Okta, Inc.

Hi, everyone. Welcome to Okta's first quarter of fiscal 2026 earnings webcast. I'm Dave Gennarelli, senior vice president of investor relations at Okta. Presenting in today's meeting will be Todd McKinnon, our chief executive officer and co-founder, and Brett Tai, our chief financial officer. Eric Kelleher, our president and chief operating officer, will join the Q&A portion of the meeting. At around the same time that the earnings press release hit the wire, we posted supplemental commentary to our IR website. 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 our 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-K. 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. The reconciliation between GAAP and non-GAAP financial measures and a discussion of the limitations of using non-GAAP measures versus their closest GAAP equivalents are 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. And now I'd like to turn the meeting over to Todd McKinnon. Todd?

Thanks, Dave, and thank you, everyone, for joining us this afternoon. We had a solid start to FY26 highlighted by continued strength with large customers, Auth0, New product contribution, strong cash flow, and record profitability. Brett will cover more of the Q1 financial highlights, and I'm going to cover product innovation, our recent showcase event, and the latest with the Okta secure identity commitment. New products, such as Okta Identity Governance, Okta Privilege Access, Okta Device Access, Fine Grain Authorization, Identity Security Posture Management, and identity threat protection with Okta AI had another quarter of strong contribution. Our combined governance portfolio of Okta identity governance, lifecycle management, and workflows has grown substantially over the past few years. With strong adoption of our governance products, Okta is becoming even more valuable and integrated into our customers' IT infrastructure and security posture. This is evidenced by the massive growth we've experienced in workflow executions. which have increased nearly 400% over the past three years to nearly $40 billion in March alone. OIG has been a tremendous success to date. We are hearing from partners and industry analysts that OIG is now ready to hit mainstream adoption, especially with recently delivered key capabilities like separation of duties and on-prem connector. These new capabilities helped with great customer wins in Q1, like the Global 2000 insurance company noted in our posted commentary. As cyber threats evolve, identity remains the first line of defense. That's why innovation at Okta never stops. In early April, we hosted Showcase, which is our biggest event outside of Octane to highlight product innovation. Our newest advancements help organizations protect their employees, customers, and AI systems. The key themes at Showcase this year were one, how Okta is protecting non-human identities, or NHIs, and two, how Auth0 is helping developers build, secure, AI agents. NHIs have been around for a long time. What's new is how the recent boom in AI agents has resulted in exponential growth in NHIs. NHIs include service accounts, shared accounts, machines, and tokens. NHIs often operate outside traditional identity governance frameworks and can leave organizations vulnerable to security risks. In fact, last year only 15% of organizations said they are confident in their ability to secure Okta addresses this problem with identity security posture management and Okta Privilege Access. By combining these two products, customers can discover, secure, and manage NHIs with an end-to-end secure identity fabric to secure both human identities and NHIs across a single system. This integrated approach protects non-federated and privileged identities, ensuring AI-driven automation and machine-to-machine interactions remain governed under zero trust policies while continuously monitoring NHI risks and vulnerabilities across the enterprise. On the developer side, customers have another compelling reason to adopt Auth0. Auth for GenAI addresses the problem of AI agents creating unsecured NHIs by enabling developers to integrate secure identity into their GenAI applications. This helps ensure that AI agents have built-in authentication fine-grain authorization, async workflows, and secure API access. Auth for GenAI secures AI agents at every step without slowing them down, providing developers with the trusted tools and flexibility they need. The product has had a successful developer preview, and we expect the GA launch this summer. To get all the details of the announcements coming out of Showcase, we encourage you to review the comprehensive summary available on the Investor Relations website. We also continue to elevate the industry with the Okta Secure Identity Commitment, which is our work to lead the fight against identity-based cyber attacks. In support of this commitment, we're now highlighting the great security work already being done by Okta's threat intelligence team and making their insights more actionable. With thousands of customers across a multitude of diverse industries, Okta is uniquely able to analyze threat activity. I encourage you to check out a blog post we shared that highlighted Okta Threat Intelligence's in-depth research on how adversaries are conducting IT contracting scams using AI and our recommendations to help mitigate these threats. To wrap things up, we're pleased with the start of the fiscal year and we're excited about the future with our growing portfolio of modern identity solutions. More and more, customers are looking to consolidate their disparate and ineffective identity systems, and Okta is there to meet them with the most comprehensive and unified identity security platform in the market today. As always, I want to thank the entire Okta team for their tireless effort and also thank our loyal customers and partners who put their trust in us every day. Now here's Brett to cover the financial commentary and talk about how we're positioned for long-term profitable growth.

Thanks, Todd, and thank you everyone for joining us today. We posted solid Q1 results with another quarter of exceptional cashflow and record operating profitability and profit margin. My commentary will provide insights to our Q1 financial performance and then move into our outlook for Q2 and FY26. We entered the first quarter with the previously announced realignment of our go-to-market team, which further specialized our sales force into OctoSellers and Auth0 sellers. While it's still too early to judge the overall success of this realignment, we're encouraged by some of the early signals in the Q1 results. In particular, off zero performed quite well following a record Q4. We were also pleased to see pipeline strengthening throughout March and April. We remain confident that increased go-to-market specialization will yield long-term benefits for Okta and our customers. Adding to our confidence is the recent performance we're seeing in the parts of our business that had already been specialized. At the beginning of last year, we moved the team focused on the US SMB market to a hunter-farmer model. That team performed well in Q1 and underscores how specialization can drive improvements over time. Another area that has been specialized for some time is the US public sector vertical, which has been an area of strength over the last few years. The strength has been a direct result of Okta's strategic commitment and investments in the US public sector. Our public sector team had a strong Q1 as two of our top three and four of our top 10 deals were in the public sector, including the federal deal we called out in our posted commentary. Clearly, there is a lot going on in the US federal vertical, and we are monitoring the developing situation closely. While we anticipate some near-term uncertainty in our federal business, we remain highly confident in the long-term public sector opportunity. That's because Okta delivers the efficiency and security benefits that government agencies require, and our FedRAMP High and IL-4 certifications distinguish Okta from the field. Now let's turn to our business outlook for Q2 and FY26. We continue to take a prudent approach to forward guidance that factors in our go-to-market specialization that was rolled out in Q1 of FY26. Additionally, we're now factoring in potential risks related to the uncertain economic environment for the remainder of FY26. For the second quarter of FY26, we expect total revenue growth of 10%, current RPO growth of 10% to 11%, non-GAAP operating margin of 26%, and free cash flow margin of approximately 19%. For the full year FY26, we expect total revenue growth of 9% to 10%, non-GAAP operating margin of 25%, and a free cash flow margin of approximately 27%. To wrap things up, we remain focused on reigniting growth and driving spend efficiencies in cash flow. We've demonstrated exceptional leverage in our model and remain positioned to deliver profitable growth for years to come. We're excited about the adoption of new products, the rapid pace of innovation, and are confident that Okta is positioned to lead the identity industry. With that, I'll turn it back to Dave for Q&A. Dave?