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Okta, Inc. (OKTA - Free Report) reported earnings of 30 cents per share in fourth-quarter fiscal 2023, comfortably beating the Zacks Consensus Estimate of 10 cents. The company reported a loss of 18 cents per share in the year-ago quarter.
Total revenues increased 33.2% year over year to $510 million and surpassed the consensus mark by 4.30%. The upside can be attributed to higher subscription revenues.
Okta’s total customer count was 17,600, up 17% year over year. Customers with more than $100K in Annual Contract Value (ACV) increased 27% year over year.
It added 550 customers in the reported quarter, out of which, 190 customers were in the $100K-plus ACV category.
Workforce ACV grew 30% and represented 61% of total ACV. Customer Identity ACV grew 35% and accounted for 39% of total ACV.
Okta shares were up almost 16% in pre-market trading following the results.
Quarter Details
Subscription revenues (97.1% of total revenues) rose 34.1% year over year to $495 million. Professional services and other revenues (2.9% of total revenues) increased 7.1% year over year to $15 million.
Location-wise, revenues from the United States accounted for 79% of the total revenues in the fiscal fourth quarter. International revenues (21% of total revenues) increased 32% year over year.
Total calculated billings were $710 million, up 18% year over year. The uptick was driven by new and existing commercial, as well as enterprise customers, and increased bookings.
The dollar-based retention rate in the trailing 12 months was 120%, unchanged year over year.
Remaining Performance Obligations (“RPO”) totaled $3.01 billion, up 12% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.68 billion, up 25% year over year.
Operating Details
Non-GAAP gross profit improved 37.4% year over year to $404 million. The gross margin expanded 250 basis points on a year-over-year basis to 79.2%.
The non-GAAP subscription gross margin was flat on a year-over-year basis.
Research and development expenses increased 4.8% year over year to $154 million. Sales and marketing increased 16.7% year over year to $259 million.
General and administrative expenses decreased 8.3% year over year to $100 million.
Total operating expenses increased 7.3% year over year to $513 million.
Non-GAAP operating income was $46 million against a loss of $24 million in the year-ago quarter.
Balance Sheet
Okta had $2.58 billion in cash, cash equivalents and short-term investments as of Oct 31, 2022, compared with $2.47 billion as of Oct 31, 2022.
Guidance
For first-quarter fiscal 2024, Okta expects revenues of $509-$511 million, which indicates year-over-year growth of 23%.
Current RPO is expected between $1.675 billion and $1.685 billion, indicating year-over-year growth of 19%.
Non-GAAP operating income is expected to be $18-$20 million, while non-GAAP earnings are anticipated to be 11-12 cents per share.
For fiscal 2024, revenues are expected to be $2.155-$2.170 billion, indicating year-over-year growth between 16% and 17%.
Non-GAAP operating income is expected to be $136-$145 million and non-GAAP earnings are anticipated between 74 cents and 79 cents per share.
Zacks Rank & Stocks to Consider
Currently, Okta carries a Zacks Rank #3 (Hold).
Okta shares have lost 60.9% in the past year, underperforming the Zacks Computer & Technology sector’s decline of 19.9% over the same time frame.
Image: Bigstock
OKTA Q4 Earnings Beat Estimates, Revenues Increase Y/Y
Okta, Inc. (OKTA - Free Report) reported earnings of 30 cents per share in fourth-quarter fiscal 2023, comfortably beating the Zacks Consensus Estimate of 10 cents. The company reported a loss of 18 cents per share in the year-ago quarter.
Total revenues increased 33.2% year over year to $510 million and surpassed the consensus mark by 4.30%. The upside can be attributed to higher subscription revenues.
Okta’s total customer count was 17,600, up 17% year over year. Customers with more than $100K in Annual Contract Value (ACV) increased 27% year over year.
It added 550 customers in the reported quarter, out of which, 190 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
Workforce ACV grew 30% and represented 61% of total ACV. Customer Identity ACV grew 35% and accounted for 39% of total ACV.
Okta shares were up almost 16% in pre-market trading following the results.
Quarter Details
Subscription revenues (97.1% of total revenues) rose 34.1% year over year to $495 million. Professional services and other revenues (2.9% of total revenues) increased 7.1% year over year to $15 million.
Location-wise, revenues from the United States accounted for 79% of the total revenues in the fiscal fourth quarter. International revenues (21% of total revenues) increased 32% year over year.
Total calculated billings were $710 million, up 18% year over year. The uptick was driven by new and existing commercial, as well as enterprise customers, and increased bookings.
The dollar-based retention rate in the trailing 12 months was 120%, unchanged year over year.
Remaining Performance Obligations (“RPO”) totaled $3.01 billion, up 12% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.68 billion, up 25% year over year.
Operating Details
Non-GAAP gross profit improved 37.4% year over year to $404 million. The gross margin expanded 250 basis points on a year-over-year basis to 79.2%.
The non-GAAP subscription gross margin was flat on a year-over-year basis.
Research and development expenses increased 4.8% year over year to $154 million. Sales and marketing increased 16.7% year over year to $259 million.
General and administrative expenses decreased 8.3% year over year to $100 million.
Total operating expenses increased 7.3% year over year to $513 million.
Non-GAAP operating income was $46 million against a loss of $24 million in the year-ago quarter.
Balance Sheet
Okta had $2.58 billion in cash, cash equivalents and short-term investments as of Oct 31, 2022, compared with $2.47 billion as of Oct 31, 2022.
Guidance
For first-quarter fiscal 2024, Okta expects revenues of $509-$511 million, which indicates year-over-year growth of 23%.
Current RPO is expected between $1.675 billion and $1.685 billion, indicating year-over-year growth of 19%.
Non-GAAP operating income is expected to be $18-$20 million, while non-GAAP earnings are anticipated to be 11-12 cents per share.
For fiscal 2024, revenues are expected to be $2.155-$2.170 billion, indicating year-over-year growth between 16% and 17%.
Non-GAAP operating income is expected to be $136-$145 million and non-GAAP earnings are anticipated between 74 cents and 79 cents per share.
Zacks Rank & Stocks to Consider
Currently, Okta carries a Zacks Rank #3 (Hold).
Okta shares have lost 60.9% in the past year, underperforming the Zacks Computer & Technology sector’s decline of 19.9% over the same time frame.
MongoDB (MDB - Free Report) , Samsara (IOT - Free Report) , and Methode Electronics (MEI - Free Report) are some better-ranked stocks that investors can consider in the broader sector. All three companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MongoDB shares have declined 45% in the past year. MDB is set to report its fourth-quarter fiscal 2023 results on Mar 8.
Samsara shares have gained 1.6% in the past year. IOT is set to report its fourth-quarter fiscal 2023 results on Mar 2.
Methode Electronics shares have gained 9.2% in the past year. MEI is set to report its third-quarter fiscal 2023 results on Mar 9.