The webcast discusses Octa's financial outlook, market positioning, and includes forward-looking statements. Key executives present, highlighting non-GAAP financial measures and providing a reconciliation to GAAP. The meeting emphasizes the company's performance and strategic direction for fiscal 2026.

The company experienced a robust start to FY 26, marked by significant growth in large customer segments, strong cash flow, and record profitability. Notable advancements include the strong contribution of new products like Octa Governance, Privilege Access, and Device Access, alongside innovations in protecting non-human identities and securing AI agents. The recent Showcase event highlighted these advancements, emphasizing the company's commitment to addressing evolving cyber threats through integrated identity security solutions.

Octa reports solid Q1 results with record operating profitability and cash flow, highlighting the success of its Go to Market team realignment and specializing sales forces. The company emphasizes its commitment to leading the fight against identity-based cyber attacks and showcases the effectiveness of its threat intelligence team. Octa remains confident in its long-term profitable growth, driven by its comprehensive identity security platform and strategic investments in the US public sector, despite potential near-term uncertainties.

The company has introduced additional conservatism into its Q1 guidance due to specialized go-to-market strategies and macroeconomic considerations, despite a strong quarter and optimistic future outlook.

Despite industry chatter about a challenging April, the company reported a strong Q1 with no observed softness, contradicting peers' experiences, indicating a solid start to the year.

The company has made a solid start in Q1 with a focus on go-to-market specialization for the O0 platform and Octa platform, leading to a strong performance and pipeline build. Key learnings include the effectiveness of specialization, the success in public sector and commercial businesses, and the importance of enablement and focus on individual platforms and buyers.

The company anticipates headwinds in seed expansion and renewal through the first half of FY26, with potential impacts from macroeconomic shifts. NRR trends are expected to remain within a certain range, but negative macro changes could affect this forecast.

Despite historical growth in CRP during worse macro conditions, guidance suggests a second consecutive quarterly decline, attributed to current RPO trends and slower growth rates.

The company introduced suite-based pricing for its OTA platform in Q1 2025, offering good, better, best configurations to encourage cross-selling and consolidation around identity management. Positive results were seen, with customers appreciating the broad array of products and the strategic benefits of consolidating with an independent, neutral provider. The largest deal in Q1 was for a workforce suite, highlighting the success of the new pricing model.

The discussion highlights the excitement around the development of AI capabilities and new internet communication protocols, particularly focusing on the integration of OAuth for authentication in the emerging AI-driven internet. The speaker emphasizes the early stage of these developments, the industry's enthusiasm, and the commitment to playing a significant role in shaping this new layer of software.

The discussed pricing model for Gen AI is usage-based, similar to the current Off Zero model. Future enhancements, such as integrating product capability into authentication handshakes for MCP servers, will have their pricing determined later in the year.

The discussion highlights the positive effects of increased specialization among reps on productivity and the growth algorithm, emphasizing improved focus on specific products and benefits for customers through more tailored service. Changes made in Q1 are seen as setting the stage for future success, regardless of the macroeconomic environment.

The company emphasizes the importance of focusing on platform capabilities, seller expertise, and technical account management to enhance product innovation and customer value. Recent developments include identity threat protection, identity security posture management, and the introduction of AuthorGen AI, aimed at accelerating team enablement and improving customer experience.

The company is experiencing positive trends in representative tenure and repetitions, indicating healthy growth. There's significant optimism regarding new logo pipeline, particularly in the workforce business, driven by a robust platform sell strategy. New products like governance, privilege access, and identity security posture management are generating substantial interest, offering both upsell opportunities and avenues to acquire new customers. The company boasts unmatched product offerings, including independent neutrality, a scalable cloud-based architecture, and a broad range of integrated identity security solutions, positioning it strongly in the market.

Despite Q1 growth exceeding expectations at 12%, the company forecasts 9% to 10% revenue growth, suggesting a potential slowdown to around 8% by Q4. Upside potential for the remainder of the year could be driven by specific products or factors yet to be detailed.

The speaker highlights the significant opportunity in large enterprise markets, emphasizing growth in million-dollar customers and the potential within the global 2000. They discuss the catalysts for change, including cloud migration, security focus, and the AI revolution, urging adoption of an independent neutral identity fabric. The improved product suite, maturity, scalability, and security, along with proven success with major organizations across various sectors, underscore the momentum and potential for further expansion.

The company is focusing on executing well in Q2, Q3, and Q4 before discussing FY 27. Incremental conservatism is being applied across the business, including new logos and NRR, with particular prudence around the federal vertical due to one-year contract mandates.

Despite a prudent macroeconomic outlook, the company maintains its investment levels, citing strong Q1 performance and promising Q2 pipelines, emphasizing specialization to enhance execution.

Despite experiencing a record quarter, the company sees a lower sequential increase in subscription revenue, attributed to factors including a shorter quarter length and changes in guidance philosophy reducing conservatism in financial projections.

Despite increasing macroeconomic concerns and cautious customer sentiments, the company experienced consistent performance in pipeline and sales throughout March and April, with no significant changes observed in May. The company acknowledges the potential for an echo chamber effect among businesses and maintains a prudent yet aggressively investing approach, noting that the quarter's performance is typically back-end loaded, with clearer indicators in June and July.

The customer identity sector, particularly A0, experienced a successful Q1 driven by large deals, with optimism for broad-based success throughout the year amid growing interest in gen AI space.

As AI adoption moves from pilots to production, particularly among leading-edge enterprises, the challenge of securing non-human identities becomes more pronounced. Identity security solutions are highlighted as crucial for managing the increased risks associated with agentic workflows and systems, emphasizing the need for robust access management and privilege solutions.

The company experienced a strong quarter with improved new business, upsell, and cross-sell activities, particularly noting success in new product bookings and execution by the team.

Discussion focuses on the decline of CRP in Q2, with expectations for growth in Q3 and Q4, addressing concerns over persistent declines in new bookings and emphasizing the coverage ratio metric.

The discussion highlights the tight correlation between subscription revenue growth and CRP growth, emphasizing a shift towards examining coverage ratios for accurate financial forecasting instead of relying solely on percentage growth.

The company discusses the four consecutive quarters of NRR decline, attributing it to headwinds from upselling older customer cohorts and potential macroeconomic deterioration. They anticipate stabilization soon but warn of possible impacts from significant macroeconomic changes.

The discussion highlights a growing preference for purchasing customer identity solutions over building in-house, driven by advancements in AI and the emergence of agent-based applications. The trend towards 'buy versus build' is attributed to the improved quality, reliability, and scalability of available solutions, making them increasingly attractive to businesses as they navigate the evolving digital landscape.

The speaker discusses Okta's current lead in the non-human identity market due to its comprehensive solution and trusted brand. They emphasize the need for continuous innovation and execution to maintain this position against competitors like CyberArk and SailPoint, especially as the market for agents working on behalf of entities grows.

The discussion highlights the prudence in adjusting strategies for the US public sector amidst uncertainty and tariffs, emphasizing the focus on efficiency and justifiable investments. Successes in the public sector, including significant deals and strategic partnerships, are noted, with optimism for continued growth despite challenges.