Okta, Inc. (OKTA) Earnings Call Transcript & Summary

Please welcome Okta's CEO and Co-Founder, Todd McKinnon.

Hello, Oktane. Okta is almost 15 years old, and I want to thank you, our customers, our partners, our employees, our former employees, and my wife, who's here, Roxanne, where are you? Thank you all. Everyone here in person and online. My dad is watching online. Hi, dad. We are here because we built this together. And in those 15 years, we've come a long way and we've seen a lot of change. And as an industry, we are no stranger to change. Look how much the technology landscape has evolved over the years from mainframe to personal computing and client server to the Internet; and finally, to cloud computing, which is where the Okta story begins. When we founded Okta in 2009 during the early days of the cloud transition, I could see that cloud would become a much bigger part of the technology landscape. The challenge of managing the cloud became an early inflection point for Okta. Our initial goal was to help companies use cloud applications. And as the first cloud native identity company out there, we approach the problem differently than anyone. Before Okta, the choices were identity silos locked into your app or monolithic platforms that locked you into their stack. But with Okta, identity could be a powerful tool to protect and connect everything without compromising on security or choice. Identity, really Okta was the driving force behind the rapid adoption and global scale of the cloud. We removed the complexity from building identity from scratch and empowered millions of developers to build apps in the cloud. So while we benefited from the transition to the cloud, no, I thought it was pretty cool too. So you can clap. We also -- we got a lot of great stuff to show you. So I want to go fast and get to the products and the announcements. While we benefited from the transition to cloud, we also helped catalyze it, and we're very proud of that. And we're not stopping there. And neither are the major technological shifts. We are entering a new technology era, and it is the AI era. Your taxi can now drive itself. Your computer can write its own code. Images and movies make themselves. You can't be totally sure if ChatGPT is AI or you're talking to a person. Congratulations, everyone. We have passed the touring test. Regulators are diving into AI policy. And over half of Americans believe that AI will become sentient. We've seen technology shifts, but this one provokes a very strong emotional reaction, whether it's the way you feel after a long conversation with the chatbot or imagining a world where music and aren't created by people. Why is this reaction so strong? It's impactful emotionally because these were all things that were previously only done by people. And as people, we are wired to react to human activities in connection, this is core to our identity. So it's not surprising that this can all feel very emotional. AI is everywhere, and it's bringing with it tremendous potential as developers, entrepreneurs and companies embrace and succeed with AI. We'll see an amazing new wave of apps, tools, capabilities and even other platforms built around AI. In 5 years, the AI revolution will mean that we all use 10x as many tools, apps and chatbots that we do right now, whether it's AI, voice control or programs that help us use existing apps, our new AI apps that are not possible before the AI era. Without great identity, this will all be overwhelming, insecure and unmanageable. This new world of AI, this new world needs identity more than ever. It goes back to our founding story. Okta has always been about connecting people with technology. First, in the backdrop of the cloud, and now with AI. Some people they see a world where AI takes over and people become less important. I do not agree. AI isn't taking over. AI isn't taking over. People, people are still in charge. So despite all the emotion, the excitement and the tremendous potential of AI, the fundamentals still apply. Technology is about serving our needs and providing a great user experience, quick access to information and the ability to be agile and secure. AI may raise the stakes, but identity belongs to you. It belongs to you, and here's how Okta is stepping up. For starters, we are fueling the growth of the AI ecosystem from open AI to hundreds of others. They all rely on the full power of Okta to create seamless and secure user experiences that can handle their massive scale and growth. Today's developers want to focus on building AI models, building amazing new AI-driven apps. All the more reason that they shouldn't have to worry about identity, Okta can handle that, and it's not just start-ups. The biggest tech companies in the world have an AI strategy, too. And it's still broader than just tech companies. We used to say that with the Internet and cloud computing taking over that every company is a technology company. That was once bold, but now it's widely accepted. The new reality is that every company is an AI company. These; major shifts present all of us with the opportunity to either leap ahead or fall behind. You should be asking yourself what you need to do. What's your AI strategy? What markets are you playing in? Can you reach more customers more effectively with a great AI-driven user experience? What advantage -- what competitive advantage does AI give you? And how do you infuse AI into all of your company operations to make your team more effective and efficient? If you aren't asking yourself these questions, I guarantee you your competition is. I've been asking myself these questions for Okta starting with what does AI mean for identity? Well, it's an exciting world because organizations will now have proactive security that will learn and evolve to combat any identity-based attack. Developers can build apps faster with auto-generated identity code with the right embedded actions. Identity user experiences will become frictionless. And your employees and business partners will become more efficient with workflow automation that learns their patterns. But AI is also introducing new risks. The bad actors have it too, and they now have access to more attack types and can attack organizations with more focus, more intelligence and more scale. Non-coders now have access to smarter tools that can exploit a wide range of vulnerabilities. Okta's role in this AI-driven world is clear. And in many ways, it's the same as it's always been. We continue to be your trusted identity partner. We focus on delivering real value to you, real value. It almost sounds quaint. It almost sounds quaint, but it's how we live, it's how we roll. So how do we do it? Let's take a step back and look at a high level at how AI works. It's 3 things. First, you need a massive amount of data. Second, you need models to process this data. And finally, you need to be able to take action. Great AI is only as good as the data that feeds it and the actions you can take. In Okta, we have a huge advantage in our data and our actions, and we're bringing it all together with Okta AI. Okta AI, it's AI for identity, and it's powered by our data about threats, usage, access policies, risk signals, integrations, users, customers, partners and it uses that data to perform powerful real-time actions for your security, making your developers more productive, for your policies and authorization to be clear, this is your data. It's always handled with our high standards of user consent, trust and privacy. Okta AI is infused across several of our products. It makes our existing products more valuable and new products possible products that expand the definition of what it means to be integrated and protected. Products like identity threat protection with Okta AI. We are dramatically expanding the role of the identity provider. It extends adaptive risk evaluation from the time of log-in to any time a user is logged in throughout the session. And not only assesses risk, it helps you prevent and respond to threats fast because identity is at the heart of your tech stack. It's the core of it. And Okta AI runs on the massive amount of anonymized crowdsource data from our 18,000-plus customers and 7,000-plus integrations in our ecosystem, we can see and protect against a wide range of threats across all of your security stack, people, apps and devices. Actions, actions are where Okta AI really shines because ultimately, value is based on what you can do. Identity threat protection allows an array of powerful options -- actions like universal logout. Yes, you heard that right, real, bonafide, genuine, real universal logout. We did it. For the first time in our industry, it's possible to automatically log users out of all critical apps when there is a security issue. It's not just 1 app. It's not just 2 apps, it's not just apps from a certain platform. It's all critical apps, all critical apps. Bad actors might be getting more sophisticated, but we are using the power of AI and our ecosystem to keep you a step ahead. Yes, I like it, too. I'm pumped up, too. I like it. We're bringing AI to the world of identity governance with governance analyzer with Okta AI. This new capability can intelligently predict access risk and proactively launch an access certification campaign that can also equip approvers with key insights such as past risk events associated with the user to enforce better decisions and more secure governance outcomes. Again, Okta AI, it's trained on billions of policies, crowdsourced from our massive pool of anonymized customer insights. And the value is delivered to you. There's more, there's more. We're bringing the power of AI to make things easier for developers with identity flow optimizer with Okta AI developers on the Customer Identity Cloud now have in-line recommendations on the identity configurations and actions they should be -- they should add to boost conversions, improve security. And what do they want to do? They want to build apps faster, yes, speed. We are not messing around. We need to build more stuff. As a developer, you never want to spend time on undifferentiated work. You want to leverage the proven patterns of success while focusing on what's most valuable to your customers. That's where your energy is focused. And with our ecosystem and integration network, identity flow optimizer, it makes this possible. We are just getting started. You will see more about Okta AI and our products throughout Oktane. So what started in 2009 as a company looking to accelerate cloud transition, it's grown into much more. We powered the transition to the cloud, and we're powering the AI era, what an exciting time to be alive, what an exciting time. And like many things in life, the more things change, the more they remain the same. In the AI era, freedom and choice are more important than ever. Our vision is to free everyone to safely use any technology. We believe strongly that technology is the key to progress, success and helping your organization achieve its vision. We believe that identity is the key enabler of freedom, identity is for everyone, every person, every technology and every stack. It is a great time to be on this journey with you. We support some of the world's biggest brands, customers like Steve Williams and the team at NTT Data, [indiscernible] on Virgin Media 02, where you can see Fortune speak at the workforce keynote later this afternoon, do not miss that. It's going to be amazing. We help them keep their employees and partners connected and productive. IKEA, Fifth Third Bank and Booking Holdings where our 3x Okta customer Spencer Mott, leads the ship there, give it up for all you multiple times Okta customers. We love you. We appreciate you. We're slightly worried because you can't give a job, but we'll talk about that later. Thank you so much. They all choose Okta because of 3 key concepts. First is our independence and our neutrality. Our neutrality is the reason we can serve every person, every technology and every stack. We don't have a horse in the race. And we're betting on you. We integrated everything, and we don't shuttle you into vendor locked in. It's your stack your way. The second concept is our ecosystem. Our ecosystem is realized through our Okta Integration Network. The Okta Integration Network is how we deliver the breadth and depth of integrations to quickly and effectively connect with your stack, your way. This best-of-breed approach is critical, especially when it comes to security. In security, a monolithic platform is the weakest defense against an adversary. A single vendor is a single point of failure. It's through our ecosystem and our -- it's through our ecosystem that's global small business platform 0 accelerated time to integrate and deploy apps across their org by over 80%. Before Okta, it used to take their IT team days to deploy a new app. Now they can do it in less than 2 hours with the Okta Integration Network. And the third concept, the third concept is extensibility. We are committed to helping developers and admins create identity their way by providing a wide variety of SDKs, APIs and templates. We empower developers to move fast, innovate on experience versus spending time on identity, capabilities like workflows and actions, extend the core power of Okta to meet your requirements and allow you to deliver identity experiences at scale. Take Wyndham Hotels. They were able to reduce their development costs by 85% by replacing their custom scripts with Okta workflows. Combining the strength of our independence and neutrality, extensibility and our ecosystem is how we make customers successful. We stay grounded in our vision to free everyone to safely using any technology. It's ambitious and long-term. And looking into the future, how will we know when we've reached that vision? How will we know? Well, you'll know it when you'll know. No, I got a better answer than that. When we freed end users, so they don't ever have to think about security when they can seamlessly access technology and manage their identity in a trusted and privacy-centric way. When we freed security teams to stop breaches before they happen. So AI works on their behalf to prevent risks and threats and proactively take rapid action on patterns. When we freed IT teams to manage a single interoperable identity layer that reduces inconsistencies while maintaining agility across platform apps and services. And last, but perhaps most important, we'll know when we freed app builders to easily go to market in our interoperable ecosystem. Let's see how Okta is powering a best-of-breed interoperable world. Over to you, Christiana.

So in my role, it's not uncommon to get requests that are urgent just like this one. Given the skill gap and AI road map commitments that we have, we need to implement this LND solution for engineering as soon as possible. And I have to say, I'm drying it. I have a fully committed road map for Q3. And since these apps don't typically support new capabilities such as SCIM and universal logout. This means a manual provisioning of accounts, not to mention this extra scrutiny from our security team, which slows this whole process down. While, in the meantime, let me confirm that my learning co is supported in the Okta Integration Network. Awesome. It's there. That should make my life so much easier. Wait, there's a little bit more here. It supports a number of capabilities, provisioning single log out and governance. And it looks like I can configure it all with 1 click, 1 click. Now I can centrally manage authentication, provisioning and respond to security events by logging out those long-lived user sessions. I wish all my apps supported this. And little do I know that my learning Co was built with Okta Customer Identity Cloud, which is why it supports all of this and streamlined interoperability while strengthening security from our entire organization. Look at that, I'm already done. So as long as my Learning Co and any other app built with the Customer Identity Cloud is part of my company's identity fabric, it will support the next wave of standards at scale. Today, that's universal logout or entitlements, but tomorrow, who knows? Back to you, Todd.

Thanks, Christiana. With our 2 clouds, we have incredible potential to help our industry build a more interoperable, best-of-breed future. It's how we're oriented. Our focus is on choice and freedom, not locking you into a single platform. Remember, identity can belong to you, not to threat actors, not to platform lock in, identity should belong to you. And when -- yes, and when identity belongs to you and to everyone in your organization, it's the catalyst for you to grow your business to achieve your goals and protect your workforce and customer base. I am fired up about this future vision and where we're going. And we have a solid foundation to build on because we built it all together. Okta is the world's largest independent and neutral identity company. That is so cool. That is so cool. 15 years of relentless hard work, we're starting to make a little progress. It's good. The 2022 IDC, Identity and Access Management market report confirms us makes it very clear, and we have a wide lead. We're not resting on our laurels. We've got more to do. And this leadership is reflected in our product usage as well. We have over 800 million unique monthly users across our 2 clouds, 800 million, 800 million. That's 10% of the world's population connecting through Okta every month. It will not belong until we're in the 3 comma club. And our customers love Okta too. Our customer net retention rate is 115%. Customers have a choice. And every year, they choose more Okta. Our customer base covers over 60% of the Fortune 500 and over 75% of the Fortune 100. We have -- yes, we have the large -- they love -- you guys love the Fortune 500 that's great, I love them too. We have the industry's broadest and deepest set of integrations through our Okta integration network with over 7,000. All this success, it takes a village. Thank you for being part of this growth. And especially thank you to our customers. We could not do this without you, we're in for a treat now because one of those customers is Eric Brohm, CISO at Wyndham Hotels. We power identity for Wyndham's corporate workforce, their franchisees and their loyalty member. Let's take a look at their story. [Presentation]

Please help me extend a warm welcome to Eric Brohm from Wyndham. Eric told me actually do a cartwheel. I said no cartwheel, sorry. That was a beautiful film.

Thank you. Yes. Thank you, guys.

Yes, we have a huge partner. I can't believe it. We have people at Okta that can make something that beautiful.

Yes, it's unreal. And if you look at the...

It's amazing, yes.

At the customer experience...

I thought we were just making SaaS stuff and they just a beautiful artistic...

You guys do a great job, a great job.

At Wyndham, what's the role of identity?

So identity strategically, right? Wyndham identity services the business goals of Wyndham. So when we think about our mission statement, Wyndham brings -- welcomes all. And so it's really that concept of welcoming in, whether it is the few thousand corporate employees, whether it is the 100,000 folks out at the franchisee level or our 100 million Wyndham Rewards members that idea of that first point of contact to welcome them in is so key for us in the hospitality industry and allows us to service them well.

If you brought me to a Board meeting at Wyndham would they know who Okta was? You can be honest.

No, no, no. They would, they would.

All right. Next question.

No, they -- and I'll tell you the reason they would is that at the Board level, security is obviously piece of the conversation, and identity goes right with security now. And I would say a lot of time...

When did that change? You said now? Is that -- it kind of implied that it wasn't always that way?

Well, for Wyndham, it would have been around 2010 and 2012 when we had our data breaches that was a big wake-up call for Wyndham Hotels. And there are very few -- when you're presenting to the Board as a CISO or any business executive, they tell you to steer clear of tech acronyms. MFA is not 1 of those, is that I need to steer clear of how it does. They know exactly what MFA is and how important it is to not only just the security strategy, but business strategy as well.

Yes. So the AI revolution. And you talked about the hospitality industry and trying to differentiate Wyndham inside that industry. What is AI going to do to that industry? And do you see it more of upstarts are going to take over for new companies? Or is it the established players are going to either use it or not and move forward and be competitively advantaged because of AI?

Yes. I love what you said before in the -- when you were just talking about -- yes, I loved all of it but specifically about that AI is not taking over. And that's how we feel in the hospitality industry. At the end of the day, as I mentioned, we're there to make people feel welcome. And so AI is a tool that helps us service. It helps us serve that goal for our guests. And so I think there's some opportunity for new competition to rise. But by and large, that welcoming feeling is a person-to-person connection. And AI will help us serve that but it will change the way we do things, not what we do. It will just help us do what we do better.

Is there another player in the hospitality industry that you worry might embrace AI faster than Wyndham?

I mean we're pretty focused.

I guess -- if they're here, I can introduce you to them.

They could, there may be. But Wyndham remains pretty focused on AI, we already have an AI steering committee that's focused on how can we use this? What are some ways we can test it out, to determine their ROI on these things and be fast implementers of that. We also, for our summer interns. We put them -- they had their regular tasks, but we put each of them on teams and at the end of the internship needed to present on ways that AI could benefit Wyndham as there.

So that's awesome. It's kind of -- it could be like a generational thing, right? The new people come into their careers.

Certainly a different way of looking at it and maybe some new ideas that people with gray hair like myself starting to get gray.

Yes. No, I'm with you on that. The -- when you think about innovation in general, what have you learned about innovating in a large organization?

So innovating is -- it's a -- I really like what Jose said last night, don't plan, adapt. Now if you went without a plan and presented that to at your quarterly earnings report and said we have no plan, that probably wouldn't be good I think the heart...

Trust me, I got this.

I think the heart of what he was saying is have the process in place to adapt. So when you're innovating, be ready to adapt, be ready to fail quickly, but have the process in place to turn that around learn from your failures and move forward in that direction. I think that's a key piece of innovation. I would say the other piece is, as you're innovating, don't innovate in a silo, right? These are all business problems that we're solving, not just technology problems. So as a technologist, innovate along with your business partners?

That's awesome. Well, there you have it. advice from one of the best. Thank you so much, Eric. It's really great to have you as a customer, and I look forward to working with you. I love Wyndham story. And thanks again for the whole team for putting that together. We talked a lot about industry trends and the long-term opportunity for AI. But the reality is we all have to execute this quarter and this year in a high stakes environment with a lot of pressure. There's 3 big things happening right now. First, the threat landscape is evolving, and it's evolving fast. And you can see it in the numbers. A recent survey by IDC said that almost 80% of organizations will have -- did experience a data breach in 2022 alone. So the stakes are high and attackers, they're coming after all of us in its Okta and our customers. You may have seen some reports in the news recently about a couple of attacks. And when these things happen, with the natural reaction from vendors is to distance themselves and say, well, our product wasn't breached. It's -- and we resist that urge at Okta. We -- when a customer has a problem, we have a problem. It's very core and important to our culture. When a customer has a problem, we have a problem. And so as you would expect, we dive in and aggressively help on an individual level. But we're also doing more and taking it a step further. Our products are incredibly flexible and incredibly configurable, and they can be set up with different levels of security constraints. Expert Assist is a new offering that gives you expert advice to ensure your configuration matches your security risk and threat posture. It has 2 parts. One is a services offering that brings our security experts. These are people who have seen thousands of policy configurations, and they know the best practices, brings them directly to you for a thorough review and recommendation in line with your security posture. It also has a product component that will evolve and automate this process over the next several quarters and Okta AI will be a big part of this. So the stakes are high. And if it's not enough, we are all operating in a very different economic environment than we were a few years ago. 84% of CEOs and think a U.S. recession is coming. They're cautious with their budgets, and they're trying to do more with less, and they're expecting all of us to do more with less. And despite all of this, customers are still in charge. And they're in more control than ever. They want the best experience as possible or they'll leave and get it from someone else, if they aren't getting it from you. 89% of customers say that they compete primarily on the basis of customer experience. So the pressures of today are complex, and we are here to address these challenges through our Customer Identity Cloud and our workforce identity cloud. The customer identity cloud is powered by Auth0, and it's the enabler of amazing digital experiences across consumer and SaaS applications. The Workforce Identity Cloud powers identity for employee, contractor and business partner use cases. These 2 clouds deliver identity that goes beyond. Unique customer identity that goes beyond login. Well the log-in box is the first touch point to all things digital, companies must look beyond login to truly know, protect and delight their customers. And you need workforce identity that goes beyond MFA. Businesses have to think further than the traditional approach to access management to thrive in a world of security threats and complex IT. And today at Oktane, we are helping you go beyond with identity. And now this show is really going to start to roll. Please welcome our next speaker. He is the President of Okta's Customer Identity Cloud. Please welcome Shiv Ramji.

All right. Thank you, Todd. Hello, everyone. I'm glad to be here. Thank you. At this year's Oktane, we have many sessions focused on developers and even have a developer day dedicated just to you. So developers, are you in the house? Yes. Welcome. It's been a year since we launched the customer Identity Cloud powered by Auth0 and what a year it has been. In only a few short months, we've seen generative AI go mainstream, ushering in a new era in technology and launching several new companies. At Okta, we believe that AI is not just a trend, it's the beginning of a new era in customer identity. Now you can leverage AI to get to market even faster. You can unlock the power of AI to enhance the customer experience. And you'll be able to use AI to rapidly remediate threats and reduce risk. In this new era of AI, you need to focus your developers on innovating fast, not creating log-in boxes, and you need to raise the bar on the customer experience. All this means looking beyond log-in. The log-in box is so much more than a simple square. It's an opportunity to put your best foot forward and create a lifelong customer, all while keeping them safe and secure. So going beyond log-in means solving for authorization. -- where authentication allows you to verify who the user is, authorization allows you to verify if that same user has access to specific objects or action inside your application. Now developers still spend too much time with homegrown systems, building authorization capabilities over and over and over again versus spending time actually innovating. But it doesn't have to be this way. Authorization is where authentication was a few years ago, and Okta pioneered solving authentication in the cloud. And now we are doing the same for authorization. Developers need solutions that allow them to implement authorization in a way that fits their application and user needs and freeze them up to drive innovation. They need solutions that will scale with their organization, operate at incredibly low latency, provide high reliability, be secure and be auditable. We have built a product to do just that. Deliver authorization at scale to reduce latency and downtime with Okta Fine Grained Authorization. In fact, if you registered for Oktane this year, the registration was powered by customer identity cloud, and the viewing experience online today is actually powered by Fine Grained Authorization. So we're using our own products, too. FGA benefits go beyond just application builders. Our vision is that through the workforce and customer identity clouds, security and IT teams will get improved governance, auditing and analytics through an integration with our Okta identity governance solution. You can create an account and start experimenting with FGA today at fga.dev. Just try it out, we'd love to get your feedback. Now launching a new technology and authorization model introduces yet another capability that developers have to learn. And we know that authorization is hard, which is why we created guide with Okta AI. This will deliver comprehensive onboarding assistance and help developers intuitively define their authorization model. Developers won't have to worry about learning how to build authorization into their application. Instead, they'll get recommendations that map out the best steps to get to market even faster. Next, Imagine a world where an AI assistant can auto recommend actions and suggestions to reduce log-in friction and improve your customer experience. Sounds magical. Well, that world is possible now with Actions Navigator with Okta AI. Actions Navigator will leverage AI to make it easier for developers to discover and implement marketplace integrations or even right an action by simply asking for it in plain English through a search prompt. This is going to make developers way more efficient. And what if you could go further so your users never have to remember any credentials again. I mean, wouldn't it be great if you could log-in without a password. Well, now you can with passkeys. Passkeys provide a phishing-resistant experience for your consumers, making them less reliant on legacy credentials. Now we will finally read ourselves off passwords. Okay. Let's take a look at how all of this comes together. We'll show you how your digital teams will use identity flow analyzer with Okta AI to make log-in recommendations that improve conversions, and how your developers will implement passkeys to drive phishing resistance and convenient customer experiences. Let's welcome the demo team.

So now I've been reviewing our conversion in a drop offering. They're really not where they should be. I'm getting a little bit concerned about the impact on our business. Have you looked at what might be causing this... Let's check out Funnel analytics in Okta customer identity cloud. Funnel analytics integrates with our existing customer data and marketing platforms and helps us better understand our conversion and funnel performance for all our apps. Looks like when users access stream work from a new device, we're seeing a significant number of drop-offs. This is an ideal, especially given the number of devices folks use these days.

All right. So did your fancy tool give us any insights into why this might be happening?

Well, if we dig in, it looks like a lot of customers abandoned the log-in process when they have to type in their user name and password, whether it's on the same device or a new one.

Okay, I get that. Passwords are so 2021 anyways. So if this friction of repeated logins is driving our conversion rates down, what could we actually do to fix this? You know our CISO loves passwords.

Okta Customer Identity Cloud just launched new AI capabilities that can help us with this. This one is called Identity Flow Optimizer with Okta AI. It analyzes all of our tenants authentication data and provide suggestions on improving the customer experience. This is really going to help us boost conversions, engagement and security. Let's try it out. Let me type in my question, how can I increase the conversion rate in my sign-up flow and search. Okay. So check it out, Identity Flow Optimizer is suggesting that we enable passkeys as a way to reduce sign-up friction.

Okay. And so I've heard about passkeys before, but how is that going to help us here?

Passkeys eliminates the need for typing and passwords and they provide a seamless cross-device experience. When users authenticate from a new device, passkeys are generated in making the process secure and frictionless.

All right. So I'm going to be honest. The sound is way too good to be true. You're telling me that users don't need to type in passwords anymore, and it's more secure. How long is this going to take to implement?

Not long with Okta. I set up a new connection and I've already added 4 number as an identifier so our customers have the flexibility to choose how they want to log in.

All right, nice. So our users don't even need to remember a user name anymore. This is already going to be a way better experience than we have now. Let's enable it. So I could be the first 1 to test it out.

Well, we're actually already done. Passkeys is enabled. Let's see if you can sign in from your phone without a password.

Okay. Cool. So I already registered for same word on my laptop, just like our customers would. So now I'll just try signing it from my phone. So I'll go ahead and type in my phone number. This time, I'll continue with a passkey. I'll go ahead and save it, so this works on other devices. And then I'll authenticate with Face ID, and I'm in, no password required. This is great. And I'm really excited about it, but a ton of our users watch streamer on their tablets. So is this going to work on those devices?

Yes. In fact, passkeys across multiple devices in the same ecosystem. So that passkey you just made on your phone. It's the same one you use on your tablet. Let's try it out.

All right. Good idea. So I'll just go ahead and go to the streamer app on my tablet. All right. It looks like it's just going to recommend that I sign with my existing account using passkeys. So I'll continue with that. Then I'll use Face ID to authenticate. And again, I'm in, super easy. I like this.

And with Okta's Universal login, we can easily customize the sign-up and sign-in flow and have a consistent look and feel for all devices.

Okay. Easily. Does this mean I'm not going to have to wait months for my AV testing anymore?

Not only that, Okta AI can make recommendations for our sign-up and sign up float. Let's see what this recommends for streamer.com.

All right. So let me see this. Okay. It looks like it's making a recommendation that we promote the newest island -- the newest season of Puppy Island on our sign-up page. That should really help both sign-ups. Let's enable that, too.

Sure. There's a couple of clicks. I can customize our branding and theme.

Awesome. Yes, this is really going to make A/B testing and optimization of [indiscernible].

Definitely. Now that Okta save us a ton of time, should we get back to tackling that streamer account sharing problem?

You read my mind. Back to you, Shiv.

Give it up to the demo team. So cool, a single toggle and you have passkeys enabled for all your customers. It's great to see how identity is powering these new advancements in technology. Now we all play a vital role in shaping the digital user experience that differentiates our products and services. And you don't have to wait to take action. All of you here today and everyone watching this live online can try all of the powerful capabilities of the customer, Identity cloud, right now by creating a free account. Simply visit Okta.com or scan the QR code to get started. To sum up, Okta customer identity cloud is leading the charge in enabling you to embrace AI's potential. We envision a future where AI enhances our defense and offense, delivers great experiences that drive growth and enables us to innovate even faster. Together, we will shape a more secure and innovative future. So let's take the leap into the age of AI and move beyond log-in. Now this is just a preview. We've got so much in store for you today. To learn more, make sure you join us at the customer I&A Cloud keynote this afternoon, where you will hear from customer -- from our customer, Twilio, and their journey of moving beyond log-in. Now let's welcome Sagnik, our President and Chief Development Officer, Workforce identity to the stage. So he can share all of the innovation we have coming for workforce identity. Please welcome, Sagnik.

Hi, everyone. It's really exciting to be here with all of you. I saw Shiv started with a shout out to developers that worked very well. So I feel like I need to do something like that for workforce. So will all employees, employers, past employees, past employers, future employees, future employees give a cheer. The Workforce Identity Cloud is a unified offering that enables customers to ensure that the right people get the right access to the right technology in the right context at the right time. It helps thousands of customers make sure that they actually get the best work done, drive identity powered security accelerate automation, modernize IT for employees, contractors and business partners. That, coupled with the depth and breadth of integrations, really ensures that you can harness the full power of your technology stack while keeping your businesses secure in today's modern AI-driven world. Today, we are introducing a range of new products and capabilities powered with Okta AI that will help improve agility, flexibility and security of your organization. The first of which is policy recommender with Okta AI. Policy recommender gives admins key insights and policy recommendations based on security best practices and aggregated AI-driven intelligence from the broader Okta community. It helps ensure that you can figure the most secure access policies for every app. Now protecting access to resources is very important. But in this modern AI-driven world, it's just not enough. To understand how much the threat landscape has changed, let's just rewind back a few years to 2019. Back then, a simple MFA with SMS as a factor could prevent 96% of all phishing attacks, isn't that crazy? 96% of all phishing attacks. Fast forward to today, and a staggering 86% of breaches stem from some form of credential abuse. And AI is a major factor, powering a 47% growth in successful phishing attacks. To protect against identity threats today, one has to think and go beyond SSO and MFA. At Okta, we are doing just that with a new capability to fast pass Okta's phishing resistant authenticator called context revaluation. Context revaluation helps run device security checks every time a new app is accessed. This means we can prevent further access anytime a device or a session is compromised. The best part, it works for all apps on all devices managed or unmanaged. This is the first step of many that we are taking here at Okta to protect our customers beyond just the initial point of authentication. Identity is the only technology that universally integrates with your entire technology stack. You can think of it as the connective glue that brings your entire tech ecosystem together. That is why it is no longer sufficient to think of identity as just the front door to your tech stack. Powered by AI, identity has to become the backbone of your entire technology story. At Okta, we are working hard to make this vision a reality. Along the journey, we are bringing the entire ecosystem along with us, be it network security providers, XDR, all the way to devices and the many, many apps that run on them to make your business successful. Working together, we can unlock unique outcomes that were just not possible before. That is why today, we are unveiling a new product Okta Identity Threat Protection with Okta AI. Identity Threat Protection helps customers automate detection and remediation of identity threats across their entire tech stack. Think of it as an ITDR for Okta. You no longer need another ITDR solution for a single actionable view. Identity Threat Protection enables 3 critical capabilities. First, it integrates risk signals from a variety of sources to provide you with a single, actionable threat intelligence solution. We are working with best-in-class security partners like CrowdStrike, Palo Alto Networks, Zscaler, Jamf and many, many others to bring their data along with Okta's rich data. Second, it leverages AI to continuously evaluate a risk score for the user, device and session. And third, it provides a wide range of flexible in-line actions to remediate identity threats in real time. One of the most powerful adaptive in-line actions we are supporting is universal logout. Universal logout allows customers to log users out of critical apps across all devices immediately. Let me repeat that now as a response to an identity threat you can log users out right away. This means even if a bad actor manages to hijack a session, we at Okta can work with you to invalidate that session. The industry has been requesting for this for a very long time, and we're excited to be the first ones to deliver this to our customers. Finally, in order to help you better deal with the huge amounts of data available in Okta, we are introducing a new capability, log investigator with Okta AI. Log investigator helps admins rationalize, analyze and understand the massive amount of data available in their Okta system logs. Powered by AI, it provides a conversational interface on top of Okta's rich data. Together with identity threat protection, now customers can get access to critical insights like risk signals, risk scores, anomalies, user access history and so much more simply by posing a question to Okta in natural language. Now they say, seeing is believing. We discussed a lot of really cool functionalities. So let's invite Jen and Alvin to the stage to show how all this comes together. Be prepared to get your mind blown.

Thanks, Sagnik. Now let's take a look at how Okta AI can help you harness the full power of your security stack to detect, assess and respond to identity threats.

It's busy at work. And just like any other day, I'm logging into my work apps through Okta, like e-mail, Salesforce and Box and more. But I got to let you in on a little secret. I'm a huge Taylor Swift fan, and I scored last-minute tickets to our upcoming concert. And I can't help but to check to see my ticket or came through. I sent it over to my personal e-mail, so let's take a look there. Oh, my god. They arrived, I can't wait to get my hands on these. I was thought Taylor was spelled with a Y. Anyway, I'll just go ahead and print these. Look, I've got to let my friends know, I'll send them a message on Slack.

What Alvin doesn't know is that as he clicks this link, Okta AI is working behind the scenes to continuously evaluate risk from across our tech ecosystem.

It looks like my swiftly spirit got me into some hot water. I was logged out of Slack. Let me check my other applications just to be sure. And that was logged out of Box in my e-mail, and I got this security alert.

Oh, Alvin. And here, I thought you would have already learned your lesson after your beyond say incident. But the good news is this attempted security breach has been blocked. As you saw Alvin clicked on a malicious link. However, Okta was able to terminate his sessions across all apps and prevent him from logging in again until SecOps is able to investigate. This means that even if malware got onto his device, his sessions would have already been invalidated, leaving an attacker little to no room for action. Now what you just witnessed is a universal logout event that Okta executed in response to a security incident. Universal logout has long been a moving target in the industry. And this means we finally have a solution for single sign out, not just single sign on. Now let's take a look at how an admin would experience this incident. Upon getting alerted that a user has been logged out, an admin can gather the forensic she needs, simply by asking a question. Using log investigator with Okta AI, we can ask something like why was Alvin logged out. Its natural language processing capabilities will give us an answer in plain English. For example, here, you can see that Alvin's risk score jumped triggering the universal logout policy. Now let's dive in a bit deeper. Switching over to the identity threat analytics. We can see a broad set of risk signals coming from across our tech ecosystem. For example, you can see some from Palo Alto Networks, Jamf or other security tools you may be using. All this is contributing to a user's risk score, which Okta AI continuously evaluates.

Let's pause here for a moment. This is a unifying moment for the security industry. These best-in-class security tools are posting signals to Okta in real time. And the good news is that Okta brings the broadest ecosystem of partners and continues to grow by the day.

Looking at our partner, Palo Alto Networks UI, we can see that as soon as Alvin clicked on that malicious link. Palo Alto Networks detected a high-risk event and immediately posted that to Okta. Back in the Okta dashboard, we can see that Alvin's risk level is elevated and that Okta triggered the universal logout as a result. All right. Now that we've contained this incident, let's take a look at one more item on my to-do list. I've been meaning to check out the new policy recommender with Okta AI to ensure that our access policies are as secure as possible. For example, as I set up Google Workspace, I can go to this authentication tab. And if I scroll down, I can click on this recommend a policy button. And policy recommender will start generating custom insights to protect all of your applications based on millions of data points within Okta and industry best practices. So to recap. We're using Okta AI to do 3 powerful things. The first is to detect, assess and respond to identity threats. The second is to gather insights from Okta system logs, simply by asking a question. And the third is to get customized policy recommendations for every app to protect you, your workforce and any other eager concert goers out there. Thank you.

Thank you so much, Jen and Alvin. That was awesome. Workforce Identity Cloud, helping customers, employees and Taylor Swift and Beyoncé fans for 15 years now. So to summarize and recap. One, AI is driving a big paradigm shift when it comes to security and identity and identity has to leverage AI to stay ahead of the curve. Two, in this modern new AI-driven world, one has to think and go beyond SSO and MFA. And three, it's time now to reimagine the role identity plays when it comes to security. One has to think of identity as the backbone to our holistic security strategy. We introduced a lot of cool products and new capabilities. But keep in mind, they were just previews to learn more about all of them and so much more, please join us for the Workforce Identity Cloud keynote section later this afternoon. We are really, really excited to take Workforce Identity forward, partnering with all of you. Thank you so much, and please welcome Todd back on stage.

Sagnik, Alvin and Jen and Nav and Mallory and Christiana, you guys are amazing. And I love seeing products and actions. We've covered a lot today about how Okta technology solve some of the most pressing issues of our time. And as we look around, we see people and talent as more important than ever, yet the technical talent gap is still growing. The U.S. Department of Labor predicts that by 2030, will be short, 85 million of these high skilled technical people. And in my conversations with customers, a common theme is this lack of identity and cybersecurity talent. Okta is driving forward with a solution in 2 major initiatives to help both in the short-term and the long-term. First, in the short-term, Okta is providing 5,000 Okta certification grants to professionals in career transition to help them grow their Okta skills. This provides access to yes, this provides access to training courses and free Okta certification exam and they're targeted at unemployed technology workers, veterans, and military spouses. These certifications are incredibly valuable. If you purchase them as a customer, they would cost over $10 million. But the real value beyond the monetary value is what it does for these folks careers. In fact, for the sixth year in a row, Okta certified individuals are among the top 20 highest paid IT admins, pretty cool. And over the long-term, we're staying focused on the communities that we live and work in that have always supported us. It is very critical at Okta that we give more than we take. We know there's a large group of people that just need some help starting their technology careers. It's some inspiration, an encouragement, some early in-career advice and input. And that's where Okta for good comes in. Okta for good is granting over $1.6 million to cybersecurity and STEM workforce development organizations to support these early in-career individuals. These grants extend our reach across the globe, and they're going to help a broad range of diverse folks in critical areas of cybersecurity and software development. So we have covered a lot today. First, how our customer and workforce identity clouds help you navigate today's most pressing issues, like the dynamic threat environment, economic uncertainty and elevated customer expectations. We've announced a ton of innovation across our 2 clouds, to help you tackle not just the challenges of today, but the opportunities of tomorrow. Okta AI, Identity Threat Protection, Governance Analyzer, Identity Flow Optimizer and much more, in fact, we built a QR code summary view, so you can see it all referenced in 1 place. So scan this code, scan this code, so everything we announced is summarized here, when it's coming, what products it's in, and it covers things announced today and later this afternoon. And this is the only time I'll ever feel like Taylor Swift with these phones up. I am so, so, so honored and proud of our product teams for what they've done this past year. If you're working product at Okta, please stand up. That's good. Yes. You are amazing. And there are actually -- a lot of them are back at the office, making sure the demos are working. So don't be overwhelmed by the small number. These folks are firing on all cylinders. So thank you for your hard work. And next year, I think you can do more. In fact, we have to because we see so much opportunity in the AI era for organizations like yours as identity powers the AI revolution. We all have the opportunity to either leap ahead or fall behind. And we build identity. So you can leap ahead. Thank you, and enjoy Oktane.

All right. Welcome, everybody. Welcome to the investor breakout session for Oktane. Hopefully, you all got a chance to either sit in or listen in to the keynote this morning. There's a tremendous amount of new product innovation that's going on. So we're happy to -- we're here to answer any and all your questions about that. So really, we just have 60 minutes for Q&A. This is your hour. We don't have any prepared materials to present to you. So we're just going to open it up for questions, but we do have Todd McKinnon, our Chief Executive. We have Eugenio Pace, who is our President of Business Operations; and Brett Tighe, our Chief Financial Officer. So again, this is your hour. [Operator Instructions] So with that, we'll take the first question.

It's Keith Bachman from BMO. Nice to see everybody. Good presentation this morning. I just -- I had 2, one macro and then one micro. But on -- there's a lot of information and new solutions, new activities announced this morning. And if you called out over the next 6 to 12 months, what could be more impactful amongst the new that we could think about? And how AI may infuse in some of that differentiation? But maybe sort of just give us a couple that you think could be more impactful and then I'll wait for my micro.

We have -- I don't know if we've shared our PDF with all of you...

Brett just showed me a snapshot of it.

One of the things we did this year because there is so much innovation and so much -- so many things we're announcing. We just wrote it all down for you. So it's in a PDF and you see which products it's in -- is it a feature? Is it a new product where it fits? Because there is a lot there, so we want to help you navigate it. The 2 I'm most excited about are -- one is the Identity Threat Protection with Okta AI. For the real reason, I think it's really going to be impactful for customers. I think it can really help the defenses and be stronger. And more importantly, it's the integration of all the players in the ecosystem. We're seeing really good technical collaboration between Zscaler, CrowdStrike, Palo Alto Networks [indiscernible] on and on and on. And that ecosystem is what the industry needs to stop some of these attacks. So that's really exciting. And then the second one is fine-grained authorization. It's a new product. It's basically -- it's a customer and cloud has been mostly about authentication, and this opens a whole new product with a whole new value prop that's going to help developers be more productive, do more in their stack than we were able to do before, provide more value. So those are the 2.