Conference Transcript - OKTA 2026-06-03

Speaker 4

Thanks everyone for joining us. With me today is Eric Keller. He's the CEO and president of Okta. Eric, thank you again for joining us. Great to be here. You know, I will maybe kick it off. You know, there's so much going on and you know, there's a lot of questions I was putting together but I really want to start, you know, from your perspective, you know, there's so much has changed with AI. So if you think about the identity market year to date, what surprised you the most

Speaker 3

in terms of like the changes that you're seeing? I think for a year to date, so if go back six months ago prior to the beginning this year our conversations with customers were fairly broad and Okta has grown over the years from providing basic access management to also providing workforce and customer identity and then also adding in identity governance privileged access management and new security products like identity threat protection identity security posture management and developer products with the Auth0 platform our conversations prior had really been about the breadth of all of those use cases for customers, and we would talk about the identity security fabric, and that fabric was the combination of all those capabilities to help customers solve identity and secure identity for all their use cases across all their products and all their technologies. What surprised us this year, to your question, is while all of that is still true and we continue to innovate and develop for the identity security fabric and all those use cases, the only thing customers want to talk about today is how to protect themselves from the AI problem they know they have within their companies. Their employees are using AI, they're turning on agents internally, 91% of them report that they know they have agents that are live in production, 22-ish percent of them believe they have them secured properly. And so that's what people want to talk about. They have an exposure today and they need to contain it. And so I guess what surprises us about that is just how acute that transition has been and and it has really dominated our conversations and as as todd mentioned on the call last week it's really been a driver of pipeline for our new products we brought zero for ai agents to market in november and octa for ai agents came out last month april 30th and so those products have really been built in consultation with customers talking to us over the past six months about how specifically they need us to help them secure AI. So maybe we'll stick with the AI theme is

Speaker 4

into your point, you know, it was AI agents GA for a couple weeks talking the call last week so it's the largest I guess pipeline built for a net new product. So in terms of like how you go to market, what are your reps doing to convert pipeline to actual dollars? And then we'll talk about the monetization but just curious more so like what's what does that pipeline look like and how

Speaker 3

are your sales reps converting them? Yeah it's interesting because the space is so new and it's evolving so rapidly and the underlying technologies are evolving so you know a few months back you know gemini was the predominant platform in conversation then anthropic would leapfrog it and now chat gpt 55 cyber is out and our customers are living in this world where they're not sure which technology is going to ultimately land and so they need flexibility to be able to protect against all of them so our conversations have largely been talking to them about the importance of neutrality and the importance of having a broad solution that can that can allow for the the rapid evolution of these platform technologies and um one of the challenges we have we we have addressed and continue to address with this particular pipeline is it's a newer motion it's it's adjacent to conversations we've had about securing human identity and securing non-human identity and service accounts but agents are a newer con our newer conversation so for our sellers they don't have depth years of experience positioning these products they're new products they're just coming out and so one of the things we've done to help them is we've stood up a a tiger team of of resources from a sales standpoint a product standpoint an engineering standpoint with forward deployed engineers that are working actively with early customers early enterprise customers to help us both design and build the products and convert pipeline. So that team has been really driving our strategy and our engagement and our specific feature prioritization over the past many months, which is why we're confident that the product that we brought to market is going to fit the need, because it was really designed collaboratively

Speaker 4

with customers. I know it's a small sample set, but on the call, a lot of investors kind of focused on the commentary where I think you said, I think it was more so on the callback, which was a customer comes in for an upsell, they buy IGA, if they were to attach AI, that component would be larger than the upsell. I know it's a small sample size, but can you just provide some color on what you meant, like when you say larger in size, I assume absolute dollars, but to the magnitude, and again, smaller sample set, but can you dissect that a little bit? Yeah, what Brett talked about in the

Speaker 3

call is that it's about 40% larger. It's significant, and it really is testament to the value that customers place on the exposure that they're working to mitigate and as every as every successful cyber attack earns a headline customers get more and more aware of the fact that they have an exposure that they need to mitigate against and so that that helps them understand they need to control for all the use cases the challenge the challenge that customers have today enterprises have today is that they can't control their employees employees are able to spin up an agent and give But access to their email and access to their calendar and access to their Google Drive Which contains things that they don't even know they have access to you and so as that becomes more prominent and More acute and as there's more issues in the press Companies don't want to be tomorrow's headline And so they know they need to invest to put themselves to increase their security posture and put them in a position where they can protect against having their own agents compromised or over permissioned or or impersonated and so so so that's really what we're seeing the invest level of investment we're seeing is that that's where customers see the biggest

Speaker 4

exposure today. Then if you think about you know Auth0 and then you know Okta where it sounds like Okta is having more success early on with AI just given the deployment because it's more internal versus Auth0 side but maybe walk through

Speaker 3

those dynamics and does that shift over time? I wouldn't agree with the premise of that question the we're having good success with Auth0 for AI agents as well. You might not have heard us talk about it as much on the call, because it's an upstream product. So Austero for AI agents is a tool for developers that helps them develop agents that can be secured. And it allows, for example, for fine-grained authorization where you validate when an agent takes action, you validate not only that it is who it says it is, but also that it has the specific permissions to do the thing it's trying to do. That capability is hugely important. Token vaulting which is included there is hugely important. So we've had we continue to have good success with that product as well from a enterprise security exposure standpoint the more acute challenge our customers are facing right now is that they don't know they don't know three things and we call answering these three things the blueprint for the secure identity enterprise where they don't know where their agents are they don't know what they can connect to and they don't know what they're authorized to do and so Okta for AI agents is the platform that addresses those three areas helping with the problem of discovery how we find what agents are live in production for your company and then helping with the problem of connection and ensuring that you know what those agents are able to connect to and then helping with the problem of authorization and knowing

Speaker 4

what they're authorized to do. I guess the question I have is and I want to ask within identities if you think of privileged access which you have iga which you have further along the maturity curve and then think about your core it's more important or a bigger

Speaker 3

priority for for customers in terms of securing ai in terms of securing ai um so governance continues to be a very strong contributor for us and uh and and we don't see that slowing down in addition and governance plays a role in securing ai as well and you know for example one of the use cases there is just-in-time provisioning so one of the challenges with agents is typically um not typically often agents are are configured with stand with standing privileges meaning you allow an agent to connect to one of your systems and it just has access to that system standing access to that one of the areas we can address that with governance is through just-in-time provisioning and deprovisioning where you wake the agent up when it needs to do work and then you turn it off immediately afterwards. So you solve the problem of standing privileges through that. So governance is an inherent part of a solution for securing AI. But then the the Octafer AI agents platform helps you, again, helps with those fundamental questions. First of all, knowing where the agents are so that you know which ones might have standing privileges, you know what to look at. Knowing what they've been given access to, what they can connect to. So again, it can help you understand what that exposure is. And then knowing the verbs, the actions that they're allowed to take. So is the analogy where it's,

Speaker 4

you know, everyone needs governance, but not everyone needs privileged access, meaning maybe the CISO, someone in the security team, I don't personally need access to turn on and off MFA. Right. So does that mean IGA is probably a bigger upsell than privileged access or do agents need both?

Speaker 3

There's aspects of privileged access that really help with AI, especially in particular token vaulting is a feature of privileged access and also also a feature of Auth0 for AI agents, and that token vaulting allows an agent to have credentials which are managed in a secure location and have business rules that requires them to be rotated, and if you go back ten years ago people would configure a service account and hard-code a user ID and password and a config file and be done with it, and that would live that way for years. We've all learned as an industry that doesn't work. It's a huge exposure. So the privilege access will become increasingly important for more of those use cases over time. As far as our business is concerned, It's a it's a newer product for us yet. It's not yet a land product We have now matured Okta identity governance to where it's now a land product for us And in addition to being a frequent cross-sell for existing access management customers It we're also going in to displace entrenched legacy deployments from other vendors. So governance has matured to the point where Where it is now a point of entry for us, which is great Privileged access is a couple of years behind governance in its maturity. It's certainly not, we don't consider it a land product for us today. But for the use cases that it supports around access management and governance, it's been very effective.

Speaker 4

Could you share what percentage, I guess, of net new customers come through IGN? We don't break that out.

Speaker 3

Keep me honest with that, do we?

Speaker 4

Maybe we talk about the monetization. This whole conference, everyone's been talking on the software side, you know, how this plays out over time how are you thinking about monetization of these agents consumption usage base maybe just walk us through what that trajectory looks like yeah todd talked about

Speaker 3

that on the call last week the one of the challenges the industry has right now is the economics of ai and inference and compute are such that most vendors are bringing to market their ai offer with a consumption-based model the challenge with the consumption-based model is customers don't know how to budget for it and so leading with a consumption-based model slows down your sales cycle materially and we have this issue internally as we're buying AI products and trying to figure out how to how do we budget for what our consumption is going to be so what we're doing with these early customers is we are entering into one-year terms and we're we're only having a seat based model for now and we've talked to all these customers coming in that for the first year we're going to have a seat based model here's what's going to look like and they can budget for that and then we have the understanding that during the year we're going to learn their actual consumption so that if we are were to add in a consumption based component at renewal they would have data to ground their budget cycle on and that the reason that we landed on that is just by working with these customers over the past six months is what would make it possible for you to get started and and

Speaker 4

that's been very effective so far okay you know maybe jumping to i think some of the comments you made on go to market you you've made a lot of changes over the past call at six quarters most of last year was kind of ramping some of these net reps you called attrition's basically at levels where you haven't seen in in a very long time so you the more senior level at a great level um to be clear that could go the other way right right um so you you it sounds like you're kind of pulling back i guess a little bit on net new hires maybe just walk us through some of the commentary on the call in terms of why not step yeah it's interesting we went through a

Speaker 3

couple years of needed go-to-market evolution and one of the questions we would get in these conversations is how much disruption is too much disruption in our and are we are we how are we managing productivity and tenure and time and seat and we're looking back we're very confident the moves we made with the right moves so our waves of specialization we're now in our fourth which I get to but our first a few years back was to carve out a set of sellers to focus on public sector federal and state and local and international and that team is has had a very good run focusing on those buyers and that budget cycle and those purchase cycles we then two years ago rolled out a hunter farmer model in our America's commercial business so we moved reps who had been accountable for all new logo acquisition and upsell cross-sell and upsell what we had found is that that business was shifting so much in the cross-sell and upsell and largely as we were brought more product to market they had more to sell that we weren't spending enough time feeding the top of the funnel by bringing in logos so we carved out a set of sellers and put them in a hunter motion where their focus was on new logo acquisition and we've talked about it took about a year for that model to to get to to really get running at full speed and that's that's what we had expected and how we've models and set guidance. And then this past year, five quarters ago, we rolled out a specialization model on our platform and our buyers. So whereas previously every rep sold everything, we divided the sellers into two populations. One that sells to the corporate IT and security buyer, the CIO and the CISO, and they sell the Okta platform to that buyer, and one that sells to developers, whether it's software developers or B2B SaaS or even in-house developers and they sell the Auth0 platform and that specialization we rolled out January of last year and we talked about this throughout the year it's it's proven to be very effective so as a result of all of this we have we have seen several quarters of improving rep rep tenure as attrition has gone down and tenure has gone up and productivity has gone up as well and overall when you talk to the field organization I was just at our club event a couple weeks back you can feel the the optimism and the people know that they can be successful and do that they can make money and so when we look at capacity to get back to your question we want to be careful to to add capacity to drive up bookings but not to add so much capacity that we disrupt territories that we disrupt books of business that we have to reallocate accounts and then people have to reset new relationships we find that when people have accounts longer they're going to sell more into those accounts and we don't want to carve territories to the point where reps lose some momentum and feel like they're losing they're losing some opportunity to be successful so we feel like we have that balance about right we've added a bunch more capacity in q1 we're adding less incrementally during this quarter and next quarter but we're going to measure based on our pipeline to make sure that we're not leaving deals on the table so we'll adjust as we go yeah where is the

Speaker 4

you know you talked about public sector real quick get a good strong q1 yep What's driving that? It sounds like it was across the board, state, federal, and local.

Speaker 3

Overall, the team is well-tenured and well-productive, and they've got the product mix that those buyers need. I think one of the things to keep in mind also is Q1 is typically a low quarter for a public sector. The federal fiscal year starts in our Q3. So Q1 is typically, we don't typically have a lot of renewals or a lot of net new purchases at the federal level, certainly. But state and local continue to be active. and we had some good federal deals in q1 as well the the one thing that also stood out to me was

Speaker 4

just the step up i think in partner source partner source bookings multi-million i think was up year over year you know along i guess more so that was part of your shift and want to talk about shifting more of your pro services to your partners obviously that broadens distribution makes it a lot more stickier they're going to push your products you know what was the move behind that and I'm part of it was probably go to market changes, but you know, if you think about this the partner driven deals, like what

Speaker 3

How does that look throughout the year? Kind of it's two things one We've we've had for many quarters. We've had Our most exciting growth has been at the top of the pyramid. It's been up market Yeah, we I think we we did announce in this quarter that our customers over 100k and in spend are now over 85% of our revenue and our customers over a million represent over a billion dollars in ARR and so as we go up market we're having bigger conversations and as our product portfolio has expanded we're having conversations that span multiple processes and multiple departments and multiple use cases and as that complexity increases our partners have an increasing need to be working with the systems integrator that can span span broader parts of their business and so So, we have been working with the global systems integrators across all this. And what we realized this year coming into our planning cycle is that we could take a deliberate step to refocus our professional services resources on enabling those partners to get greater scale. And so that's the adjustment that we made where we basically shifted 1% of revenue capacity towards partner enablement and working with those GSIs and these accounts. And that's played out as we expected. It's both financially and from an engagement standpoint. We have active engagements at customers with all the major GSIs, and we're seeing that continue to improve. And ultimately, what will happen is they build more experience, they build more bench capacity, they bring us more business because the GSIs sell what they have on their bench. And as they build octa capacity on their bench, they're going to be bringing more opportunities to us.

Speaker 4

When does that become more meaningful in the model? Is that 2Q, Q3? Maybe when does it really start to step up?

Speaker 3

Brett's comments last week was that we expect to start to see that contribute in Q2.

Speaker 4

Okay. Maybe going back to AI, the question I had for you, and again, it's been a question I've been asked this whole week, is incremental AI dollars being spent, where is that coming from? Is it being pulled from endpoint network, or is it like new buckets of spend that CISOs are getting?

Speaker 3

It's really from, it's both. So it's people rebalancing their portfolio, but there is a lot of net new investment coming in and it's coming in because this is a board level exposure so as as this market evolves and as threat actors get more published boards understand that this is a real security concern the problem of having agents having standing privileges to corporate assets the problem people are understanding that they're behind in data governance and and uh ensuring that they have proper they're finding their humans have access to data they didn't know their humans had access to but now agents are on and they're 24 7 and they work work at a much higher clock rate than their humans work there's increasing exposure that needs to be managed and invested in and so we're finding board level engagement and investment in um in agentic securities specifically so there's there's net new funding coming in um and then in addition to that companies are looking internally at where they can harvest some savings to drive in into this area as well so we feel it's very much a tailwind right now for for the product which is why we've innovated the way that we have with the offers we've brought to market

Speaker 4

so it sounds like consolidation is definitely a trend platformization obviously one of your competitors brought it up but you know with that i mean i guess within ai where's the most success is there a specific geography a certain vertical that you're seeing more traction today than you probably wouldn't have expected three months ago?

Speaker 3

Not a vertical or geo. These are pretty global needs. I think where we're having the fastest success in these conversations is where we're bringing in our specialists. And so the reason we've created a tiger team is they do nothing but talk to customers about this specific problem all day every day. And so we direct that team to what we perceive to be the largest opportunities we have we have activity in all of our geos but I wouldn't say that there's there's a single vertical right now that is standing out beyond

Speaker 4

others if there's any has any questions feel free to feel free to jump in the maybe we'll talk about the competition you know would love your input on what you're seeing or your expectations from Palo Alto with Cyborg obviously it's more the privileged access side Kyle's right he's making a big push into identity. I think they came out with Falcon ID, which I think is more of your core, slightly,

Speaker 3

but very lower end product. Where is this market evolving to? First of all, it's a huge pie. The market is enormous right now. Second, the one core differentiator that, and we talked about last week as well, is our neutrality is huge. And customers don't know which vendor is going to own which parts of the stack and they know that they need to be able to solve and secure identity across whatever technologies are coming in and out of the mix so that continues to be a core differentiator for us we also have from a distribution standpoint today over 20,000 enterprises that already trust us to secure identity and so for them expanding their their secure identity to include a new use case with agents is a very natural extended conversation of the work that we're already doing with them we've done a really great job building those connections. And then from a partnership standpoint, I mentioned we have over 8,000 applications that are integrated with us. Those companies you mentioned, CrowdStrike, Palo Alto Networks, they're huge partners of ours. We have thousands of mutual customers. So those relationships obviously will evolve as we overlap more on the edges, but we see it on the edges right now, not in core head-to-head. Okay. Where do you think Palo will have the most success with with CyberArk? I think where CyberArk is strong is on privileged access as you mentioned. They have many years of incumbent access there. Their solution is legacy on-prem. They're going through work right now to bring it into a multi-tenant, multi-tenant SaaS and that's taking some effort for them. It will continue to evolve with Palo. So for firms that are Palo customers that have a privileged access specific need, they know they are now going to be a natural offer for that. But again, that's not a land product for us today, so we wouldn't expect to be head-to-head in those in those transactions. Where we're broader on access management and governance and security threat protection and posture management, we'll bring

Speaker 2

those offers in to help bounce down. Matt, please. For your early identity customers, to what extent do they have to have a consolidated? The agentic products bundle all the capabilities that are

Speaker 3

needed from those stacks so if a customer buys Okta for AI agents they get the components of access governance and privilege access that are required

Speaker 2

to secure the agentic use case that's how we've packaged it that way no you

Speaker 3

could deploy it the Okta for AI agents to be clear I'll see yours on the build

Speaker 4

side but on the governance side yeah can you maybe help us understand where Crowdstrike compete. Is it more complementary? Is it more competitive? Where do they fit in the stack? And then...

Speaker 3

We don't see them head-to-head at all. They're... We talked about this on the earnings last week. The one named competitor that we see material is the same as it's always been as Microsoft. And the primary play they have is bundled, right? So if for customers that are... That have a very specific need for the small subset of capabilities that that Microsoft can provide in the e5 and e7 bundle and are under cost constraints That's a that's a legitimate competitor and that's something that that we grapple with but But our win rates against Microsoft haven't materially changed in many many quarters But that's something that is a constant conversation for us because if you're not using the breadth of our stack and you're only using a subset of access management and you have you're already a Microsoft on the customer, we have some exposure there. So our account teams are very driven right now and driving our stickier products that get us in great things like workflows, things like a governance and privileged access and our security products. And as we add all those in we become even more of an established standard and it and and people build on us.

Speaker 4

Is there a stat that you can maybe share, is like how much overlap, how many Okta customers are using maybe parts of, you know, ENTRE, what Microsoft has?

Speaker 3

We don't have published those stats, but we have many customers that are also Microsoft customers.

Speaker 4

Is there a specific part of the Microsoft stack they're using that perhaps that you guys don't have, like why would, maybe walk us through like what are, if it's a Microsoft customer using Okta and and Microsoft where where's the overlap it can be a customer that's migrating over time and coming more

Speaker 3

It can be a customer that has a legacy Microsoft app that they're using that has been previously configured that they haven't yet brought over those use cases are very very common but usually it's it is Either that or it is people not really using the the enter components, but they're using other components of the bundle

Speaker 4

Maybe talking about some of the cores, maybe I'll start with Auth0, that business has continued to do extremely well, checks on the channel, on the developer side, it's just a library of applications. Where does that business trend and what are the investments that you guys are making into Auth0 today that you think will help sustain that growth? the

Speaker 3

All zero continues to serve its core audience which is developers those developers Historically, we've talked about all zero as a customer identity access management Solution which it is and the reason that we've we've used to lump those in as almost synonymous Once upon a time was because the primary use cases people were using all zero for was to build applications that serves customers in a B2C model That's expanding now developers are building additional things. So we have a focus on B2B SaaS providers people that are that are bringing applications to market and so for those customers you asked about innovation targets for example We we are investing to earn FedRAMP's Authorization for the Auth0 platform which it does not have today and the reason that we're doing that is Because B2B SaaS vendors need to be able to sell their products to government So we need that we need all zero to earn FedRAMP accreditation so that they can sell their products to government That's an important investment. That's well underway for us right now And in it so in addition to b2c b2b We are now seeing a genetic development as the net new category and the reason that we've been investing in that product is specifically to serve serve that use

Speaker 4

Guess it's like how do you manage that investments across Okta and then all zero today are the engineering teams are

Speaker 3

are distinct. They were both reported to Rick Smith, our president of technology, and Rick is, and that's a recent change we announced a month ago, and Rick's charter with pulling them together is to make sure that we don't duplicate efforts. So for example, we've spent many years earning FedRAMP authorization on the Octoplatform side. It's FedRAMP high authorized. We don't want to have to repeat that and start from scratch with the work that we're doing on Oscero. So he's looking for programs like that where we can get some commonality and some some some reuse of the skills that we've already developed in-house and that'll that'll work in both directions for us. You know the other impressive I

Speaker 4

think stat in the corner net retention ticked up for the first time I think 106 to 107 sounds like perhaps maybe there is an inflection maybe later in the year but you know walk us through you know how much of that is you know the core buying net new seats AI is it IGA is it privileged access like what's what drove the trajectory to take it higher and then throughout the rest of

Speaker 3

Yeah, we so we've mentioned we expect it's going to travel around here plus or minus a point for a while It's all the things that you mentioned the although I would not I would not attribute privileged access specifically to being a material contributor But cross-sell and upsell across the entire new product portfolio had another really strong quarter for us and that that always helps and We've as we've talked about in recent quarters We've at this point flushed out the covid cohort of the exuberant purchasing in zero interest rate days That's helped us on the NRR side as well So those those headwinds have abated and the tailwinds of having new products that are available that are driving incremental value Is really resonating as well It changes every quarter based on the mix of new business and based on the mix of cross-sell and upsell and so our Expectation is for it to trend about where it is We're pleased to see it take up from 106 to 107 and we're working to drive it further

Speaker 4

But for now, we're calling it where it is if you think about the growth formula for the full-year guide You know how much of that is just maybe an uptick in that net retention better upsell across so which which you are seeing versus just Net new logo growth like how should investors how should we think about the sustainability of call it high single-digit low double-digit growth? You know for the next one to two three years. Obviously, you're not guiding that walk us through like where's growth coming from keeping out of trouble on this What do we say on this one?

Speaker 1

It's a confluence of all of the major initiatives that we've been investing in over the last couple of years. So it's going to be where it's going to come from improved go-to-market execution, new product, which includes some of the agency, but that's a little bit further out.

Speaker 3

Yeah, we haven't talked about channel much here, but the channel for us as well has been an area where we're pleased with the momentum that we have, and we're investing further in developing that. The GSIs are one example of that.

Speaker 4

What percentage of your bookings then today is partner-driven, and what does that look like 12, 24 months from now?

Speaker 1

Yeah, we said that over, that's when they actually sourced the deal and handed over We believe we can get those numbers up higher over time. That's why you see us making this move.

Speaker 4

Now, the partner influence versus partner source, like, who's getting the pro service Is that the partner sourced deals?

Speaker 3

For deals sourced with SI partners, they take prime on those deals and will support them with expert services. For partner influenced, it can go either way. It depends upon how the engagement is. our preference is to prime as little as possible we want to make sure we maximize the opportunity for our partners but we we there are some use cases that are either bleeding edge with new product capabilities or require deep work with our engineering team where it makes sense for us to be prime on those transactions but we try to we try to minimize that so that our partners have the opportunity to build their depth of relationship with customers okay maybe one more financial

Speaker 4

question and i'll just end it with another maybe if you could help you keep me honest so if you think about the margin guide, op margin guide, free cash flow margins now, high teens if not 20%. You know, as you think about going through the year, perhaps if you then double down higher on go-to-market, new reps, you know, the investments in R&D across AltZero, Okta, what's the sustainability of margins and the trajectory there? We managed to rule a 40 and we

Speaker 3

so we balance the growth and free cash flow and we work to keep them in balance and make sure we managed to rule a 40. Right now, as we've talked about, we have, we believe we should be growing faster and so we are indexing our investment to elevate our growth rate as fast as we can and we feel confident we've demonstrated we can generate cash when we choose to generate cash but what we want to do is while we're while we're focusing on efficiency we want to make sure we don't starve investment opportunity that could accelerate our growth rates. That's how we think about that balance right now.

Speaker 4

Okay, maybe this last question is, you know, what's your pitch to investors today? Your stock has obviously outperformed since you guys reported. Execution has been a lot more flawless and more consistent over the past couple of quarters. So if you look at the stock today, your guidance, kind of the tailwinds from AI, the monetization opportunity I think most of us see within security because every agent needs identity, authorization, need to authenticate what every agent has. So maybe what's your pitch today and then what does the story look like in a year? That's a pretty good baseline right there.

Speaker 3

So, securing identity has never been more important than it is right now. Human identity has, we've known that's been important for a while. Non-human identity in service accounts over the past seven, eight years, people have realized they have huge exposures there, and now gentic identity and exposure has really poured gasoline on the fire. So, from that overall perspective, there is an acute awareness of the importance of securing identity right now, which is going to help Okta. And I would say in addition to that, the challenge that new players are going to have in this space is the challenge of distribution and connectivity. And our neutrality and the depth of our network effect of our existing integrations makes us almost plug and play for any customer with all these use cases. And so we believe we're very well positioned to take this market and we're working our asses off to make sure that we do that. Excuse me. The you know Todd mentioned on the call last week. We don't get paid for pipeline We got a good our pipeline right now is is really healthy. We've got to convert it to bookings

Speaker 4

And so we're very focused on doing that. Just one last follow-up. You talked about the monetization one question I get often is I think SailPoint puts out our their metric is for every one human employee there's anywhere from five to forty I guess agents or You know chatbots, you know copilots attached. What are you seeing today?

Speaker 3

It depends who you talk to. The IDC's projection is that we'll have collectively we'll have a billion agents live in production in three years out. So it's hard for people to project and as you just mentioned in the question, it's also important in how you define an agent. What's an agent versus a chatbot versus a piece of software tool that you use? I expect personally and I can say on behalf of Okta, we expect there is going to be a lot more agents than there are people. and all those agents bring with them security concerns and security exposure and they expose data governance concerns and data exposures and so we believe all of that is going to bring bring agentic identity security to the point where it becomes much more of a prominent conversation even than human which is already critical for folks so one of the one of the areas that we talk about frequently that that remains true is over 80% of successful cyber attacks over 80% of successful cyber attacks start with compromised identity and as the industry has learned that as the industry has become aware of that they understand that they cannot have have a secure company if they're not properly investing to securing identity and we believe we have the right to earn that

Speaker 4

that business to be that solution for them a quantum question i know it's like a couple years down the road is that a concern at all for customers today if you think about quantum breaking

Speaker 3

through any basically any kind of encryption from time from time to time we'll we'll i'll talk to cso's about about their thoughts on quantum but what i can say is it's not a i'm not experiencing it as a top of mind concern today it's on the radar something that they should probably be thinking about but it's they have acute issues to manage today and that's something to think about the future not there yet there's any other questions I

Speaker 4

think we could all right thank you thank you