- Q2 revenue grew 16% year-over-year; subscription revenue grew
17% year-over-year
- Current remaining performance obligations (cRPO) grew 13%
year-over-year to $1.995 billion
- Record profitability including GAAP profitability for the first
time
- Operating cash flow of $86 million and free cash flow of $78
million
Okta, Inc. (Nasdaq: OKTA), the leading independent Identity
partner, today announced financial results for its second quarter
ended July 31, 2024.
“Okta is setting the standard for identity security by focusing
on relentless innovation and expanding our product offerings within
the Workforce Identity Cloud and Customer Identity Cloud,” said
Todd McKinnon, Chief Executive Officer and co-founder of Okta.
“We’re delivering all of this product innovation while achieving
record profitability and maintaining strong cash flow. In today's
dynamic cybersecurity landscape, identity is security, and Okta is
dedicated to providing our customers with modern solutions to meet
their evolving needs.”
Second Quarter Fiscal 2025 Financial Highlights:
- Revenue: Total revenue was $646 million, an increase of
16% year-over-year. Subscription revenue was $632 million, an
increase of 17% year-over-year.
- RPO: RPO, or subscription backlog, was $3.505 billion,
an increase of 16% year-over-year. cRPO, which represents
subscription backlog expected to be recognized over the next 12
months, was $1.995 billion, up 13% compared to the second quarter
of fiscal 2024.
- GAAP Operating Loss: GAAP operating loss was $19
million, or (3)% of total revenue, compared to a GAAP operating
loss of $162 million, or (29)% of total revenue, in the second
quarter of fiscal 2024.
- Non-GAAP Operating Income: Non-GAAP operating income was
$148 million, or 23% of total revenue, compared to a non-GAAP
operating income of $59 million, or 11% of total revenue, in the
second quarter of fiscal 2024.
- GAAP Net Income (Loss): GAAP net income was $29 million,
compared to a GAAP net loss of $111 million in the second quarter
of fiscal 2024. GAAP basic and diluted net income per share were
$0.18 and $0.15, respectively, compared to a GAAP basic and diluted
net loss per share of $0.68 in the second quarter of fiscal
2024.
- Non-GAAP Net Income: Non-GAAP net income was $131
million, compared to non-GAAP net income of $56 million in the
second quarter of fiscal 2024. Non-GAAP diluted net income per
share was $0.72, compared to non-GAAP diluted net income per share
of $0.31 in the second quarter of fiscal 2024.
- Cash Flow: Net cash provided by operations was $86
million, or 13% of total revenue, compared to net cash provided by
operations of $53 million, or 10% of total revenue, in the second
quarter of fiscal 2024. Free cash flow was $78 million, or 12% of
total revenue, compared to $49 million, or 9% of total revenue, in
the second quarter of fiscal 2024.
- Cash, cash equivalents, and short-term investments were
$2.358 billion at July 31, 2024.
The section titled "Non-GAAP Financial Measures" below contains
a description of the non-GAAP financial measures, and
reconciliations between GAAP and non-GAAP information are contained
in the tables below.
Financial Outlook:
All periods factor in a challenging macro environment, and
continue to incorporate some conservatism as the Company monitors
potential impacts related to the October 2023 security
incident.
For the third quarter of fiscal 2025, the Company expects:
- Total revenue of $648 million to $650 million, representing a
growth rate of 11% year-over-year;
- Current RPO of $1.985 billion to $1.990 billion, representing a
growth rate of 9% year-over-year;
- Non-GAAP operating income of $118 million to $120 million,
which yields a non-GAAP operating margin of 18%;
- Non-GAAP diluted net income per share of $0.57 to $0.58,
assuming diluted weighted-average shares outstanding of
approximately 183 million and a non-GAAP tax rate of 26%; and
- Non-GAAP free cash flow margin of approximately 20%.
For the full year fiscal 2025, the Company now expects:
- Total revenue of $2.555 billion to $2.565 billion, representing
a growth rate of 13% year-over-year;
- Non-GAAP operating income of $535 million to $545 million,
which yields a non-GAAP operating margin of 21%;
- Non-GAAP diluted net income per share of $2.58 to $2.63,
assuming diluted weighted-average shares outstanding of
approximately 182 million and a non-GAAP tax rate of 26%; and
- Non-GAAP free cash flow margin of approximately 23%.
These statements are forward-looking and actual results may
differ materially. Refer to the "Forward-Looking Statements" safe
harbor below for information on the factors that could cause our
actual results to differ materially from these forward-looking
statements.
Okta has not reconciled its forward-looking non-GAAP financial
measures to their most directly comparable GAAP measures because
certain items are out of Okta’s control or cannot be reasonably
predicted. Accordingly, reconciliations for forward-looking
non-GAAP financial measures are not available without unreasonable
effort.
Webcast Information:
Okta will host a live video webcast at 2:00 p.m. Pacific Time on
August 28, 2024 to discuss the results and outlook. The prepared
remarks and the news release with the financial results will be
accessible from the Company’s website at investor.okta.com prior to
the webcast. The live video webcast will be accessible from the
Okta investor relations website at investor.okta.com. A replay will
be available on the Okta investor relations website following the
completion of the event.
Supplemental Financial and Other Information:
Supplemental financial and other information can be accessed
through the Company’s investor relations website at
investor.okta.com. Okta uses its investor.okta.com website and
okta.com/blog websites (including the Security Blog, Okta Developer
Blog and Auth0 Developer Blog) as a means of disclosing material
non-public information, announcing upcoming investor conferences
and for complying with its disclosure obligations under Regulation
FD. Accordingly, you should monitor our investor relations and
okta.com/blog websites in addition to following our press releases,
SEC filings and public conference calls and webcasts.
Non-GAAP Financial Measures:
This press release and the accompanying tables contain the
following non-GAAP financial measures: non-GAAP gross profit,
non-GAAP gross margin, non-GAAP operating income, non-GAAP
operating margin, non-GAAP net income, non-GAAP net margin,
non-GAAP diluted net income per share, non-GAAP tax rate, free cash
flow and free cash flow margin. Certain of these non-GAAP financial
measures exclude stock-based compensation, non-cash charitable
contributions, amortization of acquired intangibles, acquisition
and integration-related expenses, restructuring costs related to
severance and termination benefits and lease impairments in
connection with the closing of certain leased facilities, certain
non-ordinary course legal settlements and related expenses,
amortization of debt issuance costs and gain on early
extinguishment of debt. Acquisition and integration-related
expenses include transaction costs and other non-recurring
incremental costs incurred through the one-year anniversary of the
transaction close.
Stock-based compensation is non-cash in nature and is generally
fixed at the time the stock-based instrument is granted and
amortized over a period of several years. Although stock-based
compensation is an important aspect of the compensation of our
employees and executives, the expense for the fair value of the
stock-based instruments we use may bear little resemblance to the
actual value realized upon the vesting or future exercise of the
related stock-based awards. We believe excluding stock-based
compensation provides meaningful supplemental information regarding
the long-term performance of our core business and facilitates
comparison of our results to those of peer companies.
We also exclude non-cash charitable contributions, amortization
of acquired intangibles, acquisition and integration-related
expenses, restructuring costs related to severance and termination
benefits and lease impairments in connection with the closing of
certain leased facilities, certain non-ordinary course legal
settlements and related expenses, amortization of debt issuance
costs and gain on early extinguishment of debt from the applicable
non-GAAP financial measures because these adjustments are
considered by management to be outside of our core operating
results.
In addition to these exclusions, we subtract an assumed
provision for income taxes to calculate non-GAAP net income. We use
a fixed long-term projected tax rate of 26% in our computation of
the non-GAAP income tax provision to provide better consistency
across the reporting periods. The non-GAAP tax rate could be
subject to change for a variety of reasons, including changes in
tax laws and regulations, significant changes in our geographic
earnings mix, or other changes to our strategy or business
operations. We will periodically reevaluate the projected long-term
tax rate, as necessary, for significant events based on our ongoing
analysis of relevant tax law changes, material changes in the
forecasted geographic earnings mix, and any significant
acquisitions.
We define free cash flow, a non-GAAP financial measure, as net
cash provided by operating activities, less cash used for purchases
of property and equipment, net of sales proceeds, and capitalized
software. Free cash flow margin is calculated as free cash flow
divided by total revenue. We use free cash flow as a measure of
financial progress in our business, as it balances operating
results, cash management, and capital efficiency. We believe
information regarding free cash flow provides investors and others
with an important perspective on the cash available to make
strategic acquisitions and investments, to fund ongoing operations,
and to fund other capital expenditures. Free cash flow can be
volatile and is sensitive to many factors, including changes in
working capital and timing of capital expenditures. Working capital
at any specific point in time is subject to many variables,
including seasonality, the discretionary timing of expense
payments, discounts offered by vendors, vendor payment terms, and
fluctuations in foreign exchange rates.
We periodically reassess the components of our non-GAAP
adjustments for changes in how we evaluate our performance and
changes in how we make financial and operational decisions, and
consider the use of these measures by our competitors and peers to
ensure the adjustments remain relevant and meaningful.
Okta believes that non-GAAP financial information, when taken
collectively with GAAP financial measures, may be helpful to
investors because it provides consistency and comparability with
past financial performance and assists in comparisons with other
companies, some of which use similar non-GAAP financial information
to supplement their GAAP results. The non-GAAP financial
information is presented for supplemental informational purposes
only, and should not be considered a substitute for financial
information presented in accordance with GAAP, and may be different
from similarly-titled non-GAAP measures used by other
companies.
The principal limitation of these non-GAAP financial measures is
that they exclude significant expenses that are required by GAAP to
be recorded in the Company’s financial statements. In addition,
they are subject to inherent limitations as they reflect the
exercise of judgment by the Company's management about which
expenses are excluded or included in determining these non-GAAP
financial measures. A reconciliation is provided below for each
non-GAAP financial measure to the most directly comparable
financial measure stated in accordance with GAAP.
Okta encourages investors to review the related GAAP financial
measures and the reconciliation of these non-GAAP financial
measures to their most directly comparable GAAP financial measures,
which it includes in press releases announcing quarterly financial
results, including this press release, and not to rely on any
single financial measure to evaluate the Company’s business.
Forward-Looking Statements: This press release contains
"forward-looking statements" within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act
of 1995, including but not limited to, statements regarding our
financial outlook, business strategy and plans, market trends and
market size, opportunities and positioning. These forward-looking
statements are based on current expectations, estimates, forecasts
and projections. Words such as "expect," "anticipate," "should,"
"believe," "hope," "target," "project," "goals," "estimate,"
"potential," "predict," "may," "will," "might," "could," "intend,"
"shall" and variations of these terms and similar expressions are
intended to identify these forward-looking statements, although not
all forward-looking statements contain these identifying words.
Forward-looking statements are subject to a number of risks and
uncertainties, many of which involve factors or circumstances that
are beyond our control. For example, global economic conditions
have in the past and could in the future reduce demand for our
products; we and our third-party service providers have in the past
and could in the future experience cybersecurity incidents; we may
be unable to manage or sustain the level of growth that our
business has experienced in prior periods; our financial resources
may not be sufficient to maintain or improve our competitive
position; we may be unable to attract new customers, or retain or
sell additional products to existing customers; customer growth has
slowed in recent periods and could continue to decelerate in the
future; we could experience interruptions or performance problems
associated with our technology, including a service outage; we and
our third-party service providers have failed, or were perceived as
having failed, to fully comply with various privacy and security
provisions to which we are subject, and similar incidents could
occur in the future; we may not achieve expected synergies and
efficiencies of operations from recent acquisitions or business
combinations, and we may not be able to successfully integrate the
companies we acquire; and we may not be able to pay off our
convertible senior notes when due. Further information on potential
factors that could affect our financial results is included in our
most recent Quarterly Report on Form 10-Q and our other filings
with the Securities and Exchange Commission. The forward-looking
statements included in this press release represent our views only
as of the date of this press release and we assume no obligation
and do not intend to update these forward-looking statements.
About Okta
Okta is The World’s Identity Company™. We secure Identity, so
everyone is free to safely use any technology. Our customer and
workforce solutions empower businesses and developers to use the
power of Identity to drive security, efficiencies, and success —
all while protecting their users, employees, and partners. Learn
why the world’s leading brands trust Okta for authentication,
authorization, and more at okta.com.
OKTA, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(dollars in millions, shares in
thousands, except per share data)
(unaudited)
Three Months Ended
July 31,
Six Months Ended
July 31,
2024
2023
2024
2023
Revenue:
Subscription
$
632
$
542
$
1,235
$
1,045
Professional services and other
14
14
28
29
Total revenue
646
556
1,263
1,074
Cost of revenue:
Subscription(1)
137
128
267
250
Professional services and other(1)
18
21
36
41
Total cost of revenue
155
149
303
291
Gross profit
491
407
960
783
Operating expenses:
Research and development(1)
164
172
327
335
Sales and marketing(1)
238
261
474
517
General and administrative(1)
108
119
225
229
Restructuring and other charges
—
17
—
24
Total operating expenses
510
569
1,026
1,105
Operating loss
(19
)
(162
)
(66
)
(322
)
Interest expense
(1
)
(2
)
(3
)
(5
)
Interest income and other, net
29
18
56
35
Gain on early extinguishment of debt
3
42
3
73
Interest and other, net
31
58
56
103
Income (loss) before provision for
(benefit from) income taxes
12
(104
)
(10
)
(219
)
Provision for (benefit from) income
taxes
(17
)
7
1
11
Net income (loss)
$
29
$
(111
)
$
(11
)
$
(230
)
Net income (loss) per share, basic
$
0.18
$
(0.68
)
$
(0.06
)
$
(1.42
)
Net income (loss) per share, diluted
$
0.15
$
(0.68
)
$
(0.06
)
$
(1.42
)
Weighted-average shares used to compute
net income (loss) per share, basic
168,612
162,755
168,045
162,051
Weighted-average shares used to compute
net income (loss) per share, diluted
174,443
162,755
168,045
162,051
(1) Amounts include stock-based compensation expense as
follows:
Three Months Ended
July 31,
Six Months Ended
July 31,
2024
2023
2024
2023
Cost of subscription revenue
$
22
$
21
$
41
$
37
Cost of professional services and
other
3
4
6
8
Research and development
56
74
119
142
Sales and marketing
36
41
66
79
General and administrative
31
45
67
85
Total stock-based compensation expense
$
148
$
185
$
299
$
351
OKTA, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(dollars in millions)
(unaudited)
July 31,
January 31,
2024
2024
Assets
Current assets:
Cash and cash equivalents
$
515
$
334
Short-term investments
1,843
1,868
Accounts receivable, net of allowances
377
559
Deferred commissions
122
113
Prepaid expenses and other current
assets
181
106
Total current assets
3,038
2,980
Property and equipment, net
47
48
Operating lease right-of-use assets
82
83
Deferred commissions, noncurrent
230
242
Intangible assets, net
168
182
Goodwill
5,448
5,406
Other assets
54
48
Total assets
$
9,067
$
8,989
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
11
$
12
Accrued expenses and other current
liabilities
142
115
Accrued compensation
113
167
Deferred revenue
1,394
1,488
Total current liabilities
1,660
1,782
Convertible senior notes, net,
noncurrent
1,113
1,154
Operating lease liabilities,
noncurrent
107
112
Deferred revenue, noncurrent
21
23
Other liabilities, noncurrent
33
30
Total liabilities
2,934
3,101
Stockholders’ equity:
Preferred stock
—
—
Class A common stock
—
—
Class B common stock
—
—
Additional paid-in capital
8,981
8,724
Accumulated other comprehensive loss
(7
)
(6
)
Accumulated deficit
(2,841
)
(2,830
)
Total stockholders’ equity
6,133
5,888
Total liabilities and stockholders'
equity
$
9,067
$
8,989
OKTA, INC.
SUMMARY OF CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
(unaudited)
Six Months Ended
July 31,
2024
2023
Cash flows from operating
activities:
Net loss
$
(11
)
$
(230
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Stock-based compensation
299
351
Depreciation, amortization and
accretion
42
43
Amortization of deferred commissions
62
49
Deferred income taxes
(4
)
3
Lease impairment charges
—
25
Gain on early extinguishment of debt
(3
)
(73
)
Other, net
7
6
Changes in operating assets and
liabilities:
Accounts receivable
181
92
Deferred commissions
(59
)
(65
)
Prepaid expenses and other assets
(82
)
(14
)
Operating lease right-of-use assets
10
12
Accounts payable
(1
)
1
Accrued compensation
(55
)
24
Accrued expenses and other liabilities
33
(4
)
Operating lease liabilities
(18
)
(20
)
Deferred revenue
(96
)
(18
)
Net cash provided by operating
activities
305
182
Cash flows from investing
activities:
Capitalized software
(7
)
(7
)
Purchases of property and equipment
(6
)
(2
)
Purchases of securities available-for-sale
and other
(779
)
(577
)
Proceeds from maturities and redemption of
securities available-for-sale
808
1,101
Proceeds from sales of securities
available-for-sale and other
2
61
Payments for business acquisitions, net of
cash acquired
(56
)
(22
)
Net cash provided by (used in) investing
activities
(38
)
554
Cash flows from financing
activities:
Payments for repurchases of convertible
senior notes
(40
)
(671
)
Taxes paid related to net share settlement
of equity awards
(80
)
—
Payments for warrants related to
convertible senior notes
—
(4
)
Proceeds from stock option exercises
9
8
Proceeds from shares issued in connection
with employee stock purchase plan
24
26
Net cash used in financing activities
(87
)
(641
)
Effects of changes in foreign currency
exchange rates on cash, cash equivalents and restricted cash
—
2
Net increase in cash, cash equivalents and
restricted cash
180
97
Cash, cash equivalents and restricted cash
at beginning of period
342
271
Cash, cash equivalents and restricted cash
at end of period
$
522
$
368
OKTA, INC. Reconciliation of GAAP to
Non-GAAP Data (dollars in millions, shares in thousands, except
per share data) (unaudited)
Non-GAAP Gross Profit and Non-GAAP Gross Margin
We define non-GAAP gross profit and non-GAAP gross margin as
GAAP gross profit and GAAP gross margin, adjusted for stock-based
compensation expense included in cost of revenue, amortization of
acquired intangibles and acquisition and integration-related
expenses.
Three Months Ended
July 31,
Six Months Ended
July 31,
2024
2023
2024
2023
Gross profit
$
491
$
407
$
960
$
783
Add:
Stock-based compensation expense included
in cost of revenue
25
25
47
45
Amortization of acquired intangibles
12
12
24
24
Non-GAAP gross profit
$
528
$
444
$
1,031
$
852
Gross margin
76
%
73
%
76
%
73
%
Non-GAAP gross margin
82
%
80
%
82
%
79
%
Non-GAAP Operating Income and Non-GAAP Operating
Margin
We define non-GAAP operating income and non-GAAP operating
margin as GAAP operating loss and GAAP operating margin, adjusted
for stock-based compensation expense, non-cash charitable
contributions, amortization of acquired intangibles, acquisition
and integration-related expenses, restructuring costs related to
severance and termination benefits and lease impairments in
connection with the closing of certain leased facilities and
certain non-ordinary course legal settlements and related
expenses.
In fiscal 2025, we updated our definition of non-GAAP operating
income and non-GAAP operating margin to include certain
non-ordinary course legal settlements and related expenses.
Three Months Ended
July 31,
Six Months Ended
July 31,
2024
2023
2024
2023
Operating loss
$
(19
)
$
(162
)
$
(66
)
$
(322
)
Add:
Stock-based compensation expense
148
185
299
351
Non-cash charitable contributions
1
1
4
2
Amortization of acquired intangibles
18
18
37
41
Restructuring costs
—
17
—
24
Legal settlements and related expenses
—
—
7
—
Non-GAAP operating income
$
148
$
59
$
281
$
96
Operating margin
(3
)%
(29
)%
(5
)%
(30
)%
Non-GAAP operating margin
23
%
11
%
22
%
9
%
Non-GAAP Net Income, Non-GAAP Net Margin and Non-GAAP Diluted
Net Income Per Share
We define non-GAAP net income and non-GAAP net margin as GAAP
net income (loss) and GAAP net margin, adjusted for stock-based
compensation expense, non-cash charitable contributions,
amortization of acquired intangibles, acquisition and
integration-related expenses, amortization of debt issuance costs,
gain on early extinguishment of debt, restructuring costs related
to severance and termination benefits and lease impairments in
connection with the closing of certain leased facilities and
certain non-ordinary course legal settlements and related expenses.
In addition, we subtract an assumed provision for income taxes to
calculate non-GAAP net income. We use a fixed long-term projected
tax rate of 26% in our computation of the non-GAAP income tax
provision to provide better consistency across the reporting
periods.
In fiscal 2025, we updated our definition of non-GAAP net income
and non-GAAP net margin to include certain non-ordinary course
legal settlements and related expenses.
We define non-GAAP diluted net income per share, as non-GAAP net
income divided by GAAP weighted-average shares used to compute net
income (loss) per share, basic, adjusted for the potentially
dilutive effect of (i) employee equity incentive plans, excluding
the impact of unrecognized stock-based compensation expense, and
(ii) convertible senior notes outstanding and related warrants. In
addition, non-GAAP net income per share, diluted, includes the
impact of our capped call agreements on convertible senior notes
outstanding. The capped call agreements are intended to offset
potential dilution to our Class A common stock upon any conversion
or settlement of the convertible senior notes under certain
circumstances. Accordingly, we did not record any adjustments for
the potential impact of the convertible senior notes outstanding
under the if-converted method.
Three Months Ended
July 31,
Six Months Ended
July 31,
2024
2023
2024
2023
Net income (loss)
$
29
$
(111
)
$
(11
)
$
(230
)
Add:
Stock-based compensation expense
148
185
299
351
Non-cash charitable contributions
1
1
4
2
Amortization of acquired intangibles
18
18
37
41
Amortization of debt issuance costs
1
1
1
2
Gain on early extinguishment of debt
(3
)
(42
)
(3
)
(73
)
Restructuring costs
—
17
—
24
Legal settlements and related expenses
—
—
7
—
Tax adjustment
(63
)
(13
)
(86
)
(23
)
Non-GAAP net income
$
131
$
56
$
248
$
94
Net margin
5
%
(20
)%
(1
)%
(21
)%
Non-GAAP net margin
20
%
10
%
20
%
9
%
Weighted-average shares used to compute
net income (loss) per share, basic
168,612
162,755
168,045
162,051
Non-GAAP weighted-average effect of
potentially dilutive securities
13,752
15,987
13,358
15,430
Non-GAAP weighted-average shares used to
compute non-GAAP net income per share, diluted
182,364
178,742
181,403
177,481
Net income (loss) per share, diluted
$
0.15
$
(0.68
)
$
(0.06
)
$
(1.42
)
Non-GAAP net income per share, diluted
$
0.72
$
0.31
$
1.37
$
0.53
OKTA, INC. Reconciliation of GAAP to
Non-GAAP Financial Measures (dollars in millions)
(unaudited)
Free Cash Flow and Free Cash Flow Margin
We define free cash flow, a non-GAAP financial measure, as net
cash provided by operating activities, less cash used for purchases
of property and equipment, net of sales proceeds, and capitalized
software. Free cash flow margin is calculated as free cash flow
divided by total revenue.
Three Months Ended
July 31,
Six Months Ended
July 31,
2024
2023
2024
2023
Net cash provided by operating
activities
$
86
$
53
$
305
$
182
Less:
Purchases of property and equipment
(5
)
(2
)
(6
)
(2
)
Capitalized software
(3
)
(2
)
(7
)
(7
)
Free cash flow
$
78
$
49
$
292
$
173
Net cash provided by (used in) investing
activities
$
156
$
495
$
(38
)
$
554
Net cash used in financing activities
$
(50
)
$
(315
)
$
(87
)
$
(641
)
Operating cash flow margin
13
%
10
%
24
%
17
%
Free cash flow margin
12
%
9
%
23
%
16
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240827337445/en/
Investor Contact: Dave Gennarelli investor@okta.com
Media Contact: Kyrk Storer press@okta.com
Grafico Azioni Okta (NASDAQ:OKTA)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Okta (NASDAQ:OKTA)
Storico
Da Gen 2024 a Gen 2025
