Okta ( OKTA Quick Quote OKTA - Free Report) is the $40 billion cybersecurity provider of cutting-edge identity solutions for corporations. The company's products consist of Okta IT for Developers and include Single Sign-On, Mobility Management, and Adaptive Multi-Factor Authentication. Okta reported second-quarter fiscal 2022 adjusted loss of 11 cents per share, 68% narrower than the Zacks Consensus Estimate of a loss of 35 cents. The company had reported earnings of 7 cents per share in the year-ago quarter. Total revenues surged 57.4% year over year to $315.5 million and surpassed the consensus mark by 6.5%. The upside can be attributed to higher subscription revenues. Subscription revenues (96.1% of total revenues) surged 59% year over year to $303.1 million. Professional services and other revenues (3.9% of total revenues) increased 26.9% year over year to $12.4 million. EPS Estimates Try to Dig Out Before we look at the numbers in detail, let's understand why Okta is in the cellar of the Zacks Rank now, but may soon climb out. The good news is that after the recent quarterly report, Wall Street analysts raised EPS estimates for OKTA by a nice margin from a loss of $1.12 this year to a loss of just 75 cents. The bad news is that this still represents another big loss year for OKTA and next year doesn't improve that much either. The company is still heavily investing in their business. If the upward EPS estimate revisions from analysts continue, then OKTA could rise from the temporary purgatory of the Zacks Rank lower realms. The Valuation Question More good news is that the price/sales valuation of OKTA -- at a steep 23 times next year's consensus of $1.75 billion -- is smaller than the sales growth rate of 50% this year and 39% next year. That's what you want to see for these high-flying software stocks, that might eat the world. To learn more about this math, see my most recent Cook's Kitchen dive here... Software Valuations: How to Use the Rule of 40 OKTA Quarter Details Globally, revenues from the United States (79.3% of total revenues) in the fiscal second quarter were $250.1 million, up 48.7% year over year. International revenues (20.7% of total revenues) soared 103% year over year to $65.4 million. Total calculated billings were $362.4 million, up 82.9% 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 124%, which is a solid showing that basically measures "how much of my existing customers were adding services." Remaining Performance Obligations (“RPO”) totaled $2.24 billion, up 57% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.1 billion, up 60% year over year. OKTA Customer Details Okta added an impressive 2,400 new customers in the reported quarter, taking the total customer count to 13,050, up 46% year over year. Okta Identity Cloud’s capability to consolidate and easily integrate existing applications without compromising security or stability is attracting customers. And Okta products’ ability to automate the process, secure data, and reduce costs is clearly attracting new customers. OKTA Operating Details Non-GAAP total gross profit surged 52.8% year over year to $241.5 million. Gross margin contracted 230 basis points (bps) to 76.5%. Non-GAAP research and development expenses increased 76.6% year over year to $68.7 million. Additionally, non-GAAP sales and marketing, and general and administrative expenses increased 71.9% and 85.2% year over year to $146.4 million and $50.9 million, respectively. Non-GAAP total operating expenses increased 75.5% year over year to $266 million. Non-GAAP operating loss was $24.5 million against operating income of $6.5 million in the year-ago quarter. OKTA Guidance For third-quarter fiscal 2022, Okta expects revenues in the range of $325-$327 million, which indicates year-over-year growth of 50%. Non-GAAP operating loss is expected in the range of $34-$35 million while non-GAAP net loss is anticipated in the band of 24-25 cents per share. For fiscal 2022, revenues are expected in the range of $1.243-$1.250 billion, indicating year-over-year growth between 49% and 50%. Non-GAAP operating loss is expected in the range of $114-$119 million and non-GAAP net loss is anticipated between 74 and 75 cents per share. Bottom line on OKTA: This innovative company could continue to compound annual growth in the 30-40% range with their unique security/identity solutions. Be on the watch for more EPS revisions higher and a quicker turn to profitability. The Zacks Rank will let you know.