Ladies and gentlemen, thank you for joining today to discuss Okta's 1st Quarter 2018 Financial Results. Today's conference is being recorded. I'd like to turn the conference over to Catherine Buan, Vice President of Investor Relations. Ms. Buan, please go ahead.
Good afternoon, and thank you for joining us on today's call for call to discuss Okta's fiscal first quarter 2018 financial results. With me on today's call are Todd Mckinnon, Okta's Co Founder and Chief Executive Officer, Bill Lache, the company's Chief Financial Officer and Frederick Crest, the company's Co Founder and Chief Operating Officer. Statements made on this call 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 uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements.
You should not rely upon forward looking statements as predictions of future events. Forward looking statements represent our management's beliefs and assumptions only as of the date such as statements are made. 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. There are a number of limitations related to the use of these non GAAP financial measures, versus their closest GAAP equivalents.
For example, other companies may calculate non GAAP financial measures differently or may use other measures to evaluate their performance. All of which could reduce the usefulness of our non GAAP financial measures as tools for comparison. A reconciliation between Further information on these and other factors that could affect the company's financial results is included in filings we make with the SEC, from time to time, including the section titled Risk Factors in the company's Form S-one previously filed with the SEC. Now, I'd like to turn the call over to Todd McKinnon. Todd?
Thanks, Catherine, and thanks, everyone, for joining our first earnings call. I'd like to recognize the employees at Okta, who have been instrumental to our growth and success. We are very proud of how far we've come since Freddie and I started Okta back in 2009. And look forward to building on our I'll begin with a quick overview of our performance in the quarter and then provide some background on our business for those new to the Okta story. And finally, I'll touch on some of the exciting developments and customer wins we have in the quarter before turning it over to Bill, who will walk through the financials in detail.
We had a very successful start to the year and achieved record quarterly revenue in billings, while meaningfully improving operating margins. Total revenue grew 67% year over year to a record $53,000,000, while subscription revenue grew 75% year over year, of $48,000,000. Calculated billings grew 75 percent year over year to $60,000,000. And what's even more notable is that our non GAAP operating margin improved 24 percentage points year over year, while we maintained very strong top line growth. As we continue plays in a constantly evolving cloud centric world.
Today, you cannot avoid the buzzwords digital transformation. But it's more than just marketing jargon. Organizations of all sizes around the world are rapidly adopting cloud applications and mobile technologies to move their companies forward. This often results in increasing complexity, sprawl and vulnerability within their IT infrastructures while negatively impacting their end user experience. These organizations needed secure way to manage the evolving interactions between their businesses and their employees, partners, suppliers and customers.
At Okta, we recognized from the start that identity is the foundation for connections between people and technology. Our products allow users to connect to any The Okta Identity Cloud enables millions of users every business data securely access all the applications and data they need to do their most important work. We have 6 individual products that operate as a unified platform and together make up the Okta Identity Cloud. First, is Okta single sign on, which enables users to access all of their applications from any device with a single set of credentials. Next is Okta Universal Directory, which provides a centralized cloud based flexible store to Okta adaptive multi factor authentication provides an additional layer of security for data and applications, while using modern authentication factors such as text, messaging and push notifications.
Our 4th product Okta lifecycle management is a provisioning product that automates IT processes and insurer's user accounts are created and deactivated at the appropriate times. Okta Mobility Management, our 5th product, uses identity to automate mobile device administration and provisioning across phones, tablets, and laptops, providing seamless and secure mobile access to any application without compromising security. And lastly, our newest product Okta API Access Management enables organizations to connect custom web and mobile experiences to cloud or on premise services through APIs. Customers use our platform for a variety of use cases, both internally for their employees and contractors, as well as externally to connect their customers, partners and suppliers. Identity management has historically focused on securing and authenticating internal users, but as organizations become more distributed and customer engagement moves to online and mobile channels, we recognize that the use cases for internal and external identity solutions were aligning.
For both uses, our approach to identity eliminates duplicative sprawling credentials and disparate authentication policies allowing our customers to simplify and scale their IT infrastructures more efficiently as the number of users, devices, clouds and other technologies in their ecosystem grows. We believe the Okta Identity Cloud has a number of attributes that set it apart from other solutions in the market. First, PureCloud. Our superior cloud architecture scales to deployments of any size and is designed seamlessly integrate with and manage cloud, hybrid, on premise and mobile technologies and is built with a core focus on reliability and security. 2nd, neutrality.
We offer leading technology that provides connectivity in a way that is independent, irrespective application, user, location or connected device. We believe organization should have the flexibility to use any technology they choose and their identity should not be tied to any one vendor who provides both applications and identity solutions third, ecosystem. Our ecosystem of integrations, which we call the Okta application network, provides immediate time to value with over 5000 integrations with cloud, mobile and web applications. We are also able to benefit from a number of network effects inherent to our platform, as the more people, applications, devices and organizations we connect, the more intelligence we gather and the deeper value we can deliver to our customers. Lastly, superior user experience offering an elegant and intuitive interface despite highest standards of insecurity, and we have achieved several significant industry certifications for cloud security.
On that note, we were very pleased to announce in the quarter that we achieved FedRAMP certification, a gold standard in security certification, which currently allows U. S. Government agencies to realize the benefits of the Okta identity cloud and simplify the adoption of Okta's identity mobility and security solutions at scale. This certification clears the path for us to pursue agency market, though we are still in the very early stages of capitalizing on this opportunity. These differentiators have contributed to Gartner continuously recognizing Okta as a leader in the industry.
In fact, Okta has been the clear execution leader in every single Gartner Magic Quadrant we've ever participated in. Historically, that has been in the identity as a service, our IdaaS Magic Quadrant, where we were a leader every single year, Going forward, Gartner is expected to publish a new Magic Quadrant that covers both cloud and on premise products, and we expect to Our dedication to innovation and customer success has enabled us to grow to serve a customer base of over 3350 organizations of all sizes and verticals. Saw strong customer momentum in $100,000 in annual contract value, a number that has grown 64% year over year. The enthusiasm our customers have for our products continues to grow as demonstrated by our consistently high dollar based retention rate, which was 123% in the first quarter. I'd like to highlight a few notable customer wins from the first quarter to provide some insight on our traction in the market.
First, demand for our to securely connect their 12,000 employees to cloud applications. The company will implement Okta Single sign on and universal directory simultaneously manage employee access and Okta multi factor authentication to ensure security of corporate data. 2nd, We've seen more and more traction landing initial deals with external use cases at large organizations. For example, a North American National Bank is turning to Okta Identity Cloud to build a secure and seamless banking experience for their 2,000,000 plus customers. This is an important external industries such as commercial banking to their customers.
The bank will be leveraging Okta to deploy a new digital platform offering an improved online user experience for We continue to see more and more expansion and upsells from internal use cases to external use cases. For example, Wyndham Worldwide has been an Okta customer for over a year, utilizing the Okta Identity Cloud to accelerate their move to the cloud, while enhancing user experience for their employees. The new win this quarter is that Wyndham will now leverage the Okta Identity Cloud as part of the online infrastructure supporting its Wyndham rewards loyalty program expansion. Now they are using Okta to improve their customer's experience as well. These customers are just a few examples of how organizations across wide range of verticals are utilizing the Okta Identity Cloud for a variety of use cases.
These examples also demonstrate that we have a significant potential for up sells and cross sells within our the surface of our overall market opportunity and are focused on broadening our footprint within both existing customers and into new customers and markets. Not only are we well positioned to capture share in what we estimate to be an $18,000,000,000 market for internal use cases, but we believe our opportunity with customers using Okta for external use cases is significant and largely untapped. To give some context on the external market opportunity, companies are already spending over $100,000,000,000 every year building cloud applications and custom software such as mobile applications to more effectively engage with their customers. All of these technologies require a form of identity management to function As we look to further build on our capabilities for external users, we added the team from StormPath in March. StormPath focused on identity for the developer.
The integration of StormPath into Okta accelerates the growth of our identity platform for developers. The need for secure application integration continues to grow as organizations seek to unify identity across applications, services and devices, and developers are a key part of this process. Developers are now able to natively build Okta's identity solutions into any application, enabling them to build an scale these customer facing applications in a matter of days, process that used to take months or years. We are excited about what this partnership means for developers and for our customer and ultimately, what this means for our ability to capture share and what we believe is a massive market for external use cases. In summary, we are very pleased with our results this quarter.
We generated industry leading revenue growth and demonstrated increasing financial leverage in the model and we appreciate your interest in the Okta story. I'd now like to turn over the call to Bill to walk through the financial results. Bill? Thanks, Todd,
and thanks again to everyone for joining us. I'll start by providing a brief overview of our financial model, and then I'll go through our 1st fiscal quarter results in detail before moving on to guidance for the second quarter full year of fiscal 2018. Our cloud based platform is offered through a SaaS model, and we generate revenue primarily by selling subscriptions that are generally 3 years for our large enterprise customers and range from 1 to 2 years for our small and mid market customers. We typically invoice customers annually and in advance. There are a number of levers that drive our growth, including acquiring new customers, increased customer spending when the number of users within a customer expands and upselling additional products.
We also look to grow within customers by expanding their deployment of Okta platform. We also sell professional services, which include fees for assisting customers and implementing our products. The primary objective of subscription revenue as these customers expand their usage of the Okta Identity Cloud. We expect professional services will be a smaller proportion of our overall revenue, as our business grows as our service partners lead a larger portion of implementation. We had a strong first quarter and a start to our fiscal year.
As Todd mentioned, revenue for the first quarter totaled $53,000,000, growing 67% year over year. Subscription revenue totaled $48,400,000 in the first quarter, an increase of 75% year over year, comprised 91% of our total revenue. Professional services revenue was $4,700,000, an increase of 10% over the same period last year. In terms of geographic breakdown, roughly 86% of our first quarter revenue came from the U. S, roughly 14% came from outside the U.
S, with the majority of this coming from EMEA. We are in the early stages of international expansion we remain dedicated to growing our international sales footprint over time. We expect our mix of international revenue will continue to grow over the coming years. Moving on to billings. As a reminder, we define calculated billings as total revenue recognized in that quarter plus the change in total deferred revenue for the quarter.
Calculated billings in Q1 were $59,900,000, an increase of 75% year over year. Clearly, we are happy with the calculated billings growth this quarter, and the underlying demand that's driving our business. The exceptionally high growth rate in Q1 was attributed to a number of large user expansions in enterprise, benefited billings in the quarter due to the timing of the invoicing. Of course, this also shows how billings can fluctuate from quarter to quarter based on the timing of renewals and billings duration for large enterprises. We also tend to see our strongest billings in the fourth quarter as a result of the buying patterns of large enterprise customers.
Given the seasonal billing fluctuations that we expect to continue An additional way to look at billings growth is on a trailing 12 month basis, which removes seasonality. From a trailing 12 month perspective, calculated billings growth ending Q1 was 69%. As of the end of Q1, we had over 3350 customers and continue to see strong momentum with new customer additions. We remain focused on growing our large enterprise customer base and ended the quarter with 493 customers with an annual contract value above $100,000, up 64% compared to Q1 of fiscal 2017. We have also continued to see average deal sizes grow with our large enterprise accounts.
These strong customer trends along with continued expansion with our existing customers are reflected in our dollar based retention rate was 120.30 percent for the trailing 12 months. Not only are we adding new customers at a rapid pace, but our existing customers can to grow the number of users on the platform, expanded new use cases, and buy new products. Before turning to expense items and profitability, I would like to point out that I will be discussing non GAAP results going forward. Our GAAP financial results, along with a reconciliation between GAAP and non GAAP results can be found in our points versus the first quarter last year. Our subscription gross margin has been consistently strong, although it can fluctuate slightly from quarter to quarter.
Our professional services gross margin was negative 25.5% compared to a negative 10% in the first quarter last year, as expected. In Q1 last year, we realized the benefit of a number of very large fixed deals that completed in that quarter. This had a significant impact on our professional services revenue and therefore, gross margin in the period. It's important to note that we recognize professional services costs and they're incurred, regardless of when the revenue is recognized. Therefore, our professional services margins will continue to fluctuate from quarter to quarter.
Total gross margin was 69.2 percent, up 594 basis points year over year. Gross profit was $36,700,000, up 82% year over year. We expect our overall gross margin to trend higher over time, as more of our revenues come from subscriptions, but we will still see fluctuations quarter to quarter. Turning now to operating expenses. We remain focused on improving the leverage subscription revenue will grow at a faster rate than our total operating expenses, which will continue to improve operating margins over time.
Sales and marketing expenses for Q1 was $34,800,000 compared to $25,000,000 in Q1 last year. This represents 66% of total revenue, an improvement compared to 79% in the first quarter last year. We have continued to invest in our go to market operations and are seeing improving operating leverage as our overall customer base grows and our base of subscription revenues from renewals and up sells expands. R and D expense in Q1 was $12,100,000, compared to $8,100,000 in Q1 last year. As a percentage of total revenue, R and D was 23% in Q1 versus 26% in the same period last year.
Innovation remains a top priority for us, and we will continue to invest in R&D for the foreseeable future, as evidenced by the storm path announcement that we made in the first quarter. G and A expense was $9,600,000 for the quarter, compared to $6,200,000 in the first quarter last year. G and A was 18% of revenue versus 20% of revenue last year, So although we have been investing in people and infrastructure ahead of becoming a public company, our G and A expenses increased more slowly than overall revenue growth in the quarter. Our operating loss in the quarter was $19,700,000 compared to a loss of $19,300,000 last year Operating margin was negative 37%, a 24 point improvement compared to negative 61% in the same period last year. Net loss per share in Q1 was $0.50 using $39,800,000 basic and diluted shares outstanding.
This compares to a net loss was negative $13,300,000 in Q1 compared to a negative $17,200,000 last year. Free cash flow margin was negative to 25%, a 29 point improvement compared to negative 54% for Q1 last year. We expect to continue to trajectory given period to period fluctuations in billings and working capital. Turning to the balance sheet, ended the first quarter with $224,200,000 in cash, cash equivalents, and short term investments. We raised approximately $200,000,000 in our initial public offering in April or about $194,000,000 net of expenses and we are comfortable with our current cash position.
Lastly, we ended the quarter with a total headcount of 10.20, growing at 43% year over year, although this grew at a slower pace than our revenue growth. The largest portion of our headcount growth occurred in our customer facing group as we continue to scale the organization we expect revenue in the range non GAAP operating loss in the range of $24,000,000 to $23,000,000. Non GAAP net loss per share in the range of $0.26 to $0.25 using approximately 92,500,000 common shares outstanding. For the full year fiscal 2018, we expect revenue in the range of $233,000,000 to $236,000,000, representing a growth rate of 45% to 47% year over year, Non GAAP operating loss in the range of $91,200,000 to $88,200,000. Non GAAP net loss per share outstanding.
In close, Q1 was an exceptional quarter. We delivered top line growth of 67% that is one of the highest of any public software company today. But even more importantly, we achieved this while improving operating margins by 24 points. I'm very excited about the earnings results in Q1 and look forward to seeing many of you over the next several weeks out on the road. With that, Todd, Freddie and I will take your questions.
You. Please make And our first question is from Sterling Auty with JP Morgan.
Yes, thanks. Hi, guys. So looking at the quarter, just looking at the adoption and demand, is there any 1 or 2 particular key cloud applications, whether it's Office 365 or other that's really spearheading the demand generation?
Hey, Sterling, this is a great question. We think that So we released this report called the businesses at work report. We released it about every quarter and it's a broad survey of adoption of cloud applications that we see on our platform. And then as an extrapolation of what is there in the industry. And you see pretty consistent results from the top 10 Microsoft Office 365 is very heavily adopted.
Salesforce is very heavily adopted box and some of the other collaboration services are adopted So those have all remained steady and they're all going up. I mean, you're seeing more and more cloud, more and more users on those services. There's also interesting things in the bottom tier in our last report, we saw zoom, which is a video conferencing and collaborations service really take off. And we saw that emerge on platform, and that some of the, more emerging companies are some more interesting results. But I would say in the top, it's the usual folks, all doing very well and cloud is really growing robustly.
Great. And one follow-up question. Any changes to the competitive landscape in terms of who you're seeing and kind of the final short list of RFPs?
The competitive landscape is remain consistent and with our win rates against the competitors remaining consistent, particularly Microsoft where win rates are consistent, And it's interesting because that's largely on the internal market. So we have identity for internal, which is for employees. And then identity for external, which is people outside of the employee base of our customers. So identity for customers, customers, or our customer's partners, anything they're trying to do to really connect their systems to the broader ecosystem outside their enterprise. And the competitive dynamic there is actually very different.
It's more greenfield. It's companies deciding, to build versus buy this technology. And when they make the decision to buy, we're the clear leader and, so the competitive dynamic there is pretty different. Great. Thank you.
Our next question comes from Heather Bellini with Goldman Sachs.
Yes, I wanted to dig into you just were talking about the external opportunity. I was just wondering if you could share with us, kind of how you saw the momentum for that adoption progressed during the quarter. And as you look out kind of over the course of the next 12 months, how are you seeing the pipeline for that business start to evolve and how's the messaging with customers?
The it's something we watch very closely, obviously. And it's over the last 3 years, it's gone it's grown very quickly. And it's in terms of looking out in the future, the pipeline is growing very quickly and what we see in that part of our business is going to be very all the indicators are going to be very robust growth and a big part of our business results. It's harder to size because there's not it's not as much of a replacement market as the internal market. The internal market, internal identity, there's 1,000,000,000 and 1,000,000,000 of dollars spent today on existing products that are legacy products that we're replacing in the enterprise.
And then down market smaller companies will be the 1st identity solution in there. On the external side, it's really it's a new market in the sense that the competition there is companies building this themselves. And so it's a little bit harder to forecast the market size. But if you look at all of the indicators from inside our pipeline and what we're seeing with customers and our results. I mentioned, earlier in the prepared comments about the North American bank who chose us to be the identity layer for their consumer banking website.
And once an organization makes the decision to like that to buy this technology, buy this identity component versus both themselves, that's really powerful. And the more and more successes we see like that, the bigger this opportunity will become. So we're very bullish on this.
And then I just had one follow-up, if I could, just related to, Sterling's question about Microsoft. You said the, your win rates stayed the same. I was wondering if you could just share with us kind of the list of reasons and how those might be changing in terms of why you're winning versus Azure AD. How are you seeing the reasons as to why people are going with Okta over, over looking at them or maybe going with the legacy provider is kind of why people are migrating or choosing you changing at all?
Yes, I would say the big reason is the more cloud, the more likelihood of Okta winning. So what I mean by that is, not just cloud apps, but cloud infrastructure. And companies doing more cloud means more likely that Okta will win versus other providers Microsoft being included, where a lot of their stack on the identity side is they're on it's implemented as an on premise service, at least partially, and different servers required and different complexities required. So more cloud equals more success for Okta, which is good in the world today where everyone wants to do more cloud. I would say the other dynamic, particularly with Microsoft, is the company makes a decision as to how strategic they say how strategic the identity platform is to them?
And once the identity platform is of any level of strategic importance, we win nearly every time versus where they see identity as more of just a slight adjunct or an add on to a certain app, that's a more challenging environment for us. But more cloud and the more they see identity as being a strategic choice for the company and really an enabling platform for a broad Eco system and array of technologies and applications. That's very, very high win rate there. And by the way, those strategic deals are also more valuable. So it's a nice correlation between us winning and the deals being bigger.
Our next question comes from Rob Owens with
Great. Thanks for taking my question. I was wondering if you could talk a little bit more about the cadence of your land and expanded in particular provide a little color around the 123 percent renewal rate that you had this quarter. Is that influenced more by seat expansion cross sell of solutions. And I guess in particular, there was a couple of large user expansions that you referred to.
Maybe you can color them. Thanks.
Yes. Thanks, Rob, for the question. I greatly appreciate it. So when we think about our land and expand, obviously, with the 2 different main use cases that we have, both internal identity and external identity and the 6 integrated products that we have platform. We now have a lot of different ways that we can land.
A good example would be, as Todd just mentioned, the North American bank that decided to use us for their external opportunity, something that we're seeing more and more of. Of course, we continue to land internally. As we talked about, there's a new large North American grocery chain. And then finally, the upsell opportunity where you see us going from an internal that we had, for example, at Wyndham that went very well and then they come back and say there's a new opportunity for us to use them now externally. So you see a lot of that land and expand opportunity.
I think the vectors that you see there are not only additional users, but also additional products then as I just mentioned, expanded use cases where we can go from internal to external or start externally and then go internally. We have a large number of examples of that.
Yes, I would add to that that specifically to your question, Rob, about this past quarter, those customers that we referred to, the large user expansion, that, that really is a situation where, it was predominantly, the situation where the customer, basically provision for more users. And that probably in that particular instance, for the back this past quarter, we saw more coming from additional users than, typically what that mix is, because typically that mix is, as Freddie said, user expansion, product expansion, cross sell. And historically, that mix has been fairly consistent among the 3.
And then second, you mentioned you had achieved a FedRAMP. Can you talk about what maybe some of the early conversations look like there and federal fiscal year end, obviously, coming up in the next few months, next few quarters, I guess. Do you plan on any impact of this fiscal year relative to the federal space? Or is that something with long sales cycle that's more of a fiscal 2019 type of play?
It's a great question. We are we're very excited about helping the government not federal government, but state and local governments and also educational institutions adopt technology and be more productive and more strategic. As you know, that's a big, big part of the economy overall. So we're very excited about the opportunity there. With that being said, while I think all of state and local governments education and federal governments are excited about cloud.
They're it's a new thing for them. They're figuring out what it for the regulatory and what it means for the procurement cycles and so forth. So while we're very bullish and we have we've invested in in sales resources who attack this market and we have the certification now. We talked about FedRAMP. We're being, I think, prudent with how long it'll take those investments to pay off.
But it's still something down the road that's going to be a big part of our business.
Great. Thank you.
Our next question is from Richard Davis with Canaccord.
So I think as I recall, you're about a year into, what is it, the SCIM kind of developer program. And I also, as I recall, it was supposed to automate kind of on and off boarding multiple apps. Could you talk you touched a little bit on it in the prepared remarks, but how satisfied have you been with this effort? Have you specifically, have you added SaaS vendors that have gotten under the bandwagon? And how should we just kind of think about that?
Yes, it's a great question. And this is, basically, the ability for an application to maintained their own integration to Okta. And that's going very well. We mentioned we have I mentioned the prepared remarks, we have 5000 integrations to different web applications and SaaS applications. And that number is almost understates the true number of integrations because those are just the ones that are publicly available.
There's several thousands more that are developed privately by customers and then shared across the network, with other customers, once those integrations are, tested by us and certified by applications with the most seamless integrations and not only at one point in time, but maintain those integrations over time. And to do that, we really have to enable the community And we're making good progress on that and very excited about what we'll be doing there in the future as well.
Got it. And just a quick follow-up. You announced this as I think early March, as I recall, but your new connection with the storm path, just is there anything in terms of technological footprint or improved go to market cadence that I should be thinking about as an outsider to the company? Thanks.
Yes. StormPath is where it's super important for us. And the way to think about that is there's in the world today where every company is trying to build better mobile applications and better web services to connect with their customers and partners, there's a new there's a new constituency involved in that company. It's not just IT, it's not just security, and that new constituency is development. Not, I mean, like product development and engineers in those companies building these services, even if they're not software companies, right?
It's every industry, every company. So this developer is they like to try and buy things a different way than IT or security. And StormPath for us is really making sure we have the best product and the best go to market and the best documentation and the best tool kits to make those developers super successful very quickly with our platform. So it's really a it's developer focused tuning and improving of our platform to make sure that our external opportunity reaches its full potential because in every external opportunity, there's a big developer voice. And so having a good go to market and a good product and service developers is paramount of importance.
Great. Thank you so much.
Our last question comes from Pat Walravens with JMP Securities.
Oh, great. Thank you and congratulations you guys. So you mentioned in your prepared remarks, the Gartner report, which actually looks like it just got published on our service. So if you haven't seen it already, it's pretty fantastic. I mean, basically you and, and Microsoft are at the very top and you're number 1 in the ability to execute.
But so the I went right to the concerns just like all the customers will. And one of the concerns is that you raised prices in the last year and that they say that, that Okta is one of the higher average price scenarios is how they worded. So I'm sure you have a perspective that you share with your customers. I was wondering if you could share with us.
We saw yes, thanks Pat. We saw a preview of it. And I haven't seen the final report, given that it just came out a few minutes ago, but, I trust you as saying it's positive just like the preview we saw. On the and it's really exciting, because it is customers are trying to figure out this market and Gartner helps them. So we're excited that they're, they're kind of doing the work and seeing what we see, which is that we're the leader.
On pricing, I think that we have the best product. So, and it's taken a lot of, ingenuity and investment to build that product. And I think you're seeing a command premium in the marketplace. And it's because of the value we deliver to customers, right? And I think that customers see that our product is unique and differentiated and can do things for them that other products can't can we we've gotten also very good at helping customers understand the value and quantifying it, which has led to our ability to, have a product that can be priced at a premium level.
All right. Good. So you're capturing some of the value. And then just a slightly related question, so for me as a consumer, let's say that my bank, starts using Okta for the external use case. Am I going to experience anything different?
It depends on how on how they use it. So they might use it just as a back end infrastructure piece to store the user profile and really automate the back end. But they might use it also to really automate the multi factor authentication and make it so you don't have carrier around a hard token, make it so that you can choose to receive an SMS or a push notification when you log into your bank. So it depends on how it's implemented. And that's why as companies choose to use Okta for external, that's why the developer is so important because there's a developer that's going to be integrated into this into the website or the mobile app.
But the good news is that with the Okta platform, it's very easy for the customers to make these decisions and deliver a better end user experience while also maintaining super high security, which is why we're seeing the traction we're seeing in that segment of the market and across all segments of the market.
Awesome. All right. Thank you.
Thanks a lot for taking the time.
That does conclude our question and answer session. I'd like turn the call back over to Todd Mckinnon for closing remarks.
So thanks everyone. Again, for joining us today. We're really excited about the results from today. 1, I'll just like to close with a final reminder that we're holding Octane, which is our annual customer and partner event. It's August 29th.
In Las Vegas. And this year, we're going to have about 2000 customers, partners and prospects there. And we'll be making exciting announcements about the product and about the company. And really, it's like a big celebration with our customers on their success and the potential of what we could do together in the future. So hopefully we'll see you all there.
And thanks again for your time. And I look forward to meeting you in person, soon. Have a good afternoon.
Again, that does conclude today's call. We appreciate your participation.