Text size
Okta headquarters in San Francisco.
Dreamstime
Okta
shares are heading sharply higher in late trading—after an 11% rally in Thursday’s regular session—on news the identity-management software company posted better-than-expected results for its fiscal first quarter ended April 30. The company also raised its forecast for the fiscal year.
Okta (ticker: OKTA) CEO Todd McKinnon said in an interview that the company saw no material impact on its business in the quarter from a highly publicized security breach on its systems in March. He also said Okta is not seeing any impact on its business from ongoing macroeconomic crosswinds.
Okta’s results add to a growing list of enterprise tech companies that posted healthy results for the April quarter, like
Elastic
(
ESTC
),
Pure Storage
(PSTG),
DELL
) and
HP
(
HPQ
), as spending continues apace for companies closely tied to the growth of cloud computing.
For the quarter, Okta posted revenue of $415 million, up 65% from a year earlier, and ahead of both the company’s guidance range of $388 million to $390 million, and the Wall Street consensus forecast at $389 million. Organic growth in the quarter was 39%, normalizing the company for the acquisition last year of the customer-identity-management company Auth0.
On a non-GAAP basis, Okta lost 27 cents a share in the quarter, narrower than the company’s forecast for a loss of 34 to 35 cents a share. Under generally accepted accounting principles, the company lost $243 million, or $1.56 a share. The company said remaining performance obligations were $2.71 billion at quarter end, up 43% from a year ago.
For the second quarter, Okta is projecting revenue of $428 million to $430 million, up 36%, and ahead of the Street consensus forecast for $422 million. The company expects a non-GAAP loss of 31 to 32 cents a share, while the Street had been modeling a loss of 33 cents.
For the January 2023 fiscal year, Okta now sees revenue of $1.805 billion to $1.815 billion, up 39% to 40%, with a non-GAAP loss of $1.11 to $1.14 a share. The company previously had projected revenue of $1.78 billion to $1.79 billion, and a loss of $1.24 to $1.27 a share.
McKinnon said it was “kind of a normal Okta quarter, with solid execution,” as identity management continues to move to the cloud. He said investors have been worried about the potential impact on financial results of the security breach, but he said that Okta spent a lot of time “reaffirming and building trust and confidence” with customers. And the result, he says, is that Okta “did not see an impact on the business.”
McKinnon say Okta continues to benefit from “a once in a generation shift to cloud computing, which isn’t stopping.” The Okta chief says the company should produce annual growth of at least 35% for the next three years, reaching $4 billion in revenue in the January 2026 fiscal year.
Okta stock in late trading has jumped 16%, to $108.69.
Write to Eric J. Savitz at [email protected]
