Slide 1: Q3 FY24 Investor Presentation
Q3 FY24 Investor Presentation November 29, 2023
Slide 2: Safe harbor
Safe harbor This presentation contains “forward-looking statements” within global economic conditions could worsen; a prior or future the meaning of the “safe harbor” provisions of the Private network, data of cyber security incident that has allowed or does Securities Litigation Reform Act of 1995,
Slide 3: Agenda
Agenda 01 Company Overview 02 Q3 FY24 Financial Review & Financial Outlook 03 Appendix 3
Slide 4: Company Overview
Company Overview 4
Slide 5: Vision: Free everyone to safely use any technology
Vision Free everyone to safely use any technology 5
Slide 6: Okta at a Glance
Okta at a Glance Total Revenue 39% 18,800 CAGR from FY21- FY24E Total customers $3.07B Remaining performance obligations (RPO) ($ in mil.) 115% TTM Dollar-based net retention rate(1) at October 31, 2023 (1) Trailing Twelve Months (TTM) dollar-based net retention rate $835 $1,300 $1,858 $2,243 - $2,2
Slide 7: Identity is the critical foundation for connection and trust between users and technology
Identity is the critical foundation for connection and trust between users and technology Cloud Security Digital transformation 7
Slide 8: 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
Slide 9: 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
Slide 10: Better Together
Better Together Workforce Customer Identity Cloud Identity Cloud Employees • Contractors Consumer Apps and • Business Partners Digital Experiences • SaaS Apps Okta Identity Platform 10
Slide 11: One Unified Identity Solution
One Unified Identity Solution Access Management Privileged Identity Access Governance 11
Slide 12: 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 12
Slide 13: 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 13
Slide 14: Okta's Opportunity $80B
We are here* Okta’s Opportunity $80B * See Appendix for TAM calculation methodology. Figure not drawn to scale. 14
Slide 15: Multiple Growth Vectors
Multiple Growth Vectors Innovation in platform Landing and expanding International expansion Leveraging partner and network in large enterprise ecosystem 15
Slide 16: 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 16
Slide 17: 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
Slide 18: Environmental, Social and Governance
Environmental, Social and Governance Environmental Governance Ratings Included in the FTSE4Good Index Public commitments include 100% Series by FTSE Russell, which Released FY23 ESG Fact Sheet, Renewable Electricity and Science measures the performance of which summarizes key disclosures Based Targe
Slide 19: Q3 FY24 Financial Review & Financial Outlook
Q3 FY24 Financial Review & Financial Outlook 19
Slide 20: Q3 FY24 Financial Highlights
Q3 FY24 Financial Highlights Q3 FY24 vs. Q3 FY23 Total Revenue $584M + 21% Subscription Revenue $569M + 22% Remaining Performance Obligations (RPO) $3,073M + 8% Current Remaining Performance Obligations (cRPO) $1,826M + 16% TTM Dollar Based Net Retention Rate 115% - 7 pts Non-GAAP Gross Margin(1) 81
Slide 21: Total Revenue Up 21% Y/Y; Subscription Revenue Up 22% Y/Y
Total Revenue Up 21% Y/Y; Subscription Revenue Up 22% Y/Y Quarterly Revenue(1) $584 ($ in millions) $556 $510 $518 $481 $452 $415 $383 $351 $316 97% $251 97% 97% 97% 97% 96% 96% 96% 96% 96% 96% 4% 4% 4% 4% 4% 4% 3% 3% 3% 3% 3% Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q
Slide 22: cRPO is a Leading Indicator for Future Subscription Revenue
cRPO is a Leading Indicator for Future Subscription Revenue cRPO (subscription backlog Quarterly Bookings ≤ 12 months) New Customers Dollar amount added to cRPO is impacted by Upsells(1) factors such as the cRPO moves to Future subscription Components that number of customers, quarterly revenue is h
Slide 23: RPO Up 8% Y/Y; Current RPO Up 16% Y/Y
RPO Up 8% Y/Y; Current RPO Up 16% Y/Y Quarterly RPO ($ in millions) $3,007 $3,027 $3,073 $2,942 $2,790 $2,853 $2,694 $2,710 $2,350 $2,236 $1,890 $1,684 $1,701 $1,772 $1,826 $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 Q1 FY24 Q2 FY24
Slide 24: TTM Dollar-based Net Retention Rate of 115%
TTM Dollar-based Net Retention Rate of 115% TTM Dollar-based net retention rate 124% 122% 124% 123% 122% 122% 120% 120% 117% 115% 115% Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1FY24 Q2FY24 Q3FY24 24
Slide 25: Strong and Expanding Non-GAAP Gross Margins
Strong and Expanding Non-GAAP Gross Margins Non-GAAP Gross Margins(1) 82.2% 81.5% 82.5% 83.3% 80.5% 80.5% 79.8% 81.0% 78.3% 77.0% 77.6% 78.9% FY21 FY22 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Total Gross Margin Subscription Gross Margin (1) See appendix for non-GAAP reconciliation. 25
Slide 26: Efficiency and Reduced Cost Structure Yielding Significant 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) ~19% ~12% 13.3% 0.9% 6.7% (0.5)% FY21 FY22 FY23 FY24E 3.5% (5.7)% FY21 FY22 FY23 FY24E (1) See appendix for non-GAAP reconciliation. (2) FY21 does not inclu
Slide 27: Over 18,800 Total Customers
Over 18,800 Total Customers Total customers(1) 18,400 18,800 17,600 18,050 15,000 10,000 FY21 FY22 FY23 Q1 FY24 Q2 FY24 Q3 FY24 (1) Includes one time addition of 1,650 customers from Auth0 in Q2 FY22. 27
Slide 28: Customers with >$100K Annual Contract Value at 4,365
Customers with >$100K Annual Contract Value at 4,365 Customers with >$100K ACV(1) 4,365 4,205 4,080 3,930 3,100 1,950 FY21 FY22 FY23 Q1 FY24 Q2 FY24 Q3 FY24 (1) Includes one time addition of 375 >$100K ACV customers from Auth0 in Q2 FY22. 28
Slide 29: Financial Outlook for Q4 FY24
Financial Outlook(1) for Q4 FY24 Q4 FY24 (January 31, 2024) Total Revenue $585M to $587M Total Revenue Growth (Y/Y) 15% Current Remaining Performance Obligations $1,875M to $1,880M cRPO Growth (Y/Y) 11% - 12% Non-GAAP Operating Income $102M to $104M Non-GAAP Operating Margin 17% - 18% Non-GAAP Dilut
Slide 30: Financial Outlook for FY24
Financial Outlook(1) for FY24 Fiscal 2024 (January 31, 2024) Total Revenue $2,243M to $2,245M Total Revenue Growth (Y/Y) 21% Non-GAAP Operating Income $283M to $285M Non-GAAP Operating Margin 13% Non-GAAP Diluted Net Income Per Share(2) $1.47 to $1.48 Diluted Weighted Average Share Count(3) 179 mill
Slide 31: Preliminary Financial Outlook for FY25
Preliminary Financial Outlook(1) for FY25 Fiscal 2025 (January 31, 2025) Total Revenue $2,460M to $2,470M Total Revenue Growth (Y/Y) 10% Non-GAAP Operating Margin ~ 17% Non-GAAP Free Cash Flow Margin At least 19% (1) Outlook is as of November 29, 2023. Okta has not reconciled its forward-looking non
Slide 32: 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. 32
Slide 33: Appendix
Appendix 33
Slide 34: 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
Slide 35: 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
Slide 36: 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-
Slide 37: 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 FY24 YTD GAAP subscription gross profit $ 188 $ 219 $ 246 $ 267 $ 920 $ 287 $ 318 $ 349 $ 376 $ 1,330 $ 381 $ 414 $ 443 $ 1,23
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 FY24 YTD GAAP research and development expense $ 69 $ 122 $ 131 $ 147 $ 469 $ 162 $ 156 $ 148 $ 154 $ 620 $ 163 $ 172 $ 165 $
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 FY24 YTD GAAP total operating expenses $ 276 $ 478 $ 440 $ 478 $ 1,672 $ 524 $ 522 $ 550 $ 528 $ 2,124 $ 536 $ 569 $ 550 $ 1,6
Slide 40: 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 FY24 YTD GAAP net loss $ (109) $ (277) $ (221) $ (241) $ (848) $ (243) $ (210) $ (
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 FY24 YTD GAAP net loss per share, diluted $ (0.83) $ (1.83) $ (1.44) $ (1.56) $ (5
Slide 42: 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 FY24 YTD Free Cash Flow and Margin Net cash provided by (used in) operating activities $
Slide 43: okta
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