Okta (OKTA) investor relations material

AI-driven changes in the identity market

• Customer conversations have shifted rapidly to focus almost exclusively on securing AI agents, with 91% reporting agents in production but only about 22% feeling they are properly secured.

• New products, Auth0 for AI Agents and Okta for AI Agents, were launched in response to customer demand for AI security, with significant pipeline growth since their release.

• Customers are seeking flexible, neutral solutions to secure a rapidly evolving landscape of AI platforms, emphasizing the need for broad compatibility.

• A specialized tiger team was created to support early customers and accelerate product development and sales conversion.

• AI-related upsells are about 40% larger than traditional identity governance upsells, reflecting the urgency and value placed on mitigating AI-related exposures.

Product strategy and go-to-market evolution

• Governance remains a strong contributor, with just-in-time provisioning highlighted as a key feature for securing AI agents.

• Privileged access is becoming more important, especially with features like token vaulting, but is less mature as a standalone product compared to governance.

• Okta Identity Governance has matured into a primary entry point for new customers, while privileged access is still developing as a land product.

• Monetization of AI agent security is currently seat-based for the first year, with plans to potentially add consumption-based pricing after usage data is collected.

• Go-to-market changes include specialization by buyer type and product, leading to improved rep tenure, lower attrition, and higher productivity.

Partner ecosystem and market expansion

• Shifted professional services focus to enable global system integrators (GSIs), aiming for greater scale and broader distribution.

• Over 80% of bookings are partner-influenced, and over 40% are partner-sourced, with expectations to increase these figures.

• Larger enterprise customers now represent over 85% of revenue, and customers spending over $1 million account for more than $1 billion in ARR.

• Partner-driven deals are expected to contribute more meaningfully starting in Q2.