Hi, everybody, and welcome to Okta's first Zoom video earnings call. I'm Dave Gennarelli, Vice President of Investor Relations at Okta, and we're here today to discuss our Second Quarter of Fiscal 2021 Financial Results. With me in today's meeting, we have Todd McKinnon, our Chief Executive Officer and Co-Founder; Bill Losch, our Chief Financial Officer; and Frederic Kerrest, our Executive Vice Chairman, COO and Co-Founder. 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 results is included in its filings with the SEC from time to time, including the section titled Risk Factors in its previously filed Form 10-Q. In addition, during today's meeting, we will discuss non-GAAP financial measures. 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 or growth changes as we discuss our financial performance. And unless otherwise noted, each such reference represents a year-on-year comparison. And now I'd like to turn the meeting over to Todd McKinnon. Todd?

Thanks, Dave, and thanks, everyone, for joining us. I hope you like this new video format, which I think personalizes these earnings calls a little more. I also hope that you and your families have remained safe and healthy since the last time we spoke. With the ongoing pandemic, Okta, like so many organizations around the world, remains fully remote. Last quarter, I discussed how Okta had already been moving down the path of creating a workplace of the future or what we call dynamic work. The pandemic has accelerated our move to dynamic work, which is our initiative to build a more agile, flexible work style into our culture to ensure that all our employees have great work environments, experiences, benefits and flexibility regardless of their location. We're fortunate that the nature of our business allows us to operate successfully in this dynamic work environment, and I couldn't be more proud of the team at Okta and what we've accomplished. It's this agility and the recognition by more and more companies of identity's importance that has enabled Okta to continue to execute at a very high level, and I'm pleased to report that we delivered another quarter of strong financial results. Second quarter total revenue grew 43% and the subscription revenue grew 44%. We also saw continued strength with total remaining performance obligations, or RPO, growing 56%. Okta is helping organizations around the world accelerate their adoption and deployment of cloud applications in remote access and reimagine their digital customer experiences. While emergency implementations during the first phase of the pandemic, like the one we did for FedEx last quarter, are largely behind us, companies are reevaluating their road map to modernize their identity systems. And Okta's platform is the linchpin of the new cloud technology stack. We believe…

Thanks, Todd, and thank you to everyone for joining us. As a reminder, we have posted an earnings presentation that contains our detailed financial results on our Investor Relations website. I think you'll find it to be a useful summary, and as such, I will only cover a few of the notable highlights in my commentary this afternoon. We had a strong second quarter, with particular strength in revenue, RPO, profitability, cash flow and net retention rate. I'll now touch on some of the second quarter highlights and then go into our outlook for Q3 and the full year. Turning to our Q2 results. Total revenue increased 43%, driven by a 44% increase in subscription revenue. Subscription revenue represented 95% of our total revenue. RPO or backlog, which for us is contracted subscription revenue, both billed and unbilled but has not yet been recognized, grew 56% to $1.43 billion. Current RPO, which represents subscription revenue we expect to recognize over the next 12 months, also experienced strong growth of 48%. Year-over-year growth in current RPO is the more meaningful metric when viewed along with subscription revenue and billings growth. Total and current calculated billings grew 27%. There were a few things that impacted Q2 billings, so I'll walk through the notable items. As expected, we experienced some mild pandemic-related business headwinds. And as I mentioned on last quarter's call, we experienced some beneficial invoice timing in Q1 that created a modest headwind for Q2 billings growth. Q2 billings was also negatively impacted by our strong upsell activity. That may sound counterintuitive so let me explain. When large enterprise customers expand their purchases with us, they often want to align new contract start dates with existing contracts, and thus, we only bill them for the stub period before the new large…

Great. Thanks, Bill. [Operator Instructions].

So with that, your first question is going to come from Sterling Auty at JPMorgan.

All right, great. Can you hear me okay?

Sounds great, Sterling. Nice to see you.

Well, it's good to see you as well. Thanks for doing it this way. I think that it's certainly a step-up. So I wanted to ask about the partnership with CrowdStrike, Proofpoint and Netskope. And in particular, what does this tell us about what is happening in the competitive landscape vis-à-vis Microsoft?

So yes, we're really excited about -- I mean, as you know, especially like you, Sterling, and other folks that have followed us for a while, our culture is really about being integrated with the ecosystem. Our claim to fame is the most integrations and the deepest integrations, something we've maintained and extended over the course of our history. And so particularly around security these days and this concept of zero trust security, everyone's excited about it, but customers aren't quite sure, in many cases, the specifics of what it means. So I think the most exciting thing about this partnership is that you have these vendors coming together with an integrated solution both on the product side but also on the go-to-market side with a consistent message about what it means to be zero trust secure and how you get there. And so I think it's going to simplify things for customers. And I think that to your question about Microsoft, the zero trust security is about securing access to all of your applications. And I just think it's unrealistic to think you can get that from one company, one platform. And that's why it's important that the vendors like Proofpoint and Netskope and Carbon Black are coming together -- or CrowdStrike are coming together to define this architecture and clarify it for customers. And I think ultimately, customers are going to benefit, which is going to benefit all of our businesses.

Great. Your next question is going to come from Hamza Fodderwala at Morgan Stanley. Okay. Why don't we go to the next question from Rob Owens at Piper Sandler.

So thanks for the color around the customer identity piece. And I was hoping you could go into a little bit more detail just in terms of what you're seeing here. Is this typically going into the installed base? Or is it somewhat the tip of the spear, where there's competitive differentiation in this market? And lastly, for Bill, could you remind us of any TAM analysis you guys have done of the customer side versus the enterprise side? And I'll take those three as my one question.

Very efficient, Rob. Nicely done. Customer identity is a really important market for us. And I think that it's a little bit different than the workforce market in that the dynamic is -- it's a build versus buy. And the marketing and the positioning of customer identity is all about making sure the market understands that there's a better way. They don't have to build login and customer synchronization and registration and two factor. They don't have to build that themselves. They can get back to focusing on the features that are going to differentiate their company and their app. And we can take care of the stuff we're good at, the identity and security. So there's always multiple systems involved and there's some legacy, but largely, it's build versus buy. And I think that when you are catalyzing a market like this, and we clearly are, if you look at the numbers, the 72% growth, the 24% of our revenue, when you're catalyzing a market, it helps to be a vendor that has proven that we can make customers successful with our broad workforce customer success. So I think we're in full position here and we're working hard to extend that lead.

Yes. And Rob, to your question about the TAM, as we talked about this at Investor Day back in April, and at that time, we've evaluated that our TAM for workforce is $30 billion and the TAM for customer identity is $25 billion. So very large TAMs on both sides. And for the reasons that we've talked about before, we think there's huge opportunities for us to grab a lot of that TAM in the future.

And then also, just one more thought on that. It is an important question. The concept I was speaking about of Okta being one of the first-class clouds or the primary clouds in the enterprise in the future, the degree to which we can broaden and support multiple use case, both workforce and customer, it gives us a much better chance to establish that position as one of these first-class clouds. Enterprises are going to trust clouds that can do more things for them. And the more use cases we can support and handle in those critical paths that lead to the customer success, the better our success at establishing that first-class cloud is going to be.

Okay. We're going to try Hamza again from Morgan Stanley.

What do you think Hamza would ask if he was going to ask a question?

Here he comes. Hamza, unmute your line.

Can you guys hear me?

Yes.

Okay. Success. Sorry about that. Todd, this question's for you. I wanted to ask a little bit about the momentum you're seeing in the customer identity space. Particularly the deal with Equifax, which I found to be quite notable, just given the size of the user base and obviously, the sensitivity around that data. So can you speak a little bit more about what you're seeing in customer identity, particularly in this more sort of heightened threat environment?

Yes. The dynamic in customer identity, as I mentioned, it's companies -- so what's really been clarified for companies over the last three months with COVID is it's clarified the priority of digital transformation in getting these direct relationships with consumers, with the website and the mobile app. And it's clarified what they have to do. Everyone needs a website. Everyone needs a mobile app. So there's not a lot of confusion about that anymore. And what happens when you have that realization, it becomes very clear that identity is a primary part of that because everyone knows when you have a great web experience or a great mobile experience, it leads with that application knowing about what you're trying to do, your preferences, your history with that company. So identity feeds right into that. So that's becoming clear, which is great for our business and great for this -- really, this broad second flank of our business, which is customer identity.

Excellent. Your next question is going to come from Matt Hedberg at RBC. All right. We're going to try Walter Pritchard at Citi.

All right. Can you hear me?

Yes. That's great.

All right. Good deal. So a question for you just, Bill, I think, for you on seasonality of billings. How should we be thinking about things? I think we've seen other companies go through this process where more of the business gets pushed into the renewal and with co-term deals. Could you just help us understand how we should think about that and maybe any sort of magnitude commentary around what that means for the seasonality?

Yes. Sure, Walter. So as we've said before, the timing dynamics in billings really does exemplify where we think current RPO is an important metric as it eliminates those kind of variances, and those variances really have no impact on revenues. Specific to the timing question, as I talked about in my commentary, we did have certain timing elements with billings this quarter as far as some of the invoicing that was in Q1 got pulling out of Q2, which had an impact on Q2, the coterminous billings that you talked about, which is the [stub] [ph] billings when we sell into larger enterprise. And the way we think about that is that, that billings really does -- is going to balance out. The timing is really going to balance out during the course of the year. So one of the ways to think about it, to give you some measure of it, so to speak, is that in the second half, we expect that our subscription revenue growth and billings growth to narrow to about a 5% to 6% delta from the 11% delta that was in the first half of the year.

Okay. Our next question is going to come from Jonathan Ho at William Blair.

This is Jonathan Ho. Great. So just wanted to get a sense from you, just regarding what you're hearing from customers and maybe their willingness to spend. Are you seeing any situations where they're perhaps downsizing deals or delaying deals? And when you're renewing customers in impacted industries that have lower headcount, are you seeing any impact from that?

Jonathan, it's Frederic. Thanks a lot for the question. We are not seeing any impacts, as you mentioned. Our ongoing focus on enterprise customers continues to yield, I think, very good results. We now have over 100 customers with ACV greater than $1 million. We've got 105 net new adds in Q2 of customers paying us $100,000 or more. And I think about half of those were net new logos to Okta. So we're not seeing any slowdown in terms of customers either coming in with smaller purchases or interest than we thought they might and/or renewing. In particular, we've seen no renewals on the workforce side in the enterprise that are lower than what they were originally doing. And if you think about it, right, as everyone's moving remote and as everyone's trying to integrate more in this world with not only their employees but also their customers and partners and vendors, they need to actually increase the way they're doing this digital enablement and communication, and we're starting to see a lot of that in the business.

Great. Next question is going to come from Andy Nowinski at D.A. Davidson.

Great. So a lot of people seem to be worried about a potential deceleration revenue growth at Okta. Yet there was no change in your CRPO, your RPO or your net retention rate. And I know you talked a lot about facing some mild headwinds from the pandemic this quarter, but it doesn't look like it's showing up in your results. So if you are seeing some headwinds from COVID, I guess, has your product portfolio improved or your competitive position improved that enables you to sort of offset those headwinds from COVID and maintain these growth rates?

Yes. Andy, what I would say is you're right that our current RPO, our total RPO both saw strong growth. And our net retention rate was 121%. So very strong. So we're obviously pleased with the results of the quarter and the strength in the quarter. We did see those mild pandemic headwinds. Frankly, they were not as strong as we thought they would be. And so I think what the movement of companies to decentralizing how they're working with the fact that companies are seeing with their customers, they're transitioning to more of an online relationship with those customers are both just big impacts for us, big tailwinds for us that are just accelerating some of the overall mega tailwinds we've talked about before, and that's really what's happening.

Yes. And Andy, just to add to that, if you think about the market tailwinds and what's really driving our business and has been for many quarters and will for many years to come, it's about these big changes, right, around the adoption of cloud and hybrid IT, this digital transformation and everyone now needs to prioritize security more and more. And these are not short-lived. These are not recent and these are not going away. So as the world continues to figure out how to work in COVID and then as the world starts to come out of that in a post-COVID world, this work environment of everyone working more remotely, doing more digital interaction, the importance of customer interactions on mobile apps, online, this is only going to continue to grow. And so if you think about the TAMs that we're in, I'm very pleased with the results. And as an entrepreneur, if you look at what we've done over the last 11, 12 years, we're very proud of the progress we've made. But these markets are tens of billions of dollars and they're continuing to grow very fast. So I think there's a huge opportunity ahead, and I think that we're fortunate that we can help a lot of customers be successful in these challenging times.

All right. Great. All right. We're going to try Matt Hedberg at RBC again.

I guess for Todd or Frederic, I wanted to ask about Advanced Server Access, which is an exciting TAM expansion opportunity. Obviously, started with server access but logically could grow into databases and container access. A little bit more there. And then, Bill, could you talk about linearity and perhaps how August is trending thus far?

Advanced Server Access, it's a newer product but the potential is massive. I mean when we think about identity for infrastructure, the broad category that Advanced Server Access plays in is one day down the line, it could be as important to our business as customer identity or workforce identity. It's smaller and much more nascent but it's that exciting. And the exciting thing about it is there's a big fundamental change going on in how not only does every organization have to build new apps and new websites but there's a fundamental shift in how they're built. They're built much more dynamically. They use cloud servers and cloud infrastructure to burst capacity and rapidly iterate. And we think Advanced Server Access, and more broadly speaking, infrastructure identity is the modern way to help manage and secure that environment, which if you about -- if you look at what's most important to companies, it's building these customer-facing digital transformation solutions and be able to do that at scale and build them securely in an agile way. You need good tooling and good infrastructure and good security to do that. So we think it's a very exciting future product area for us. And the Advanced Server Access product specifically is doing well. We're seeing -- it's doing well in terms of its bookings plan, but also as important, it's doing well in terms of adoption. So we're seeing that companies that are really doubling down on digital transformation during COVID are using it to help make them more effective in securing customer success. Anytime you're building a new product area, you have to have that customer success, that adoption, that robust usage. And that's what we're seeing, which is as exciting as anything else there.

Matt, I would say with linearity, we're really not seeing any difference. It's still very consistent with what we did see prior to the pandemic. So that stayed pretty constant. As far as August, what we're seeing in August is what we incorporated into the guidance we gave for Q3.

All right. Next question up, we have Gregg Moskowitz from Mizuho.

Good to see everybody. Congrats on a good quarter. So Todd, I recall you mentioning a couple of months back that hosting Oktane as a virtual event resulted in more than 5000 sales leads versus, I think, a few hundred last year. So presumably, your pipeline is far larger than it had been. But can you talk about your expectations for net new logo growth going forward? Also, do you expect to see any change in average sales cycles?

Pipeline is strong. We're investing a lot in pipeline just because the business is growing and we got to keep that pipeline growing. And Oktane20 Live was a great step there, as you mentioned. I think that there's one thing about generating pipeline. And there's actually been a lot of questions about if people were sheltered in place, would it impact positively pipeline because they had more time to take meetings and so forth, but would it actually translate into deals closed? And we're getting a little bit in Q2, but into Q3, we're really starting to see it will really be good proof points about how those deals are closing, and we're optimistic about that as well. So it's pretty positive in terms of the outlook for the business. That being said, we are being measured in terms there are unknowns like we've talked about in terms of like macroeconomic headwinds and other uncertainties in the world. So as optimistic as we are, we're also being prudent about planning the future as well. Was there a second part of the question? I forgot.

We moved him back to the attendee list here, but we can come back to that. Next up, we have Dan Church from Goldman.

This is Dan Church on for Heather Bellini. I just have a couple of quick one's for you. You touched on the billings headwinds in the quarter. Any additional commentary you can provide regarding duration in the quarter and what we should expect for the back half of the year? And then are you seeing any change or noticeable change in the environment in terms of pricing or discounting request from customers, particularly in the impacted verticals?

Yes. Dan, I would say on the billings, as we discussed, we did see those timing differences that really did impact billings duration, specifically in certain circumstances where we purposely did short-duration invoicing to help some customers that are in impacted industries. And then as we discussed, with the large amount of upsell that we have in the large enterprise customers, we did see an impactful on billings, doing sub billings, which is beneficial in the long term because obviously, we're adding to the contract over time. And as I said, we believe that most of these timing variances or these timing impacts that were negative headwinds in Q2 will balance out during the course of the year. And as I said, I think that the way to think about that is when you think about subscription revenue and the delta of that growth to billings, we think it will be about 5% to 6% in the second half of the year. And that's a smaller delta than the first half of the year, which is 11%. So as you can see, it kind of those impacts will balance out during the course of the year.

All right. Next up, Gray Powell from BTIG.

Okay. Great. Can you guys hear me okay?

Yes.

Okay. So I mean I know there's still a lot of uncertainty in the macro environment and you guys have called that out. But it does seem like things are turning pretty well. You had a good current RPO number. So I'm just curious, like how do you feel about the visibility that you have on demand today versus the March and April time frame?

Yes. I mean I think that as we said in the second quarter, we didn't see the impact from the pandemic, the headwind impact that we had anticipated. But we did see an impact. And as we think about the guidance we gave for the full year, we did incorporate that we think those impacts will continue through the balance of the year. And we're being prudent about that from the standpoint that we're still in the midst of this economic uncertainty. And I think that even though we're feeling very good about the business from the performance of the quarter, from the strong pipeline, from the fact that the engagement we're seeing with customers, but we did want to be prudent about the fact that there still is not complete visibility as we go through the rest of the year. So we did factor that into the guidance that we gave today.

That being said, Gray, I would just add on that when you talk to the field and you think in particular about enterprise and the name groups, they're seeing a lot of very good activity not only with existing customers. You see that in the dollar-based net retention that continues to remain very, very strong. And then obviously, a focus on customer's success will drive that because they're comfortable with us. They know how we work. They understand the products and platform. It's easy to buy more from an existing vendor that you're comfortable with. But also net new logos. And these conversations are more and more at various senior levels inside these companies. We're now talking to the largest companies in the world. And I think the opportunity is going to be very exciting in the times ahead. Some of that certainly will come in the second half of the year, but we're also preparing for what's going to happen into next year and beyond. And I think the future portends very well from that side.

Dave, Gregg Moskowitz chatted the second part of his question. He was saying that he was wondering about average sales cycle. Do we expect any changes in average sales cycles going forward? And I just wanted to say, we don't really model that in, in terms of our expectation. We see those being pretty consistent in the history, and we see that being consistent going forward as well. So hopefully, that answers your question there, Gregg.

All right. Next question is going to come from Alex Henderson at Needham.

I was hoping you could talk a little bit about the machine-to-machine identity market and to what extent the server access is able to do domain-domain communication between applications and to what extent you're tying into identity as, which is obviously the key to security in Kubernetes deployments.

Yes. I would say that most of our product suite and our orientation is definitely around person identity, but there's two parts of our product that are starting to do more with machine identity. And one of them is our product called API Access. And what that does is it basically -- it serves up an identity protocol called OAuth as a service and helps people bind their identities in Okta to anything they want to program to. So you see some use cases in that product around machine to machine. And then as you mentioned, Advanced Server Access is -- it kind of depends on when you buy machine to machine. But usually with Advanced Server Access, there's a person involved as well. The biggest investment we're making in machine identity is our platform service, which we unveiled at Oktane, called Okta Devices and what Okta Devices does is it basically embeds Okta inside of the client operating system and serves up key data points about that machine to the Okta policy engine so that customers can make easier, simpler policies for users and make them more secure. The killer use case there is the capability called Okta FastPass where you can log in just by identifying your biometric to the machine, whether it's Touch ID or Face ID, and you're in all your apps. And that combines that machine identity because the Okta Identity Cloud can verify that, that machine on the client is who -- it's your machine proven to be your machine, and it can just get you in without any other checks that you, as a user, have to do manually. Of course, it's checking under the scenes that machine identity, but it's a powerful capability. So we're pushing forward on all those fronts, and I think it's really paying off to the benefit of customers.

All right. Next up, we have Taz from Guggenheim.

Can you guys hear me okay?

Taz, you're faint. But we can make it out, I think.

A quick question on the new customer momentum. You had a strong retention rate and strong new customer momentum. Any more color on the new customer dynamics this quarter in terms of deal sizes, type of customers, type of products customers are buying? Any change from what you saw pre-COVID in the new customer momentum?

Yes, absolutely. Happy to talk about that. We added 550 customers this quarter, which is on par with what we've been doing in the past quarters. So a lot of similarity there, a lot of continuation of the good work we're doing, a lot of interest in the Okta Identity Cloud, obviously. And as we get into more and more use cases, we're going to be able to help these customers with more and more things. I think what's particularly exciting is the traction that we're getting in the enterprise, which we mentioned a little bit already on this call. But we're very happy with the 100 customers paying us over $1 million, and half of the 105 net new customers of $100,000 are net new logos to us. And that's just great. That shows the continued opportunity and momentum in the enterprise, which I expect will continue for a long time. And while these results are very good and we're very proud of the hard work the team has done, I think when you look at the opportunity in the enterprise and help these customers not only with the specific challenges and opportunities they have today, but as they think about, going forward, how their businesses are going to change and some of the dislocation that they're going to face, I think this is huge opportunities for us. And we're really excited to try and take advantage of that and help these folks be successful.

Yes. I'll just throw in there quickly, too, that the usage of the service is very high. We mentioned in the stats in the prepared remarks about app logins and multifactor. But that's true across the board at all products. So that means customers are having success. They're adopted. They're benefiting from the service, which in all the craziness going on in the world right now, that makes us feel very good.

All right. Next up, we have Shaul Eyal from Oppenheimer.

Congrats on the quarter first. Congrats on the virtual call, thumbs up, without a doubt. Todd or Freddy, what has been the initial reaction to the Workflow product over the course of the past few months? And also maybe just a word about the education vertical this quarter.

Yes, absolutely. The Workflow product is doing very well. As you mentioned, that was something that we GA-ed at the beginning of the year. It's progressing very, very well. Customers are finding a lot of great use cases with it. Right now, it's primarily focused on how we can integrate a lot of the HR systems and make sure that the integrations are flowing properly downstream to all the other applications. The typical use case there would be on the workforce side around the employee JML, the joiner, mover, leaver problem that people always have when you're onboarding a lot of folks, when they're changing roles or when they're leaving the company. So there's a lot of great progress there. And then on the customer side, obviously, now you can not only register and provision folks but also entitle them to the right products. So there's a lot of great usage there, and there's a huge opportunity for us in the times ahead as we broaden out the use cases around Workflow. So product is doing very well, and I think that there's a very bright future for that product as we dig into it. And then on the second side, from the EDU side, we are continuing to see a lot of strength in the business, obviously. As a lot of these, both, I would say, high school but also secondary universities are going online, they're having to figure out how they're going to interact not only with all the students but all the professors and everyone that's associated with that. I think we've given some examples in the past. I think Seton Hall was a good one that we talked about last quarter. And we've got more and more of these coming. So yes, that is certainly something that is going well for us. And I think it's something very important as we help the education system figure out how it's going to work in this increasingly digital and modern world.

All right. Next up, Pat Walravens from JMP.

Great. All right. Todd, so how do you make Okta the best place to work when everyone is working remotely?

It's something we've worked on a lot. When we have our strategy for each year, our strategic plan and it depends on the year but it has 5 or 6 high-level priorities. And when COVID-19 hit, we actually shifted around the strategy and made the number one method, we call it a method, it's basically the strategic focus for the year, it's called something called Thriving at Okta. So making sure that the employees were taken care of, were motivated, were happy, were able to work effectively. And culturally, we maintain that cohesive group. So it's something we've thought about a lot. And the strategy and approach is quite thorough and something that I've personally worked on a lot. And I would say that if I were to summarize it, the one thing is like the leadership team needs to be really present and open and transparent and over-communicate and because it's hard to make all the perfect decisions when it's such a dynamic environment. But we can make sure that we're very communicative and transparent and reasoning. And it makes all the employees feel very bought-in as a builder and owner of the company. And I think it's benefited us. And it's a big part of the reason why we've been able to execute over the last 6 months or so, but it's not something that you can like turn on like a switch during a crisis like COVID-19. It's something we've built up over many, many years, the openness and the leading by example and so forth. So lucky to have that foundation that we could capitalize on as we've gone through this year and we've been going through so far.

Okay. Next question is coming from Mandeep Singh from Bloomberg.

Excellent. So I was curious if you can talk about how much adoption you have seen from increased VPN use with something like Citrix. And also maybe characterize your win rates against Ping Identity.

Yes. Thanks, Mandeep. Certainly, the Okta service is one that can help with all sorts of existing infrastructure that you have. We integrate very well into a lot of the on-prem infrastructure. Our Okta Access Gateway product that allows people to take advantage of that has done very, very well, and it's helped us a lot in the large enterprise over the past quarters. And that's continued to accelerate. Frankly, we integrate well with VPNs, and if you have a VPN that you're happy with, we most likely got it pre-integrated into the Okta service. That being said, I think people are also taking advantage of this opportunity to leapfrog technology and think about how they're going to deprecate their VPNs because VPNs are really good when you're thinking about accessing on-premises infrastructure, servers, software, hardware or other things. But as people are moving more and more to the cloud, as they're moving a lot of these contact services to the public cloud and allowing a lot of authentication happening in the cloud, doesn't make that much sense to draw all the traffic back to your network just to push it back out to the public cloud. And in fact, we have a number of customers, including some large financial institutions, where they ultimately had to move from 10,000 or 20,000 employees working remotely on a VPN to instantly having 100,000 employees over a weekend going home and VPNs are just not standing up. So while we work fine with the existing VPN technologies, frankly, I think it's something that you're going to see more and more transitions off of as the Okta Identity Cloud really continues to help customers. On your second question regarding Ping Identity, look, there's a set of legacy software providers out there that have been providing services for a number of years. Frankly, Ping Identity is 1/3 of our size, growing half as fast. It's not something we really focus on. We do see them from time to time but a lot of times, it's a situation where people say, "Look, I have Ping running. Can you integrate to it? But over time, I'm going to replace it as I want to go modern." And as you see all the shift happening to -- both on the workforce and customer side to modern identity solutions, I think it's going to be a very clear differentiation in the times ahead.

All right. Our final question comes from Joshua Tilton at Berenberg.

Yes. I just wanted to touch on the competitive landscape a little bit. So if you think about Idaptive, they have numerous overlapping asset management products. They have single sign-on, MFA and life cycle management, and they're now under the CyberArk umbrella. So how does this change your competitive dynamic with the large enterprise access management market?

Yes, absolutely. I think what you're seeing is the importance of enterprise identity as a public cloud offering. And I think that what you're going to see is more and more folks are looking to the core of identity as being very central to what they're trying to do across their enterprises, right, again, on the workforce or customer side. I think that's a very good example of a legacy software provider with an on-premises solution trying to find a way into the modern version of enterprise identity and an enterprise identity cloud. We don't really see them much in the market. We know the Idaptive product suite has been around for some time, and I don't think it had that much traction. So we pay attention to all competitors, of course, but we're really focused on customer success. And customers are looking for, one, broad, integrated, modern identity solution that helps them not only with the problems they have today but the ones that are going to come in the future. And we think that we're very well positioned to help customers not only with core identity but a lot of the adjacencies that you might see coming down the path. And we don't think about it in terms of -- there's a privileged access management market. We think about it in terms of what are the customer problems. We can help them with products like Advanced Server Access. They're well integrated into the Okta service, which is something that people know and are comfortable with, and then we kind of move on to make them successful.

All right. Thanks, everyone. I hope you enjoyed the new format. And before you go, just a couple of quick announcements. We'll be attending the virtual Citi Tech Conference on September 9. And as we mentioned earlier, the Okta Showcase virtual event will be held on October 7, and you will receive more information on that in a few weeks. And so that's it for today. If you have any follow-up questions, you can e-mail us at investor@okta.com. Thanks.

Thanks, everyone.

Thank you.

Thank you.