- Q1 revenue grew 65% year-over-year; subscription revenue grew
66% year-over-year
- Remaining performance obligations (RPO) grew 43% year-over-year
to $2.71 billion; current remaining performance obligations (cRPO)
grew 57% year-over-year to $1.41 billion
Okta, Inc. (Nasdaq: OKTA), the leading independent identity
provider, today announced financial results for its first quarter
ended April 30, 2022.
“We delivered solid first quarter results highlighted by
strength in new customer additions, dollar-based net retention
rate, and the success we’re having with large customers as they
continue their journey to the cloud,” said Todd McKinnon, Chief
Executive Officer and co-founder of Okta. “Organizations around the
world have made it clear that identity is the foundation for their
digital transformation projects and zero trust security
environments. Okta is the recognized leader in identity and we’re
confident in our ability to capture more of the massive market
opportunity.”
First Quarter Fiscal 2023 Financial Highlights:
- Revenue: Total revenue was $415 million, an increase of
65% year-over-year. Subscription revenue was $398 million, an
increase of 66% year-over-year. On an Okta standalone basis
(excluding $66 million attributable to Auth0), total revenue grew
39%.
- Remaining Performance Obligations (RPO): RPO, or
subscription backlog, was $2.71 billion, an increase of 43%
year-over-year. cRPO, which is contracted subscription revenue
expected to be recognized over the next 12 months, was $1.41
billion, up 57% compared to the first quarter of fiscal 2022.
- Calculated Billings: Total calculated billings was $389
million, an increase of 7% year-over-year. Calculated billings
includes the effect of billings process improvements that were
enacted at the end of the first quarter of fiscal 2022. Calculated
billings increased 52% when viewed on a like-for-like basis, which
includes the full effect of the billings process improvements in
the first quarter of fiscal 2022.
- GAAP Operating Loss: GAAP operating loss was $240
million, or 58% of total revenue, compared to a GAAP operating loss
of $91 million, or 36% of total revenue, in the first quarter of
fiscal 2022.
- Non-GAAP Operating Loss: Non-GAAP operating loss was $41
million, or 10% of total revenue, compared to non-GAAP operating
loss of $16 million, or 6% of total revenue, in the first quarter
of fiscal 2022.
- GAAP Net Loss: GAAP net loss was $243 million, compared
to a GAAP net loss of $109 million in the first quarter of fiscal
2022. GAAP net loss per share was $1.56, compared to a GAAP net
loss per share of $0.83 in the first quarter of fiscal 2022.
- Non-GAAP Net Loss: Non-GAAP net loss was $43 million,
compared to non-GAAP net loss of $13 million in the first quarter
of fiscal 2022. Non-GAAP basic and diluted net loss per share was
$0.27, compared to non-GAAP basic and diluted net loss per share of
$0.10 in the first quarter of fiscal 2022.
- Cash Flow: Net cash provided by operations was $19
million, or 5% of total revenue, compared to net cash provided by
operations of $56 million, or 22% of total revenue, in the first
quarter of fiscal 2022. Free cash flow was $11 million, or 3% of
total revenue, compared to $53 million, or 21% of total revenue, in
the first quarter of fiscal 2022.
- Cash, cash equivalents, and short-term investments were
$2.49 billion at April 30, 2022.
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:
For the second quarter of fiscal 2023, the Company expects:
- Total revenue of $428 million to $430 million, representing a
growth rate of 36% year-over-year;
- Current RPO of $1.48 billion to $1.49 billion, representing a
growth rate of 35% to 36% year-over-year;
- Non-GAAP operating loss of $44 million to $43 million; and
- Non-GAAP net loss per share of $0.32 to $0.31, assuming
weighted-average shares outstanding of approximately 156
million.
For the full year fiscal 2023, the Company now expects:
- Total revenue of $1.805 billion to $1.815 billion, representing
a growth rate of 39% to 40% year-over-year;
- Non-GAAP operating loss of $167 million to $162 million;
and
- Non-GAAP net loss per share of $1.14 to $1.11, assuming
weighted-average shares outstanding of approximately 157
million.
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 expectations as to non-GAAP
operating loss and non-GAAP net loss per share 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 operating loss and
non-GAAP net loss per share are not available without unreasonable
effort.
Webcast Information:
Okta will host a live video webcast at 2:00 p.m. Pacific Time on
June 2, 2022 to discuss the results and outlook. 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.
Supplemental Financial and Other Information:
Supplemental financial and other information can be accessed
through the Company’s investor relations website at
investor.okta.com.
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 loss, non-GAAP operating
margin, non-GAAP net loss, non-GAAP net margin, non-GAAP net loss
per share, basic and diluted, free cash flow, free cash flow
margin, current calculated billings and calculated billings.
Certain of these non-GAAP financial measures exclude stock-based
compensation, non-cash charitable contributions, amortization of
acquired intangibles, acquisition and integration-related expenses,
amortization of debt discount and debt issuance costs and loss on
early extinguishment and conversion of debt. Non-GAAP financial
measures reflect the adoption of ASU 2020-06 under the modified
retrospective method as of February 1, 2022, as applicable.
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, the market for our products
may develop more slowly than expected or than it has in the past;
our results of operations may fluctuate more than expected; there
may be significant fluctuations in our results of operations and
cash flows related to our revenue recognition or otherwise; the
impact of COVID-19, related public health measures and any
associated economic downturn on our business and results of
operations may be more than we expect; a network or data security
incident that allows unauthorized access to our network or data or
our customers’ data could damage our reputation and cause us to
incur significant costs; we could experience interruptions or
performance problems associated with our technology, including a
service outage; we may not be able to pay off our convertible
senior notes when due; global economic conditions could worsen; we
may not achieve expected synergies and efficiencies of operations
between Okta and Auth0, and we may not be able to successfully
integrate the companies. Further information on potential factors
that could affect our financial results is included in our most
recent Annual Report on Form 10-K 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 leading independent identity provider. The Okta
Identity Cloud enables organizations to securely connect the right
people to the right technologies at the right time. With more than
7,000 pre-built integrations to applications and infrastructure
providers, Okta provides simple and secure access to people and
organizations everywhere, giving them the confidence to reach their
full potential. More than 15,800 organizations, including JetBlue,
Nordstrom, Siemens, Slack, Takeda, Teach for America, and Twilio,
trust Okta to help protect the identities of their workforces and
customers.
Okta uses its investor.okta.com website 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 website in addition to following our press releases, SEC
filings and public conference calls and webcasts.
OKTA, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share
data)
(unaudited)
Three Months Ended
April 30,
2022
2021
Revenue:
Subscription
$
397,941
$
240,058
Professional services and other
17,002
10,948
Total revenue
414,943
251,006
Cost of revenue:
Subscription(1)
110,876
52,398
Professional services and other(1)
20,289
13,725
Total cost of revenue
131,165
66,123
Gross profit
283,778
184,883
Operating expenses:
Research and development(1)
161,651
68,863
Sales and marketing(1)
252,473
146,521
General and administrative(1)
109,343
60,180
Total operating expenses
523,467
275,564
Operating loss
(239,689
)
(90,681
)
Interest expense
(2,868
)
(22,760
)
Interest income and other, net
1,704
4,355
Loss on conversion of debt
—
(136
)
Interest and other, net
(1,164
)
(18,541
)
Loss before provision for income taxes
(240,853
)
(109,222
)
Provision for income taxes
1,860
10
Net loss
$
(242,713
)
$
(109,232
)
Net loss per share, basic and diluted
$
(1.56
)
$
(0.83
)
Weighted-average shares used to compute
net loss per share, basic and diluted
155,875
131,777
(1)
Amounts include stock-based compensation
expense as follows (in thousands):
Three Months Ended
April 30,
2022
2021
Cost of subscription revenue
$
16,625
$
7,250
Cost of professional services and
other
3,637
2,342
Research and development
69,044
20,093
Sales and marketing
39,802
21,066
General and administrative
40,415
13,361
Total stock-based compensation expense
$
169,523
$
64,112
OKTA, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(unaudited)
April 30,
January 31,
2022
2022
Assets
Current assets:
Cash and cash equivalents
$
194,227
$
260,134
Short-term investments
2,292,902
2,241,657
Accounts receivable, net of allowances
258,911
397,509
Deferred commissions
77,120
74,728
Prepaid expenses and other current
assets
75,483
66,605
Total current assets
2,898,643
3,040,633
Property and equipment, net
66,418
65,488
Operating lease right-of-use assets
144,731
147,940
Deferred commissions, noncurrent
188,490
191,029
Intangible assets, net
298,823
316,968
Goodwill
5,401,343
5,401,343
Other assets
47,233
42,294
Total assets
$
9,045,681
$
9,205,695
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
33,752
$
20,203
Accrued expenses and other current
liabilities
110,928
89,315
Accrued compensation
83,207
143,805
Convertible senior notes, net
5,198
16,194
Deferred revenue
952,190
973,289
Total current liabilities
1,185,275
1,242,806
Convertible senior notes, net,
noncurrent
2,188,675
1,815,714
Operating lease liabilities,
noncurrent
163,868
170,611
Deferred revenue, noncurrent
19,074
22,933
Other liabilities, noncurrent
16,095
31,775
Total liabilities
3,572,987
3,283,839
Stockholders’ equity:
Preferred stock
—
—
Class A common stock
15
15
Class B common stock
1
1
Additional paid-in capital
7,411,550
7,749,716
Accumulated other comprehensive loss
(36,148
)
(12,009
)
Accumulated deficit
(1,902,724
)
(1,815,867
)
Total stockholders’ equity
5,472,694
5,921,856
Total liabilities and stockholders'
equity
$
9,045,681
$
9,205,695
OKTA, INC.
SUMMARY OF CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Three Months Ended April
30,
2022
2021(1)
Cash flows from operating
activities:
Net loss
$
(242,713
)
$
(109,232
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Stock-based compensation
169,523
64,112
Depreciation, amortization and
accretion
30,060
13,134
Amortization of debt discount and issuance
costs
1,449
21,331
Amortization of deferred commissions
19,140
11,816
Deferred income taxes
(355
)
(829
)
Non-cash charitable contributions
1,381
2,024
Loss on conversion of debt
—
136
Gain on strategic investments
(1,380
)
(2,895
)
Other, net
(648
)
(909
)
Changes in operating assets and
liabilities:
Accounts receivable
139,247
(22,747
)
Deferred commissions
(21,928
)
(14,861
)
Prepaid expenses and other assets
(12,952
)
(3,861
)
Operating lease right-of-use assets
6,643
5,072
Accounts payable
15,177
1,627
Accrued compensation
(60,318
)
(23,837
)
Accrued expenses and other liabilities
9,470
10,965
Operating lease liabilities
(8,007
)
(6,285
)
Deferred revenue
(24,958
)
111,314
Net cash provided by operating
activities
18,831
56,075
Cash flows from investing
activities:
Capitalization of internal-use software
costs
(2,487
)
(10
)
Purchases of property and equipment
(5,328
)
(3,259
)
Purchases of securities available for sale
and other
(306,831
)
(189,533
)
Proceeds from maturities and redemption of
securities available for sale
231,314
344,820
Purchases of intangible assets
(1,040
)
(113
)
Payments for business acquisitions, net of
cash acquired
(3,970
)
—
Net cash provided by (used in) investing
activities
(88,342
)
151,905
Cash flows from financing
activities:
Payments for conversions of convertible
senior notes
(4
)
(12
)
Proceeds from hedges related to
convertible senior notes
—
1
Proceeds from stock option exercises
5,386
16,190
Net cash provided by financing
activities
5,382
16,179
Effects of changes in foreign currency
exchange rates on cash, cash equivalents and restricted cash
(4,041
)
647
Net increase (decrease) in cash, cash
equivalents and restricted cash
(68,170
)
224,806
Cash, cash equivalents and restricted cash
at beginning of period
272,656
448,630
Cash, cash equivalents and restricted
cash at end of period
$
204,486
$
673,436
(1)
The condensed consolidated statement of
cash flows for the prior period has been adjusted to conform to
current period presentation.
OKTA, INC. Reconciliation of GAAP to
Non-GAAP Data (In thousands, except percentages and 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
April 30,
2022
2021
Gross profit
$
283,778
$
184,883
Add:
Stock-based compensation expense included
in cost of revenue(1)
20,262
9,592
Amortization of acquired intangibles
11,335
1,593
Acquisition and integration-related
expenses(2)
459
—
Non-GAAP gross profit
$
315,834
$
196,068
Gross margin
68
%
74
%
Non-GAAP gross margin
76
%
78
%
(1)
See table in footnote (1) to the condensed
consolidated statements of operations above for breakdown of
stock-based compensation expense by line item.
(2)
Acquisition and integration-related
expenses include transaction costs and other non-recurring
incremental costs incurred through the one-year anniversary of
transaction close.
Non-GAAP Operating Loss and Non-GAAP Operating Margin
We define Non-GAAP operating loss 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 and acquisition
and integration-related expenses.
Three Months Ended
April 30,
2022
2021
Operating loss
$
(239,689
)
$
(90,681
)
Add:
Stock-based compensation expense(1)
169,523
964,112
Non-cash charitable contributions
1,381
2,024
Amortization of acquired intangibles
21,205
1,593
Acquisition and integration-related
expenses(2)
6,555
7,054
Non-GAAP operating loss
$
(41,025
)
$
(15,898
)
Operating margin
(58
)%
(36
)%
Non-GAAP operating margin
(10
)%
(6
)%
(1)
See table in footnote (1) to the condensed
consolidated statements of operations above for breakdown of
stock-based compensation expense by line item.
(2)
Acquisition and integration-related
expenses include transaction costs and other non-recurring
incremental costs incurred through the one-year anniversary of
transaction close.
Non-GAAP Net Loss, Non-GAAP Net Margin and Non-GAAP Net Loss
Per Share, Basic and Diluted
We define Non-GAAP net loss and Non-GAAP net margin as GAAP net
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 discount and debt issuance costs and loss on
early extinguishment and conversion of debt. Adjustments reflect
the adoption of ASU 2020-06 under the modified retrospective method
as of February 1, 2022, as applicable.
We define Non-GAAP net loss per share, basic, as Non-GAAP net
loss divided by GAAP weighted-average shares used to compute net
loss per share, basic and diluted.
We define Non-GAAP net loss per share, diluted, as Non-GAAP net
loss divided by GAAP weighted-average shares used to compute net
loss per share, basic and diluted 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 loss per share, diluted, includes the
anti-dilutive impact of our note hedge and capped call agreements
on convertible senior notes outstanding, as applicable.
Accordingly, we did not record any adjustments to Non-GAAP net loss
for the potential impact of the convertible senior notes
outstanding under the if-converted method.
Three Months Ended
April 30,
2022
2021
Net loss
$
(242,713
)
$
(109,232
)
Add:
Stock-based compensation expense(1)
169,523
64,112
Non-cash charitable contributions
1,381
2,024
Amortization of acquired intangibles
21,205
1,593
Acquisition and integration-related
expenses(2)
6,555
7,054
Amortization of debt discount and debt
issuance costs(3)
1,449
21,331
Loss on conversion of debt(3)
—
136
Non-GAAP net loss
$
(42,600
)
$
(12,982
)
Net margin
(58
)%
(44
)%
Non-GAAP net margin
(10
)%
(5
)%
Weighted-average shares used to compute
net loss per share, basic and diluted
155,875
131,777
Non-GAAP weighted-average effect of
potentially dilutive securities
—
—
Non-GAAP weighted-average shares used to
compute non-GAAP net loss per share, diluted
155,875
131,777
Net loss per share, basic and diluted
$
(1.56
)
$
(0.83
)
Non-GAAP net loss per share, basic and
diluted
$
(0.27
)
$
(0.10
)
(1)
See table in footnote (1) to the condensed
consolidated statements of operations above for breakdown of
stock-based compensation expense by line item.
(2)
Acquisition and integration-related
expenses include transaction costs and other non-recurring
incremental costs incurred through the one-year anniversary of
transaction close.
(3)
Reflects the adoption of ASU 2020-06 under
the modified retrospective method effective February 1, 2022.
OKTA, INC Reconciliation of GAAP to
Non-GAAP Financial Measures (In thousands, except percentages)
(unaudited)
Free Cash Flow and Free Cash Flow Margin
We define Free cash flow as net cash provided by operating
activities, less cash used for purchases of property and equipment,
net of sales proceeds, and capitalized internal-use software costs.
Free cash flow margin is calculated as Free cash flow divided by
total revenue.
Three Months Ended
April 30,
2022
2021
Net cash provided by operating
activities
$
18,831
$
56,075
Less:
Purchases of property and equipment
(5,328
)
(3,259
)
Capitalization of internal-use software
costs
(2,487
)
(10
)
Free cash flow
$
11,016
$
52,806
Net cash provided by (used in) investing
activities
$
(88,342
)
$
151,905
Net cash provided by financing
activities
$
5,382
$
16,179
Free cash flow margin
3
%
21
%
Calculated Billings
We define Calculated Billings as total revenue plus the change
in deferred revenue, net of acquired deferred revenue, and less the
change in unbilled receivables, net of acquired unbilled
receivables, in the period.
Three Months Ended
April 30,
2022
2021
Total revenue
$
414,943
$
251,006
Add:
Deferred revenue, current (end of
period)
952,190
613,167
Unbilled receivables, current (beginning
of period)
3,228
2,604
Less:
Deferred revenue, current (beginning of
period)
(973,289
)
(502,738
)
Unbilled receivables, current (end of
period)
(4,039
)
(894
)
Current Calculated Billings
393,033
363,145
Add:
Deferred revenue, noncurrent (end of
period)
19,074
11,745
Less:
Deferred revenue, noncurrent (beginning of
period)
(22,933
)
(10,860
)
Calculated Billings
$
389,174
$
364,030
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220601006235/en/
Investor Contact: Dave Gennarelli investor@okta.com
Media Contact: Vitor De Souza press@okta.com
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