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OKTA Incurs Loss in Q4, Subscription Revenues Increase Y/Y
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Okta, Inc. (OKTA - Free Report) reported fourth-quarter fiscal 2022 adjusted loss of 18 cents per share that beat the Zacks Consensus Estimate by 25%. The company had reported earnings of 6 cents per share in the year-ago quarter.
Total revenues surged 63.2% year over year to $383 million and surpassed the consensus mark by 6.6%. The upside can be attributed to higher subscription revenues.
Subscription revenues (96.4% of total revenues) surged 63.9% year over year to $369.3 million. Professional services and other revenues (3.6% of total revenues) increased 46.5% year over year to $13.7 million.
Quarter Details
Location wise, revenues from the United States (78% of total revenues) in the fiscal fourth quarter were $298.7 million, up 51.3% year over year. International revenues (22% of total revenues) soared 125.7% year over year to $84.3 million.
Total calculated billings were $598.2 million, up 91.4% 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 124%.
Remaining Performance Obligations (“RPO”) totaled $2.69 billion, up 50% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.35 billion, up 60% year over year.
Okta’s total customer count was 15,000, up 50% year over year.
Operating Details
Non-GAAP total gross profit surged 59.8% year over year to $294.1 million. Gross margin contracted 160 basis points (bps) to 76.8%.
Non-GAAP research and development expenses increased 136.6% year over year to $147.5 million. Non-GAAP sales and marketing, and general and administrative expenses, increased 92.4% and 114.8% year over year to $221.6 million and $108.9 million, respectively.
Non-GAAP total operating expenses surged 109.4% year over year to $477.9 million.
Non-GAAP operating loss was $23.8 million against operating income of $8 million in the year-ago quarter.
Balance Sheet
Okta had $2.50 billion in cash, cash equivalents and short-term investments as of Jan 31, 2022, compared with $2.48 billion as of Oct 31, 2021.
Guidance
For first-quarter fiscal 2022, Okta expects revenues in the range of $388-$390 million, which indicates year-over-year growth of 55%.
Non-GAAP operating loss is expected in the range of $51-$50 million while non-GAAP net loss is anticipated in the band of 35-34 cents per share.
For fiscal 2023, revenues are expected in the range of $1.78-$1.79 billion, indicating year-over-year growth between 37% and 38%.
Non-GAAP operating loss is expected in the range of $185-$180 million and non-GAAP net loss is anticipated between $1.27 and $1.24 per share.
Zacks Rank & Stocks to Consider
Currently, Okta carries a Zacks Rank #4 (Sell).
Okta shares are down 18.5%, underperforming the Zacks Computer & Technology sector’s decline of 14.2% year to date.
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OKTA Incurs Loss in Q4, Subscription Revenues Increase Y/Y
Okta, Inc. (OKTA - Free Report) reported fourth-quarter fiscal 2022 adjusted loss of 18 cents per share that beat the Zacks Consensus Estimate by 25%. The company had reported earnings of 6 cents per share in the year-ago quarter.
Total revenues surged 63.2% year over year to $383 million and surpassed the consensus mark by 6.6%. The upside can be attributed to higher subscription revenues.
Subscription revenues (96.4% of total revenues) surged 63.9% year over year to $369.3 million. Professional services and other revenues (3.6% of total revenues) increased 46.5% year over year to $13.7 million.
Quarter Details
Location wise, revenues from the United States (78% of total revenues) in the fiscal fourth quarter were $298.7 million, up 51.3% year over year. International revenues (22% of total revenues) soared 125.7% year over year to $84.3 million.
Okta, Inc. Price, Consensus and EPS Surprise
Okta, Inc. price-consensus-eps-surprise-chart | Okta, Inc. Quote
Total calculated billings were $598.2 million, up 91.4% 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 124%.
Remaining Performance Obligations (“RPO”) totaled $2.69 billion, up 50% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.35 billion, up 60% year over year.
Okta’s total customer count was 15,000, up 50% year over year.
Operating Details
Non-GAAP total gross profit surged 59.8% year over year to $294.1 million. Gross margin contracted 160 basis points (bps) to 76.8%.
Non-GAAP research and development expenses increased 136.6% year over year to $147.5 million. Non-GAAP sales and marketing, and general and administrative expenses, increased 92.4% and 114.8% year over year to $221.6 million and $108.9 million, respectively.
Non-GAAP total operating expenses surged 109.4% year over year to $477.9 million.
Non-GAAP operating loss was $23.8 million against operating income of $8 million in the year-ago quarter.
Balance Sheet
Okta had $2.50 billion in cash, cash equivalents and short-term investments as of Jan 31, 2022, compared with $2.48 billion as of Oct 31, 2021.
Guidance
For first-quarter fiscal 2022, Okta expects revenues in the range of $388-$390 million, which indicates year-over-year growth of 55%.
Non-GAAP operating loss is expected in the range of $51-$50 million while non-GAAP net loss is anticipated in the band of 35-34 cents per share.
For fiscal 2023, revenues are expected in the range of $1.78-$1.79 billion, indicating year-over-year growth between 37% and 38%.
Non-GAAP operating loss is expected in the range of $185-$180 million and non-GAAP net loss is anticipated between $1.27 and $1.24 per share.
Zacks Rank & Stocks to Consider
Currently, Okta carries a Zacks Rank #4 (Sell).
Okta shares are down 18.5%, underperforming the Zacks Computer & Technology sector’s decline of 14.2% year to date.
Investors interested in the Computer & Technology sector are eagerly awaiting earnings releases from players like Asana (ASAN - Free Report) , Broadcom (AVGO - Free Report) and CrowdStrike (CRWD - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Asana is scheduled to release fourth-quarter fiscal 2022 results on Mar 9.
ASAN shares have declined 28.8% in the year-to-date period.
Broadcom is set to report first-quarter fiscal 2022 earnings on Mar 3.
AVGO shares have declined 11.9% in the year-to-date period.
CrowdStrike is set to release fourth-quarter fiscal 2022 results on Mar 9.
CRWD shares are down 1.4% year to date.