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OKTA's Q4 Earnings Beat Estimates, Revenues Increase Y/Y

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Okta (OKTA - Free Report) reported fourth-quarter fiscal 2024 earnings of 63 cents per share, comfortably beating the Zacks Consensus Estimate by 23.53%. The company reported earnings of 30 cents in the year-ago quarter.

Total revenues increased 18.6% year over year to $605 million and surpassed the consensus mark of $586 million. The year-over-year upside can be attributed to higher subscription revenues.

Okta’s total customer count was 18,950, up 8% year over year. Customers with more than $100K in Annual Contract Value (ACV) increased 14% year over year to 4,485.

Quarter Details

Subscription revenues (97.7% of total revenues) rose 19.4% year over year to $591 million.

Okta, Inc. Price, Consensus and EPS Surprise


Okta, Inc. Price, Consensus and EPS Surprise

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

Professional services and other revenues (2.3% of total revenues) down 6.7% year over year to $14 million.

Location-wise, revenues from the United States contributed 79% to total revenues in the fiscal fourth quarter. The figure increased 19.2% year over year to $478 million.

International revenues contributed 21% to total revenues.The figure increased 16.5% year over year to $127 million.

The dollar-based retention rate in the trailing 12 months was 111%, down from 120% reported in the year-ago quarter.

Remaining Performance Obligations (“RPO”) totaled $3.38 billion, up 13% year over year. The current RPO, expected to be recognized over the next 12 months, was $1.95 billion, up 16% year over year.

In the fourth quarter, Okta introduced the Okta Secure Identity Commitment, focusing on countering identity attacks. This comprised Project Bedrock to fortify ancillary and corporate systems.

The company also emphasized its leadership in access management and entered larger markets with Okta Identity Governance and Okta Privileged Access. The unified platform attracted customers seeking benefits across Access Management, Governance and Privileged Access.

Operating Details

Non-GAAP gross profit improved 22.3% year over year to $494 million. Gross margin expanded 240 basis points on a year-over-year basis to 81.7%.

Research and development expenses increased 1.3% year over year to $156 million. Sales and marketing decreased 3.9% year over year to $249 million.

General and administrative expenses increased 10% year over year to $110 million.

Total operating expenses increased 40 bps year over year to $515 million.

Non-GAAP operating income was $129 million compared with $46 million in the year-ago quarter.

Balance Sheet

Okta had $2.2 billion in cash, cash equivalents and short-term investments as of Jan 31, 2024, compared with $2.13 billion as of Oct 31, 2023.

Net cash provided by operations was $174 million in the reported quarter, while free cash flow was $166 million.


For first-quarter fiscal 2025, Okta expects revenues in the range of $603-$605 million, indicating year-over-year growth of 16-17%.

Current RPO is expected between $1.915 billion and $1.920 billion, suggesting year-over-year growth of 13%.

Non-GAAP operating income is expected in the range of $108-$110 million. Operating margin is expected to be 18%.

Non-GAAP earnings are anticipated to be 54-55 cents per share.

The non-GAAP free cash flow margin is expected to be approximately 25%, including an estimated $24 million cash impact from organizational restructuring to be paid out in the first quarter.

Zacks Rank & Other Stocks to Consider

Currently, Okta has a Zacks Rank #2 (Buy).

Okta’s shares have lost 3.6% year to date compared with the Zacks Computer & Technology sector’s increase of 7.9%.

Crowdstrike (CRWD - Free Report) , SEMrush (SEMR - Free Report) and Adobe (ADBE - Free Report) are some better-ranked stocks that investors can consider in the broader sector.

CRWD currently sports Zacks Rank#1(Strong Buy), while SEMR and ADBE have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Crowdstrike shares have returned 25.7% year to date. CRWD is scheduled to release fourth-quarter and fiscal year 2024 results on Mar 5.

SEMrush’s shares have declined 9.1% year to date. SEMR is set to report its first-quarter 2024 results on Mar 4.

Adobe’s shares have declined 7.4% year to date. ADBE is set to release its fourth-quarter fiscal 2024 results on Mar 14.

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