Okta, Inc. ( OKTA Quick Quote OKTA - Free Report) reported third-quarter fiscal 2022 adjusted loss of 7 cents per share that beat the Zacks Consensus Estimate by 69.6%. The company had reported earnings of 4 cents per share in the year-ago quarter. Total revenues surged 61.3% year over year to $350.7 million and surpassed the consensus mark by 7.1%. The upside can be attributed to higher subscription revenues. Subscription revenues (96% of total revenues) surged 62.9% year over year to $336.7 million. Professional services and other revenues (4%of total revenues) increased 31.4% year over year to $14 million. Quarter Details Location wise, revenues from the United States (78.7% of total revenues) in fiscal third quarter were $276.1million, up 51.3% year over year. International revenues (21.3% of total revenues) soared 114.1% year over year to $74.5 million. Total calculated billings were $389 million, up 54.4% 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 122%. Remaining Performance Obligations (“RPO”) totaled $2.35 billion, up 49% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.18 billion, up 57% year over year. Okta’s total customer count was14,000, up 49% year over year. Operating Details Non-GAAP total gross profit surged 58.5% year over year to $269.8 million. Gross margin contracted 140 basis points (bps) to 76.9%. Non-GAAP research and development expenses increased 81.2% year over year to $73.6 million. Non-GAAP sales and marketing, and general and administrative expenses, increased 61.1% and 81.1% year over year to $153.8 million and $52 million, respectively. Non-GAAP total operating expenses increased 69.6% year over year to $279.4 million. Non-GAAP operating loss was $9.5 million against operating income of $5.5 million in the year-ago quarter. Balance Sheet Okta had $2.48 billion in cash, cash equivalents, and short-term investments, as of Oct 31, 2021, compared with $2.47 billion as of Jul 31, 2021. Guidance For fourth-quarter fiscal 2022, Okta expects revenues in the range of $358-$360 million, which indicates year-over-year growth of 53%. 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 $1.275-$1.277 billion, indicating year-over-year growth 53%. Non-GAAP operating loss is expected in the range of $84-$85 million and non-GAAP net loss is anticipated between 52 cents and 53 cents per share. Zacks Rank & Stocks to Consider Currently, Okta carries a Zacks Rank #4 (Sell). Okta shares are down 22.1%, underperforming the Zacks Internet-Software and Services industry’s decline of 6.3% and Computer & Technology sector’s return of 23.6% year to date. Long term earnings growth rate stands at 25%. Some of the better-ranked stocks in the Computer & Technology sector are Nova Measuring Instruments ( NVMI Quick Quote NVMI - Free Report) , Advanced Micro Devices ( AMD Quick Quote AMD - Free Report) and Pinterest ( PINS Quick Quote PINS - Free Report) . Currently, Nova Measuring sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Long term earnings growth rate stands at 32.2%. Nova Measuring shares have returned 83% year to date compared with the Zacks Electronics-Semiconductors industry’s growth of 36.7% and the Computer & Technology sector’s return of 22.7%. Long term earnings growth rate for AMD, a Zacks Rank #2 (Buy) stock, is currently pegged at 46.2%. AMD shares have returned 62.6% year to date, outperforming the Electronics-Semiconductors industry’s growth of 36.7% and the Computer & Technology sector’s return of 22.7%. Pinterest, currently carrying a Zacks Rank #2 (Buy) has a long-term earnings growth rate of 52.7%. PINS shares are down 43.4%, underperforming the Zacks Internet Software industry’s decline of 17.8% and Computer & Technology sector’s return of 22.7% year to date.