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Okta, Inc. (OKTA - Free Report) reported third-quarter fiscal 2024 earnings of 44 cents per share, comfortably beating the Zacks Consensus Estimate by 46.67%. The company reported break-even earnings in the year-ago quarter.
Total revenues increased 21.4% year over year to $584 million and surpassed the consensus mark of $560 million. The year-over-year upside can be attributed to higher subscription revenues.
Okta’s total customer count was 18,800, up 10% year over year. Customers with more than $100K in Annual Contract Value (ACV) increased 17% year over year to 4,365.
It added 400 new customers in the reported quarter, out of which 160 customers were in the $100K-plus ACV category.
Okta shares were down 1.24% in after-hours trading. Shares have gained 3.6% year to date, underperforming the Zacks Computer & Technology sector’s growth of 46% over the same time frame.
Quarter Details
Subscription revenues (97.4% of total revenues) rose 22.1% year over year to $569 million. Professional services and other revenues (2.6% of total revenues) were unchanged year over year to $15 million.
Location-wise, revenues from the United States accounted for 78.6% of total revenues in the fiscal third quarter. The figure increased 21.8% year over year to $459 million.
International revenues accounted for 21.4% of total revenues. The figure increased 20.2% year over year to $125 million.
The dollar-based retention rate in the trailing 12 months was 115%, down from 122% reported in the year-ago quarter.
Remaining Performance Obligations (“RPO”) totaled $3.07 billion, up 8% year over year. The current RPO, expected to be recognized over the next 12 months, was $1.83 billion, up 16% year over year.
Operating Details
Non-GAAP gross profit improved 26.1% year over year to $473 million. Gross margin expanded 300 basis points on a year-over-year basis to 81%.
Research and development expenses increased 11.5% year over year to $165 million. Sales and marketing decreased 6.9% year over year to $270 million.
Moreover, general and administrative expenses increased 13.3% year over year to $111 million.
Total operating expenses increased 1.9% year over year to $546 million.
Non-GAAP operating income was $85 million compared with break-even earnings in the year-ago quarter.
Balance Sheet
Okta had $2.13 billion in cash, cash equivalents and short-term investments as of Oct 31, 2023 compared with $2.58 billion as of Jul 31, 2023.
Net cash provided by operations was $156 million in the reported quarter, while free cash flow was $150 million.
Guidance
For fourth-quarter fiscal 2024, Okta expects revenues in the range of $585-$587 million, indicating year-over-year growth of 15%.
Current RPO is expected between $1.875 billion and $1.880 billion, suggesting year-over-year growth in the 11-12% range.
Non-GAAP operating income is expected in the range of $102-$104 million. Operating margin is expected between 17% and 18%.
Non-GAAP earnings are anticipated to be 50-51 cents per share.
For fiscal 2024, revenues are expected to be $2.243-2.245 billion, indicating year-over-year growth of 21%.
Non-GAAP operating income is expected in the range of $283-$285 million. Operating margin is expected to be 13%.
Non-GAAP earnings are anticipated between $1.47 and $1.48 per share.
For fiscal 2025, Okta provided preliminary guidance. Revenues are expected to be $2.46-$2.47 billion, indicating year-over-year growth of 10%.
Image: Bigstock
OKTA's Q3 Earnings Beat Estimates, Revenues Increase Y/Y
Okta, Inc. (OKTA - Free Report) reported third-quarter fiscal 2024 earnings of 44 cents per share, comfortably beating the Zacks Consensus Estimate by 46.67%. The company reported break-even earnings in the year-ago quarter.
Total revenues increased 21.4% year over year to $584 million and surpassed the consensus mark of $560 million. The year-over-year upside can be attributed to higher subscription revenues.
Okta’s total customer count was 18,800, up 10% year over year. Customers with more than $100K in Annual Contract Value (ACV) increased 17% year over year to 4,365.
It added 400 new customers in the reported quarter, out of which 160 customers were in the $100K-plus ACV category.
Okta, Inc. Price, Consensus and EPS Surprise
Okta, Inc. price-consensus-eps-surprise-chart | Okta, Inc. Quote
Okta shares were down 1.24% in after-hours trading. Shares have gained 3.6% year to date, underperforming the Zacks Computer & Technology sector’s growth of 46% over the same time frame.
Quarter Details
Subscription revenues (97.4% of total revenues) rose 22.1% year over year to $569 million. Professional services and other revenues (2.6% of total revenues) were unchanged year over year to $15 million.
Location-wise, revenues from the United States accounted for 78.6% of total revenues in the fiscal third quarter. The figure increased 21.8% year over year to $459 million.
International revenues accounted for 21.4% of total revenues. The figure increased 20.2% year over year to $125 million.
The dollar-based retention rate in the trailing 12 months was 115%, down from 122% reported in the year-ago quarter.
Remaining Performance Obligations (“RPO”) totaled $3.07 billion, up 8% year over year. The current RPO, expected to be recognized over the next 12 months, was $1.83 billion, up 16% year over year.
Operating Details
Non-GAAP gross profit improved 26.1% year over year to $473 million. Gross margin expanded 300 basis points on a year-over-year basis to 81%.
Research and development expenses increased 11.5% year over year to $165 million. Sales and marketing decreased 6.9% year over year to $270 million.
Moreover, general and administrative expenses increased 13.3% year over year to $111 million.
Total operating expenses increased 1.9% year over year to $546 million.
Non-GAAP operating income was $85 million compared with break-even earnings in the year-ago quarter.
Balance Sheet
Okta had $2.13 billion in cash, cash equivalents and short-term investments as of Oct 31, 2023 compared with $2.58 billion as of Jul 31, 2023.
Net cash provided by operations was $156 million in the reported quarter, while free cash flow was $150 million.
Guidance
For fourth-quarter fiscal 2024, Okta expects revenues in the range of $585-$587 million, indicating year-over-year growth of 15%.
Current RPO is expected between $1.875 billion and $1.880 billion, suggesting year-over-year growth in the 11-12% range.
Non-GAAP operating income is expected in the range of $102-$104 million. Operating margin is expected between 17% and 18%.
Non-GAAP earnings are anticipated to be 50-51 cents per share.
For fiscal 2024, revenues are expected to be $2.243-2.245 billion, indicating year-over-year growth of 21%.
Non-GAAP operating income is expected in the range of $283-$285 million. Operating margin is expected to be 13%.
Non-GAAP earnings are anticipated between $1.47 and $1.48 per share.
For fiscal 2025, Okta provided preliminary guidance. Revenues are expected to be $2.46-$2.47 billion, indicating year-over-year growth of 10%.
Operating margin is expected to be roughly 17%.
Zacks Rank & Stocks to Consider
Currently, Okta carries a Zacks Rank #3 (Hold).
BlackLine (BL - Free Report) , Ceridian HCM , and Everbridge (EVBG - Free Report) are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BlackLine shares have lost 13.2% year to date. The long-term earnings growth rate is pegged at 50.56%.
Ceridian HCM shares have gained 7.8% year to date. The long-term earnings growth rate is pegged at 44.15%.
Everbridge shares have declined 30.2% year to date. The long-term earnings growth rate is pegged at 47.04%.