Okta, Inc. · NASDAQ:OKTA

Okta — Q4 2024 Earnings Presentation

44 slides from Okta's earnings presentation, Feb 28, 2024

  1. Slide 1: Q4 FY24 Investor Presentation

    Q4 FY24 Investor Presentation February 28, 2024

  2. Slide 2: Safe harbor

    Safe harbor This presentation contains “forward-looking statements” within customers; we may be unable to retain key personnel; global the meaning of the “safe harbor” provisions of the Private economic conditions could worsen; a prior or future network, Securities Litigation Reform Act of 1995, inc

  3. Slide 3: Agenda

    Agenda 01 Company Overview 02 Q4 FY24 Financial Review 03 Q1 FY25 and FY25 Financial Outlook 04 Appendix 3

  4. Slide 4: Company Overview

    Company Overview 4

  5. Slide 5: Vision: Free everyone to safely use any technology

    Vision Free everyone to safely use any technology 5

  6. Slide 6: Okta at a Glance

    Okta at a Glance Total Revenue 24% 18,950 CAGR from FY22- FY25E Total customers $3.385B Remaining performance obligations (RPO) ($ in mil.) 111% TTM Dollar-based net retention rate(1) at January 31, 2024 (1) Trailing Twelve Months (TTM) dollar-based net retention rate $1,300 $1,858 $2,263 $2,495 - $

  7. Slide 7: FY25 Priorities

    FY25 Priorities Security Reignite growth Scale Okta 7

  8. Slide 8: Okta Secure Identity Commitment

    Okta Secure Identity Commitment To lead the industry in the fight against identity attacks PILLARS Champion customer Provide market leading Elevate our industry to best practices to ensure Harden our corporate secure Identity products be more protected from our customers are best infrastructure and

  9. Slide 9: Identity is the critical foundation for connection and trust

    Identity is the critical foundation for connection and trust between users and technology Cloud Security Digital transformation 9

  10. Slide 10: Every C-suite leader uses identity

    Every C-suite leader uses identity CMO, CDO, digital teams CEO CTO, app dev teams Business acceleration Frictionless Unifying User Conversion onboarding identity management Identity CPO, product team CIO, CISO, IT, security teams CFO Omnichannel Creating Security and Engagement access trust privacy

  11. Slide 11: The Okta Identity Cloud

    Okta Trust: Cloud security certifications with 99.99% uptime Vendor neutrality supports best-of-breed stack The Okta Identity Cloud Cloud-first: Providing hybrid access from cloud to ground Delivers a unified Unified solution to secure workforce, customer and infrastructure identity identity solutio

  12. Slide 12: Better Together

    Better Together Workforce Customer Identity Cloud Identity Cloud Employees • Contractors Consumer Apps and • Business Partners Digital Experiences • SaaS Apps Okta Identity Platform 12

  13. Slide 13: One Unified Identity Solution

    One Unified Identity Solution Access Management Privileged Identity Access Governance 13

  14. Slide 14: One Platform to Secure Every Identity

    One Platform to Secure Every Identity Devices IoT Cloud Apps On-Prem Apps Infrastructure APIs + SDKs Okta Identity Cloud 14

  15. Slide 15: Delivering Measurable Customer Value

    Delivering Measurable Customer Value Mitigate Accelerate growth Reduce costs & risk & innovation streamline ops Reduced time to detect and Faster application launch Reduced operations and respond to malicious attacks and time-to-revenue maintenance costs compared with on-prem solutions 15

  16. Slide 16: Okta's Opportunity $80B

    We are here* Okta’s Opportunity $80B * See Appendix for TAM calculation methodology. Figure not drawn to scale. 16

  17. Slide 17: Multiple Growth Vectors

    Multiple Growth Vectors Innovation in platform Landing and expanding International expansion Leveraging partner and network in large enterprise ecosystem 17

  18. Slide 18: Innovation in Platform and Network

    Innovation in Platform and Network More users and integrations result in deeper signals and enhanced use cases Deeper signals More users & integrations Growing value to customers Enhanced use cases 18

  19. Slide 19: Okta is the superior choice vs. Microsoft - every time

    Okta is the superior choice vs. Microsoft - every time Enterprise Reliability & Ease of Use & Time to Executing on Identity Okta Integration Mitigate Commercial Agility Performance Value for the Best Challenges Network and Operational Risk Outcomes Okta accelerates identity for Okta protects custome

  20. Slide 20: Environmental, Social and Governance

    Environmental, Social and Governance $7.3M In cash contributed by the Okta for Good Fund, $6.0M In technology and services donated Okta, Inc., and Okta employees 88% Employee participation in Okta for Good 21 Employees and interns brought on as part of workforce development initiatives ~4,000 Nonpro

  21. Slide 21: Q4 FY24 Financial Review & Financial Outlook

    Q4 FY24 Financial Review & Financial Outlook 21

  22. Slide 22: Q4 FY24 Financial Highlights

    Q4 FY24 Financial Highlights Q4 FY24 vs. Q4 FY23 Total Revenue $605M + 19% Subscription Revenue $591M + 20% Remaining Performance Obligations (RPO) $3,385M + 13% Current Remaining Performance Obligations (cRPO) $1,952M + 16% TTM Dollar Based Net Retention Rate 111% - 9 pts Non-GAAP Gross Margin(1) 8

  23. Slide 23: Total Revenue Up 19% Y/Y; Subscription Revenue Up 20% Y/Y

    Total Revenue Up 19% Y/Y; Subscription Revenue Up 20% Y/Y $605 Quarterly Revenue(1) $584 $556 ($ in millions) $510 $518 $481 $452 $415 $383 $351 $316 97% 98% $251 97% 97% 97% 97% 96% 96% 96% 96% 96% 96% 4% 4% 4% 4% 4% 4% 3% 3% 3% 3% 3% 2% Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY

  24. Slide 24: cRPO is a Leading Indicator for Future Subscription Revenue

    cRPO is a Leading Indicator for Future Subscription Revenue cRPO (subscription backlog Quarterly Bookings ≤ 12 months) New Customers Dollar amount added to cRPO is impacted by Upsells(1) factors such as the cRPO moves to Future subscription Components that number of customers, quarterly revenue is h

  25. Slide 25: RPO Up 13% Y/Y; Current RPO Up 16% Y/Y

    RPO Up 13% Y/Y; Current RPO Up 16% Y/Y Quarterly RPO $3,385 ($ in millions) $3,073 $3,007 $3,027 $2,942 $2,790 $2,853 $2,694 $2,710 $2,350 $2,236 $1,890 $1,826 $1,952 $1,684 $1,701 $1,772 $1,497 $1,579 $1,351 $1,413 $1,098 $1,180 $899 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q

  26. Slide 26: TTM Dollar-based Net Retention Rate of 111%

    TTM Dollar-based Net Retention Rate of 111% TTM Dollar-based net retention rate 124% 122% 124% 123% 122% 122% 120% 120% 117% 115% 115% 111% Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 26

  27. Slide 27: Strong and Expanding Non-GAAP Gross Margins

    Strong and Expanding Non-GAAP Gross Margins Non-GAAP Gross Margins(1) 82.8% 82.5% 83.3% 83.7% 80.5% 80.5% 80.4% 81.5% 79.8% 81.0% 81.6% 77.0% 77.6% 78.9% FY22 FY23 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Total Gross Margin Subscription Gross Margin (1) See appendix for non-GAAP reconciliation. 27

  28. Slide 28: Efficiency and Reduced Cost Structure Yielding Margin Improvement

    Efficiency and Reduced Cost Structure Yielding Significant Margin Improvement Non-GAAP Operating Margin(1)(2)(3) Free Cash Flow Margin(1)(2)(3) ~18-19% 21.6% ~21% 13.7% 6.7% (0.5)% 3.5% (5.7)% FY22 FY23 FY24 FY25E FY22 FY23 FY24 FY25E (1) See appendix for non-GAAP reconciliation. (2) FY22 includes 3

  29. Slide 29: Over 18,950 Total Customers

    Over 18,950 Total Customers Total customers(1) 20,000 18,950 18,800 18,950 18,400 18,050 17,600 15,000 10,000 FY22 FY23 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 (1) Includes one time addition of 1,650 customers from Auth0 in Q2 FY22. 29

  30. Slide 30: Customers with >$100K Annual Contract Value at 4,485

    Customers with >$100K Annual Contract Value at 4,485 Customers with >$100K ACV(1) 5,000 4,485 4,485 4,365 4,205 4,080 3,930 3,100 2,000 FY22 FY23 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 (1) Includes one time addition of 375 >$100K ACV customers from Auth0 in Q2 FY22. 30

  31. Slide 31: Financial Outlook for Q1 FY25

    Financial Outlook(1) for Q1 FY25 Q1 FY25 (April 30, 2023) Total Revenue $603M to $605M Total Revenue Growth (Y/Y) 16-17% Current Remaining Performance Obligations $1,915M to $1,920M cRPO Growth (Y/Y) 13% Non-GAAP Operating Income $108M to $110M Non-GAAP Operating Margin 18% Non-GAAP Diluted Net Inco

  32. Slide 32: Financial Outlook for FY25

    Financial Outlook(1) for FY25 Fiscal 2025 (January 31, 2025) Total Revenue $2,495M to $2,505M Total Revenue Growth (Y/Y) 10-11% Non-GAAP Operating Income $455M to $465M Non-GAAP Operating Margin 18-19% Non-GAAP Diluted Net Income Per Share(2) $2.24 to $2.29 Diluted Weighted Average Share Count(3) 18

  33. Slide 33: Key Takeaways

    Key Strong foundation for growth at scale Takeaways Large addressable markets with multiple growth vectors Positioned for profitable growth(1) (1) Non-GAAP basis. 34

  34. Slide 34: Appendix

    Appendix 35

  35. Slide 35: Total Addressable Market Calculation Methodology

    Total Addressable Market Calculation Methodology Workforce Identity and Identity Governance and Administration (IGA) TAM based on over 50,000 U.S. businesses with more than 250 employees (per 2019 U.S. Bureau of Labor Statistics) multiplied by 12-month ARR assuming adoption of all our current produc

  36. Slide 36: Sources: Okta is the superior choice vs. Microsoft

    Sources: Okta is the superior choice vs. Microsoft 1 News Corp transforms media. Okta helps all 25,000 global employees connect., Okta. 2 Microsoft 365 outage blocks access to web apps and services, BleepingComputer (Apr 2023) 3 Global Azure AD outage affecting Microsoft 365 Services, Exoprise (Dec

  37. Slide 37: Statement Regarding Use of Non-GAAP Financial Measures

    Statement Regarding Use of Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures and other metrics. This appendix contains our reconciliation of those non-GAAP measures and other financial metrics. This presentation may reference one or more of the following non-

  38. Slide 38: GAAP to Non-GAAP Reconciliations - Fiscal Quarters

    GAAP to Non-GAAP Reconciliations - Fiscal Quarters(1) (dollars in millions) Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 GAAP subscription gross profit $ 188 $ 219 $ 246 $ 267 $ 920 $ 287 $ 318 $ 349 $ 376 $ 1,330 $ 381 $ 414 $ 443 $

  39. Slide 39: GAAP to Non-GAAP Reconciliations - Fiscal Quarters

    GAAP to Non-GAAP Reconciliations - Fiscal Quarters(1) (dollars in millions) Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 GAAP research and development expense $ 69 $ 122 $ 131 $ 147 $ 469 $ 162 $ 156 $ 148 $ 154 $ 620 $ 163 $ 172 $ 16

  40. Slide 40: GAAP to Non-GAAP Reconciliations - Fiscal Quarters

    GAAP to Non-GAAP Reconciliations - Fiscal Quarters(1) (dollars in millions) Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 GAAP total operating expenses $ 276 $ 478 $ 440 $ 478 $ 1,672 $ 524 $ 522 $ 550 $ 528 $ 2,124 $ 536 $ 569 $ 550 $

  41. Slide 41: GAAP to Non-GAAP Reconciliations - Fiscal Quarters

    GAAP to Non-GAAP Reconciliations - Fiscal Quarters(1) (dollars in millions, shares in thousands, except per share data) Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 GAAP net loss $ (109) $ (277) $ (221) $ (241) $ (848) $ (243) $ (210)

  42. Slide 42: GAAP to Non-GAAP Reconciliations - Fiscal Quarters

    GAAP to Non-GAAP Reconciliations - Fiscal Quarters(1) (dollars in millions, shares in thousands, except per share data) Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 GAAP net loss per share, diluted $ (0.83) $ (1.83) $ (1.44) $ (1.56)

  43. Slide 43: Calculations of Key and Other Selected Metrics - Fiscal Quarters

    Calculations of Key and Other Selected Metrics - Fiscal Quarters(1) (dollars in millions, except headcount data) Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 Free Cash Flow and Margin Net cash provided by (used in) operating activitie

  44. Slide 44: okta

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