Slide 1: Investor Presentation Q2 FY23
Investor Presentation Q2 FY23 August 31, 2022
Slide 2: Safe Harbor
Safe Harbor This presentation contains “forward-looking statements” within the network or data or our customers’ data could damage our reputation and meaning of the “safe harbor” provisions of the Private Securities cause us to incur significant costs; we could experience interruptions or Litigation
Slide 3: Company Overview; Q2 FY23 Financial Review & Outlook; Appendix
01 Company Overview 02 Q2 FY23 Financial Review & Financial Outlook 03 Appendix Includes historical financial statements, reconciliations, and other select metrics 3
Slide 4: Company Overview
Company Overview okta
Slide 5: Okta's vision: Free everyone to safely use any technology
Okta’s vision Free everyone to safely use any technology. 5
Slide 6: Okta at a Glance
Okta at a Glance Total Revenue $2,000 $1,800 46% 16,400 $1,600 CAGR from FY20- FY23E Total customers $1,400 $2.79B $1,200 ($ in mil.) $1,000 Remaining performance obligations (RPO) $800 122% $600 TTM Dollar-based net retention rate(1) $400 at July 31, 2022 $200 $586 $835 $1,300 $1,812 - $1,820 $0 (1
Slide 7: Macro Trends Driving Growth in Identity
Macro Trends Driving Growth in Identity Identity is the critical foundation for connection and trust between users and technology Cloud adoption Digital Zero Trust and Hybrid IT transformation security 7
Slide 8: 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 identity solution infrastructure identit
Slide 9: Why Okta: Delivering a secure and frictionless Workforce experience
Why Okta: Delivering a secure and frictionless Workforce experience © Okta and/or its affiliates. All rights reserved. 9
Slide 10: Why Okta: Get support for your most important customer-facing initiatives
Why Okta: Get support for your most important customer-facing initiatives © Okta and/or its affiliates. All rights reserved. 10
Slide 11: 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 11
Slide 12: Unifying Identity with One Control Plane
Unifying Identity with One Control Plane © Okta and/or its affiliates. All rights reserved. 12
Slide 13: 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 13
Slide 14: There is a Massive Future for Identity
There is a Massive Future for Identity MASSIVE Adjacent Addressable Market Identity Proofing & Affirmation Anti-Fraud Analytics & Insights Identity Proofing Security Analytics Background Check Identity Behavioral Biometrics Workforce Identity Identity Governance Customer Identity Privileged Access S
Slide 15: Attractive Long-Term Financial Profile
Attractive Long-Term Financial Profile © Okta and/or its affiliates. All rights reserved. 15
Slide 16: Large Addressable Market $80B
Large Addressable Market Total Workforce $50B IGA + PAM $15B Expanded use cases Higher utilization Total TAM Workforce Identity of Workforce Identity Customer Identity 35B $80B $ $30B $Customer Identity 30B $25B See Appendix for TAM calculation methodology. © Okta and/or its affiliates. All rights r
Slide 17: Multiple Growth Vectors
Multiple Growth Vectors Innovation in platform Landing and expanding International expansion Leveraging partner and network in large enterprise ecosystem © Okta and/or its affiliates. All rights reserved. 17
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 © Okta and/or its affiliates. All rights reserved. 18
Slide 19: Environmental, Social and Governance
Environmental, Social and Governance Environmental Social Governance Achieved 100% renewable Okta for Good launched Nonprofit Published our ESG Fact electricity for cloud service Cybersecurity Portfolio and $1M Sheet, which summarizes our providers’ in addition to our in grants to support better key
Slide 20: Q2 FY23 Financial Review & Financial Outlook
Q2 FY23 Financial Review & Financial Outlook 20
Slide 21: Q2 FY23 Financial Highlights
Q2 FY23 Financial Highlights(1) Q2 FY23 vs. Q2 FY22 Total Revenue $452M + 43% Subscription Revenue $435M + 44% Remaining Performance Obligations (RPO) $2,790M + 25% Current Remaining Performance Obligations (cRPO) $1,497M + 36% Total Calculated Billings(2) $491M + 36% TTM Dollar Based Net Retention
Slide 22: Total Revenue Up 43% Y/Y; Subscription Revenue Up 44% Y/Y
Total Revenue Up 43% Y/Y; Subscription Revenue Up 44% Y/Y $452 Quarterly Revenue(1) $415 ($ in millions) $383 $351 $316 $251 $235 $217 96% $200 96% $183 96% 96% 96% 96% 95% 96% 95% 95% 5% 5% 5% 4% 4% 4% 4% 4% 4% 4% Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1FY23 Q2FY23 Profess
Slide 23: International Revenue Up 52% Y/Y
International Revenue Up 52% Y/Y Quarterly Revenue(1) $452 ($ in millions) $415 $383 $351 $316 $251 78% $235 78% $217 78% $200 $183 79% 79% 83% 84% 84% 84% 84% 22% 22% 22% 21% 21% 16% 16% 16% 16% 17% Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 International U.S. (
Slide 24: RPO Up 25% Y/Y; Current RPO Up 36% Y/Y
RPO Up 25% Y/Y; Current RPO Up 36% Y/Y $2,790 $2,694 $2,710 Quarterly RPO ($ in millions) $2,350 $2,236 $1,890 $1,797 $1,582 $1,427 $1,240 $1,413 $1,497 $1,351 $1,098 $1,180 $842 $899 $685 $753 $619 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Current RPO Non-Curre
Slide 25: Total Calculated Billings Up 36% Y/Y
Total Calculated Billings(1) Up 36% Y/Y Quarterly Total Calculated Billings(3) ($ in millions) Q1 FY22 calculated billings of $256M(2) when comparing on a like-for-like basis to Q1 FY23 $603 $491 $389 $389 $364 $362 $316 $252 $210 $198 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22
Slide 26: Calculated Billings Supplemental Modeling Details
Calculated Billings Supplemental Modeling Details(1) (1) Supplemental details provided for modeling purposes only. There is no operational impact. (2) Assumes there was no change to the billings policy in FY22. Provided to show a like-for-like comparison between FY21 and FY22 for modeling purposes.
Slide 27: TTM Dollar-based Net Retention Rate of 122%
TTM Dollar-based Net Retention Rate of 122% TTM Dollar-based net retention rate 123% 124% 122% 124% 123% 122% 121% 121% 121% 120% Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 27
Slide 28: Non-GAAP Total Gross Margin Up 30 bps Y/Y
Non-GAAP Total Gross Margin Up 30 bps Y/Y(1) Non-GAAP Subscription Gross Margin Flat Y/Y Quarterly Non-GAAP Gross Margins(2) 82.8% 81.8% 82.1% 82.1% 81.9% 80.0% 80.5% 79.9% 80.0% 78.9% 79.3% 78.3% 78.4% 78.1% 77.5% 76.9% 76.5% 76.8% 76.8% 76.1% Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22
Slide 29: Free Cash Flow Margin Down 410 bps Y/Y
Non-GAAP Operating Margin Up 450 bps Y/Y; Free Cash Flow Margin Down 410 bps Y/Y Quarterly Non-GAAP Operating Margin(2) Quarterly Free Cash Flow Margin(1)(2) 3.2% 3.4% 21.0% 2.5% 19.1% 16.3% (2.7)% 13.8% 9.5% (3.3)% 3.4% 2.7% (6.3)% (6.2)% (6.7)% 1.3% (1.2)% (7.8)% (5.3)% (9.9)% Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 30: TTM Total Revenue Growth Plus Free Cash Flow Margin (Rule of 40)
TTM Total Revenue Growth Plus Free Cash Flow Margin (“Rule of 40”) TTM total revenue growth plus free cash flow margin(1) 65% 62% 60% 59% 56% 56% 57% 54% 55% 54% Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 (1) See appendix for non-GAAP reconciliation. 30
Slide 31: Total Customers Up 26% Y/Y
Total Customers Up 26% Y/Y Total customers(1) 16,400 15,800 15,000 14,000 13,050 10,650 10,000 9,400 8,950 8,400 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 (1) Includes one time addition of 1,650 customers from Auth0 in Q2 FY22. 31
Slide 32: Customers with >$100K Annual Contract Value Up 35% Y/Y
Customers with >$100K Annual Contract Value Up 35% Y/Y Customers with >$100K ACV(1) 3,525 3,305 3,100 2,825 2,610 2,075 1,950 1,780 1,685 1,580 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 (1) Includes one time addition of 375 >$100K ACV customers from Auth0 in Q2
Slide 33: Financial Outlook
Financial Outlook(1) Q3 FY23 Fiscal 2023 (October 31, 2022) (January 31, 2023) Total Revenue $463M to $465M $1,812M to $1,820M Total Revenue Growth (Y/Y) 32% - 33% 39% - 40% Current Remaining Performance Obligations $1,540M to $1,550M N/A cRPO Growth (Y/Y) 30% - 31% Non-GAAP Operating Loss(2) $37M t
Slide 34: Key Takeaways
Key Takeaways Strong foundation Large addressable Attractive long-term for growth at scale markets with multiple financial profile growth vectors © Okta and/or its affiliates. All rights reserved. 34
Slide 35: Appendix
Appendix okta
Slide 36: Total Addressable Market Calculation Methodology
Appendix 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 curre
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-
Slide 38: Condensed Consolidated Statements of Operations - Fiscal Quarters
Condensed Consolidated Statements of Operations - Fiscal Quarters (in thousands, except per share data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD Revenue: Subscription $ 173,781 $ 190,689 $ 206,743 $ 225,400 $ 796,613 $ 240,058 $ 303,121 $ 336
Slide 39: Non-GAAP Condensed Consolidated Statements of Operations - Fiscal Quarters
Non-GAAP Condensed Consolidated Statements of Operations - Fiscal Quarters (in thousands, except per share data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD Revenue: Subscription $ 173,781 $ 190,689 $ 206,743 $ 225,400 $ 796,613 $ 240,058 $ 303,
Slide 40: Condensed Consolidated Balance Sheets - Fiscal Quarters
Condensed Consolidated Balance Sheets - Fiscal Quarters (in thousands, except per share data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Assets Current assets: Cash and cash equivalents $ 619,221 $ 957,234 $ 409,769 $ 434,607 $ 659,886 $ 225,265 $ 372,372 $ 260,1
Slide 41: Condensed Consolidated Balance Sheets - Fiscal Quarters
Condensed Consolidated Balance Sheets - Fiscal Quarters (in thousands, except per share data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 8,021 $ 4,726 $ 5,114 $ 8,557 $ 9,542 $ 9,414 $ 1
Slide 42: Condensed Consolidated Statements of Cash Flows - Fiscal Quarters
Condensed Consolidated Statements of Cash Flows - Fiscal Quarters (in thousands) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD Operating activities: Net loss $ (57,662) $ (60,100) $ (72,764) $ (75,806) $ (266,332) $ (109,232) $ (276,682) $ (221,31
Slide 43: Condensed Consolidated Statements of Cash Flows - Fiscal Quarters
Condensed Consolidated Statements of Cash Flows - Fiscal Quarters (in thousands) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD Investing activities: Capitalization of internal-use software costs (1,000) (1,326) (1,204) (629) (4,159) (10) (368) (1,
Slide 44: Condensed Consolidated Statements of Cash Flows - Fiscal Quarters
Condensed Consolidated Statements of Cash Flows - Fiscal Quarters (in thousands) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD Financing activities: Proceeds from issuance of convertible senior notes, net of issuance costs — 1,135,418 (577) — 1,13
Slide 45: GAAP to Non-GAAP Reconciliations - Fiscal Quarters
GAAP to Non-GAAP Reconciliations - Fiscal Quarters (in thousands, except percentages and per share data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD GAAP subscription gross profit $ 136,624 $ 151,188 $ 161,981 $ 176,725 $ 626,518 $ 187,660 $ 218
Slide 46: GAAP to Non-GAAP Reconciliations - Fiscal Quarters
GAAP to Non-GAAP Reconciliations - Fiscal Quarters (in thousands, except percentages and per share data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD GAAP research and development expense $ 48,494 $ 53,866 $ 58,150 $ 62,316 $ 222,826 $ 68,863 $ 1
Slide 47: GAAP to Non-GAAP Reconciliations - Fiscal Quarters
GAAP to Non-GAAP Reconciliations - Fiscal Quarters (in thousands, except percentages and per share data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD GAAP total operating expenses $ 186,572 $ 194,687 $ 212,447 $ 228,196 $ 821,902 $ 275,564 $ 477,
Slide 48: GAAP to Non-GAAP Reconciliations - Fiscal Quarters
GAAP to Non-GAAP Reconciliations - Fiscal Quarters (in thousands, except percentages and per share data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD GAAP net loss $ (57,662) $ (60,100) $ (72,764) $ (75,806) $(266,332) $(109,232) $(276,682) $(221
Slide 49: GAAP to Non-GAAP Reconciliations - Fiscal Quarters
GAAP to Non-GAAP Reconciliations - Fiscal Quarters (in thousands, except percentages and per share data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD GAAP net loss per share, diluted $ (0.47) $ (0.48) $ (0.56) $ (0.58) $ (2.09) $ (0.83) $ (1.83)
Slide 50: Calculations of Key and Other Selected Metrics - Fiscal Quarters
Calculations of Key and Other Selected Metrics - Fiscal Quarters (in thousands, except percentages and headcount data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD Calculated Billings Total revenue $ 182,859 $ 200,446 $ 217,379 $ 234,740 $ 835,42
Slide 51: Calculations of Key and Other Selected Metrics - Fiscal Quarters
Calculations of Key and Other Selected Metrics - Fiscal Quarters (in thousands, except percentages and headcount data) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Q1 FY23 Q2 FY23 FY23 YTD Free Cash Flow and Margin Net cash provided by (used in) operating activities $ 38
Slide 52: okta
okta