Okta, a leader in the probably soon-to-be-named customer identity and access management market, released earnings on Tuesday. Their surprise on third quarter results was fabulous! The firm posted net income of $62 million or 35 cents/share. That represents a huge swing from the $40 million, or 24 cent per share net loss posted in the year-ago quarter. Although Okta beat earnings, the company’s stock was penalized in the market. It headed down 11% in extended trading as the firm kept its fiscal guidance unchanged, pointing to ambiguities in the macroeconomic landscape.
In his statement on the strong results, CEO Todd McKinnon pointed out that Okta’s subscription revenue jumped to $673 million, fueling a strong financial performance. Further, Okta’s current performance obligations grew to $2.23 billion, above the StreetAccount consensus of $2.19 billion. This figure looks very promising for future dedicated revenue. It’s a sign of their weakening financial position — contracts that are guaranteed to start generating revenue in the very near term.
Okta’s fiscal year guidance is unchanged, with revenue projected between $2.85 billion and $2.86 billion. Yet while McKinnon celebrated the developments, she stressed that they need to proceed with caution as they go ahead. He pointed out that conversations with customers have become “increasingly skittish.” Therefore, the firm has chosen to take a conservative short-term view given possible macro headwinds.
“When we look forward for our outlook, we’re putting a little bit of conservatism for potentially some macro uncertainty going forward,” – Todd McKinnon.
Even with these headwinds, McKinnon sounded a hopeful note about Okta’s competitive advantages. He stated, “Big picture, we’re in a good position in our market,” reflecting confidence in the company’s ability to navigate through economic fluctuations.
Login and identity management platform Okta surprised Wall Street with a booming first fiscal quarter. Apparently this success took no toll on its business side. Investors will have the opportunity to gain further insights into Okta’s performance and future strategies during an analyst call scheduled for 5 p.m. ET.