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OKTA's Q4 Earnings and Revenues Surpass Estimates, Rise Y/Y

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Okta, Inc. (OKTA - Free Report) reported fourth-quarter fiscal 2021 adjusted earnings of 6 cents per share against the Zacks Consensus Estimate of a loss of a penny. The company reported a loss of a penny in the year-ago quarter.

Total revenues have surged 40.3% year over year to $234.7 million and surpassed the consensus mark by 5.8%. The upside can be attributed to higher subscription revenues.

Quarter Details

Subscription revenues (96% of total revenues) surged 42.2% year over year to $225.4 million. Moreover, professional services and other revenues (4%of total revenues) increased 6% year over year to $9.3 million.

Location wise, revenues from the United States (84% of total revenues) in fiscal fourth quarter were $197 million, up 40.2% year over year. International revenues (16.1% of total revenues) increased 41% year over year to $37.7million.
 

Okta, Inc. Price, Consensus and EPS Surprise

 

Okta, Inc. Price, Consensus and EPS Surprise

Okta, Inc. price-consensus-eps-surprise-chart | Okta, Inc. Quote

 

Total calculated billings were $316 million, up 40% year over year. The uptick was driven by new and existing commercial as well as enterprise customers and increased bookings.

Dollar-based retention rate in the trailing 12 months was 121%, which increased 2% sequentially.

Remaining Performance Obligations (“RPO”) totaled $1.80 billion, up 49% year over year. Current RPO, expected to be recognized over the next 12 months, was $842 million, up 42% year over year.

 

User Details

Okta added 600 new customers in the reported quarter, taking the total customer count to 10,000, up 26% year over year.

Okta Identity Cloud’s capability to consolidate and easily integrate existing applications, without compromising security or stability, is attracting customers. Okta products’ ability to automate process, secure data and reduce costs is also a positive.

Moreover, partnership with the likes of salesforce.com (CRM - Free Report) is helping the company to win customers.

Operating Details

Non-GAAP total gross profit surged 41.7% year over year to $184 million. Gross margin expanded 80 basis points (bps) to 78.4%.

Non-GAAP research and development expenses increased 35.9% year over year to $43.5 million. Additionally, non-GAAP sales and marketing (S&M), and general and administrative expenses increased 22.8% and 47.6% year over year to $100.1 million and $32.4 million, respectively.

Non-GAAP total operating expenses increased 29.9% year over year to $176 million.

Non-GAAP operating income was $8 million against operating loss of $5.6 million in the year-ago quarter.

Balance Sheet and Cash Flow

Okta had $2.56 billion in cash, cash equivalents and short-term investments as of Jan 31, 2021 compared with $2.48 billion as of Oct 31, 2020.

Cash provided by operations was $34.9 million in the reported quarter compared with the previous quarter’s $43.4 million.

Okta recorded free cash of $32.5 million in the reported quarter compared with $41.6 million reported in the previous quarter.

Acquisition of Auth0

Okta announced that it has entered into an agreement to buy Auth0, a leading identity platform for application teams, in a stock transaction valued at approximately $6.5 billion based on a fixed number of Okta shares and an Okta share price of $276.21.

Guidance

For first-quarter fiscal 2022, Okta expects revenues in the range of $237-$239 million, which indicates year-over-year growth of 30-31%.

Non-GAAP operating loss is expected in the range of $27-$28 million and non-GAAP net loss is anticipated in the band of 20-21 cents per share.

For fiscal 2022, revenues are expected in the range of $1.08-$1.09 billion, indicating year-over-year growth between 29% and 30%.

Non-GAAP operating loss is expected in the range of $55-$61 million and non-GAAP net loss is anticipated within 44-49 cents per share.

Zacks Rank & Stocks to Consider

Currently, Okta carries a Zacks Rank #3 (Hold).

Avid Technology and CrowdStrike (CRWD - Free Report) are a couple of better-ranked stocks in the broader computer and technology sector. Both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Avid Technology is set to report its quarterly results on Mar 9. CrowdStrike is scheduled to report the same on Mar 16.

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