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Todd McKinnon, Okta Co-Founder and CEO, joined Yahoo Finance Live to discuss the future of cyber security and the company's third quarter earnings report.
ADAM SHAPIRO: You wanted Wall Street to pay attention to the contracts which are indicating the performance obligations that are almost 2 and 1/2 billion dollars going forward, and yet it's almost like, what have you done for me lately? Is what investors are saying. What are they missing?
TODD MCKINNON: Well, Adam, thanks for having me on. It's great to be on the show. We're really excited about the business, we're really excited about the market opportunity. And I think, for me, the main message is 14,000 plus customers, that's 14,000 plus customers we added over 900 customers in the quarter we just reported, and that's 14,000 customers that have realized that they need an independent and neutral identity provider. That's going to unlock their choice in technology and in the economy. Everyone's worried about what's happening in the economy, is it growing, what's happening?
What's imperative is that companies use technology. They get their workers the best tools to be productive, they build great websites and customer experience mobile apps to drive their businesses forward, collaborate with their supply chain. And technology is at the heart of all of that, and identity is at the heart of that technology. It enables these companies to achieve their vision and their strategy, and 14,000 customers have realized that, and they're investing in Okta, and that's what we're most excited about.
ADAM SHAPIRO: Well, wouldn't that-- not only the 14,000 you've mentioned, but the RPO number, $2.35 billion is something that-- if I'm an investor looking at growth, wouldn't I be zeroing in on that? Because it seems as if people are not.
TODD MCKINNON: Well, it's a big TAM, total addressable market, we're going after for identity, it's $80 billion, and our revenue in the quarter is $350 million, so we have a lot of growth ahead of us. You can look at various stats-- you could look at the subscription revenue growth of 63% a year, you can look at the organic revenue growth, which is 40% a year, and on and on, so we're growing into this massive TAM. But the thing that excites us, again, is what customers can do with our technology.
And by choosing Okta for identity-- identity is a complex challenge. It has ease of use implications, it has security implications. As the leading independent, neutral scale provider of identity, we can unlock technology for all of our customers, and unlock their strategy, and help them be more successful, and progress in their missions, and that's what fires up all of our employees every day to come help customers.
ADAM SHAPIRO: As I mentioned, we use Okta. I sign in, and we've got so many security protocols, sometimes you get up a half hour earlier to get through all of them when they reset, as they often do every other day. Is there a great expense at your business? Because I would imagine hackers are trying to get in through the back door, that you've got to constantly devote a portion of your expenditures to stopping those people.
TODD MCKINNON: I've talked a lot about customer success and how customers can do more with technology. One of the foundations of that is it has to be secure. We hear headline after headline about ransomware, and cyber attacks, and phishing attacks, and so every company, as they move to adopt more technology, is under attack.
And by moving to an identity-centric model, your organization knows the person, who they are, and what access they're supposed to have, and what applications they're allowed to have, and from what device. And you can make a security policy that is flexible enough, that allows employees and customers to connect to your technology from anywhere, but at the same time, keeping the bad guys out. And having this identity-centric approach helps you implement that flexible, easy to use, highly secure policy, because you're right, everyone is under attack. And we spend an enormous amount of effort and focus to making sure we're secure, and by extension, our customers secure so they can get back to the business of focusing on their strategy.
ADAM SHAPIRO: Just wrapping this up, because I tend to be a sci-fi geek-- I was curious with the platform, the way I can, on my Apple computer when it's working, I put my finger on and I've got the biometric reading-- are you working with companies that maybe it would be an iris scan so that I don't have to constantly keep re-entering or changing my Okta passwords?
TODD MCKINNON: It's a great question, and our secret sauce is that we're integrated to everything. So the reason it's important to have an independent and neutral identity provider is because we connect to every technology you want to use, whether it's your Mac touch ID, whether it's your iPhone face ID, whether it's your Windows computer, whether it's an iris scanner. No matter where you're coming from, the policy and the ease of use is all around you and what you want to experience, and that works across any device. You're not locked into one application or one platform, we connect it all together. In fact, we have over 7,000 out of the box, pre-built integrations that give our customers choice and freedom to do whatever they want to do without any restrictions about what else we may want to sell them or what application or infrastructure we think they should use, so it's really enabling for our customers and we're working hard every day to make sure that stays the case and even extends in the future.
ADAM SHAPIRO: Todd, I just want to assure you it is not Okta that I curse when things don't work, it's Mr Cook's company when my Commodore 64, known as my Mac, doesn't seem to want to function correctly. Todd McKinnon is Okta's co-founder and CEO. All the best to you. We'll be right back after this.