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Okta, Inc. (OKTA - Free Report) reported earnings of 31 cents per share in second-quarter fiscal 2024, comfortably beating the Zacks Consensus Estimate of 21 cents. The company reported a loss of 10 cents per share in the year-ago quarter.
Total revenues increased 23% year over year to $556 million and surpassed the consensus mark by 4.11%. The upside can be attributed to higher subscription revenues.
Okta’s total customer count was 18,400, up 12% year over year. Customers with more than $100K in Annual Contract Value (ACV) increased 19% year over year.
It added 350 new customers in the reported quarter, out of which, 125 customers were in the $100K-plus ACV category.
Workforce Identity ACV grew 22% and represented 61% of total ACV. Customer Identity ACV grew 29% and accounted for 39% of total ACV.
Subscription revenues (97.5% of total revenues) rose 24.6% year over year to $542 million. Professional services and other revenues (2.5% of total revenues) decreased 17.6% year over year to $15 million.
Location-wise, revenues from the United States accounted for 79% of total revenues in the fiscal second quarter. International revenues (21% of total revenues) increased 18.2% year over year.
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 $3.03 billion, up 8% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.77 billion, up 18% year over year.
Operating Details
Non-GAAP gross profit improved 28% year over year to $444 million. Gross margin expanded 310 basis points on a year-over-year basis to 79.9%.
Research and development expenses increased 10.3% year over year to $172 million. Sales and marketing decreased 1.5% year over year to $261 million.
Moreover, general and administrative expenses increased 17.8% year over year to $119 million.
Total operating expenses increased 5.7% year over year to $552 million.
Non-GAAP operating income was $59 million against a loss of $15 million in the year-ago quarter.
Balance Sheet
Okta had $2.58 billion in cash, cash equivalents and short-term investments as of Jul 31, 2023 compared with $2.58 billion as of Apr 30, 2023.
Guidance
For second-quarter fiscal 2024, Okta expects revenues in the range of $558-$560 million, indicating year-over-year growth of 16%.
Current RPO is expected between $1.78 billion and $1.785 billion, suggesting year-over-year growth of 13%.
Non-GAAP operating income is expected in the range of $53-$55 million while non-GAAP earnings are anticipated to be 29-30 cents per share.
For fiscal 2024, revenues are expected to be $2.207-$2.215 billion, indicating year-over-year growth of 19%.
Non-GAAP operating income is expected in the range of $215-$220 million and non-GAAP earnings are anticipated between $1.17 and $1.20 per share.
Zacks Rank & Stocks to Consider
Currently, Okta carries a Zacks Rank #3 (Hold).
Okta shares have gained 7.7% year to date, underperforming the Zacks Computer & Technology sector’s growth of 40.3% over the same time frame.
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OKTA's Q2 Earnings Beat Estimates, Revenues Increase Y/Y
Okta, Inc. (OKTA - Free Report) reported earnings of 31 cents per share in second-quarter fiscal 2024, comfortably beating the Zacks Consensus Estimate of 21 cents. The company reported a loss of 10 cents per share in the year-ago quarter.
Total revenues increased 23% year over year to $556 million and surpassed the consensus mark by 4.11%. The upside can be attributed to higher subscription revenues.
Okta’s total customer count was 18,400, up 12% year over year. Customers with more than $100K in Annual Contract Value (ACV) increased 19% year over year.
It added 350 new customers in the reported quarter, out of which, 125 customers were in the $100K-plus ACV category.
Workforce Identity ACV grew 22% and represented 61% of total ACV. Customer Identity ACV grew 29% and accounted for 39% of total ACV.
Okta, Inc. Price, Consensus and EPS Surprise
Okta, Inc. price-consensus-eps-surprise-chart | Okta, Inc. Quote
Quarter Details
Subscription revenues (97.5% of total revenues) rose 24.6% year over year to $542 million. Professional services and other revenues (2.5% of total revenues) decreased 17.6% year over year to $15 million.
Location-wise, revenues from the United States accounted for 79% of total revenues in the fiscal second quarter. International revenues (21% of total revenues) increased 18.2% year over year.
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 $3.03 billion, up 8% year over year. Current RPO, expected to be recognized over the next 12 months, was $1.77 billion, up 18% year over year.
Operating Details
Non-GAAP gross profit improved 28% year over year to $444 million. Gross margin expanded 310 basis points on a year-over-year basis to 79.9%.
Research and development expenses increased 10.3% year over year to $172 million. Sales and marketing decreased 1.5% year over year to $261 million.
Moreover, general and administrative expenses increased 17.8% year over year to $119 million.
Total operating expenses increased 5.7% year over year to $552 million.
Non-GAAP operating income was $59 million against a loss of $15 million in the year-ago quarter.
Balance Sheet
Okta had $2.58 billion in cash, cash equivalents and short-term investments as of Jul 31, 2023 compared with $2.58 billion as of Apr 30, 2023.
Guidance
For second-quarter fiscal 2024, Okta expects revenues in the range of $558-$560 million, indicating year-over-year growth of 16%.
Current RPO is expected between $1.78 billion and $1.785 billion, suggesting year-over-year growth of 13%.
Non-GAAP operating income is expected in the range of $53-$55 million while non-GAAP earnings are anticipated to be 29-30 cents per share.
For fiscal 2024, revenues are expected to be $2.207-$2.215 billion, indicating year-over-year growth of 19%.
Non-GAAP operating income is expected in the range of $215-$220 million and non-GAAP earnings are anticipated between $1.17 and $1.20 per share.
Zacks Rank & Stocks to Consider
Currently, Okta carries a Zacks Rank #3 (Hold).
Okta shares have gained 7.7% year to date, underperforming the Zacks Computer & Technology sector’s growth of 40.3% over the same time frame.
Salesforce (CRM - Free Report) , Freshwork (FRSH - Free Report) , and Splunk are some better-ranked stocks that investors can consider in the broader sector, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Salesforce shares have gained 62.2% year to date. The long-term earnings growth rate is pegged at 21.47%.
Freshwork shares have gained 48.8% year to date. The long-term earnings growth rate is pegged at 30%.
Splunk shares have gained 39.7% year to date. The long-term earnings growth rate is pegged at 24.71%.