Hi, everybody. Welcome to Okta's fourth quarter fiscal year 2023 earnings webcast. I'm Dave Gennarelli, Senior Vice President of Investor Relations at Okta. With me in today's meeting, we have Todd McKinnon, our Chief Executive Officer and Co-Founder, and Brett Tighe, our Chief Financial Officer. Today's meeting will include forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding our financial outlook and market positioning. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. Forward-looking statements represent our management's beliefs and assumptions only as of the date made. Information on factors that could affect the company's financial results is included in our filings with the SEC from time to time, including the section titled Risk Factors in our previously filed Form 10-Q. In addition, during today's meeting, we'll discuss non-GAAP financial measures. Though we may not state it explicitly during the meeting, all references to profitability are non-GAAP. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial measures and a discussion of the limitations of using non-GAAP measures versus their closest GAAP equivalents is available in our earnings release. You can also find more detailed information in our supplemental financial materials, which include trended financial statements and key metrics posted on our investor relations website. In today's meeting, we will quote a number of numeric growth changes as we discuss our financial performance, and unless otherwise noted, each such reference represents a year-over-year comparison. Now I'd like to turn the meeting over to Todd McKinnon. Todd? Thanks, Dave, thank you everyone for joining us this afternoon. We're pleased with our Q4 results and the significant improvement in our profitability and record cash flow. It was a strong close to FY 2023 with continued improvement in our go-to-market business performance, giving us confidence going into the new fiscal year. We've positioned Okta for continued success with our customers and improved profitability and increased cash flow as an organization to navigate the evolving macroeconomic environment. The three mega trends that have driven Okta's business over the past several years, the deployment of cloud and hybrid IT, digital transformation projects, and the adoption of Zero Trust security, remain top priorities for organizations around the world. These trends are more relevant than ever, the role of identity has only grown in importance in helping organizations do more with less. Organizations that can address at least one, if not all three of these trends, will fare better over the long term. All organizations need to enable a more efficient workforce and invest in security and innovation around revenue-generating initiatives, whether during a recession or emerging from one. All of these initiatives are powered by identity. Remember that Okta was founded during a downturn. Over the past several months, how many companies have you heard talk about increasing efficiency? Okta has always enabled organizations to do more with less. In this new environment where business leaders are striving for increased efficiency, Okta is well positioned to advance our leadership position in a market that continues to move toward us. I'll dive into a deeper review of the quarter and finish with some comments to wrap up FY 2023. The two-cloud, one-platform approach that we introduced to the market mid last year, the Workforce Identity Cloud and the Customer Identity Cloud, has really hit the mark and continues to be well-received by our customers and partners. Our go-to-market team has enthusiastically embraced the structure, and we continue to see an upward trend line in the number of sales reps that have closed Customer Identity Cloud deals over the past four quarters. Just last week, we had our annual Sales Kickoff summit. The energy at the event was fantastic, and the team is highly motivated to keep the momentum going. Turning to our Q4 results, we added 550 new customers in the quarter, bringing our total customer base to 17,600, representing growth of 17%. New customer growth is an area where we believe the macroeconomic environment is affecting our business. Conversely, Brett will cover the continued strength we're experiencing with our upsell, cross-sell business with existing customers. We continue to see growth with large customers for both Workforce and Customer Identity, and we are proud to work with some of the most important brands in the world, such as Sonos, Hewlett Packard Enterprise, and MassMutual. In Q4, we added 190 customers with a $100,000+ ACV. Our total base of $100,000+ ACV customers now stands at 3,930 and grew 27%. Here are just a few notable examples of customer wins and upsells in Q4, which come from a wide range of industries. OpenAI, the company powering ChatGPT, was a great Customer Identity Cloud win this quarter. With the increasing popularity of its cutting-edge AI technology, the company looked to Okta's Customer Identity Cloud to support authentication for the rapid influx of people interested in using the tool. Having utilized Customer Identity Cloud for authentication as a self-service customer, OpenAI's developers were able to bolster its Customer Identity needs, thanks to Okta's ease of use, reliability, and security. A Global 2,000 agriculture and home improvement supply chain company was a great Workforce Identity Cloud win this quarter. The company selected Okta for its breadth of integrations, partnerships, and technology roadmap alignment. Okta will provide secure access for its 40,000 employees while providing the company with increased automation to reduce administrative overhead. A Fortune 100 insurance company was an exciting Workforce Identity Cloud upsell this quarter. The company selected Okta's Customer Identity solution last year to reduce complexity associated with its homegrown identity solution and free up developers' time to focus on business-differentiating projects. With this upsell, the company expanded its investment with Okta to replace its incumbent on-prem workforce technology and eliminate the friction in the end-user experience. We continue to see strong demand for Okta Identity Governance, or OIG, as our customers are tapping into the power of Okta's unified platform to improve their overall security posture and remove identity silos. This helps our customers gain better visibility across their identity stacks and implement a governance solution with faster time to value and cost reductions. It's still very early days with OIG, as it just became globally available in early December. We are seeing a lot of interest across various business segments and verticals, from organizations like Notion, the upstart productivity tool company, to NOV, a Fortune 1000 energy manufacturing company. NOV was a great OIG upsell this quarter. They had been leveraging Okta Workforce Identity Cloud products since 2020 and were looking for a product that would satisfy their regulatory reporting obligations. Since they had already implemented Okta Workflows, OIG was a natural step for them. Reflecting back on FY 2023, we accomplished a tremendous amount. For example, revenue increased by 43%. RPO hit $3 billion. We added 2,600 customers. We added over 800 customers with an ACV of $100,000 or more. We expanded our portfolio of products, including Okta Identity Governance, and we made tremendous progress on the ESG front, including setting validated science-based targets for Scope 1, 2, and 3 emissions reductions. FY 2023 was a year of challenges, learnings, action, and change. Our vision, purpose, opportunity, and everything we do is grounded in what we make possible for customers. Identity isn't just part of an organization's infrastructure, it's a strategic component. Okta isn't just a technology vendor, we're a strategic partner. We're a stronger company going into FY 2024 with deeper relationships with our customers and an expanding product portfolio. As we go forward into FY 2024, organizational leaders around the world are looking for ways to become more efficient in today's environment, and we've never been so confident in our ability to help our customers create more efficiencies for both their workforce and their Customer Identity solutions. Okta, too, has taken several actions to create more efficiencies within our own organization as we position the company for our next phase of profitable growth. I also thought it would be helpful to share a few of Okta's top strategic priorities for FY 2024. These are shared across the entire organization to align our execution with our broader company strategy. Keep in mind, these are multi-year horizons. The first priority is winning the Customer Identity market. We've made tremendous progress in CIAM, but in many respects, we are still just getting started on what we believe is a $30 billion market opportunity. Second, take Workforce Identity to the next level. We've done well to establish our clear market leadership over the past 14 years with the broadest independent and neutral identity platform. Consistent with our core value of continuous innovation, we're pushing to advance our leadership position in the $50 billion workforce market. Third, scale Okta to support durable growth. This includes increasing automation throughout the organization and expanding our international presence in lower cost geographies, both of which have margin benefits. Scaling for durable growth also includes hardening our own security infrastructure. Of course, underpinning our strategy continues to be our vision to free everyone to safely use any technology. To wrap things up, we're pleased with our finish to FY 2023 and believe we're positioned for profitable growth going into FY 2024 and beyond. I want to thank the entire Okta team for their tireless work, and a special thank you to our customers and partners who place their trust in us every day. Before I turn it over to Brett, I want to give a special thank you to our outgoing General Counsel, Jon Runyan. Jon has been a key advisor since Freddy and I founded the company, an executive team member over the past 8+ years, and will continue to serve as an advisor through mid-September. I'm very excited that Larissa Schwartz, our Deputy General Counsel, who has been a member of the Okta legal team for the past 7+ years, is being promoted to Chief Legal Officer. Now here's Brett to walk you through more of the Q4 financial details and our outlook for meaningfully improved profitability this year. Thanks, Todd, and thank you everyone for joining us today. We're pleased with the progress we've made over the past two quarters. We've taken action to significantly reduce our cost structure while maintaining key investments to fuel our future growth, and we're confident that we have set the path for many years of profitable growth. I'll review our fourth quarter results and our outlook for FY 2024. First, I'll start with some commentary on the macro environment and the restructuring we announced last month. With regards to the macro environment, similar to last quarter, we have not experienced a meaningful change in sales cycles or close rates. However, customers are requesting shorter term contract links as they become more conservative with their long-term commitments. Additionally, our overall business was more weighted towards upsells versus new business across both SMB and enterprise. New pipeline generation was also more weighted towards upsells. Finally, we continue to experience minor FX headwinds on our top-line metrics, which are incorporated into our reported numbers and outlook. With regards to the restructuring that we announced in early February, we've taken a GAAP charge of approximately $15 million in Q4. There were many functions in the organization that were affected, with the biggest reductions within the go-to-market and G&A teams. The vast majority were located in the United States. Turning to our Q4 results, total revenue growth for the fourth quarter was 33%, driven by a 34% increase in subscription revenue. Subscription revenue represented 97% of our total revenue. International revenue grew 32% and represented 21% of our total revenue. Looking at the ACV split between Workforce Identity and Customer Identity, Workforce ACV grew 30% and represented 61% of total ACV. Customer Identity ACV grew 35% and represented 39% of total ACV. Over the long term, we expect the mix to trend towards 50/50 with healthy growth in both businesses. RPO or backlog grew 12% and hit the $3 billion mark. Impacting total RPO growth is the general shortening of term lengths of recently signed contracts. Our average term length is just over 2.5 years. Current RPO, which represents subscription revenue we expect to recognize over the next 12 months, grew 25% to $1.68 billion. We view Current RPO as the better metric to assess our quarterly performance relative to calculated billings, which as we've noted, can be noisy due to fluctuations in invoice timing and duration. Calculated billings grew 18% and current calculated billings grew 19%. As we've noted previously, this is the final time we'll be referencing billings performance in our formal commentary. Turning to retention. Our dollar-based net retention rate for the trailing 12-month period remains strong at 120%. The sequential downtick in the net retention rate was driven primarily by a decrease in the upsell rate with our SMB customers. As always, the net retention rate may fluctuate from quarter to quarter as the mix of new business renewals and upsells fluctuates. Consistent with prior quarters, gross retention rates remain very healthy in the mid-90% range. Before turning to expense items and profitability, I'll point out that I'll be discussing non-GAAP results going forward. Looking at operating expenses. Total operating expenses for the quarter were lower than expected. The better-than-expected profitability is primarily due to the combination of revenue overperformance and better than expected outcomes from spend efficiency measures. Total headcount at the end of Q4 was just over 6,000, which is flat quarter-over-quarter. That number does not reflect the restructuring action, which will be incorporated in next quarter's headcount total. We will continue to hire in critical areas and backfill open positions. Moving to cash flow. Q4 free cash flow was seasonally strong, producing a record $72 million. We ended the year with a strong balance sheet anchored by nearly $2.58 billion in cash equivalents, and short-term investments. Overall, we're pleased with our Q4 results. Now let's turn to our business outlook for Q1 and FY 2024. While we've been pleased with improved execution over the past two quarters, our projections continue to factor in the uncertainties of the macroeconomic environment. We're also factoring in the go-to-market leadership transition and the challenges we faced in the first half of last year. We're taking several actions to reduce our cost structure and increase our efficiency as an organization, including reducing head count by 5%, rationalizing our facilities footprint, narrowing our R&D scope to focus on core product development, eliminating redundant software tools, increasing systems and process automation, and we're focusing on building operations in lower cost regions in Europe and Asia-Pacific that have fantastic talent bases. With that as a backdrop, for the first quarter of FY 2024, we expect total revenue of $509 million-$511 million, representing growth of 23%. Current RPO of $1.67 billion-$1.685 billion, representing growth of 19%. Non-GAAP operating income of $18 million-$20 million, and non-GAAP diluted net income per share of $0.11-$0.12, assuming diluted weighted average shares outstanding of approximately 178 million. For FY 2024, we are raising our revenue outlook by approximately $25 million at the high end. We now expect revenue of $2.155 billion-$2.170 billion, representing growth of 16%-17%. With our continued expense control, we plan to achieve non-GAAP profitability for the full year. We expect non-GAAP operating income of $136 million - $145 million, which yields a non-GAAP operating margin of approximately 6%-7%. Non-GAAP net income per share of $0.74 to $0.79, assuming diluted weighted average shares outstanding of approximately 180 million. We expect free cash flow margin for FY 2024 to improve to approximately 10%. This includes a cash impact of approximately $15 million related to the organizational restructuring, which will be paid out in Q1. Lastly, I want to provide a few comments to help with modeling Okta. Keep in mind that when viewing our Q1 projections versus our Q4 results, Q1 has three fewer days, which impacts revenue and gross margins. We expect non-GAAP operating margin to build as we progress through the fiscal year. Similar to years past, Q2 is expected to be the seasonal low for cash flow. We are applying a static 26% non-GAAP effective tax rate now that we expect to be non-GAAP profitable for the foreseeable future. Partially offsetting the higher effective tax rate is a significant increase in interest income related to higher interest rates we expect on our cash and investments. We are also continuing to reduce our stock-based compensation. SBC as a percentage of revenue decreased by 7 percentage points in FY 2023, but remains elevated largely due to the Auth0 acquisition. We expect SBC to be in the low 30% range of revenue in FY 2024. The improvement is being driven by slower hiring, decreased grant sizes, and as the SBC impact from the Auth0 acquisition begins to roll off. We remain committed to further reducing SBC and dilution over the long term. To wrap things up, I'll reiterate that we're pleased with the progress we've made over the past two quarters. Our business performance has improved, but we recognize there's still more work to do. We've significantly reduced our cost structure while maintaining key investments to fuel our future growth. We're confident that we've positioned the company for many years of profitable growth. With that, I'll turn it back to Dave for Q&A. Dave? Great. Thanks, Brett. I see that there's quite a few hands raised already, so I'll take them in order. In the interest of time, please limit yourself to one question so that we can get to everyone, and then you're welcome to queue back up with additional questions. With that, let's take the first question from Rob Owens at Piper. Rob? Thanks, Dave. Good afternoon, guys. Curious how you're thinking about DBNRR as we move throughout the year. We've seen some pressure there obviously, and I think you addressed it in the script. Especially as we contemplate OIG ramping from the cross-sell activity that you're seeing on the CIAM front, can you put some guardrails around where this could be as we move throughout the year? Thanks. Hey, Rob. Thanks for the question. It's nice to see everyone. We're pleased with the results. I think one of the themes to the results are the foundation of the business are very solid, and the core of that solidity is the customer success. In that net retention rate, the foundation is the gross retention rate, which remains healthy and consistent in the mid-90% range. I think the change you've seen in the rate, sequentially and, you know, projecting forward, the change will largely be because of just the amount of upsells. As there are headwinds on the business and the amount of upsells change, that's gonna be the changing factor. We have the macroeconomic impact in the business overall that we're trying to account for going forward, but we also have a lot of positives, like you mentioned. We have really record performance in terms of cross-sells in the quarter we just finished, and we expect with our improved execution on the Customer Identity side, that'll continue. Then we have this product, OIG, which is, you know, early, and it's only been generally available since December, but it's got all the markings of a hit. It's exceeded our expectations, and we're gonna get one full year in market with that in FY 2024, so we're super excited about that. Yeah. I would just add to that, Rob. Thanks for that question. I think to put a finer point on what Todd was saying, I totally agree with everything he's saying around gross retentions. We think it's gonna travel in that 90%, mid-90% range that we've seen be very stable for a while now. I think we are gonna see a little bit of net upsell rate he was describing. I think we will see a little bit of headwind for the reasons he was saying around macro. Then I think the other one is around, you know, we didn't close as many new customers in FY 2023 as we would've liked, which means there's less customers to upsell into in FY 2024. I do think we see a little bit of a headwind on that net retention rate as we travel through FY 2024. Thanks. Okay, let's go to Gray Powell at BTIG. Okay. Great. Thank you for taking the questions and really good results here. Was happy to see the guidance. One thing I wanted to make sure that I understood correctly, just looking at the Q1 revenue guidance, it implies that revenue is flat from Q4. You know, I understand the commentary around three less selling days, which is just three less calendar days, services around the macro, but it just seems really conservative. Anything else that we should be thinking of that's going on in Q1, and then just, you know, your confidence level in the ramp needed to hit the full year guide in terms of sequential growth? Gray, that's a good question. It really has more to do with that 89 days versus 92 days. Just as a reminder for everybody, we recognize revenue on a daily basis, so at these dollar levels and these growth rates, it does become very material for us. In terms of the, you know, top-line guide for the full fiscal year, you know, we're confident. Obviously, we're taking a prudent approach given we're still very early in the year. We've talked about the macro headwinds, and we've talked about obviously, go-to-market leadership transition and then also, you know, some of the challenges we had last year. We're not saying, you know, job done, despite the fact that we've had two good quarters in a row for both attrition in the field and also participation of the field in Customer Identity deals. You know, we're excited about the momentum, but I also wanna be thoughtful given how early we are in the fiscal year. Yeah. I think that when we first gave that top-line guide three months ago, from that point until now, our confidence in the ability to execute this year has, I would say, increased. I think we're turning in the right direction along with some of the positives in the business we've talked about. That's perfect. Nice work. Thank you very much. Thanks. Nice to speak with you. Thanks, Gray. Next, we'll go to Hamza Fodderwala at Morgan Stanley. Hey, good afternoon. Thank you for taking my question. Todd, congrats on the OpenAI win. Thanks, Hamza. I wanted to ask, I mean, you've been running effectively the sales force now for about a quarter. I was wondering if you'd give us any finer points around what the sales execution is looking like from an attrition standpoint in particular. You know, I looked at the Customer Identity growth at 35%. It's slowed down a bit, obviously, given the execution. I imagine, you know, you can't be satisfied with that just given the opportunity ahead of you in Customer Identity. I'm curious, you know, when that sort of starts to stabilize. I'm, in general, I'm a type of person that's not satisfied with a lot of things. Yeah, I think we can across the business, I think we can always improve. In terms of the go-to-market organization, it's obviously a very important part of Okta, and there have been a bunch of changes there. Let me just level set the group. First of all, Susan, our outgoing President of Go-to-Market, was here through the end of February. Her and Steve Rowland, who's also leaving, cranked it out. Obviously, you can see the numbers. They did a good job, and their teams did a good job delivering Q4. Now, with them leaving, we have interim leaders on the Chief Revenue Officer side stepping up. Jon Addison has been at Okta a couple years now, has been running Europe, and he is in the interim CRO role. We're looking, and I'm spending a ton of time looking for the next great go-to-market president over all of it. Until we find that person, I'll obviously be more involved working with Jon. We've also collapsed and focused the organization so that marketing, customer success, services, and everything is under one leader, Okta veteran Eric Kelleher. We have two go-to-market leaders running go-to-market and with me the leader over them. As part of that change, we're also moving marketing under Eric. That's led to another change, which is our Chief Marketing Officer is going to be leaving Okta. That's a change as well. We have this consolidated team under Jon, under Eric, that's really. It has a deep bench. There's a lot of people that are psyched up. They've delivered Q4, Q3. The trends are getting better in terms of number of reps doing CIC deals, which is very positive. The attrition, which is a key metric we've talked about for the last couple quarters, is we've had really two positive quarters in terms of low rep attrition, which is great. We just got back from Las Vegas, where we had an amazing sales kickoff and got the reiterated the product positioning and the messaging and got everyone psyched up and trained for the year. There's a lot of very positive things happening there, and I'm very confident in this team to go out and have a great FY 2024. Thank you. Okay. Next up, we have Jonathan Ho at William Blair. Hi. Congratulations on the strong quarter and the operating margin guide. I did wanna drive a bit deeper into the operating margin and guidance and sort of take a look at the $15 million cost restructuring actions. You know, how's that going to translate into cost savings for 2024? How do we think about, you know, sort of that balance going forward between, you know, showing re-acceleration and growth as well as the operating leverage? Thank you. Yeah. I would say, if you look at the, if you look at the non-GAAP operating margin for FY 2024 or the free cash flow margin for FY 2024, you look at both, they're about a 7-point increase relative to what we just produced in FY 2023. It's, it's not really just the, a single action that's producing that. You know, you brought up the restructuring action, right? It's really a tale of multiple actions that we've been taking over the last few quarters. If you remember, the last couple of quarters I've talked about slowing down hiring, I've talked about real estate rationalization, cost efficiency measures like software rationalization, you see the results Q3 and Q4. You see pretty large beats on our expectations for both non-GAAP operating margin in both of those quarters, right? It's really been a plan that we've been working for a while now to set ourselves up to have that cost envelope as we enter into FY 2024. We don't think we're gonna be done in FY 2024. We're not gonna be like, "Hey, 6%-7%." We're all of a sudden done, and, you know, we're gonna go on our merry way. It's all about, you know, continuing to scale this business, to be able to profitably grow this business, and that's why you heard about, you know, one of our three strategic initiatives that Todd talked about a few minutes ago, was around scaling and automating the business. We wanna be able to profitably grow this business, not just in 2024, but also 2025 and beyond. That's one thing to keep in mind, Jonathan, but also just that balancing of growth and profitability. One of the things that we did in this year's budget is really focus our investments toward those three strategic initiatives we talked about, around, you know, solidifying our leadership in Workforce Identity, capturing more of the market in Customer Identity, and then obviously the scale and automation I just talked about. Those are about how can we focus our investments, make us grow as fast as possible, but doing it in a responsible way from a profitability perspective. We're gonna continue to balance growth and margin just like we've done for years now, and we're gonna continue to do it as we move forward. Thank you. Very helpful. Okay. Next up, we have Ittai Kidron from Oppenheimer. Thanks, Dave, congrats guys. Great quarter. I guess a couple small ones for me. One on comp. Starting the new year, are there any changes to the comp plan, if you can go into that? Todd, a little bit more to you. I wanna dig into OIG, and maybe you could give us a little bit more color on that. Clearly, you're off to a solid start there, but maybe you could give us a little bit of a flavor. If I'm a $100,000 customer, what is the percent uptake in deal size that can come if I adopt OIG on a broad basis? Number one. Number two, are deployments mostly greenfield? Do you find that you're just entering into open wide space or they're displacement-driven? Any color you can give on the traction there would be great. On the comp plans and the comp changes, the one thing that is very, a very positive for the go-to-market team and for Okta's plan for this year going into FY 2024 is that relative to last year, there are far, far fewer changes in terms of product mix that the sales rep have to be able to sell, territory changes, org structures. It's nothing like last year. Last year was a lot of change, which I think was, in retrospect, pretty hard to navigate through. We've kept things much more consistent this year, whether it's structure of the comp plans, whether it's territory changes, whether it's organizational changes. There obviously are some, but we've kept things largely the same and focused and so that's really good for continuity there. We've also tried to keep it simple. I think a lot of companies try to overly make comp plans complex, sometimes it's best just to keep it simple. Customer Identity, Workforce Identity, make customers successful, and so forth. I think that's part of the when I talk about being confident in the year, that's a big contributor in terms of change there. Hopefully that gives you some color there. On OIG specifically, I think that the way to think about it is it's a natural adjacency for us. If you think about access management and what it does, is it gives you, it creates profiles and roles and gives you access to resources, and it does that in real time and checks it as you log in and gives you single sign-on, etc. It's a natural extension to have the system that reports on who can go where, and it does exception reporting and compliance reporting on who can go where and make sure the right people are going to the right place, is tightly coupled to that system. It's a natural adjacency, it's a natural upsell item. I think in the history of identity, the reason that governance grew up independently than access management is basically because there was no Okta. There was no independent and neutral leader of access management. Companies had to create these governance solutions in an unnatural way, which is off to the side. I think it's a natural thing to bring them together. The success of the product has actually been pretty interesting. You know, the IGA solutions out there tend to be sold to larger enterprises and be more complex implementations. We thought that our product would start more at the smaller companies and be bottoms up. We've seen a much more balanced enterprise success and mid-market success than we expected. To your question about $100,000, the simple way to think about it is, if it's a $100,000 customer, it might be a $30,000-$50,000 upsell for the governance solution. I think that will increase as the product gets more mature and our selling motion gets more mature. Just in the examples I gave on the call, Notion is a relatively small company, great innovative company, relatively small. You think of them as cloud first, but NOV is actually a large Fortune 1000 energy company. It's this combination of Okta access management with Okta Identity Governance is magical for them, it's very impactful. The last thing about is it greenfield versus net new. It is, it's the majority of it is greenfield, but again, I think the replacements have exceeded our expectations. What also has exceeded our expectations is our ability to win in RFPs. We thought greenfield would be good. We, you know, I think replacements we thought would be pretty infrequent. We've seen some of those, not many, but some. Then the RFP wins have exceeded our expectations. We have a lot of work to do, but it's, you know, it's off to a really good start. That's great. Good luck. Next, let's go to Adam Tindle at Raymond James. Okay, thanks. Good afternoon. Todd, I wanted to acknowledge you've seen obviously significant improvement in profitability of the business, proving a lot of what the business can do. At the same time, in the slides, you talk about how you're so early in this opportunity based on this $80 billion market. I guess more of a philosophical question at the end of the fiscal year to ask, why is focusing on profit right now the right strategy, given we are seeing moderation or deceleration in the growth metrics concurrent with this? If you're trading off a little bit of growth for profit, what do you do with the $2.5 billion of cash on the balance sheet and more coming in? Thank you. I think about it broadly in two buckets. One is the growth rate and the spend in sales and marketing. Those things are very related. The more we spend in sales and marketing, the more we grow. That's one bucket. When you think about how we're balancing growth rate with sales and marketing expense, there's the two factors. There's the macroeconomic expense. There's a limit in terms of the growth rate with the macroeconomy. At least go forward, we're being prudent about that limit. So that gates our investment in sales and marketing, and thus our growth rate. The second factor is just some of the execution challenges we had last year. We had a bunch of attrition, which brings down the cost, brings down the growth, and it takes time to ramp that back up again, whether it's hiring people and now having them ramp, which translates into the growth. There's some factors there that are. We're not being limited by the market opportunity. It's execution macro and which is leading to some of this profitability improvement. Although you could argue that we maybe we don't want that profitability improvement because we could be growing faster without the macro issue or without some of our execution challenges. The second bucket is just call it efficiency and better discipline and running the business more rigorously. I think like a lot of companies, we were we lived through many, many years of zero interest rates and growth, growth. And it's healthy. We need a dose of being more efficient and making sure we're investing in the highest ROI things, and we're not spreading ourselves too thinly, both from the go-to-market side, but also the R&D side and other areas of G&A. We're being efficient. That's why, you know, that drove the workforce reduction we did about a month ago. It also is this third pillar of our company strategy, which is scale Okta for durable growth and make sure we have that as a core value, because right now we're, you know, our run rate is around $2 billion, and as it goes to $4 billion and $8 billion and $10 billion over the next several years, the investments and the efficiency we build in now can be hugely impactful down the road, and we're very cognizant of that. The final point about the, about the cash on the balance sheet, we're, you know, we think about that as a little bit of it was, when we raised that money and, as we build up cash on the balance sheet, a little bit of it is margin of safety to run the business. Now that we're really turning toward profitability and generating cash, and you've seen our outlook on that. The second use of those funds is for the M&A at the right point. How can we expand the portfolio in a way that makes sense and, is strategic for our customers and will be synergistic to what we're doing from a go-to-market perspective? We're still open to that. The things we're looking at tend to be smaller. It's a good option to have, and, you know, we're always looking at managing the balance sheet overall, but those are some ways we think about that balance. I would just add, yeah, to obviously what Todd was just saying, you know, we're obviously looking at options, but to your point, Adam, the additional cash flow that we're gonna generate this year does give us even more optionality as we think about those 2025 and 2026 converts about what to do with them. I think it's a win-win for us to, obviously, as Todd was saying, become a more efficient company. That's something we want to become. We've already made a lot of progress, but we need to continue to make more progress while also balancing that growth aspect that you were just talking, you know, about. It just helps us in a variety of ways that, you know, like you just were saying around capital allocation, let's give ourselves a little more optionality. A lot of this I go back to over and over, you know, as we execute and we have our challenges, and we improve our challenges, and we work to fulfill our vision, it's all built on this foundation of this really strategic thing we're providing. I was having a meeting with a CIO of a global, one of our, you know, large customers, a global media company that's been through a lot of change themselves, and they were telling me that, you know, "Identity is one of our top three priorities at our whole company this year." There's macroeconomic stuff, there's structural stuff in their industry, but they're still prioritizing identity, and that's golden when you're trying to build a company. If you're building a company and you have that customer success and that kind of focus and that kind of mind share, it can really give you a foundation to work through a lot of what may be short-term issues for a long-term success. Okay, let's go to Gabriela Borges at Goldman. Good afternoon. Thank you. I wanted to follow up on the comments on growth and profitability. I can appreciate it's a little bit too early for formalized long-term targets. I'd love to get your preliminary thoughts on how you're thinking about what does the normalized work profile of this business look like minus the macro of what's happening right now. Thank you. I mean, obviously, we're gonna balance growth and profitability as we go forward. I mean, it's something we've been doing for years. What I will say is our goal is to profitably grow the business, right? If there's areas that we can invest in that can stoke growth, we're gonna do it so long as it's efficient, just like Todd was talking about. We wanna make sure that we have investments that are high probability of payoff and high ROI, right? Trying to be a little bit more thoughtful around those acceptance of investments. I can't give you an exact number, Gabriela, but I mean, obviously, we're gonna try to balance both the growth and the profitability over time. We wanna continue to expand margins, I can tell you that, beyond 2024. We're gonna try to grow as fast as we can, but do it in a responsible way. Thank you for the detail. Yeah, of course. Gabriela, quick question. It's nice to see you. One thing I think about a lot is the strategy is we wanna... Basically, we wanna be the one-stop shop for identity. We think identity is so strategic and so impactful, and there's such a value to having an independent, for customers, to having an independent neutral partner there that will give them choice of technology and not lock them in. To do that, we have to have really a lot of balance in terms of the use cases, which are Customer Identity and Workforce Identity. The business has to get to more of a 50/50 mix, both growing very, at a healthy pace. If you look at the numbers now, they're about 60/40. We think there's a big TAM over there. When you add that all up, it's if we do this right, it's a healthy grower and profitably for a long time. Excellent. Next up is Rudy Kessinger at D.A. Davidson. Hey, great. Thank you for taking my questions. I guess I'm curious, maybe kind of related to Gabriela's question, you know, the restructuring, the cuts you made in S&M, I'm curious how that impacts your capacity to grow. I guess maybe the question is, if your execution improves, maybe the macro impacts aren't as severe, and maybe you get better traction with IGA, you know, what kind of growth do you have the capacity to deliver if things go right? Is 20%-25% completely out of the question, or is something like that doable? Look, I can't give you the exact number, Rudy, but what I will say is when we thought about the plan, we weren't gonna sacrifice, you know, capacity build for FY 2025, right? Really, when you think about it, right, the capacity we have for 2024 is the capacity we're gonna have. I mean, you could, we could hire some folks in the first half and have a small amount of capacity build for the second half, but in reality, when we, when we think about this year's plan, it's about making sure we have the capacity for 2024, but also having it for 2025. We're, we're not getting over our skis in one period to the other and not sacrificing growth in one period to the other. We've been very thoughtful about that, in terms of how we're thinking about the capacity build for both fiscal years. More specifically on that, the way we run the business is the headcount growth in the second half of the year really is, this is kind of restating what Brett just said, it's really like that tells you the bullishness and the capacity build going into next year, 'cause by, like he said, by the end of Q4 this year, the people that are on, the capacity on board is gonna drive the growth number for next year. Okay, let's go to Matt Hedberg at RBC. Great, guys. Thanks for taking my question. I'll offer my congrats as well. Todd, maybe a higher level question. During COVID, we heard a lot of customers that wanted to stay put on a legacy identity provider. Now that we're a few years removed, a lot of the partners we talked to think there could be a more material replacement opportunity from the legacy side. Can you talk about that as like a long-term catalyst within maybe I, you know, identity and access management, IGA and PAM, less so CIAM, obviously more of a greenfield opportunity? I think that it's a great question. It's super insightful. I think the biggest opportunity we have is actually what you're saying, which is the mainstream or sorry, the mainstream, more traditional organization deciding to do security and identity from the cloud. That's if they... You know, that's still not mainstream. That's more of a progressive thing. It's getting more mainstream, but it's still relatively progressive, and the companies that choose not to do that are maybe building their own Workforce Identity or maybe customizing a legacy Oracle or IBM or Computer Associates, or they're just going with one of those solutions. This is a big opportunity, and so how do we... Part of it's natural. The cloud is the future. The benefits of being more integrated and more flexibility that an Okta provides is gonna help us. Another thing, which is, you know, just these are smart economical buyers, and if they can get more functionality from one vendor, whether it's not just access, but it's governance and it's privilege, that's gonna help. Another big thing, which might sound maybe counterintuitive coming from me, but what is Microsoft, they're a significant in terms of competitors, they're a competitor of ours, but what are they telling the whole world? They're telling the whole world is that use the cloud for identity and security. This is a huge boon for us because I do think that the biggest opportunity we have is the mainstream company wanting to go to this model for Workforce Identity, and it's, we're both, we're all making it mainstream. I'm very confident that the value we provide, which is more integration, more security, best of breed choice on security tools, on the technology you wanna do to make your business successful, our differentiation there against any platform provider, whether it's Microsoft today or another major platform tomorrow that wants to be broader in identity, our independent neutral choice is gonna win out. You can see this in the IDC numbers where it's still pretty fragmented market. You see Microsoft, you see Okta, you see a bunch of other little slices in that graph that are eventually gonna go to the cloud, and we're set up to continue to be the leader to benefit from it. Thanks, Todd. Next up is Brian Colley at Stephens. Thanks, Dave, and thanks for taking my question here. Last quarter, you talked about the macro impacting the SMB market in the U.S. most acutely. I mean, have you seen any of that macro impact start to bleed in, impact larger companies, or customers, or customers in other geographies as well, or is it still mostly limited to U.S., SMB? Yeah, Brian, it's mainly U.S. at this point from our perspective, at least what we can see in the quant. In terms of it leaking into enterprise, we have seen that new business versus upsell mix in both SMB and enterprise now. More so in SMB, but it is, to your point, Brian, it's starting to leak a little bit into the enterprise from that perspective. In terms of international, we haven't seen it quite as much there, from a quantitative perspective. From a qualitative perspective, if we just talk to sales leadership in most of the regions, they have heard that, "Hey, budgets are tighter," or budgets are being delayed, or projects are being delayed. We've got the quant side of it, and then we've got that qualitative side of it as well to kind of prove out that it does feel like the macro has started to hit us in the last couple of quarters. Yeah. One thing that's interesting from my perspective there is that in the enterprise, big deals are doing well. I have this theory that if there is some macro headwinds in the enterprise, there's a dynamic there that's, it's being counterbalanced by big deals going through. I mentioned on the pre-prepared remarks, one of our biggest wins was a big deal in a well-known insurance company that was an upsell. So some of these things are, even though the economy is, there's some questions about the economy, these big deals are going through, which, I think when we look at in the aggregate at our enterprise business, it might be balancing out any headwinds from a quantitative perspective. Got it. Thanks for the time. All right. Next up is Shaul Eyal from TD Cowen. Thank you for that, Dave. Good afternoon, everybody. Congrats on the ongoing notable improvement. Todd or Brett, you know, the business remains on solid fundamentals, as Todd indicated. We're seeing the macro impacting new logos predominantly. As you think about the fiscal 2024 guidance, how should we be thinking about the new logos in that context? I would say it's really, that's probably where the headwind will exist. I mean, frankly, we wanna grow both as fast as we possibly can, both new business and upsells. We do believe that if we do see a headwind, it is probably more likely to happen there in FY 2024. You know, we'd love to have that not happen and not be the macro situation. I mean, just think about it. If you're a customer today or a company today, you're likely gonna go to the vendors you trust and love, right? You can see it in some of the numbers that we've produced. Our customers love us. Look at that solid or strong gross retention rate. That's been in the mid-90s for a very long time now. You can see it in the net retention rate. You can see the growth in the customer count and the greater than 100K growth, which comes from a lot of our current customers. It's upselling into those, into those cohorts. I can see how customers will be a little bit more hesitant to engage in new partnerships at this time just because, you know, there is an unknown macro situation out there or the fear of the unknown, if you will. We do believe it will hit us a little bit more on the new business side, but we're obviously actively working to try to sell both new business and upsells. We're just being prudent with our expectations at this point. Great. Next up is Joseph Gallo at Jefferies. Hey, guys. Really appreciate the question and love that you laid out your top priorities for fiscal 2024. Todd, can you just double-click on what's needed to win the CIAM market? Is there a technical moat you need to widen or is it more go-to-market focused? I'd say the primary is go-to-market focus. Not that it's a... I guess I should be more precise. It's, it's the whole company and the engineering product marketing, demand generation, it's the whole end-to-end, at Okta maturing in that motion. Because, as we talked about, it's a big opportunity. It's related, but it's distinct in a lot of ways that require the company to work hard to get that second act going. So that's the, that's things like clarity of the product portfolio. That's things like enablement. That's things like, clarifying the messaging. We talked last year about the systems, all that stuff coming together to execute there. There are... It's an interesting market because in a lot of ways, just to the size is interesting, but also the boundaries of it and what it means to be a Customer Identity provider and how that overlaps with general customer data functionality or the more of the marketing use case of finding new users. There's a lot of gray areas in how the market, I think, eventually will crystallize to be a mature category, and what will be included and what won't be included. The strategy in that business now is we have a marketplace of partner solutions around there, and you can get like fraud detection, identity verification, more kind of market integration functionality. It's almost like a platform in itself, and the advantage is it gives customer as the category is being created in many ways, it gives customers a ton of value with these integrations. Also puts us in a position to help define what the final market in terms of the boundaries around the market, how it'll play out. It's important that we not only execute on that, but keep innovating and define that market as it eventually comes into mature status in several years from now. You know, we're the leader by far. It's not even close, it's an exciting place to be in. Thanks. Okay, we'll go to Adam Borg at Stifel. Awesome, and thanks so much for taking the question. Maybe just for Todd on the macro, obviously we talked a little bit about some of the headcount reduction you guys made, and we've been hearing more broadly about headcount reductions across the industries. Maybe just remind us how correlated Okta's top line growth is to headcount changes in your installed base overall. Thanks so much. The first thing to understand is that our products, whether it's Customer Identity or Workforce Identity, are licensed on their recurring subscription. There's on the Customer Identity self-service business, the credit card business, this is accepting that, but everything else, it's one-year subscriptions minimum. The average is over 2.5 years. These aren't month-to-month subscriptions or pure usage-based subscriptions that can get downsized if there's less usage or less employees. That's one level. That's just a level set about the business. They're licensed on number of users in the employee case, or number of monthly active users in the Customer Identity case. All things being equal, when the contracts come up for renewal, more employees or more users is gonna be more money, and less is gonna be less. There is some correlation. What we've seen in the business is that there's some insulation just because of the contract duration, and then when companies do come up for renewal and they have much more employees or users or much less, a lot of times the difference can be made up with the other dimension, which is just selling them more products. Let's say you go into a new renewal on a workforce side, and there's fewer employees 'cause of a reduction. Well, you can maybe keep the contract flat or even increase it by upselling workflows or lifecycle management or advanced multi-factor authentication. I think those two dimensions, usage contracts and the product portfolio, what we've seen it insulates our foundations of our gross retention and our NRR to some degree. We, of course, talked about that earlier about how that will trend over time, but those are some important dynamics there. Yeah. One other thing to factor in there, Adam, is the diversity of our customer base. I think sometimes everyone thinks we just sell to tech companies, but we don't. If you look at the slide at Investor Day, the diversity of industry that we have is quite good, in fact, and there's no industry on that slide, if you go back and look at it, that is greater than 10% of our total portfolio of annualized contract value. Yes, there's been a lot of a fair amount of layoffs in tech, but if you look at the rest of the economy, it hasn't quite hit it as much. I think that's one of the benefits of our product. That's why identity is this universal problem that everybody has. It's not a tech problem. It's not a financials problem. It's not a U.S. versus, you know, international problem. It's not a small company or big company. It's a universal problem that we're solving here. Great. Thanks so much. All right. Let's go to Sterling Auty at MoffettNathanson. Hey, guys. This is Billy Fitzsimmons in for Sterling Auty. Hello. We'll keep it quick for you. You guys talked about how macro compared, from Q4 to Q3. I'm curious, how did Q4 2023 end of quarter close rates compare to Q4 a year ago, so back in 2022? Close rates have been fairly similar across that timeframe. Also sales cycles, sales duration, we haven't seen a change there either. When we're talking about the macro, we're talking about those major factors of new business versus upsell mix, contract duration, and then the qualitative talking with our sales leadership. Those other two factors that you just that I just mentioned around sales cycles and the other one is, it hasn't changed. Like the close rates haven't changed. It's been more the same. Perfect, thank you. No problem. Next up is Wolfe Research. Hey, this is Patrick on for Josh. In a similar vein to the last question, just kind of now that you're two months into the year and selling into 2023 budgets, what changes have you noticed, if any, in customer budget dynamics, both kind of in general and then also specifically with regard to like the priority of identity security within the budgets? Thanks. We're only a month into our fiscal, so it's pretty early. Our fiscal starts February 1st. I think that I haven't, we haven't noticed change, but I, you know, the honest answer is it's pretty early to get a really good read for that. We are confident in ability to execute our plan for the year, and talking to sales reps at our sales kickoff last year, they're confident about their plans and ability to be successful in their plans. I, when I look at what makes me comfortable or confident, that's a big factor. I think we gotta maybe get a few more months before we get a real good look on customer buying behavior, 'cause I think a lot of times the customers are figuring out things in the macroeconomic situation like we are. Great. Let's go to Eric Heath at KeyBanc. Great. Thanks, Dave, great to see the strong results here, Brett and Todd. Brett, I guess two questions for you just on the margins. If you look at subscription gross margins, it's kind of been improving quarter-over-quarter for a handful of quarters now. Just curious what's driving that improvement and how to think about that going forward. That's one. Two, if I look back to Okta in the kind of pre-COVID, pre-Auth0, I saw that your free cash flow margins were typically about 10 points higher than your EBIT margins were. I think your guidance for this year calls for about 6 points of delta there. Just talk about maybe any dynamics that might be happening on that front as well too. Yeah, sure. In terms of the gross margin, you know, the reason why you're seeing the improvement is kind of what I've been talking about in terms of just becoming more efficient across the board. You know, slowing down hiring, you know, cost efficiency measures. Those are the two things that we really kind of focused on as you could see through the second half of the year in terms of just margins in general. We do expect subs gross margins to probably roughly travel about the same percentage in FY 2024 as we do in FY 2023. Then on the question around Auth0 and the delta between Okta or the delta between cash flow and op margins, that's just a function of the business slowing down a little bit, right? You bill a little bit less. You know, obviously, if you're growing a little bit faster, the billings are growing a little bit faster, you're gonna collect cash a little bit faster. Thus you're gonna get that little bit of compression between the two numbers of free cash flow and non-GAAP operating margin. Okay, we're running up on the hour, but I think we can go a little bit over time here and try to get as many as we can. We'll go to Peter Weed at Bernstein. Thank you. Congratulations on the continued momentum in the business. I just wanna make sure everyone knows that we would go over even if the results weren't strong. We're not cherry-picking. It's even more fun, though, to talk about outcomes, right? We can at least celebrate something right now. Maybe we carry on that theme. You know, I think you answered a couple of questions here recently that clarified saying, hey, you know, at the beginning of this year, whether or not it's January or February, you're not seeing any new deterioration relative to what was seen kind of in the second half of last year, and we kind of know how that played out. In those quarters, we ended up seeing kind of on a quarter-over-quarter basis, like 6% growth rates, right? Things were continuing to hum forward. Yet, if I look at the guidance for this upcoming year, if I take, you know, the quarter four results and annualize that, you're talking about for an entire year having a 6% growth rate relative to just annualizing the fourth quarter. Like, when you set that type of guide, what are you seeing out there that you think could be this credible reason why what has been seen, you know, at the second half of last year and what you continue to see in January and February this year might fall apart and result in such a huge deceleration relative to kind of the quarter-over-quarter path that's been going on without, you know, accelerated problems? Well, keep in mind, the second half of the year, you know, revenue growth rates are a reflection of the prior periods, right? Because of the obvious, you know, the way the revenue model works or the revenue accounting works. In terms of going forward, we're just being thoughtful with the guidance at this point, right? I mean, we've talked about the macro, we've talked about go-to-market leadership changes. We've talked about the, you know, not getting too aggressive in our expectations around attrition in the field and Customer Identity Cloud. We're very early in the year, right? We still got 11 months left in the year, and we wanna make sure that we're just being thoughtful about all those factors, given the. Are you seeing any specific things that worry you, like, hey, there's reasons to believe that new customers are gonna, you know, further deteriorate relative to what we're seeing? I think I heard sales pipelines look okay. You know, you said, "Hey, SMBs are a little bit weaker," you know, I think we've started to see some indications that maybe SMBs may be bottoming. Like, you know, maybe not a leg down there, it's enterprises to worry. Are you seeing reasons to be worried on the enterprise? You know, I think you had a great point around NRR saying, "Hey, from an NRR standpoint, when you have fewer new customers, over time, you're gonna just see a headwind 'cause you got fewer people to upgrade." Like, that's a relatively small number, you know, 'cause you didn't fall off the cliff, you know, that big with new customers. I'm just trying to figure out, like, what keeps you up at night the most, when you look forward? What should we watch for that would, like, tell us, you know, hey, you know, something might be going on? What keeps me up at night? That's a dangerous question. You know, I'm sure Todd's got some answers on that one as well. No, I think it's just the sum of the items I've already talked about around just being thoughtful about the productivity in the field, making sure we're doing the right actions, right, doing the right things. You know, like I said, early in the year, we just wanna be thoughtful about things. We do think the macro's gonna get worse, right? We're not expecting things to get better from here on a variety of fronts. That's really what our expectations are at this point. Thank you. All right, let's go to Keith Bachman at BMO. Hi. Thanks very much. I'm gonna ask a question, I think, Todd, this is for you. A, could you talk about your win rates over the last kinda 90%, you know, 1 - 2 quarters and how those might have changed, in particular with regard to any of the categories that you may wanna define, whether it's SMB or large enterprise or CIAM versus employee. B, I just wanted to make sure I understand on the go-to-market, I know there's a lot of transition at the top. Comp plan sounds like they're not changing much, but I just wanted to broaden that out about territories or strategies or anything along those lines. I think the go-to-market is relatively stable, but you had previously highlighted a different question, just comp plans, but I wanted to broaden that out to just talk about go-to-market more broadly than comp plans, including geo- any geo redistributions or any other org kind of changes that might be involved in go-to-market changes. Thank you. Yeah. I think it's a really insightful question because it is more than just comp plans. It's the sum of all changes that a go-to-market team has to adjust to and pivot around, and there just aren't many of them, whether it's countries entering or not entering, or territories or organizational shifts or down at the. We talked about leadership changes at the top, but the go-to-market strategy is not changed. When you talk about SKO last week, Jon Addison gets up there as the interim Chief Revenue Officer and kicks off the year, and Eric Kelleher gets up there about professional services and customer success, what they're saying is sounds very consistent to the teams, which is we have to win CIAM, we have to keep executing on Workforce. You asked a question about win rates. Our win rates remain very healthy, and it's a very good situation to be in. I think whether it's on the Customer Identity side, where it's really it's are you gonna build it or are you gonna buy it from Okta? We have things like, you know, ChatGPT is in the news right now and everyone's talking about it. We, we had some success there, so we're, we use that to illustrate that market, which is developers found the product, put it in that product when it was as the login and the identity when the product was very nascent, then all of a sudden it takes off, and it's a huge deal for us. That's happening in a lot of places in Customer Identity. There's engineering teams that are thinking about what to use and thinking about should they use open source, should they build it themselves? We have the best product there for developers, which is a huge advantage. On the workforce side, it's, like I mentioned, it's are we gonna use the cloud for identity and security? There's lots of forces, whether it's great solutions like Okta, whether it's just legacy maintenance contracts expiring, there's reasons to use something, and we continue to execute well with our message of independence and neutrality, yeah, it's a solid foundation to work off of. Okay. When you say, just to push on that, when you say healthy, I was just asking have they changed much in the last 1 - 2 quarters? No, they've been healthy for a long time. Okay. All right. Many thanks. Let's go to Madeline Brooks at BofA. Hi, guys. Thanks for taking my question. Just a really quick one here. You know, wanted to just get a sense of what an ideal split is for Okta between upsell and cross-sell and new business. Additionally, on the new business side, would you just be able to give us some color if over the last quarter you needed to implement any discounting or further bundling? Thank you. In terms of the discounting, the discounting has actually been very consistent as well. It's one of those things that it hasn't changed very much. In terms of the mix between new business and upsell, right now, we want it to be higher new business than it is. We're too weighted toward upsells, and that's something we're focused on. You know, it's definitely like a factor of the macro, but we gotta get better at doing new business in the future. Brett and I were talking about this earlier this week. I think another factor on new business versus upsell is ramping reps. Yeah. Brett talked about a customer that wants to double down on their vendor, their vendor relationship they have in place. If you're a new sales rep that's ramping, what's the easiest thing to sell to? A customer that the company already has a relationship to. I think so you'll see well, us make progress there just as reps ramp and get more tenure. Yeah. That's a good point. I'm sorry, can you just remind us two of the percentage breakout between them as it stands for fourth quarter? We don't usually talk about that. We just talk about new, net retention, which was 120%. Okay. Thanks. No problem. Okay. We'll go to Brian Essex at JP Morgan. All right. Thank you very much, and congratulations from me as well. Thanks, Brian. M aybe if I could, I guess take an one layer deeper on Keith's question with regard to Salesforce organization, how that's structured so I better understand it. Yeah. It sounds like maybe it's still relatively siloed between Workforce and CIAM. Do you envision, you know, shifting towards more of a platform approach, and are you seeing a lot of, you know, multi-product Workforce plus CIAM deals, or are you gonna stick with maybe a more, what seems to be a land anywhere approach or keep those kind of Salesforces relatively siloed? Yeah. There's one sales team, so every customer has one rep from Okta, and the rep from Okta sells them all our products, OIG, Workforce customer. There's some technical specialists, but it's, you know, I think people call it the IBM model. There's one. I think that's the first time I've ever compared myself to IBM. It's a great company. Anyways, there's one sales rep, t heir idea is that we wanna be the strategic partner for identity, so that's incumbent on the sales reps to use their capability to appeal to different buying centers in their company. It's a disadvantage of that is it's sometimes harder to train and enable. The advantages of that is you can get higher if you do it right, and that's in line with our strategy of being the strategic platform. It's one sales team. They're selling all the products with specialist help and pre-sales help when they need it, when it's very technical. Are they incentivized to sell the platform or do they go into, like a customer has a specific use case, and they go in to solve that problem? The comp plans, we kept them simple, but they're incentivized to sell more, and they're incentivized to sell multi-year, there's a little bit of a kicker for our priority, which is Customer Identity. Got it. Yeah. I think the other really important thing is we had a really, really good quarter for cross-sales. I think you're starting to see this work, whether it's, you know, a company starting with Customer Identity Cloud and selling Workforce or the vice versa. Even OIG, which is modules inside a Workforce. It's a positive indicator. Those responsible for developers, is that completely separate or is that under that same team umbrella as well? There's one sales team. Yeah, one sales team. Okay. Yeah. There's a lot of. For the developer motion, so the, you know, there's a team that's dedicated to making that developer experience. That developer team at OpenAI that found online and learned about Customer Identity Cloud in their APIs and read the documentation, that's all a different team. Once it gets to a rep, once the lead from a self-service credit card customer goes up to a rep, we're gonna do a bigger deal. T hat's the one sales team. The sales team loves this because in addition to their leads they get from normal demand gen, they get a bunch of leads off this Customer Identity self-service. They have to, like we've talked about, they have to be, we have to ramp them and make sure they're ready to sell it. Once that starts to happen, it's a good time to be a salesperson at Okta. Very helpful. Thank you. Yeah, sure. Happy to lay it out there for you. Okay, I'm gonna call a five-minute warning here. It's if we can get as many as we can here. Let's go to Taz Koujalgi at Wedbush. Hey, guys. Thanks for taking my question. I have a question for Brett. Brett, your guide implies 5% growth in OpEx for the quarter and for the year. Is that also reflective of the sales capacity increase? Would your sales capacity increase at that same 5% rate? Our sales capacity is designed to be able to hit, like I said earlier, designed to hit the FY 2024 bookings number and also set us up for success in FY 2025. We're not, you know, saying one way or the other exactly what the quota increase or the quota capacity out there on the street is, but ultimately we're making sure that we've got the right people in the right places, right segments, right geos to be able to go after this opportunity, both this year and in fiscal year 2025. Thanks. One quick follow-up, please. Your cRPO guide implies cRPO stepping down from Q4 to Q1. That's never happened before. Are you just being very conservative or there's something happening with seasonality, backlog getting built into the integration? Yeah, I mean, at the top end, it would imply about flat. I mean, keep in mind, remember, Q4 is our seasonally biggest quarter of bookings. Q1 is our seasonally lowest quarter of bookings. We're just being thoughtful about that and making sure we're incorporating it in the guidance for you guys today. Nothing changing in terms of the booking mix by quarter? Like, are you assuming a smaller mix in Q1 versus the usual mix in Q1? You've always had that Q1 being smaller than Q4, but your cRPO still keeps going up. Yeah. Keep in mind, though, if you look at the quarters before from Q4 to Q1, the growth rates were higher, you'll see a slightly different result when you have that. A slightly lower growth rate, you're gonna have a seasonality that looks a little bit more like what we're talking about this time around. Nothing really different from a overall seasonality of bookings. It's just the results of having slower growth than we have in the years past. Got it. Thank you. Okay, we'll go to Patrick Colville at Scotiabank. Hey, guys. Thank you so much for having me on. Congrats on a very solid set of results. I guess my question is around the ACV disclosure you guys gave, which is extremely helpful. When I look at the numbers, my take is that Workforce has held up, you know, very, like, robustly in four Q and over the trailing kind of, you know, 24 months. Whereas the deltas have been really in the customer segment. I guess, can I sneak in a two-parter, you know? One is the Street thinks that Workforce is the maturing segment at Okta. What is the Street missing? What would it take you in that customer segment for that growth to start, you know, plateauing or maybe even increasing? We're very excited about both. I think the Street is underestimating Workforce. I think that there's been this narrative that Okta's so much focused on Customer Identity cause Workforce is, there's a problem with it. I couldn't disagree more. I think it's a great opportunity long term. We wanna build this partner and independent, neutral, one-stop shop for identity, and you gotta have both. I think that Workforce can grow, Customer Identity can grow. If you look at those numbers, besides just thinking that, you know, the death of Workforce is greatly overrated, I think you see some of our, in the Customer Identity number, you see there's an opportunity for better execution. I think that even with all the things we've talked about, whether it's macro, whatever, we can execute better on Customer Identity, we're set up to do that. We're the leader by far, we've got a bunch of stuff we've done to improve that, I'm confident about that growing faster as well, 'cause it's still smaller. You said the growth rates are 30%, 35%. That customer growth rate should be higher given it's coming off a lower base. Agreed. All right. Cheers, guys. Thank you. Okay, we're gonna take the last question from Fatima Boolani at Citi. Apologies to Carson, Fred, and Brad. We'll get you next time. You're first next time, Carson. You're first. Ladies last in 2023. How you doing? Hi. Good, thanks for taking my question. Brett, I'll make it quick for you. Between you and Todd, you quantified for us the contract duration and some of the dynamics there. I'm wondering what you're assuming in your guidance as it relates to some of the contractual duration with, especially with your renewals business. As a related matter, if there's any particularly large cohorts of renewals that are coming up that you're being maybe more cautious about by way of, you know, shortening a contract duration. Thank you. That's a good question. There's no real cohort that's wildly different than the other. I mean, that's one of the benefits of having these longer duration contracts, just spreads everything out. There's nothing really to speak of in terms of like major assumptions in terms of what we're thinking about from a re-renewals perspective. You know, we talked about the gross retention earlier as being a subset of the net retention. We do expect that to remain stable because from our forecasts, from what the teams are telling us and what we can see in the business, you know, we do believe that's a continue gonna be stable and really one of the strengths of our business, right? We've talked about this for a long time, that gross retention really reflects the value that we deliver on a day-to-day basis. Yeah, that's probably how I'd categor- or, you know, kind of put it to. Okay, that's the time we have today. Before we go, I wanna let you know that we'll be attending a couple of investor conferences this quarter. We'll be at the Morgan Stanley Conference in San Francisco next week on the sixth, and the KeyBanc Conference in San Francisco on the seventh. We hope to see you at one of those events. If you have any other follow-up questions, you can reach us at ir@okta.com. Thanks.