San Francisco-based Okta Inc (NASDAQ:OKTA) recently announced its earnings report for the third quarter ended October 31 this year, revealing an impressive performance.
Okta’s total revenue for the quarter was $105.6 million which represents a 58 percent increment compared to the revenue that the company reported in Q3 2017. Subscription revenue also benefited from a 58% year-over-year increase after hitting $97.7 million during this year’s Q3.
Okta’s subscription revenue currently covers 92.5% of its entire revenue. Professional services generated the remaining 7.5% revenue which is equivalent to $7.9 million. The company’s Chairman and CEO, Todd McKinnon described Okta’s Q3 performance as outstanding. He also pointed out that the company will continue to invest throughout its business and also remain committed to Improving its bottom line.
Strong customer growth
McKinnon also noted that the company’s free cash flow margin gained more than 18 points on a year-over-year basis. It was also the first time that Okta has enjoyed a positive free cash flow. The CEO also added that the company also reached new heights as far as customer growth is concerned. The company attracted 450 new customers in the third quarter bringing its total number of customers to more than 5,600 customers.
McKinnon claims that Okta was particularly pleased with the momentum demonstrated by their largest customers. Those that generate more than $100,000 annually in recurring revenue grew by 55 percent. The growing customer base demonstrates the company’s growing identity in the industry.
“We are very excited about the customer momentum in the quarter. Not only are we seeing more deals, but we’re also seeing broader adoption of our technology,” stated McKinnon.
Stock and revenue performance
Okta closed Tuesday’s trading session at $64.54 at which point the stock had dropped by -14.51% from its 52-week high, However, the price was 158.88% higher than its 52-week low which means that the stock has so far performed well. However, its volatility has been ranging around 158.88% over the past one week and about 8.37% over the past one month. The company’s return on investment (ROI) was -58.20% while its Return on assets (ROA) was -17.80%.
Analysts gave Okta a 1.9 mean rating on a scale ranging from 1 to 5. According to the scale, a 3 represents a hold rating while 1 and 2 represents a buy recommendation. A 4 or 5 represents a sell recommendation. Okta also provided a performance guidance for the current quarter. It expects growth for the quarter to be between 39% and 40% on a year-over-year basis. The firm also expects its total revenue to be between $391 million and $392 million.
Okta also expects its non-GAAP operating loss for the fourth quarter to come in between $11.5 million and $12.5 million. It also expects its Non-GAAP net loss to be between $0.08 and $0.09. The company anticipates its revenue figures for the current fiscal year to be between $391 million and $392 million.
It also anticipates 52% to 53% growth year-over-year and $0.08 to $0.09 non-GAAP net loss in the fourth quarter with roughly 110 million outstanding shares.
About Okta
Okta is an identity management firm that offers software designed to help organizations to manage their employee passwords through single sign-on solutions. it helps companies to deliver faster service, eliminate friction, achieve automation, provide secure applications to customers and prevent data breaches.
Some of Okta’s solutions include lifecycle management, multi-factor authentification, API access management, Universal directory, and Octa API products. The company boasts of more than 5,500 integrations and it is still determined to attract more customers in the future through its robust product portfolio.