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Okta, Inc. (OKTA - Free Report) reported breakeven earnings in third-quarter fiscal 2023, beating the Zacks Consensus Estimate by 100%. The company reported a loss of 7 cents per share in the year-ago quarter.
Total revenues increased 37.2% year over year to $481 million and surpassed the consensus mark by 3.76%. The upside can be attributed to higher subscription revenues.
Subscription revenues (96.8% of total revenues) rose 38.4% year over year to $465.9 million. Professional services and other revenues (3.2% of total revenues) increased 8.6% year over year to $15.2 million.
Okta shares were up 14.40% in pre-market trading following the results.
Location-wise, revenues from the United States (78% of total revenues) in the fiscal third quarter were $375.2 million, up 35.4% year over year. International revenues (22% of total revenues) increased 43.7% year over year to $105.8 million.
Total calculated billings were $532 million, up 37% year over year. The uptick was driven by new and existing commercial as well as enterprise customers and increased bookings.
The dollar-based retention rate in the trailing 12 months was 122%, unchanged year over year.
Remaining Performance Obligations (“RPO”) totaled $2.85 billion, up 21% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.58 billion, up 34% year over year.
Okta’s total customer count was 17,050, up 26% year over year. Customers with more than $100K in Annual Contract Value increased 32% year over year.
Operating Details
Non-GAAP gross profit improved 39.1% year over year to $375.5 million. Gross margin expanded 110 basis points on a year-over-year basis to 78%.
Non-GAAP subscription gross margin was flat on a year-over-year basis.
Research and development expenses increased 13.8% year over year to $148.5 million. Sales and marketing increased 42.2% year over year to $290 million.
Moreover, general and administrative expenses increased 6.1% year over year to $111.5 million.
Total operating expenses increased 25.1% year over year to $550 million.
Non-GAAP operating income was $0.3 million against a loss of $9.5 million in the year-ago quarter.
Balance Sheet
Okta had $2.47 billion in cash, cash equivalents and short-term investments as of Oct 31, 2022 compared with $2.49 billion as of Jul 31, 2022.
Guidance
For fourth-quarter fiscal 2022, Okta expects revenues in the range of $488-$490 million, which indicates year-over-year growth between 27% and 28%.
Non-GAAP operating income is expected in the range of $15-$36 million while non-GAAP earnings are anticipated to be 9-10 cents per share.
For fiscal 2023, revenues are expected to be $1.836-$1.838 billion, indicating year-over-year growth of 41%.
Non-GAAP operating loss is expected in the range of $41-$39 million and non-GAAP net loss is anticipated between 27 and 26 cents per share.
For fiscal 2024, Okta expects revenues in the range of $2.130-$2.145 million, which indicates year-over-year growth between 16% and 17%.
Zacks Rank & Stocks to Consider
Currently, Okta carries a Zacks Rank #3 (Hold).
Okta shares have declined 76.2% in the past year, underperforming the Zacks Computer & Technology sector’s decline of 33.6% year to date.
Image: Bigstock
OKTA Posts Breakeven Q3 Earnings, Revenues Beat Estimates
Okta, Inc. (OKTA - Free Report) reported breakeven earnings in third-quarter fiscal 2023, beating the Zacks Consensus Estimate by 100%. The company reported a loss of 7 cents per share in the year-ago quarter.
Total revenues increased 37.2% year over year to $481 million and surpassed the consensus mark by 3.76%. The upside can be attributed to higher subscription revenues.
Subscription revenues (96.8% of total revenues) rose 38.4% year over year to $465.9 million. Professional services and other revenues (3.2% of total revenues) increased 8.6% year over year to $15.2 million.
Okta shares were up 14.40% in pre-market trading following the results.
Okta, Inc. Price, Consensus and EPS Surprise
Okta, Inc. price-consensus-eps-surprise-chart | Okta, Inc. Quote
Quarter Details
Location-wise, revenues from the United States (78% of total revenues) in the fiscal third quarter were $375.2 million, up 35.4% year over year. International revenues (22% of total revenues) increased 43.7% year over year to $105.8 million.
Total calculated billings were $532 million, up 37% year over year. The uptick was driven by new and existing commercial as well as enterprise customers and increased bookings.
The dollar-based retention rate in the trailing 12 months was 122%, unchanged year over year.
Remaining Performance Obligations (“RPO”) totaled $2.85 billion, up 21% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.58 billion, up 34% year over year.
Okta’s total customer count was 17,050, up 26% year over year. Customers with more than $100K in Annual Contract Value increased 32% year over year.
Operating Details
Non-GAAP gross profit improved 39.1% year over year to $375.5 million. Gross margin expanded 110 basis points on a year-over-year basis to 78%.
Non-GAAP subscription gross margin was flat on a year-over-year basis.
Research and development expenses increased 13.8% year over year to $148.5 million. Sales and marketing increased 42.2% year over year to $290 million.
Moreover, general and administrative expenses increased 6.1% year over year to $111.5 million.
Total operating expenses increased 25.1% year over year to $550 million.
Non-GAAP operating income was $0.3 million against a loss of $9.5 million in the year-ago quarter.
Balance Sheet
Okta had $2.47 billion in cash, cash equivalents and short-term investments as of Oct 31, 2022 compared with $2.49 billion as of Jul 31, 2022.
Guidance
For fourth-quarter fiscal 2022, Okta expects revenues in the range of $488-$490 million, which indicates year-over-year growth between 27% and 28%.
Non-GAAP operating income is expected in the range of $15-$36 million while non-GAAP earnings are anticipated to be 9-10 cents per share.
For fiscal 2023, revenues are expected to be $1.836-$1.838 billion, indicating year-over-year growth of 41%.
Non-GAAP operating loss is expected in the range of $41-$39 million and non-GAAP net loss is anticipated between 27 and 26 cents per share.
For fiscal 2024, Okta expects revenues in the range of $2.130-$2.145 million, which indicates year-over-year growth between 16% and 17%.
Zacks Rank & Stocks to Consider
Currently, Okta carries a Zacks Rank #3 (Hold).
Okta shares have declined 76.2% in the past year, underperforming the Zacks Computer & Technology sector’s decline of 33.6% year to date.
Some better-ranked stocks in the sector are Richardson Electronics (RELL - Free Report) , Sanmina (SANM - Free Report) and Super Micro Computer (SMCI - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Richardson Electronics, Sanmina and Super Micro Computer are up 88.2%, 59.4% and 105.3%, respectively, on a year-to-date basis.