad, you’re mentioning, the strong public sector performance? Especially integrating the customer identity in the public sector. So as your federal momentum keeps building, right, just curious in the face of the near-term federal uncertainties, how are you seeing the near-term, medium-term, long-term outlooks for not just your opportunity set, but also execution dynamics, any specific initiatives that’s helping you navigating these challenging federal dynamics right now? And had a quick follow-up.

Todd McKinnon: Public sector for us includes federal, of course, US federal, of course. US commercial federal and DOD. Also includes all of the state and local. And so it’s a big important vertical for us. So the momentum across the entire vertical is very strong, as we mentioned. But let’s not lose sight of the state governments and the big deals outside of federal that we closed last year in Q4 in particular. So now focusing on the US federal specifically, I think there’s a lot, obviously, a lot going on there with new administration and thinking about the government structure and efficiency and so forth, which is all super important. But big picture. I think the number of licenses that we’ve sold into the federal government so far is it’s a good start.

But it’s relatively low, especially compared to the money they’re spending and the complexity and the risk they have with their legacy identity systems. The federal government has a lot of legacy identity systems. The agencies we’ve been successful in is because we’ve been able to consolidate and replace and really help modernize those applications. And I think that when you talk about efficiency and effective government, this we’re, like, perfect for that. You don’t have to manage servers. You don’t have to the implementations are much easier. The time to value is much higher. The amount of people it takes to run our services and run our systems at a customer is far, far, far less than the legacy identity technologies, where they have to upgrade it and maintain it.

And, you know, it’s and it’s not because the you know, it’s not it’s because the legacy technology that surrounds these identity systems is it’s hard to integrate to. But as those things get modernized, and the federal government goes for more efficiency, we’re gonna have a big opportunity to help them do that. And I think yeah. I mean, there’s probably a little bit of uncertainty right now, especially in the first part of the year as things get sorted out. But I’m very confident that we’re gonna be a big we’re gonna be very successful in the federal government and helping them modernize, be more secure. No one wants the federal government that’s not secure. I think that’s probably the only nonpartisan thing in Washington these days. We can help them be more secure, and that’s why we’re so excited about that opportunity.

Dave Gennarelli: Alright. Let’s go to Gray Powell at BTIG.

Gray Powell: Alright. Great. Thank you very much for taking the question. And congratulations on the good results. So I thought the $100 million ACV stat on OIG was it’s a good number, really helpful. You called out the $300 million on lifecycle management workflows. So I’m curious if those customers were to upgrade to OIG, can you give us a ballpark sense as to what the uplift would be? And then just how should we think about the growth of your governance products, you know, on a combined basis? Over the next year versus the rest of the business?

Todd McKinnon: Yeah. I think the way to think about it is we’ve talked about this consistently enough for a while. When they upgrade to OIG, it can be a 30% to 40% plus increase in the ACV for that customer. So if you have nothing and you buy OIG, Lifecycle, and Workflows, it can be north of 40%. If you have workflows or lifecycle, maybe it’s just in the 30% range. I think when you look at the book of business and workforce identity, the opportunity is to upgrade all of those customers to include OIG. So that’s how big it is. It’s quite significant. Quite a lot of run rate a run room above the $100 million directly for OIG and the $400 million total you just talked about.

Brett Tighe: And if you think about one of the reasons why we are further specializing the field your question about maybe going forward, Gray, is to be able to get in there and deeper into accounts and be able to do more of these upsells that Todd was just talking about. Right? Whether you started the basic package and move all the way up or you already got a little bit of the more advanced capabilities, the idea here is to allow our reps to go in and be able to sell some of these more advanced capabilities because that’s really a big opportunity for our customers to solve as many use cases as possible.

Gray Powell: Understood.

Dave Gennarelli: Okay. Thank you. And let’s go to Saket Kalia at Barclays.

Saket Kalia: Hey. Great. Hey, guys. Thanks for taking my question here and echo my congrats to the team. Todd, maybe for you, was wondering if you could dig into the workforce identity suites that you talked about at launch week. And maybe the question is, what are some of the suites that we’re introducing and how do you make that pricing packaging enticing to a customer that wants to continue to consolidate identity?

Todd McKinnon: The main part about it is it’s simpler. And that’s what’s enticing. It helps customers understand simply what they need to buy to be successful. We and the history of this is we monetize innovation over the years by, you know, keeping the basically sold customers the plat the capabilities at the time. And then as we added more capabilities where there’s multi-factor or lifecycle management, we added those as new SKUs or new products. And so and that was great because they would add more over time. But what you look at now is just if you buy those things all a la carte, a lot of them, and it’s com you know, universal directory, single sign-on, advanced single sign-on, multi-factor events. It’s a little bit complicated to buy.

And so we took a comprehensive look at it. We said, what are the outcomes customers wanna have? They whether they wanna just get started, the workforce starter suite, and then there’s the professional suite, and then there’s the enterprise suite. It’s basically good, better, best. Meaning the if you want a full identity fabric to cover all of your use cases from privilege to governance to threat protection to posture management, that’s the enterprise. And then, you know, if you wanna do that but without the some of the more advanced capability more advanced modules I talked about, you do the enterprise, and then the starter is just the basic. So it’s just simplicity, and clarifying the and a little bit making the buying process simpler. For our customers.

Saket Kalia: Makes sense. Thank you.

Dave Gennarelli: And next up, we have Shaoyal at TD Cohen.

Shaoyal: Thank you. Good afternoon, Chance. Congrats on the quarter and outlook. Thanks for the color on OIG. Can you maybe apply for us in broad strokes that the profile of OIG customers are are these new logos existing customers, are they more enterprise or SMB driven? Are they mostly displacements or greenfield? Any color will be greatly appreciated. Thank you.

Todd McKinnon: Yeah. Absolutely. So I think the it’s the majority of the vast majority of OIG customers are upsells. They have access management, and they add OIG. Not a hundred percent, but it’s close to a hundred percent. There are a couple of cases of new lands with OIG, but in both of those cases, the customers went with the full access management suite pretty quickly after. So, yeah, you can almost think of it as my main point of the answer, which is I think we’re moving to this world where this is a suite. I talked about the suites in the previous answer, and the way customers are thinking about it is I think this idea that you’re gonna get governance from one vendor and privilege from another and threat protection from another is really antiquated, and we’re moving to this world where there’s one identity platform that can cover all these use cases and try to increase your security outcomes by having it all stitched together and take out point products.

That’s where we’re going. And so I think when we think about innovating on the product, the product has to be of course, more it has to be better. The competitors. It has to be better than SailPoint. It has to be better than Savion. It has to be better than the other small there’s a bunch of little startups out there doing stuff here. It has to be better than all those. But then it really has to be great integrating with the rest of our capabilities. So you need to be able to have governance workflows on the credentials you vault in your in the PAM product. It has to have governance workflows consistently across business applications and servers and any kind of resource you wanna control through Okta. Your identity security posture management has to have universal visibility and tell you alerts about human identities that might be compromised or not set up correctly across any system and any identity provider.

But also has to give you notifications and updated constantly about nonhuman identities in a modern way that then you can then put in a modern protocol and vault those credentials with our privilege access product. So that’s the idea. I said before, and we saw the trend to continue, I’ve been I didn’t think that I didn’t think that people were ever gonna take out a governance system they had installed. I thought this was, like, a bunch of customers didn’t have one. And that would be the opportunity here. I’ve been surprised by the amount of takeouts. Still not massive. There’s a lot of greenfield out of here, and we’re having a lot of success there. But there are more takeouts than you would think, especially if you include the companies that didn’t really get that implemented with that’s the secret about some of these governance things is that they were they were software.

So they were sold a big license and they never got it implemented. And that was kinda like the vendor was off doing something else now, but in the SaaS world, you really have to make them successful, and that’s how we’ve built our product to make sure that they can be successful. You see we see it in the data. Like, we should release some of this data next report maybe that the time to value and the how much usage our customers get out of our governance product very quickly is best in the industry.

Brett Tighe: Yeah. I would just add there are in addition to what Todd was just saying, that there are side-by-side implementations because I was part of your question. And we’re really excited about those for a lot of reasons because we can what Todd was just talking about, demonstrate value to the customer and earn the right for future flows or future opportunities or the right to take out that other one. And if you remember what made us big in the beginning was we did that with access management. That’s that was our play. We never went in whole hog and took everything out. It was go demonstrate value to the customer and earn the right for the next thing. And so we’re running a very similar play with governance and just the suite strategy that we’re running now which is obviously showing some traction with these numbers we just produced.

Shaoyal: Thank you.

Dave Gennarelli: And next up, let’s go to Josh Tilton at Wolfe Research.

Josh Tilton: Hey, guys. Thanks for sneaking me in here, and I will also echo my congrats on an awesome quarter. I think maybe a high-level one for me. Naturally, I think we kinda gravitate to the workforce side of the business as having this clear agentic AI opportunity. But listen, you guys speak. It’s pretty clear that you guys have opportunities across both workforce and SIEM. Guess my question is, Todd, for you. Like, which side of the business are you more excited about from an agentic AI perspective? And maybe which side do you think we’ll see a monetization opportunity sooner and why? You can’t tell me you can’t pick between your favorite kids.

Todd McKinnon: You always have a favorite, Josh. You always have a favorite. I think the I think the customer identity side is more exciting. I think it’s a little bit of a my answer is a little bit of a I’m kinda, like, having both ways because a lot of the you talk about developers building agentic AI, they’re doing it inside of enterprises. The, like, the pattern I was talking about earlier, they’re there there’s these teams and these companies that have been tasked with you know, we hear about this agent thing. Make it work. And the first thing they have to do is I’ve had many conversations with customers where they’ve been in these discussions, and we wanna we did a POC, and now we’re worried about doing it broadly. But the task was basically hook everything up to our existing hook these agents up to all of our existing systems.

And before we could do that inside of enterprise, we had to good we have to get we had to get a good identity foundation in front of all these things. And so it’s kinda like similar to you’re building something. You’re a developer. You’re you’re you know, exposing APIs. You’re doing fine-grained authorization. You’re taking another you’re using another platform or you’re building your own agentic AI platform, you’re having to talk to those systems and those APIs to do things on user’s behalf. So you’re a developer, but it’s kinda like a workforce use case. But I think people building these systems and getting the benefit from that is really exciting.

Dave Gennarelli: Good. Next up, we have Keith Bachman at BMO.

Keith Bachman: Hi. Thank you very much. Just also wanna congratulate you specifically on the cash flow. It looked really impressive in the guide. Likewise, Doug, if we were a rule of fifty-four in Q4, so impressive. And I did I just wanna say thank you, Keith, for noticing. You guys we went through a bunch of questions to get to that. Forty-two percent. That was a Yeah. Yeah. Yeah. Well, but Todd Todd was mentioning that Salesforce got well paid. I assume that, Brett, you’re gonna look for some of that as well based on the cash flow. But moving on to the question, the net retention rate was 107. The quarter. And I know it’s sort of a lagging indicator, but as we march through the year, how are you just thinking about it directionally in terms of what’s the puts and takes?

And particularly, some of the things that you were talking about as it relates to governance and some of the upsell opportunities it would seem to me that we’re hearing that you’re gaining more, you know, more traction, so to speak, in governance if that would be a source of upside tension as we progress through the year. And you anniversary some of the headwinds. But just to talk a little bit about the net retention rate.

Brett Tighe: Yeah. Thanks, Keith, for that question. So as you know, we did expect it to go down into this range. Yes. On the back of healthy gross retention. From here, for the balance of FY 2026, what our model suggests is roughly in this range, maybe plus or minus a point in either direction, it really depends on new business versus upsell mix. So that’s where we’re seeing it for the balance of FY 2026.

Keith Bachman: Okay. Alright. Thank you very much.

Dave Gennarelli: Let’s go to Roger Boyd at UBS.

Roger Boyd: Awesome. I’ll echo my congrats as well. Brett, just a quick one. You mentioned, I think, record sales productivity in the quarter. I was just wondering how you’re thinking about go-to-market capacity into fiscal 2026. What and to what extent do you see an opportunity to invest in behind some of that strength, especially as you think about kind of the sales specialization from here? Thanks.

Brett Tighe: Yeah. We feel good about the capacity where it is today. We feel we’re in a really good spot. We wanna make sure we find that right balance between having enough capacity to grow as fast as possible, but also having a bunch of very productive reps. We don’t wanna get too much in one direction or the other. We wanna make sure the porridge is just right. So we feel good with where we are right now.

Dave Gennarelli: Okay. Let’s move on to Rudy Kessinger at D.A. Davidson.

Rudy Kessinger: Hey, Greg. Thanks for taking my questions, guys. On the sales productivity, could you just talk about it relative to, I guess, where you guys were at? Know, pre-Auth0 integration, like, where you guys are on now, and what level of productivity gains are you basing into the fiscal 2026 guide? And then again, I have my congrats. Very, very strong quarter here. The CRPO growth acceleration, etcetera. Just the strength you saw in the quarter, I know Q1 is a smaller quarter, early a month into it, but have you seen that momentum continue thus far in Q1, or just where are you seeing? According to date?

Brett Tighe: Yeah. In terms of productivity, it was really good. I can’t give you a compare back to those time frames, but it was really good. We talked about multi-year high. Really pleased with how things came out. In terms of your question on Q1, look, I mean, like we talked about earlier, Q1’s usually our seasonally lowest. And the reason why is we’re getting, you know, accounts in the right places, territories in the right places, we have our sales kickoff, so February doesn’t typically offer too much for us in terms of information. And so we obviously gotta got a long ways to go for the quarter and are excited about the quarter.

Todd McKinnon: People are very excited at the kickoff.

Brett Tighe: Yeah. That’s a good point. I guess that’s not nothing.

Dave Gennarelli: Yeah. I know we have a lot more hands raised. We’re at the top of the hour, but let’s try a few more here. I’ll go to Kevin at B of A and from Evan.

Kevin: David, that was pretty good for your first time. Yeah. Sorry. Tough last name.

Evan: Thank you. Thank you for taking my question. I guess, I have two quick questions for you. The first one is, in this quarter, were there any large one-off deals that led to the outperformance, or did the environment really inflect? And then I guess my second question is looking into the future, are these trends that you saw in Q1, are they sustainable, or what should we expect so that the street can kind of reset their models going forward?

Brett Tighe: Yeah. I mean, I’ll take the first part of it, Todd. You can add you can add in how you see fit, which is we had a lot of big deals. There wasn’t any one single deal that was outsized relative to the rest, but we had a lot of big deals. That’s why we gave you the stat of, you know, top 25 deals over $320 million in total contract value. So it goes back to really all the work we put in throughout FY 2025, whether it be new product introduction, which we’ve talked about, enhancing partners, further specializing the field, doubling down on security. These are all things that helped us build toward this Q4 that was so successful.

Todd McKinnon: Yeah. Just from a, like, a culture and a leadership perspective, we are here to build a large, growing, important company. So we expect more and more quarters like this. I think, you know, this was a blowout, so it’s tough to repeat this exactly. But this is the expectation we have. We’re not here to build a slow-growing company. We’re here to build a company that’s changing the industry and gonna really solve this problem of identity security and help companies achieve their objectives and free them to use any technology. So that’s what we’re obsessed with doing, and that’s what we show up every day working hard trying to do.

Evan: Great. Thanks, guys. We have Peter O’Dean.

Chris: Thanks, Gus. It’s Chris here. I maybe just one. You know, are you seeing in terms of, like, the ratio of, like, nonhuman AI agents to employees? And I ask because I guess I wanna understand, like, pricing model and perhaps, you know, when you’re talking to your customers, if what are they willing to pay for? It’s one to five or one to forty. Just curious to know, you know, how you price that and you know, when do you think it will become maybe agreed to your top line?

Todd McKinnon: One of the things that we don’t have today is the industry doesn’t have a way to, like, identify an agent. I don’t mean in the sense of, like, authenticating or validating each. I mean, to actually universal vernacular for how to record an agent, how to track it, and how to account for it. And so I think that’s something you’ll see coming. You’ll see there’ll be actually a type of account, an Okta that’s an agent account. You’ll see companies starting to when they buy software, they’ll say, hey. You know, I buy these many people and this many agentic licenses. And that’s not quite there yet. Of course, platforms that are coming out with agent versions have to some degree, but there isn’t a common cross-company, cross-enterprise definition of an agent, which is an interesting opportunity for us, actually.

We do know in the business today, there’s a significant amount of there’s significantly more machine-to-machine interactions. Forget about agents. There’s a lot of API calls and a lot of tokens and a lot of API access management that’s done on the Auth0 platform and the Okta platform. And like I said, I think that’s the machine part of that with agents could increase by two orders of magnitude. If the potential is that high.

Dave Gennarelli: Go to Matt Hedberg at RBC.

Matt Hedberg: Great. Thanks, Dave, for the question. You know, Todd, like, I think a lot of us are just sitting back here kinda seeing all the opportunities that you have here. And the questions that I’m getting from my inbox is, like, there’s a lot that we can think about in terms of fiscal 2026 and beyond. And, again, it’s kinda getting back to the question of picking your favorite child. But, you know, between, like, all of the catalysts that you’ve got going here, we’re sitting here twelve months from now. Large enterprise.

Todd McKinnon: Large enterprise success? Okay. Okay. Yeah. Yeah. Sorry. I didn’t mean to cut you off, but I think the answer is so clear in my mind. But as I work on these big transformative deals with these customers, it’s just different than it was a year ago and two years ago. You can see the products are there. You can see the buyers are ready. You can see the partners, I work on these big deals with these global systems integrators, and they’re turning their whole practices to security and to modern identity. They’re done with the whole they’re done with the whole you know, we’re gonna install software to manage your identity. That’s how they need a cloud solution, and we’re the only game in town. Unless you wanna unless you wanna go with Microsoft and just wrap your entire company up in one company, none of these are enterprises can do.

I mentioned this global technology company. They have an E5 license. So Microsoft has licensed them every identity product they had. It did not didn’t matter because they’re not gonna wind their whole future around Microsoft. They have got it. They have three infrastructure clouds. They have you know, these companies, the complexity and the expanse of what their identity challenges are as far beyond what one company that’s not focused on it can do. And we’re the only game in town where the cloud version. We have all the parts of the suite. So, yeah, when we’re talking in a year, if I’m off to something and not large enterprise, then you can call me on it.

Matt Hedberg: Thanks a lot. Best of luck. I would just add to that, Matt, in a sense of, like, thinking about what we told you four or five quarters ago. There are four things we’re gonna work on security, new products, partners, further specializing. We’re gonna keep working on all those things because that’s what that’s what will drive what Todd just talked about. So it worked in Q4, we believe those are the right vectors of growth for us. We will continue to do those things. To be able to capture the opportunity as fast as possible.

Matt Hedberg: Thanks, guys.

Dave Gennarelli: Let’s go to Patrick Colville at Scotiabank.

Patrick Colville: Cheers, Dave. And thank you for taking my question here. So I guess let me just sneak two quickies in. Mean, if I look back at this quarter and last, the CRPO beats, we’ve got significantly larger. And you said this was a blowout quarter, but I guess how should we think about the guidance for loss Brett. For CRPO beats heading into 2025, then Todd, I guess, just for you, you know, most of your prepared remarks were actually about the workforce business but the disclosure you guys give around kinda ACV growth you know, it looks like actually customer density was the real strength, you know, in Q4 with ACV growing 16%. So I guess just talk to us about, like, why do you sound so pumped in the Fed remarks about workforce when it seems like the customer business is actually what’s really kind of the rocketship right now.

Brett Tighe: I’ll take the first which is around the guidance philosophy. Like we talked about last time last quarter, we talked about reducing the conservatism in the model. Now we had a blowout quarter. I gotta do so much, and we’re gonna close as much business as we possibly can. If it blows up, the guidance philosophy in this situation, I’m happy to have that problem. But you can see the guidance philosophy in action in a sense that we had a very large quarter. And you see the revenue growth going up by a very significant amount. Going from 7% to 10%, a raise of $80 million, we’re giving it to you right there. So in other words, whatever that upside, that big upside you just saw, you’re seeing it reflected in our guidance immediately. So that is going to be our strategy going forward and our philosophy going forward, and I’ll let Todd talk about the growth rates.

Todd McKinnon: Yeah. I think both, Okta had really strong quarters. The Auth0 quarter was a big summer. So I don’t my remarks maybe weren’t accurate in the sense that I wanna reflect the strength in both in both of those respective businesses that I worked very closely. I’ve mentioned a few times on the call this Fortune 500 tech company. It was a big workforce deal. I also worked on a name brand global food and beverage company that bought Auth0 to be the front door login for their entire mobile app, which has huge volume. So there’s success on both sides. I think, you know, it’s that gives us a diversity in the business that you know, is really powerful. I’m really gets us that seat of the table to help customers with these strategic problems.

It gives us credibility. It gives us scale. I mean, when you talk about the cash flow and the rule of fifty-four and the, over $700 million of cash generated last year, it’s because of the scale. I mean, we spent sixteen years building this business that has amazingly loyal, happy customers. So it gives us the opportunity to provide you know, do all the work we’ve done in security and do all the product innovation at the same time. Generate a lot of cash. So it’s a good position to be in going forward.

Dave Gennarelli: Well, thanks, Eric. Try to get through five questions here over the next seven minutes, so we’ll go to Mike Cikos in Needham.

Mike Cikos: Great. Thanks for taking the questions, guys, and congrats on the quarter from our end as well. Two-parted here, but first on the OIG. Just wanted to make sure we’re all gonna be running our numbers now on $100 million ACV versus the 1,300 customer count. If we’re calling about $75,000 per customer, does that is that a fair assessment of what customers are paying you currently for OIG, or is that skewed by any of your power customers, like, the big power users?

Todd McKinnon: No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No.Brett Tighe: That’s a good average.

Yeah. I mean, obviously, there’s some big ones and some small ones, but it’s a good average.

Mike Cikos: And then the second piece is, the AWS stat that we got today. Solid growth. If I’m running the numbers on my side, is that down north of 10% of Okta’s ACV? Have we breached that threshold yet?

Brett Tighe: It’s a growing percentage. It is definitely, as you saw, the 80% revenue growth in FY 2025, I mean, it’s definitely getting big now. Which is one of the reasons why we’re so excited about it, why we were the partner of the year. So we’re, yeah, we’re excited about that opportunity. As part of the four that we’ve talked about. Right? It’s under the partnership umbrella that we talked about throughout this call.

Mike Cikos: Excellent. Thank you, guys.

Dave Gennarelli: Yeah. Let’s go to Fatima Boolani at Citi.

Fatima Boolani: Thank you very much for squeezing me in. Todd, I wanted to go back to something you mentioned with regards to launch week. Where there’s a dedicated, CIAM product now for the US public sector. So you gave us a lot of good reasons to appreciate why you won’t be sort of victimized by, you know, the DoD efforts and mandates. And that’s pretty compelling. But the efficiency has no victim. Efficiency is. And so just with regards to the opportunity for the customer identity-centric solutions, do you largely see that as a greenfield opportunity? I mean, start we’re big consumers and myself. I’m a big consumer of government services. So what does that opportunity look like today between DIY and or other commercial competitors and why continue to double down on investments?

Todd McKinnon: Yes. It’s a I mean, it’s a huge market, and we’ve seen success in the business. We did the ACV growth rates. We released ACV growth rates. It’s, you know, it’s the ACV growth is faster than the workforce business. At 16%, I believe, was the ACV stat we released. I think it’s I think if you go back to the last three years, you know, you’ve done great work following us, Fatima, for a few years now. And think what you’re seeing now is almost kind of a resurgence of the workforce business in our own minds and our own psychologies for a long time, we thought that customer opportunity is so big, so massive. Let’s focus on that, and maybe let’s not focus as much on the workforce business. I think what you’re seeing is us realizing that that business is big as well.

And with the security initiatives and how identity is really the center of security these days and how you have to have identity in place to get good security outcomes. Think you see us talking about that more, but that doesn’t belie the fact that whether it’s governments or whether it’s tech companies, SaaS companies, whether it’s companies in other industries, you know, this infrastructure and how they authenticate users and you know, we’re the another big deal in Q4 was you know, we’ve all we’re the by far the leader in authenticating the chatbots. So we basically have all of the leading chatbots out there. Even from even from some customers that some big companies that might have competing technology with us on the workforce side. Where the authentication now for all their chatbots?

So the opportunity on that side is big and important, and we’re trying to capture both of them.

Dave Gennarelli: Hey. Let’s go to Brian Essex at J.P. Morgan.

Brian Essex: Hi. Good afternoon. Thanks for taking the question. Great to see that monster acceleration on RPO and good acceleration on CRPO as well. I think Brett last quarter, on a callback, you noted that part of the reason for this kind of, like, disparity in the growth rates between the two is that you shifted the or you I guess, enhanced incentives to sell longer duration contracts. So, obviously, if it’s not broke, don’t fix it. But maybe for Todd, can you help us understand what some of the conversations with enterprises are like there with regard to those longer-term contracts? What are their incentives? And how much visibility does this give you kind of and CRPO acceleration, for example, as those longer duration contracts amortize into the current category.

Todd McKinnon: Yeah. The conversations are I think it’s a sign of the displacements, like how many products they’re displacing. They realize that if they’re gonna bet on a vendor that’s gonna replace ten, fifteen, literally twenty-five thirty products. It’s crazy how many identity products these big companies have. Many cases, it’s the same product in multiple divisions, or it’s the same you know, infrastructure customized different ways. So you have that kind of conversation, Brian, they’re much more apt to sign up for a longer term. Just because they think about it. They have a big GSI, and they’re thinking about replacing, and they have a multiyear frame. And they’re like the mindset up front is, like, this is a strategic platform versus another thing that might be more tactical. Like, hey. We’ll come into a year, and we’ll see what it’s like. And think that’s the biggest thing I’d call out there.

Brian Essex: Got it. That’s helpful. Thank you.

Dave Gennarelli: Hey. Peter, where are you at Bernstein?

Peter: Hey. Thanks so much, and congrats on the continued progress. You know, obviously really excited like many people around maybe the expansive opportunity that kind of agentic identity provides. You know, I think today, in the market, you know, it’s probably modestly adopted as an opportunity. Yeah. I think you’re already seeing, you know, really great traction. When you kind of look forward at the pipeline of customer demand for this, and where this could get to, you know, how material could the scale of this be relative to, you know, the number of workers that you cover or these types of things when we start to think about the art of the possible here.

Todd McKinnon: I think it could be massive. And I think what we could potentially we have more work to do and talk gotta give you folks more details about our plans here, and we’ll do that. We have our showcase event coming up in April. We’ll talk more about this. But we can monetize it on, quote, unquote, both sides, meaning people building the agents and people using the agents. You know, the agents have to log in, and they have to log in to something. So I think there’s potential to monetize it on both sides. But whatever we do here, I think it’s gonna be everything we do. It’s gonna be pre-integrated. It’s gonna be across all different kinds of technology. It’s not gonna be tied up to one cloud or one app or one collaboration tool or one chatbot. It’s gonna be very neutral and independent. I think that’s what customers want.

Peter: Thank you.

Dave Gennarelli: And we’ll wrap things up with Andy Nowinski at Wells Fargo.

Andy Nowinski: Great. Thank you for squeezing me in. You know, Todd, I think your comments on the importance of a platform is like an itch that customers have had for many years but could never scratch. So it makes sense that you’re seeing, you know, customers gravitate toward this platform, but when we look at the new components of that platform, OIG and PAM, it does seem like those are maybe more large customer tools. I’m just wondering if you think, you know, the OIG and PAM solutions are applicable to your entire installed base, are they more targeted at those larger customers? And same thing on the platform sale. Is that more of a large customer solution deployment?

Todd McKinnon: I think that’s the I think that’s reason I think I don’t think that impression is right. And I think the reason why people have that misimpression is that PAM market and governance market the products were so hard to install and configure and on-premise that that’s why large companies used them. I think now that we’ve made it so easy to integrate it and accessible, I think that’s why you’re gonna see this greenfield opportunity really blossom. You know, it’s very similar, like, Brett was saying earlier, this is how we did access management. We started at Okta, it was like, oh, we’ll just, you know, make it really easy for smaller companies that are adopting a bunch of SaaS and they wanna hook it up to Active Directory on-prem, make it super easy.

And then you, you know, you work really hard for five years and seven years and ten years, and pretty soon, it’s like, you really find yourself somewhere. And I think we’re gonna see the same thing here where we’re gonna work hard on this. We’ve been at it for really three and a half years now, consistently working on it, staying up high, not getting distracted. The team’s cranking. Customer driving success. You’re gonna see the same thing blossom here on this unified platform over the next few years.

Andy Nowinski: Thanks.

Dave Gennarelli: Excellent. Thanks for everybody’s patience, and appreciate you going along with us here. Before we go, I just wanna let investors know that in addition to hosting on-site virtual bus tours, we’ll be attending the Morgan Stanley Conference in San Francisco this Wednesday, KeyBank tech conference in San Francisco this Wednesday as well. Cisco HANA virtual conference on Thursday, March sixth. The Evercore Cybersecurity Summit in New York City on April first, the Wells Fargo Software Symposium in Menlo Park, here in California on April tenth. We hope to see you at one of those events, and we’ll talk to them. Thank you.