Taz Koujalgi

Taz Koujalgi asked for color on how the U.S. market differs from other regions in terms of competitive landscape and who Cognyte typically encounters in bake-offs. He also inquired about contract duration trends, specifically if the mix of RPO versus CRPO indicated a slight year-over-year decrease in duration. Additionally, he sought clarification on the professional services revenue being lighter than the previous quarter and guidance on the revenue mix between software, software services, and professional services for the full year, especially considering a seasonal jump in software revenue in Q4 of the prior year.

Answer

Elad Sharon (CEO, Cognyte) stated that U.S. market challenges are similar, with Cognyte focusing on operational units within law enforcement, identifying L3Harris and Octasic as key competitors in the U.S. territory. David Abadi (CFO, Cognyte) affirmed strong overall RPO, with CRPO growing 10% year-over-year, providing confidence in growth. He explained that professional services revenue fluctuates due to recognition criteria but is aligned with the 13% of total revenue target. He emphasized looking at total software revenue (software + software services) which grew 18% and is expected to be 87% of total revenue for the year, reflecting recurring customer behavior and upgrades.

Taz Koujalgi asked about the human-to-agent relationship in a large AI deal customer example, the competitive landscape for AI security, and whether Okta expects to sustain its Rule of 40 performance in FY27.

Answer

CEO Todd McKinnon estimated a human-to-agent relationship of five to ten agents per person in scenarios like software engineering. CFO Brett Tighe stated that Okta will continue to employ the Rule of 40 framework, aiming to lean more into growth acceleration while managing margins, and will provide more detail for FY27 after Q4.

Taz Koujalgi asked about a customer example involving a large AI deal, specifically the human-to-agent relationship (one-to-many), the competitive landscape for AI security, and whether the Rule of 40 is expected to sustain for fiscal 2027, considering revenue and margin expectations.

Answer

CEO Todd McKinnon estimated a human-to-agent relationship of five to ten agents per person, citing software engineers as an example where agents perform various tasks on their behalf or independently. He highlighted Okta's flexibility to support diverse use cases. CFO Brett Tighe affirmed that the Rule of 40 framework will continue to be employed for managing the business. He acknowledged the significant margin increase over the past three years but stated the company's goal is to lean more into growth acceleration. Brett Tighe indicated that more specific FY27 details would be provided after Q4.