Good day, welcome to the Okta Third Quarter Fiscal 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Dave Gennarelli, Head of Investor Relations at Okta. Please go ahead, sir.

Good afternoon and thank you for joining us on today's conference call to discuss the financial results of Okta's third quarter of fiscal 2020. With me on today's call are Todd McKinnon, Okta's Co-Founder and Chief Executive Officer; Bill Losch, the company's Chief Financial Officer; and Frederic Kerrest the company's Co-Founder and Chief Operating Officer. Today's call 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-Q. In addition, during today's call, 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 and reconciliation between GAAP and non-GAAP financial measures and discussion of the limitations of using non-GAAP measures versus their closest GAAP equivalents is available on our earnings release. You can also find more detailed information and our supplemental financial materials, which includes trended financial statements and key metrics posted on our Investor Relations website. On today's call, 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 call over to Todd McKinnon. Todd?

Thanks, Dave. And thanks everyone for joining us today. Our third quarter results reflect another strong quarter of execution and financial performance. Total revenue grew 45%, subscription revenue grew 48%, and remaining performance obligations or RPO grew 68% to over $1 billion. We added 400 new customers in the quarter, bringing our total customer count to over 7,400. We also continue to broaden our base of enterprise customers as demonstrated by the addition of 103 customers with annual contract value greater than $100,000 and once again, over half of these additions were from new customers. The total number of 100,000 plus customers is now over 1,300 and increased over 40% year-over-year and over 90% since the beginning of last fiscal year. That's great progress as we continue to focus on broadening our enterprise business, with the investments we're making in our customer-facing teams and deepening our relationships with global systems integrators. For a while now, we've talked about the three massive secular market tailwinds that help drive our business. First, organizations are moving to the cloud. Second, they are going through a digital transformation; and the third market tailwind is that businesses are embracing Zero Trust security environments. We're still in the very early stages of each of these trends. So, they are going to be around for many years to come. Importantly, Okta is in a unique position to capitalize on these trends because of our ability to address the broadest set of use cases. Across complex IT environments. One of my favorite parts of these earnings calls is being able to share customer stores because they help drive home how our cloud-based solutions, for identity and access management are being adopted by some of the biggest and most innovative organizations in the world. The cloud has forced every…

Thanks, Todd. And thanks again to everyone for joining us. Before I get started on the results, I want to call out that we developed a new earnings presentation that is available on our IR website and contains our detailed financial results. 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 leaving more time for Q&A. As Todd mentioned, we maintain the strong momentum we built in the first half of the year and experience strength across the board, including key metrics such as revenue, RPO billings and free cash flow. Total revenues increased 45%, driven by a 48% increase in subscription revenue. Subscription revenue represents 94% of our total revenue. Total RPO or backlog, which for us is contracted subscription revenue, both billed and unbilled that is not yet been recognized through 68% to just over $1 billion. This marks a milestone, as total RPO cross the $1 billion mark for the first time. The exceptional growth in total RPO reflects the success we've been experiencing with large enterprise customers, but the contracts tend to be much larger in value and longer in length. As we continue to see success with winning the world's largest organizations, we expect the average contract size and term length to continue to trend upwards over time. Current RPO, which represents subscription revenue, we expect to recognize over the next 12 months also experienced strong growth of 52%. As you know, RPO should be viewed as an additional metric to gauge our performance in the quarter. Year-over-year growth in current RPO is a more meaningful metric when viewed along with subscription revenue and billings growth. Total calculated billings grew 42%, and current calculated billings increased…

Thank you. [Operator Instructions] We'll take our first question from Melissa Franchi with Morgan Stanley. Please go ahead.

Hi guys. This is Hamza Fodderwala in for Melissa Franchi. Thanks for taking my question. Really nice results. I just wanted to dig in on the international revenue growth, it might be a question for Bill, it was up 37% in Q3, that was lower from 45% in Q2 and 60% Q1, so I'm just wondering, is there anything that you're seeing from a macro standpoint or longer sales cycles that might be driving the slowdown in growth? And I just have one more follow.

Hi, Hamza. Thanks for the question and thanks for the comments. The demand environment is very, very healthy in every segment, every geography; and it's really the – we talked about in a bunch, but it's these secular massive trends of digital transformation, Cloud, and every company needed to be secure. So, I think that's very clear in the results. Particularly strong was – from the prepared comments is pretty clear, was the enterprise segment, and we're continuing to invest to take advantage of these trends across the board. I think, Bill probably has some follow-ups on the international piece, specifically though.

Yes, I would say that to Todd’s point the trends that we're seeing here, we're certainly seeing outside of the U.S. Internationally, we think that there is big out long-term opportunities there. We're continuing to invest there. And we feel like the demand for our products is very strong outside the U.S. So, we're feeling very good about that.

Got it. And then, just on the current RPO versus billings growth. So, current RPO was up 52%. If we look at it from a sort of a booking’s perspective, just taking the revenue plus change in sequential change in current RPO, I'm getting to about 18% growth. One is that a metric that you guys look at? And two, is there any reason for the big variance between the billings growth that you're seeing versus the current RPO bookings growth because it seems to be – the variance seems to be widening, and just wondering if there is any sort of duration impact there, any changes in linearity that we should be mindful of going into Q4 and 2021?

Yes, I mean, I think if you look at both billings and RPO, so current RPO growth as we talked about on the call is very strong 52% year-over-year. The billings growth also very strong at 41% year-over-year. I think what you're seeing is, current RPO we believe is a strong metric that you should look in conjunction with billings and subscription revenue, but the reason current RPO we think gives a – probably a clearer picture, let's say, of the strength of the business is the fact that with billings you can have situations like invoice duration, invoice timing dynamics, the current IPO really does eliminate, and so that's why we’ve introduced that as a pretty strong metric and both of them are growing very, very well. You know, RPO for us, we've now reported seven quarters of it, so it's fairly early you also with RPO you're going to have some dynamics as far as renewals and timing of renewals, but we think looking at billings, and RPO, especially current RPO together is the best way to evaluate the strength of the business, which as we said, based on our results in Q3 and prior quarters has been very strong.

Okay, Thank you very much guys.

And we'll take our next question from Heather Bellini with Goldman Sachs. Please go ahead.

Great, thank you. Hi Todd, I had a question for you, just following up on your comments about Access Gateway and I was just, obviously, it remains this huge priority to replace the legacy systems, but I'm wondering if you have a sense is, to what the typical life cycle of and access management deployment might be like where are we in the aging of the installed base that you're going to replace and just wondering if there is, you know a tipping point coming in terms of end of life for some of the legacy products or anything like that that could help drive the migration to more of a modern offering even faster than what you're seeing? Thanks.

Yes, I think that there is a couple of things to consider there. One is, just the speed and flexibility that's required by people wanting to do new digital transformation initiatives and people wanting to adopt cloud tools in general. And that's really putting pressure on these legacy tools that are static, a lot of times companies have these big deployments that people that know how to work, know how to upgrade don’t even work there anymore. And they go to a big SI and to even change it a little bit is a huge bill and a lot of times just on that, something like Okta is justified on ROI basis, that's one big trend. The other big trend is, specific things that are going on the industry. I mean, with – like with computer associates in the transaction with Broadcom there, they've shifted away from that in terms of a go-forward perspective even Oracle is investing less in their identity management solution and even Microsoft has a legacy identity management set of products that they've kind of abandoned because they realize like everyone else that cloud is the way to do. I did any management going forward. So, vendor-specific is helping us as well. Where we are overall in the lifecycle. It's hard for me to say. All I know is that, in our business, we’re seeing every organization, especially large enterprises, they have, of course, Myriad technologies and a big part of it is on premise and we're making sure our products are built to make those as easy to use and with as much agility of these cloud products and Okta Access Gateway is a big part of that.

Great, thank you very much. And Bill, yes, I really like the slide deck that you put out. So, thanks for that, and thanks Dave.

Yes, thank you, Heather.

We'll take our next question from Rob Owens from Piper Jaffray. Please go ahead.

Yes, hi, good afternoon guys. I wanted to touch on just the competitive landscape and a lot of the competitive rhetoric we’re hearing from some of the large players that are talking about identity being a focus for them even though they’ve been in the category for some time. So, as you move up market, which is evidenced by the numbers today, are you seeing Microsoft more or are you seeing them more aggressive at this point, and anything you can do to add color would be helpful? Thanks.

It's been very consistent. I mean, I think you see companies that are smaller than us that are either newer companies or companies that have been around longer just never got to scale and we have a very, very clear differentiation against them as we do all the competitors. It's either scale breadth amount of resources, we can put on the problem. And then you have companies like Microsoft, which obviously have a big platform and a big, a wide array of technologies. And the differentiation there, some of the legacy platform companies like an Oracle don't have a good cloud story, but some of it or all of the platform companies the differentiation for us is that we're very focused on allowing customers choice and giving them the flexibility to deploy tools and do access management, everything from their customer websites, things they've built themselves, products and technologies from any vendor and it really matters and it really resonates with the mark – with the market. You can see, for example, everyone wants to move to this security model, the Zero Trust security model, which basically means, Zero Trust basically means don't trust anything because it's on a particular network. Make sure you know who the user is. I mean to do that; a couple of things are very important. First of all, as you have to have an identity company that is at the center of it. If you want to verify and log every user in, you have to know who the users are and what they can access, and so identities at the core of that. And secondly, it's implicitly multi-platform because even the biggest platform companies can't give you every device, every network, every firewall, every piece of developer tooling, every piece of infrastructure, and on and on. So, it's implicitly a best of breed hybrid world. And those two things mean that we're clearly differentiated from the big platform companies, which I think especially large enterprise, right, because every large enterprise has probably at least a few things from every large platform company, and we're able to have this success despite those companies in our perspective. Finally, realizing this is important and making noise about it will not be able to deliver the results we can deliver.

Great. Appreciate the color. And then second for Bill, is there anything that informs your fourth quarter guidance that maybe not as is apparent to us. And if I look at the sequential change, it kind of goes back to a level, when you're a one-sixth the size that you were, you saw 2.3 million sequentially. So, is there a renewal. That's not happening? Was there any pull forward, I guess, in the third quarter or is this conservatism on your part? Thanks.

Yes, Rob. I think that we’re obviously pleased with the performance in third quarter and based on that we felt very good about raising our guidance as we went into the fourth quarter, and for the full fiscal year 2020, we’re raising our guidance $12 million versus what we forecasted back in August and full year is at 40% year-over-year growth, which is very strong. I do think the one thing to note is, because it is the fourth quarter, the fourth quarter tends to be a little bit back-end loaded as far as bookings. So, the amount of revenue we would derive in quarter – are derived from in-quarter bookings is not going to be as much as you might normally see, so that's really what you're seeing there, but demand is strong, we're feeling very good about our product demand. And so, there’s no other things I would point out.

Thank you.

We'll take our next question from Walter Pritchard from Citi. Please go ahead.

Thanks. I guess, question for Todd to start out. Just on next year, as you think about the drivers, specifically with enterprise becoming a bigger part of the business, how do you think about things like Access Gateway and just the sales cycles and enterprise being swing factors on the guide next year? And if you compare to sort of how you guided last year going into the year and this year, how much, how much sort of an envelope is around those numbers, given some of the new drivers this year?

I think enterprises is, it's very important to us and it's a big driver of our business overall. And I think that we're very, very optimistic about it, but I think the reality is that the success there is still fairly early considering the size of that market. Even when you look at our ads to customers over $100,000 in recurring revenue, you know what, 4 or 5 years ago would have been significant deals for us sizes for us at Okta. Now, these are big deals relative to what we did in the past, but they're actually very small considering the overall problems we can solve for these customers. So, we're very excited about the enterprise, but we think the upside there is massive, and that's why we're really focused on from everything from how we build out the go to market? How we continue to double down on customer success? How we build the products to address those use cases? How we make sure we do what we've always been incredibly strong out, which is building this extensible platform and this platform that connect to anything in their environment, whether it's on-premise or cloud and that's why we were oriented to the way we are.

And Walter, this is Frederic. I would just add a couple of things. The first one is, when we go into these large organizations, I think one thing that the executives at our prospects really appreciated, we're not walking in with a forklift upgrade story telling them that they're not going to see any value for a long time. We're walking in with a land and expand story where we're going to earn their business and their trust and deliver results and then grow that opportunity over time for ourselves. So, that's one thing that I think plays out in our favor. When you talk about swing and kind of our resiliency to having a lot of those big swing challenges that large enterprise companies have traditionally have on-premises. The second thing is, I would just add to Heather's question earlier and to your commentary on Okta Access Gateway, from my perspective in talking with large organizations and CIOs at Fortune 500 companies, it's a great opportunity for us to unlock more value and more potential for Okta inside these organizations. We've always been very good at the Cloud migration. We've always been very, very good at the digital transformation when their trying to create new websites or new applications, but now there are really seeing the potential for us to be the end-to-end identity platform for them to standardize on across the workforce, both in the Cloud and on-premises, and I think that hybrid IT story that OAG unlocks, you're going to see a lot of value and power out of that in the quarters ahead.

Great, thank you.

And, we'll take our next question from Andrew Nowinski with DA Davidson. Please go ahead.

That's great, thank you very much and congrats on a nice quarter. First question, maybe for Todd kind of piggybacking on the last question, if you look at where you are now versus a year ago in terms of the key drivers of demand, you have more integrations, you have a much larger installed base, and you have many new use cases that you support, so it's – and it seems that your current RPO growth is reflective of those trends. So, I'm just wondering if you could give us your views and how you think the company's position now versus where you were a year ago?

I think I would say the biggest change is there is lots, there’s been a lot of changes and a lot of positive evolution. I think, I would say that the headline would be the recognition in the market that identity is central to all these things. If you look at how people have traditionally thought about technology, it was, it was firewall centric or it was maybe platform centric, but it's different now. People are seeing that with these trends, where they have to be more faster, more flexible, build these digital transformation, projects and initiatives, they have to keep it all secure in a way that also allows seamless access for any – from anywhere. What is different now is that they see identity has been central to those trends, which is the most positive change or positive evolution for Okta in last year. That's kind of – that's kind of in the market side. On the product side, I think we've made a ton of progress, making the platform more scalable. We talked about dynamic scale in our success there in terms of that capability and wrapping that into a product offering. We’ve a released a capability called Okta Hooks, which is really an extensibility play. We talked about identity engine, which is really serving up Okta as a set of componentized building blocks that helps customers use it in a much more flexible way. We of course have the integration catalog that continues to be far and away the most, the Premier integration catalog in terms of breadth and depth in the industry. It's really unrivaled, and we've made progress along those dimensions. So, that's important to addressing this market that's coming to the realization that, not a lot of these macro, these massive secular trends, but also identity being central to those.

Great, thank you. And then maybe just a follow-up for Bill. I certainly appreciate the outlook for fiscal 2021, but when we look at your current RPO has been growing in the 50% range all year your billings have been in the 40% to 50% range all year, given the growth of those metrics. I guess, why would you only expect 31.5% growth in revenue for fiscal 2021?

Well, Andy, as I said in my prepared remarks, we're still early in our financial planning and the other comment I would make is, we're still yet to close. Q4, which is our seasonally strongest quarter. So, this really is a preliminary view for next year. We are very confident in our positioning, and but we remain measured in our approach to guidance because you're right, as evidenced by the strong RPO, strong business, we are seeing strong momentum with our enterprise customers. But those engagements typically have longer sales cycles. So, that does result in less near-term visibility. So, I think we're just being prudent this early in our financial planning process.

That’s great. Keep us the good work, guys.

Thank you.

We'll take our next question from Jonathan Ho with William Blair. Please go ahead.

Hi, good afternoon. I just wanted to, maybe start with some of the newer use cases around maybe contextual access, zero trust and maybe can you give us a sense of how this has may be impacted deal sizes, number of products, and may be are you seeing any customers coalesce around certain product family?

I think the contextual access and, you know, zero trust it's, I think that’s doing a couple of things for us. One is it's helping drive new business because it increases the urgency to adopt a modern Access Management Framework, especially if you have a legacy Access Management Framework, whether it's firewall based or whether it's active, you know, on premise Active Directory, Active Directory based when you realize that you're, you know, that's not going to get you where you need to be in terms of a flexible access model, you have to get a modern solution. So, something Okta, which has dynamic capabilities around adaptive multi-factor authentication, contextual access management, and not to mention the – all of the security insight capabilities we talked about, at our showcase event. It really raises the urgency and customers to buy a modern solution, but also helps us on the upsell side where, you know, we can upsell our adaptive multi factor authentication product, we can upsell adaptive SSL, which includes the security inside capabilities. So, help us on both dimensions. Another big part of that too is, it still, zero trust is very much an integration story. You don't want zero trust just for one application or one scenario, you want it for everything. And if you want to support every device and every network and every, you know, partners and different scenario – different business applications that need to be accessed in various ways, you have to have integration to everything. And that's, you know, we come back to that foundation for us, which is broad breadth and depth of the integration catalogue.

Got it. And then just as a quick follow up. You talked a little bit about the scale bursting capabilities and specifically does this put you ahead of the competition or open up new use cases, just understand the opportunity around that, as you go forward? Thank you.

Yes, dynamic scale, which is the capability, which if you basically you buy dynamic scale and you get up to 500,000 authentications per minute, which puts us ahead of all the competition in terms of the capability that that supports even the biggest [burstiest] websites in the world. We don't know their exact numbers. They don't disclose their exact numbers, but we gave the example of Amazon Prime in the prepared comments, but this is what our customers need. And given our Cloud native approach, we built Okta, as a cloud service from the day we started writing code. It was possible for us to add this capability and package it up and something customers can take advantage very rapidly, right? It doesn't require, like, if you're running Oracle Identity, it would require, you know, you would ask a big SI to come in and spend a bunch of millions of dollars in a year to get this going. And we were able to add it and offer to our customers relatively rapidly.

And Jonathan, I would just add that if you look, we put out a press releases an example today of athenahealth, an existing customer of ours. They've been using our customer ID and access management capability for some time, and they purchased dynamic scale as a leading provider in healthcare IT services. They had to think about how they support tens of millions of users. And that's both all their doctors, all their providers, and millions of patients that access these portals. And obviously, they want to make sure that when you're trying to access that kind of information, something you can always do, you can do it reliably, you can do it scalablely in a secure manner. And I think that's a very good example of brand-new product innovation being introduced and immediately adopted by customers at scale.

We will take our next question from Jonathan Ruykhaer with Baird. Please go ahead.

Yes, hi, good afternoon. I'm curious if you could just talk a little bit about traction with our size, just the impact that channels having on the business, what gives you confidence that the investments you've made there can support enduring opportunity?

Yes, thanks for the question. We're seeing the investments that we've been making over the years in the partnered channel pay off. Certainly, in terms of global reach and scale. We think that's going to be a big opportunity and then specifically when it comes to the global system integrators. All of the big ones out there that work on these transformative IT projects Accenture, Deloitte PWC they're all getting more and more of their consultants certified and trained and we're seeing them do more and more critical deployments for us. So, we think that's a big opportunity. It's also very early days. As you can imagine, as we're just getting into the world's largest organizations just aren't to get them up and running and successful on their first deployments of part of the Okta Identity Cloud. There is a lot more opportunity ahead. And I think that's something that the global system integrators see and certainly are coming and more and more interested in what we're doing. I would also add that new products like Okta Access Gateway are huge because they allow us to really unlock that potential of the hybrid IT ecosystem, which in a large organization, they might be looking to do more cloud internally, they might be looking at digital transformation, but the reality of it is, they've made investments in legacy on-premises infrastructure for decades and they need to take advantage of those investments. So, with Okta Access Gateway it really allows us to tie in the end-to-end story from the cloud, all the way back to the deepest on-premises legacy infrastructure and those kinds of deployments and integrations are obviously something that is very – that are very appealing to the global system integrators.

And we'll take our next question from Taz Koujalgi with Guggenheim Partners. Please go ahead.

Hi guys, thanks for taking my question. I had a question about the new customer adds, the new customer adds I think were flat year-over-year last quarter, and I think for this quarter, they've gone down year-over-year, which is I think the first time ever that we've seen that, anything to call out there and what you guys expecting in terms of new customer adds going forward?

Yes, thanks for the question. We're very excited about the results that we've shown. I think for the past number of quarters, the net customer adds have always been between 350 – 500 and we’re right there in the middle again at 400. I would point out a few things though. First of all, if you look at the $100,000 and above customers. If you look at the ACV growth year-over-year. It's at about 50%, compared to last year, which is great. We added 103 of those larger customers, which is the second-best number that we've had in the quarter all-time. And over 50% of those plus 103 net new customers are new logos to us, which is really exciting. I would also point to the Q3, a top 25 contracts that we had the TCV for those was all over $1 million, which is the first time ever, and obviously you see the results in the total RPO of 68% year-over-year growth. So, what you're really seeing is, we're getting into larger organizations, we're doing larger engagements, larger purchases, and it's really the quality of the customers is really going up and we're very, very excited about that and very bullish on that that the investments we're making in the world's largest organizations are really starting to bear fruit, and we're very bullish on that in the quarters ahead.

And we'll take our next question is from Keith Bachman with BMO. Please go ahead.

Hi, thank you very much. I wanted to ask two questions, if I could? The follow-up from a previous question, as we think about next year, I wanted to see if you could specifically comment on net retention rate? The net retention rate has been ticking down over the last number of quarters, but if you think about Access Gateway, in some of the other products that you mentioned, do you think that stabilizes?

Yes, I mean I think, as we talked about the net retention rate, the point drop that we saw this quarter is really because we're doing more and more larger initial deals with our large enterprise customers, which is evident by the RPO growth of 68% and landing bigger and longer-term deals like that are really healthy indicators for the business and it really is a testament to the strategic value that Okta plays for these large enterprises. So, we do think there’s significant opportunity for expansion in those accounts over time. I think as you look at it, we have said before, we think there'll be or may be fluctuations a bit up or down maybe a receipt a bit further we've talked about a range of 115% to 120%. We still think that's a reasonable range to be thinking about for net retention rate.

We will take our next question from Nick Yako with Cowen and Company. Please go ahead.

Great, thanks for taking my questions. I wanted to ask about you're standing in the developer community and if you've seen any noticeable change in terms of developer’s willingness to work with the company since launching the identity engine and Hooks earlier this year and then maybe how important is buying from that community to the go-forward strategy?

It's important, it's something we're investing a lot in. And it's, if you think about a typical customer identity management project, there is, of course there is a lot of stake. These are such strategic projects for these companies. There's lots of stakeholders around the company that are interested, from the technology team, the marketing team, the customer service team, and of course the developers. Right. And we've been very, very strong traditionally, with the technology team or the IT team or the security team, but in that equation, especially on the customer identity side, the developers are very important. So, part of it is – part of it is just making sure you have the – clearly communicate what your product does from a documentation perspective and not only just documenting the basic functionality, but documenting design patterns and ideas and how to use it and what are the best practices and so forth and we're seeing our investments there over the last few years pay off in terms of engagement on our developer.okta.com, and just that overall traffic and the energy around that community. And then I would say that the other big part of it is that the product, whether it's how the APIs work and how the core platform is composable and how you can use parts of it and choose exactly what you need and what's relevant and order it and set it up in the exact way you need it and that's about that's identity engine, right. And I think identity engine is critical, but it's also relatively early. It's in beta right now, it's being used and we're getting great feedback from the beta customers and we're learning as we suspected that it's incredibly, incredibly valuable to these companies. It makes things that were not possible before possible at the Okta platform, which is exactly why we invested in it and you'll see us continue to invest in that and roll that capability out to broader and broader audiences in the – in the quarters ahead.

We'll take our next question from Pat Walravens with JMP Securities. Please go ahead.

This is [Joe Young] for Pat. Congrats on the quarter, and thank you for taking my question. I was just wondering, if you could provide an update on your target model for FY 2024? Thank you.

So, as we talked about, we're early in our fiscal year 2021 planning for next year. We gave some preliminary guidance on revenues, which we thought would be helpful for you as you start to – update your models. I think on profitability, again, we're going through that planning process, and so, it's still early. That being said, I mean I think that you should think about the fact that as we've said before, we've demonstrated strong leverage in the model. We are in the early stages of growing and what we think are very large opportunities in two really big markets both workforce and customer identity, and so we're going to invest and continue to invest in go-to-market and innovation to optimize growth, but these investments are consistent with our model and we are still feeling that we're on track for the model that we shared back in Analyst Day last October or October last year.

And we’ll take our next question from Sterling Auty with JPMorgan. Please go ahead.

Hi guys, this is [Sahil] on for Sterling. Thank you for taking my questions. So, how is the traction in advanced server access into the existing customer base, and how should we see the new infrastructure identity opportunity ramp? Thank you.

Advanced server access is – it’s early, it just became or it was generally available back at Oktane back in April, and we're seeing solid uptake on customers that are – want to take their – what traditionally Okta has done and apply it to their servers in their infrastructure, so single sign on to apps now can also be single sign-on to servers and access control for servers, which is very powerful, especially if you think about companies that are trying to become technology companies and trying to build more websites to launch new products or enhance existing products and largely, they're doing that with cloud and that cloud environments. They're very dynamic environment and that have thousands of servers that burst up and down and they're not the traditional IT environments that are more static and you put up six servers in a rack and kind of, that's the access management challenge. These are – you might have ten servers today and a thousand tomorrow and the access management challenges on that become even more of a pressing issue in terms of security. So, the success there is, it's still relatively early, like I said, it just launched GA back in April, but we're excited about that being a big driver for us going forward.

[Operator Instructions] We will hear next from Roger Boyd with Needham & Company. Please go ahead.

Great, thank you. I'm on for Alex Henderson. Wonder if you can get your thoughts on hiring environment. Nice to see head count growth accelerate to 44%, but is this where you expected it to be, or would you like to down a little bit more?

Yes. The 44% as we talked about was an acceleration of our head count growth over the first half of the year, which is also very strong at 40% growth. And so, we're on target for our hiring. We feel really good about our ability to hire, develop, and retain talent. So, we're feeling like we're on target in all the areas we're hiring across the Board and are pretty pleased with our success as far as bringing folks and retaining folks in the company.

This concludes today's question-and-answer session. I would like to turn the call back over to Mr. Gennarelli for any additional or closing remarks.

Thanks, operator. We'll be hosting a number of bus tours over the next several weeks, as well as attending the Needham Growth Conference in New York on January 15. So, we hope to see you at one of those events. And thank you for your time this afternoon.

Once again that concludes today's conference. Thank you for your participation. You may now disconnect your phone lines.