Okta, Inc. Price & Performance (OKTA)

Gonna get on Gonna get it. Hi, everyone.

Fiscal twenty twenty five Earnings Webcast.

I'm Dave Gianarelli, Senior Vice President of Investor Relations at Okta. With me in today's meeting, we have Todd McKinnon, our Chief Executive Officer and Co Founder and Brett Tye, 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.

In today's meeting, we will include forward looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Including but not limited to statements regarding our financial outlook and market positioning. Forward looking statements involve known and unknown risks and uncertainties that may cause our actual results performance or achievements to be materially different from those expressed or implied by the forward looking statements. Forward looking statements represent our management's beliefs and assumptions only as of the date made.

Information on factors that could affect our financial results is included in our filings with the SEC from time to time including the section titled Risk Factors in our previously filed Form 10 Q. In addition, during today's meeting, we will discuss non GAAP financial measures, Though we may not state it explicitly during the meeting, all references to profitability are non GAAP. These non GAAP measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP A reconciliation between GAAP and non GAAP financial measures and a discussion of the limitations of using non GAAP measures versus their closest GAAP equivalents are available in our earnings release. You can also find more detailed information in our supplemental financial materials which include trended financial statements and key metrics posted on our Investor Relations website. In today's meeting, we will quote a number of numeric or growth changes as we discuss our financial and unless otherwise noted, each such reference represents a year over year comparison. And now I'd like to turn the meeting over to Todd McKinnon. Todd? Thanks, Dave, and thanks everyone for joining us this afternoon. We're really pleased with our strong Q4 results and the finish to 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 is best positioned to capture more of the massive market opportunity in front of us as we go into FY '26 and beyond. As you know, two of our top FY 2025 priorities were: one, transform Okta 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 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 Grain Authorization, identity security posture management, and identity threat protection with Okta.ai. Okta Okta 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 $100,000,000 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 $300,000,000 of business with Okta Lifecycle Management and Okta Workflows. Combined, that's over $400,000,000 in governance related business 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 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 of event where we highlighted our latest innovations. Here are just a few. On the Okta platform, customer identity for U. S. Public sector is now even better. New features, including passwordless, enhanced security, and streamline the user experience while helping agencies meet strict compliance needs. We also announced workforce identity suites, which are new pricing packages designed to provide a simple, and unified solution tailored to our customers' security needs. These suites will provide even faster time to value outcomes for our customers. On the Auth0 platform, we announced Auth0 for Gen AI, will begin early access this month.

We already have a wait list of eager customers ranging from early start Okta to Fortune 100 organizations, Auth for Gen AI is developed to help customers securely build and scale their Gen AI applications. 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 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 Okta identity, Auth0 sellers will focus on meeting the unique needs of developers which include highly technical customer identity customizations and flexible deployment models. 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 'twenty six priorities, which build upon the great progress we made in FY 2025. The first priority is elevate the industry, with the Okta Secure Identity Commitment. This initiative underscores our dedication to be the trusted leader in combating identity based threats.

I can't 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 win IT and security with Okta Okta. Identity has become fragmented and 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 win developers with Auth0. This focuses on further strengthening Auth0's market presence through strategic investments in product innovation, brand and marketing. Seminole customer wins like the Global 2,000 Food and Beverage retailer that purchased Auth0 in Q4 to replace their aging homegrown system gives 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's been part of our leadership team since 2016 and will be focused on reigniting growth championing the Okta Okta Identity Commit, 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 co founder of Auth0, he helped build an incredible platform and his contributions to Okta over the past four years cannot be overstated. 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 in effect identity systems 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.

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 initiative is 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 40 which we've achieved every year since going public in 2017. My commentary will provide insights to our Q4 financial performance and then move on to our outlook for Q1 and FY 'twenty six. 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 SiAM 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 $4,000,000,000 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 $1,000,000,000 in total contract value for the first time.

Large deals and large 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 $320,000,000 Additionally, we added 25 customers in Q4 with $1,000,000 plus ACV in the quarter. Our total base of $1,000,000 plus ACV customers grew 22% to four seventy. The $1,000,000 plus cohort represents over $1,000,000,000 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 $1,000,000,000 in aggregate total contract value since the partnership was announced. Just four years ago. In f y twenty five, revenue from AWS Marketplace grew over 80%. Now let's turn to our business outlook for Q1 and FY twenty twenty six. 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 twenty twenty six 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 twenty twenty six, 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%. In inclusive of the expected cash impact of approximately $11,000,000 related to the headcount reduction expected to be paid out in the first quarter. For the full year FY twenty six, 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 and A. [indiscernible] I think our attendees are going to 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 DiFucci. At Guggenheim. John?

Thanks, guys.

Thanks.

I don't normally say this, but nice job, guys. Listen, you talked in the past and this, I think this is for 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 or even the macro backdrop? Todd, I think you were the first guy to say, 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, this is Well, For Q4, John, thanks for the question and thanks for the compliment at the beginning. Q4 was a blow up.

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 we gave, and I said, FY 2025, the earnings finish was pretty back end loaded. And the team really delivered. It was a it was a blowout quarter, and some of the stats, it was first time ever we had over $1,000,000,000 of bookings in a quarter. Record quarter for Auth0, And, you know, the top the top $1,000,000 deal cohort grew 22% year over year. So the records and the big stats going 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 did on the guidance.

But I 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 companies, and they can modernize the disparate systems they have, and they can they invest in this layer, it's going to really lead to better security outcomes. Going to get a handle on their various identity silos. They're going to be able to do governance and privilege and customer identity with a 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 going to give these agents access to all these systems if I don't even know what's in these systems and I don't even know the access permissions that are there and how to securely authenticate them? So that's driving the business. Great quarter. We're very bullish. But we have we're Q1 is just halfway over and we're making sure that we're prudent in our guidance going forward as well.

So it sounds like things are pretty much the same. You guys are executing. Things are coming together for Okta Okta.

Absolutely. Yeah. We're very excited.

Yeah. John, I can answer a little bit on the [indiscernible] reducing the conservatism in in the model [indiscernible] we've issued here. Same same program. We're going to continue to do that in for the balance of FY 'twenty six. The only line item in there is something we talked about earlier, which is further specializing the field. But yeah, that's 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 were really pleased with how they executed. And looking forward to a strong FY 2026.

We can see it. Thanks, guys. Yeah, let's go to Eric Heath at KeyBanc. Great. Thanks guys and really great quarter. Great to see. Two for me Brett. Just start with you quickly on on the CRPO guide for 1Q. 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 the degree of change this entails?

That makes sense. Hey, Brett, maybe you go first on this.

Yes, it's a real short answer. The seasonality of our fiscal years are 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 So it's obviously very early in the year and Q1 is like I said, seasonally our lowest quarter typically.

Specialization has been the trend Specialization has been the trend for a little bit over a year now. At the beginning of FY 'twenty five, 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. If 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 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 closed a big deal in q four. 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, 10 legacy application for just a mass it's one of those big deals that that put that over $1,000,000,000 of TCV on the board in Q4. I'm not saying this one deal was $1,000,000,000 in TCV, but I'm saying that these kind of deals led to that kind of number as they added up in the quarter.

And so and then when you go on the Auth Zero 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 grain authorization, which is like, how do you actually sub domains of permissions inside your applications or highly regulated identity, which is advanced capabilities to do step up authentication and so forth. And so [indiscernible] and now with we have on the off-zero side, we have off for Gen AI. It's like, how do you actually stitch this together if you're building agented applications and make it all secure and make sure that agents don't get hacked 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 going to 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 these products do. And when we look at 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 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 we're basically competing against a large monolithic platform that kind of says, hey, everything in our stack and we'll do it all for you, maybe, except no one really has everything in one stack, so it doesn't really 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 rate. So that's the that's the metric we're watching. As 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 even go faster and grow more and do even better than q four. Q four 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. Thanks, Todd. Let's go to Brad Zelnick at Deutsche Bank. 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, 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 that maybe we'd see improvement sooner than the midpoint of next year. Thanks.

Yes, maybe I'll start and 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 going to be the same going forward. I think the big difference, as you mentioned, is that in contracts we signed in, call it, you know, first quarter of twenty twenty two, And then in calendar twenty one, before it was the zero interest rate era, and people were buying a little bit. They just bought a lot and they over forecast what they're going to need. And if you needed 1,000 things, you bought 1,500. And now the world is different in the last two years. Now if you need a thousand, you buy 700. And then you wait to see when you go seven zero one, then you buy that that that last seat. So it's a very different world, but I as those things our average contract length is two and a half years. So as those contracts come up for renewal, they don't get renewed. They don't get renewed at 1,500.

Get renewed at a rightsized level So you're seeing that headwind of bait. It doesn't mean the macro is changing. It just means that our contracts are rolling off from that, I think, unsustainable period before.

Yes, I would just add, Brad, to that question, which is Do you had two options, buying more products or the headwinds abating, it's 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 that's why I congratulate them at the beginning of the core at the beginning of this call. It's Yeah. Really excellent execution from the sales team.

They all deserve it. Thank you.

Well, they actually did a lot of money, Brad. They all made a lot of money.

So that's a little bit of a thank you.

Next up is Joe Gallo at Jefferies. Hey guys, thanks for the question. It was awesome to see the $1,000,000 cohort represent over $1,000,000,000 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.

Yes. 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're we are really just scratching the surface If you look at IT spend, if you look at just that's kind of quantitatively. You can look at total IT spend and kind of 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 work with them through this journey. I I told the story of that, you know, five 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 when you compare it to what they're saving and the value they can get from that and what they can take out of their environment, in terms of reducing complexity and streamlining effectiveness. So their security operations are more effective. They kind of have one view of all their identities, cross privilege and governance and 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 the, potential is massive. That being said, also Okta's bread and butter growing was kind of this mid enterprise or lower lower enterprise success. And with all our investments in the partner ecosystem and the hunter and farmer specialization and the we crossed the $1,000,000,000 threshold with Amazon.

Was like the quarter of billion dollar thresholds.

Through the marketplace, dollars 1,000,000,000 of TCV, which is lot of that's in the enterprise, but some of the 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 off-site, 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 2,000 with these large platform deals, we mentioned the top 25 deals were $320,000,000 of bookings in the quarter. The way down to the bottom with the self-service plans. And, yeah, it's robust strength across the board.

Awesome to hear. Nice job, guys. Thanks, Joe. Next up is Gabriela Borgesette Goldman.

Hi, good afternoon. Thank you. Todd, I wanted to follow-up on your comments on OZIER and some of the nuances to the go to market this year. Maybe just remind us, I know you've experimented with OZYRA 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 OZYRA go to market this year versus some of the other other ways of selling that you've that you've experimented with in the past?

Yeah. It's yeah, it's real simple. We 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 twenty twenty one, so right at the beginning of twenty twenty two. Because we wanted coverage. We wanted to get the product out there product was on fire. It was growing super fast. We wanted to get it 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. But 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 grain authorization.

And and highly regulated identity and other capabilities inside of Ostero, 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 on one area were more productive. We saw conversations with certain buyers around you know, product officers or technical buyers versus IT and security. They were more just kind of differentiated conversations, And so when we look out the next five years as we go from where we are now, dollars 2,600,000,000.0 from ever last year, reaccelerated growth, building this massive company we're trying to build over time, we think the right way to do it is to have specialized sellers, specialized marketers, specialized demand generation, to speak to those value props, those buyers. We're going to serve multiple buyers over time. We're going to serve every buyer in the C suite ultimately. Identity touches everything. This is a good step in the right direction.

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 Al Zero is putting them in places that they're comfortable. Right, where they have the skill, they've got the specialism already. So that's why we're excited about this because we look at the results like you just saw in Q4 record Oc Zero bookings, put a lot of those people on the Ocio side of the house. And see how well they can do with all these great new products that are coming Thank you. Next up, we have Adam Borr from Stifel.

Awesome.

And thanks a lot for taking the question. Todd or 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 twenty six versus '25, at least qualitatively, Breck, can you talk about the size of the pipeline, the quality of pipeline during this year relative to last? Thanks so much. 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 hovering right around 20 ish of our 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. So we got to figure out how to do both at the same time.

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 we could find a an area of weakness frankly. I mean new business upsell up renewal, cross sell, everything really went well. The team executed really quite well. Proud of the effort.

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

Yes, yes, we're comfortable with the pipeline based on the guidance we gave here you guys today. So we're comfortable with where we're at. Excited about executing and FY '26.

Nice work. Thanks again.

Okay.

Next up, Jonathan Ho at William Blair.

Let me echo my congratulations as well on appears to be a good inflection 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 potentially benefits from that. [indiscernible] Jonathan, I'll focus in on the 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 I'll spare you that, and I'll focus on the Agentic part of AI. 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, the 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 if you look at a server, maybe, you know, probably 99.9% of the connections to that server are probably other machines. 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, twenty years ago, fifteen years ago was the way going to give every machine a public certificate and we're going to manage that all in certificate authority. That kind of never really took off except in some narrow cases. And now here we are today, with this the agenic 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 infer next actions, etcetera, etcetera, all know it's really real, but 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.

That's 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 OAuth Zero for the login for that, Okta has similar capabilities. And now you have not only that basic authentication challenge, but you have the all of these applications as you get two orders of magnitude more things logging in, you have to really worry about the worry about the fine grain authorization into your services. So if you're in an enterprise, you're building a system that is going to be an API that the agents talk to, By the way, that is an under that is a misunderstood thing or not a well understood thing. You want to get Agintiq 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 they're building an AI wrapper around a bunch of stuff.

And now once they get that a or sorry, an API wrapper around a bunch of stuff. And once they get that API, They need a system like Flying Green 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 want to see Jonathan can access these records. But John can access these other records.

Gabrielle can access these others. You can do that with FGA. When you put these APIs in front of all your systems, you have a nice fine grain 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 want to 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 OAuth four 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.

If that agent needs to pop out and get some approval from the user, OphphraGenAI supports that. So you can get a step up by authentication from the user to say, hey, want to check Jonathan's fingerprint to make sure before I book this trip or I spend this money really Jonathan. So those three parts are what Offered Gen AI is, and we're super, super excited about it. We have a wait list over 200 plus Fortune one hundreds and start ups around thing. They want this product, and it's going into early access this month, so we're really watching it closely to see how well it can do Thank you.

All right. Next up is Itay Kidron at Oppenheimer.

Hey, guys. Again, congrats on a great quarter.

Couple from me. Brett, on the CRPO, you gave guidance for the first quarter.

For the fiscal year. To a previous question, you said you're this is beginning of the year, so a little bit conservative on the CRPO. So I guess we should assume either only [indiscernible] get some color on that. And then for you, Todd, you didn't 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.

Sure. Hey, Kyle. I'll just take it. It's a quick one.

We only guide one at a time, one quarter at a time. We've 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.

Sounds good.

Yeah. Pam is doing great. I mentioned the new products, the total new products 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, dollars 100,000,000 of just OIG bookings when you add in the other lifecycle and workflow, which is really what you would include if you kind of looked at all the parts of governance of our business. Over $400,000,000 in 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, Fort Goldish Thousand Company that bought those existing Okta customer upgraded in the quarter to not only the access management part, they had before, but they added identity security posture management, identity threat protection with Okta.ai and Okta Okta Access. So they added those three products and it increased the ARR on that account. North of 30%. So that was a pretty significant. So on the stories like this, on and on. And I think that product Oktoprillage Access, is think it's it's getting really good and really mature and routing more capability We've got a great engineering team moving quickly.

It's it's really a modern product. It's integrated great with SaaS applications. It's kind of a rethinking of how the privilege access management market is. And I think in the next few years, as we have these conversations more, I think what you're going to hear more and more is it's just not as it's like just part of the whole suite.

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 governance and separate PAM and separate posture management. You're going to buy an identity platform and we're we're we're in a great position to deliver that.

If you look around want an independent neutral identity company, there's no one else has the pieces we have. No one has privilege and access management. No one's at near our scale. No one has 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, and the big customers don't want to do it, and they're kind of 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 have to combine two or three of the other companies and independent identity to get 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 going to see results like we just saw. I think, Jonathan, you used the word before. On the previous question about inflection. I really think this is an inflection. And I'm I'm really excited. We have we have work for you to back it up and keep going, but I'm really excited about what the future brings for Okta.

Good stuff. I mean, just one point to clarify, Itay.

You were saying $100,000,000 and $400,000,000 annualized contract value. So that's total book of business, okay? Not bookings, you said bookings. So I just want to make sure we're all on the same page.

Sorry.

It's okay. Just want to make sure we got the facts straight. They're huge businesses. They're massive and really proud of where they've gotten to, but we got a lot a lot of opportunity as we move forward. Sounds good. Thank you.

Let's go over to Shnek Azaria here.

Questions. Yeah. Awesome. Thanks for taking my question. Congrats on great execution. Just a quick couple from me. So, you're capitalizing on on cross selling, which is great. And what stood out Brad, you're mentioning, the strong public sector performance especially integrating the 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 the execution dynamics, any specific, initiatives that's helping you navigating these, challenging, federal dynamic right now? And had a Public sector for us is includes federal, of course, U. S. Federal, of course, US commercial federal and DOD, but 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 of the state governments and the big deals outside of federal that we closed last year and in Q4 in particular. So now focusing on the U. S. 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 The, 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 their legacy identity systems. The federal government has a lot 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, we're like perfect for that. Don't have to manage servers. You don't have to the implementations are easy. The time 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, would 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, very confident that we're going to be a big we're going to be very successful in the federal government helping them modernize, be more secure, No one wants a federal government that's not secure.

Think that's probably the only nonpartisan thing in Washington these days. And we can we can help them be more secure, and that's why we're so excited about that opportunity. Okay. Let's go to Greg, Paul.

Great. Thank you very much for taking the question.

And congratulations on the good results So I thought the $100,000,000 ACV stat on OIG was a good number, really helpful. You called out the $300,000,000 on lifecycle management workflows. So I'm curious if those 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 on a combined basis over the next year versus rest of the business?

Yes. I think the way to think about it is we've talked about this consistently now for a while.

When they upgrade to OIG, it can be a 30 to 40 plus percent increase in the ACB for that customer. So if you have nothing and you you buy OIG, Lifecycle, and Work life cycles, maybe it's 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, run room above the the $100,000,000 directly for OIG and the $400,000,000 total you just talked about.

And if you think about one of the reasons why we are further specializing the field to your question about maybe going forward, Gray, is to be able to get in in there and deeper into accounts and be able to do more of these upsells that 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.

Understood. And let's go to Saket Kalia at Barclays.

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?

The main part about it is it's simpler. The and that's what's enticing. It helps customers understand simply what they need to buy to be successful. And the history of this is we monetize innovation over the years by keeping the we basically sold customers the the capabilities at the time. And then as we added more capabilities where there's 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 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 want to have? Whether they want to 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 the, if you want a full identity fabric 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 want to 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.

Makes sense. Thank you.

Next up, we have Shahu Yal at Thank you. Good afternoon, gents. Congrats on the quarter and outlook. Thanks for the color on [indiscernible] 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 high end enterprise driven? Are they mostly displacements or greenfield? Any color will be greatly Thank you.

Yes, absolutely. So I think it's The majority of the vast majority of OIG customers are upsells. They have access management, and they add OIG. Not a %, but it's close to a %. There are a couple cases of new lands with OIG, but in both of those cases, they 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 sweets in the previous answer, and way customers are thinking about it is [indiscernible] I think this idea that you're going to 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 stitch 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. That's 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 work flows 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 want to 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 those in a modern protocol, involve those credentials with our privilege access product. So that's that's the idea. I 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 going to 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 the they were they were software. So they were sold a big license and they never got it implemented. And that was kind of 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 see it in the Okta. Like, we should release some of this data next report maybe that the time to value and the the how much usage our customers get out of our governance product very quickly is best in the industry.

Yes, I would just add there are are in addition to what Todd was just saying that there are side by side implementations because was part of your question. [indiscernible] we're really excited about those for a lot of reasons because we can, what Todd was just talking about, demonstrate value to customer and earn the right for future flows or future opportunities or the right to take out that other one, if you remember what made us big in the beginning was we did that with access management. 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. So we're running a very similar play with governance and just the sweet strategy that we're running now which is obviously showing some traction with these numbers we just produced.

Thank you. And next up, let's go to Josh Tilton at Wolfe Research.

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 kind of gravitate to the workforce side of the business as having this this clear agenTec AI opportunity. But listen, you guys speak it's pretty clear that you guys have opportunities across both workforce and SIAM. I guess my question is, Todd, for you, like, which side of the business are you more excited about from an agentic AI perspective 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.

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 kind of, 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's these teams and these companies that have been tasked with we hear about this agent thing, make it work.

And the first thing they have to do is I've I've had many conversations with customers where they've been in these discussions, and we want to 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 kind of like similar to you're building something, you're a developer, you're you're exposing APIs, you're doing fine grain 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 users' behalf, So you're a developer, but it's kind of like a work workforce use case. But I think people building these systems and and getting the benefit from that is really exciting. Good. Next up, we have Keith Bachman at BMO.

Hi. Thank you very much.

Just also want to congratulate you specifically on the cash flow It looked really impressive in the guide, likewise. Doug, Keith, we were rule of 54.

Q4. And I just want to say thank you, for noticing. You guys were through a bunch of questions to get to that 42%.

That was a Yeah. Yeah. Yeah. Todd was mentioning that Salesforce got well paid. I assume that Brett, you're going to look for some of that as well based on the cash flow. But moving on to the question, the net retention rate was 107% this 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 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?

Yes. Thanks, Keith, for that question. So as you know, we did expect it to go down into this range on the back of healthy grocery retention. From here, for the balance of FY 'twenty six, 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.

Okay. All right. Thank you very much.

Let's go to Roger Boyd at UBS.

Awesome. I'll echo my congrats as well. Brett, just a quick one.

You mentioned, I think record sales productivity the quarter. I was just wondering how you're thinking about go to market capacity into fiscal twenty twenty six six, and to what extent you see an opportunity to invest in behind some of that strength, especially as you think about kind of the sales specialization from here?

Yeah. We feel good about the capacity where it is today. We feel we're in a really good spot. We want to 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 want to get too much in one direction or the other. We want to sure the porridge is just right. So we feel good with where we are right now. Okay, let's move on to Rudy, Kaczinger, D. A. Davidson.

Hey, great. 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 pre doc, Zero integration, like, where you guys are on now And what level of productivity gains are you basing into the fiscal twenty twenty six guide?

And then again, I want my congrats. Very, very strong quarter here. The CRPO growth acceleration, etcetera.

Just the strength you saw in the quarter, I know Q1 is just smaller quarter, rolling a month into it, but have you seen that momentum continue thus far in Q1? Or just what are you seeing?

According to date?

Yes. 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 multiyear high. Really pleased with how things came out. In terms of your question on Q1, look, I mean, like we talked about earlier, Q1 is usually our seasonally lowest. And the reason why is we're getting 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. So we obviously got a long ways to go for the quarter and are excited about People were very excited at the kickoff. [indiscernible] That's a good point. I guess that's not nothing.

Okay.

I know we have a lot more hands raised. We're at the top of the hour, but let's try to take a few more here.

I'll go to Kevin Neapurum at B of A and from Evan. David, that was pretty good for your first time. That's right. Tough last name.

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 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 1Q are they sustainable or what should we expect so that the Street can kind of reset their models going forward?

Yeah. I mean, I'll take the first part of Todd. You can You can add in how you see fit, which is we had a lot of big deals. There wasn't any one single deals deal that was outsized relative to the rest, but we had a lot of big deals why we gave you the stat of top 25 deals over $320,000,000 in total contract value. So it goes back to really the the we've talked about enhancing partners, further specializing field, doubling down on security, these are all things 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 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 that's what we're obsessed with doing, and that's what we show up every day working hard trying to do. [indiscernible] Thanks, Kastr. It's Priscan here. Maybe just one.

What are you seeing in terms of like the ratio of like nonhuman AI agents to employee? And I ask because I guess I want to understand like pricing model and perhaps when you're talking to your customers, what are they willing to pay for? It's one to five or one to 40, just curious to know how you price that and when do you think it will become maybe accretive to your top line?

One of the things that the things that we don't have today is the industry doesn't have a way to like identify an agent. I don't I don't mean in the sense of, like, authenticating or validated agent. I mean, to actually universal vernacular for how to record an agent, how to track it, and how to 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 Asian account.

You'll see companies starting to when they buy software, they say, hey, you know, I buy this 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 this to some degree, but there isn't common cross company, cross enterprise definition of an agent, which is an interesting opportunity for us actually. Do know in the business today, there's a 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 Okta Zero 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.

Thank you. Go to Matt Hedberg at RBC.

Great. Thanks, Dave, for the question.

Todd, I think a lot of us are just sitting back here kind of seeing all the opportunities that you guys 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 'twenty six and beyond. And again, it's kind of getting back to the question of picking your favorite child. But between like all of the catalysts that you've got going here, we're sitting here twelve months from now.

Large enterprise.

Large enterprise success? Okay.

Okay.

Yeah. Sorry, I didn't mean to cut you off, but I think 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 going to install software to manage your identity. That's out. They need a cloud solution, and we're the only game in town. Unless you want to to unless you want to go with Microsoft and just just kind of 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 park they had.

It didn't matter It didn't matter because they're not going to wind their whole future around Microsoft.

They have three infrastructure clouds, they have these companies, the complexity and the expanse of what their identity challenges are is far beyond what one company that's not focused on it can do. And the only game in town. We're the cloud version. We have all the parts of the suite. Yeah, when we're talking in a year, if I'm if I'm off to something and not large enterprise, then you can call me on it.

Thanks a lot. Best of luck. Yes.

I would just add to that Matt, in the sense of, like, thinking about what we told you probably four or five quarters ago. There are four things we're going to work on, security, new products, [indiscernible] further specializing. We're going to keep working on all those things because that's what that's what will drive what Todd just talked about. So it's 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.

Thanks, guys. Let's go to Patrick Colville at Scotiabank.

So I guess let me just sneak two quickies in.

Mean, if I look back at this quarter and last, the CRPO beats have got significant any larger And EU, you said this was a blowout quarter, but I guess how should we think about the guidance philosophy Brett, for CRPO beats heading into 2025? And then, Todd, I guess, just for you, most of your prepared remarks were actually about the workforce business. But the disclosure you guys give around kind of ACV growth it looked like actually customer density was the real strength in 4Q 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 really kind of a rocket ship right now I'll take the first, which was around the guidance philosophy. Like we talked about last time, last quarter, we talked about reducing the level of conservatism in the model.

Now [indiscernible] I can only do so much, and we're going to 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 the sense that we had a very large quarter.

You see the revenue growth going up by a very significant amount. From 7% to 10%, a raise of $80,000,000 and we're giving it to you right there. So in other words, whatever that upside, that big upside you just saw, seeing it reflected in our guidance immediately. So that is going to be our our strategy going forward and our philosophy going forward. And I'll let I'll let Todd talk about the the growth rates.

Yeah. I think both, Auth0 and Okta had really strong quarters. The Auth0 quarter was a big seller.

So I don't my remarks maybe weren't accurate in the sense that I want to reflect the strength in both in both of those respective businesses. The 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 work in worked on a name brand global food and beverage company that bought OZ Zero to be the front door login for their their entire mobile app, which has huge volume. So there's [indiscernible] you know, 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 54 and over $700,000,000 of cash generated last year, it's It's because of the scale. I mean, we spent sixteen years building this business that's [indiscernible] 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.

Try to get through five questions here over the next seven minutes.

So we'll go to Mike, CECOS and Needham.

Great.

Thanks for taking the questions guys and congrats on the quarter from our end as well. Two ported here, but first on the OIG. Just wanted to make sure we're all going to be running our numbers now, on $100,000,000 in ACV versus the 1,300 customer count. If we're, call it, 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? [indiscernible] A good average. Yes, I mean, obviously, there's some big ones and some small ones, but it's good average.

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?

It's a growing percentage. It is definitely, as you So excited about it, why we're one of the partners of the year, the the 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 we talked about throughout this call. Excellent. Okay. Let's go to Fatima Belani, Citi.

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 was a dedicated CIAN product now for The U. S. Public sector. So you gave us a lot of good reasons to appreciate why you won't you won't be sort of victimized by the Doge efforts and mandates. And that's pretty compelling. But the efficiency has no victim. Efficiency 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, certainly 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?

Yes. It's I mean, it's a huge market and it's we've seen success in the business. We did the ACV growth rates. We released ACV growth rates at 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 last three years, 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 mind, in 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. I 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, this infrastructure and how they authenticate users and you know, we're the another big deal in Q4 was we're by far the leader in authenticating the chatbots.

So we basically have all of the leading chatbots out there. Even from some customers that some big companies that might have technologies with us on the workforce side. 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.

Thank you.

And let's go to Brian Essex at JPMorgan. Hi, good afternoon. Thanks for taking the the question. Great to see monster acceleration on RPO and last quarter on our call back, you noted that part of the reason for this kind of like disparity in the growth rates between the two is that you shifted 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.

Yeah. The 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 going to 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 when you have that kind of conversation, Brian, they're they're much more apt to sign up for a longer term just because they're get they think about it. They have a big GSI, and they're thinking about replacing, and they have a multiyear timeframe, and they're like the mindset upfront is like, this is a strategic platform versus another thing that might be more tactical. And okay, come into a year, and we'll see what it's like. And think that's the biggest thing I'd call out there.

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

I think it could be massive. And I think what we could potentially we have more work to do and talk we've got to give you folks more details about our plans there, and we'll do that We have our showcase event coming up in, in April. We're talking more about this But we can monetize it on both sides, meaning people building the agents and people using the agents the agents have to log in, and they have to log in to something. So I think it's potential to monetize it on both sides. But whatever we do here I think it's going to be like everything we do. It's going to be pre integrated. It's going to be across different kinds of technology. It's not going to be tied up to one cloud or one app or one collaboration tool or one chatbot, it's going to be very neutral and independent. I think that's what customers want. Thank you. And we'll wrap things up with Andy Nowinski at Wells Fargo.

Great. Thank you for squeezing me in. 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 customers gravitate toward this platform. But when we look at the new components of that platform OAG and PAM, it does seem like those are maybe more large customer tools. I'm just wondering if If you think the OIG and PAM solutions are a applicable to your entire installed base, are they more targeted at those larger customers? And same thing on the platform sales, is that more of a large customer? So deployment?

I think that's the I think that's reason I don't think that impression is right. And I think the reason why people have that misimpression is that [indiscernible] 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 [indiscernible] opportunity really blossom. You know, it's very similar, like, Brett was saying earlier, this is how we did access management. We started Okta, it was like, oh, we'll just, you know, make it really easy for smaller companies that are adopting a bunch of SaaS apps and they want to 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 going to see the same thing here where we're going to work hard on this. We've been at it for really three and a half years now, consistently working on it, staying applied, not get distracted. The team's cranking, customer driving success.

You're going to see the same thing blossom here on this unified platform over the next few years.

Thanks.

Excellent. Thanks for everybody's patience and appreciate you going along with us here.

Before we go, I just want to 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, KeyBanc Tech Conference in San Francisco this Wednesday as well. Susquehanna Virtual Conference on Thursday, March 6, the Evercore Cybersecurity Summit in New York City on April 1, and the Wells Fargo Software Symposium in Menlo Park here in California on April 10. So we hope to see one of those those events and we'll talk to you then. Thank you.

Thanks everyone.