Growth Drivers
Q: What will drive growth re-acceleration?
A: Todd McKinnon emphasized that increased sales productivity, opportunities in large enterprise deals, and growth in customer identity products will drive growth re-acceleration. Sales team tenure is improving, boosting productivity. Large enterprises present significant untapped potential, and customer identity could eventually represent half of the business, as it's currently at 40% and growing faster than workforce identity.

Net Retention Rate Decline
Q: What's impacting NRR and future expectations?
A: The Net Retention Rate (NRR) declined to 111%, as expected, due to macro challenges affecting seat upsells and MAU upsells. Gross retention remains healthy in the mid-90% range. For FY '25, they anticipate NRR to stay around 111%, potentially varying by a couple of points depending on the mix of new business versus upsell.

Customer Acquisition
Q: Are lower net new customer adds a new normal?
A: Todd McKinnon stated that the lower number of net new customer adds is not the new normal. They aim to drive growth in customer count and have implemented strategies like the hunter-farmer sales model and managed service provider programs to focus on new logo acquisition. They are also investing in self-service customer identity options to broaden reach.

CRPO Guidance
Q: Why is CRPO expected to decline sequentially in Q1?
A: Brett Tighe explained that Q1 is seasonally the smallest bookings quarter, while Q4 is usually the largest. This seasonal dynamic can result in a sequential decline in Current Remaining Performance Obligation (CRPO) dollars from Q4 to Q1. This is expected not just this year but in future years due to the enterprise-focused nature of the business.

Product Expansion
Q: How are OIG and PAM contributing to growth?
A: Okta Identity Governance (OIG) has exceeded expectations since its launch over a year ago, providing a 30%+ upsell opportunity over existing workforce customers. Combined with Privileged Access Management (PAM), which also offers a potential 30% uplift, these products enhance the suite's appeal and drive strategic value beyond direct revenue. Early traction with PAM is exceeding expectations, and customers are seeing synergies with the rest of the platform.

Contract Duration Increase
Q: Why did average contract terms extend?
A: Average contract duration reached a two-year high, indicating stronger customer commitment to Okta. This uptick was seen across new business and renewals, primarily driven by larger customers who tend to sign longer contracts. Total Remaining Performance Obligation (RPO) growth increased to 13% from 8% last quarter.

Security Investments
Q: How is Okta addressing the recent security incident?
A: The security incident from October is considered behind them, with specific issues resolved and a third-party report released. Security remains the top priority, with significant investments in enhancing infrastructure and product capabilities, such as the Okta Secure Identity Commitment and the acquisition of Spera. These efforts aim to proactively secure all identities and protect against identity-based attacks, which account for 85% of data breaches.

Large Deal Momentum
Q: Was Q4 performance driven by one-off large deals?
A: The strong Q4 performance was due to broad-based strength in large deals rather than one-off transactions. Million-dollar deals grew over 30%, and the average Annual Contract Value (ACV) for customers with contracts over $100,000 is the largest it's ever been. The pipeline for FY '25 is stronger than it was entering FY '24.

Sales Productivity
Q: How is sales productivity influencing growth?
A: Improved sales team tenure and productivity are expected to boost growth. Focus is on enabling salespeople, ensuring stability in territories and targets, and capitalizing on the healthy pipeline, particularly in large enterprise deals.

Channel Strategy
Q: How is Okta enhancing channel engagement?
A: Okta relaunched its partner program, Elevate, focusing on a smaller number of strategic partners to drive success. Sales through the AWS marketplace grew 130% year-over-year, reaching $175 million in Annual Contract Value (ACV). Partner-led sales accounted for 40% of total sales, up from about 33% two years ago. Global System Integrators (SIs) are increasingly important partners, especially for large enterprise deals.

Pricing Strategy
Q: Are you incentivizing customers to buy the whole platform?
A: Okta has considered various pricing and packaging strategies. For governance and privilege products, pricing encourages customers to purchase all three offerings due to their tightly related use cases. However, customer identity and workforce identity often involve different buyers, so bundling them isn't as straightforward. Over time, they may consider changes as they broaden and expand.

Financial Balance
Q: How are you balancing growth investments with cash flow?
A: Todd McKinnon explained that slower growth naturally leads to more leverage, enhancing cash flow. They are disciplined in spending, finding efficiencies, and prioritizing investments that support long-term scalability. They are confident in balancing investments in go-to-market and product development with achieving cash flow targets.

Identity Security Expansion
Q: What's the customer feedback on identity security products?
A: Customers are highly interested in identity security solutions, including the recent acquisition of Spera. As companies adopt modern identity stacks, they seek comprehensive tools to secure identities across all apps and cloud infrastructure. Okta plans to monetize these capabilities through additional licensing fees.