Okta, Inc. Q4 FY2025 earnings call

Key Sections - Okta Secure Identity Commitment: Made progress as a trusted security voice, with work on security advancements ongoing. - Product Innovation: Okta Identity Governance is a success with over 1,300 customers and over $100M ACV. New products like Okta Identity Governance, privilege access, device access, etc., had over 20% of Q4 bookings. At launch week, new features for US public sector identity and workforce identity suites were announced. Auth0 announced Auth for Gen AI in early access. - Go-to-Market Specialization: Expanding into Okta sellers (focus on IT and security buyer needs) and Auth0 sellers (focus on developers). - Partner Ecosystem: Over 70% of Q4 deals were partner-influenced, and Okta was named partner of the year by AWS Marketplace, with over $1 billion in aggregate TCV since partnership started four years ago.

In Q4, Okta saw strong financial performance. Okta Identity Governance has over 1,300 customers contributing over $100 million in annual contract value. Auth0 had its best bookings quarter in history. RPO increased 25% and crossed the $4 billion mark. Record bookings in Q4 crossed $1 billion in total contract value. The total contract value of top 25 deals in Q4 was over $320 million. The $1 million-plus ACV customer base grew 22% to 470, representing over $1 billion in total ACV. Over 70% of deals in Q4 were partner-influenced, with revenue from AWS Marketplace growing over 80% in FY 2025.

FY 2026 Guidance - Total revenue growth expected 9%-10%, non-GAAP operating margin 25%, free cash flow margin ~26%. ### Q1 2026 Guidance - Total revenue growth expected 10%, current RPO growth 12%, non-GAAP operating margin 25%, free cash flow margin ~25% inclusive of headcount reduction cash impact.

Risks - Macro backdrop uncertainties affecting customer spending. - Seat-based headwinds from prior unsustainable contract buying periods. - Uncertainties in federal dynamics impacting public sector sales.

Q: John DeFucci asked about prudence in giving guidance and if anything changed in the business or macro backdrop.

A: Todd McKinnon said Q4 was a blowout, with records like over $1 billion bookings and Auth0's best quarter. Macro shows identity is a critical layer for companies to modernize systems, leading to better security outcomes.

Q: Eric Heath asked about CRPO guide seasonality and specialized sales model.

A: Brett Tighe said Q1 is seasonally back-end loaded. Todd McKinnon explained specialization has been a trend for over a year, with learnings from prior specialization leading to further specialization to better serve customers with detailed products.