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OKTA Incurs Loss in Q1, Subscription Revenues Increase Y/Y

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Okta, Inc. (OKTA - Free Report) reported first-quarter fiscal 2022 adjusted loss of 10 cents per share, narrower than the Zacks Consensus Estimate of a loss of 20 cents but wider than loss of six cents reported in the year-ago quarter.

Total revenues surged 37.3% year over year to $251 million and surpassed the consensus mark by 5.2%. The upside can be attributed to higher subscription revenues.

Subscription revenues (95.6% of total revenues) surged 38.1% year over year to $240.1 million. Moreover, professional services and other revenues (4.4% of total revenues) increased 20.6% year over year to $10.9 million.

Quarter Details

Location wise, revenues from the United States (83% of total revenues) in fiscal first quarter were $208.3 million, up 35.6% year over year. International revenues (17% of total revenues) soared 45.8% year over year to $42.7 million.

Total calculated billings were $364 million, up 74% year over year. The uptick was driven by new and existing commercial as well as enterprise customers, and increased bookings.
 

Okta, Inc. Price, Consensus and EPS Surprise

Okta, Inc. Price, Consensus and EPS Surprise

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

 

Dollar-based retention rate in the trailing 12 months was 120% .

Remaining Performance Obligations (“RPO”) totaled $1.89 billion, up 52% year over year. Current RPO, expected to be recognized over the next 12 months, was $899 million, up 45% year over year.

User Details

Okta added 650 new customers in the reported quarter, taking the total customer count to 10,650, up 27% 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 38.3% year over year to $196.1 million. Gross margin expanded 60 basis points (bps) to 78.1%.

Non-GAAP research and development expenses increased 42% year over year to $68.9 million. Additionally, non-GAAP sales and marketing, and general and administrative expenses increased 40.8% and 76.8% year over year to $146.5 million and $60.2 million, respectively.

Non-GAAP total operating expenses increased 47.7% year over year to $275.6 million.

Non-GAAP operating loss was $15.9 million compared with operating loss of $5.6 million in the year-ago quarter.

Balance Sheet and Cash Flow

Okta had $2.69 billion in cash, cash equivalents and short-term investments, as of Apr 30, 2021, compared with $2.56 billion as of Jan 31, 2021.

Cash provided by operations was $56.1 million in the reported quarter compared with the previous quarter’s $34.9 million.

Okta recorded free cash of $52.8 million in the reported quarter compared with $32.5 million reported in the previous quarter.

Guidance

For second-quarter fiscal 2022, Okta expects revenues in the range of $295-$297 million, which indicates year-over-year growth of 47-48%.

Non-GAAP operating loss is expected in the range of $53-$55 million while non-GAAP net loss is anticipated in the band of 35-36 cents per share.

For fiscal 2022, revenues are expected in the range of $1.215-$1.225 billion, indicating year-over-year growth between 45% and 47%.

Non-GAAP operating loss is expected in the range of $167-$172 million and non-GAAP net loss is anticipated between $1.13 per share and $1.16 per share.

Zacks Rank & Stocks to Consider

Currently, Okta carries a Zacks Rank #4 (Sell).

Digital Turbine (APPS - Free Report) and Zoom (ZM - 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.

Both Digital Turbine and Zoom are set to report their quarterly results on Jun 1.

 

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