Earnings Highlights and Review: Okta’s Quarterly Revenue Soared 67%; Adjusted Net Loss Narrowed

LONDON, UK / ACCESSWIRE / June 27, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Okta, Inc. (NASDAQ: OKTA), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=OKTA, following the Company’s disclosure of its first quarter fiscal 2018 financial results on June 07, 2017. The cloud identity management Company reported better than expected revenue expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

For its first fiscal quarter ended April 30, 2017, Okta’s revenue surged 66.8% to $53.01 million compared to revenue of $31.79 million in Q1 FY17. The Company’s revenue numbers surpassed analysts’ expectations of $48.52 million.

During Q1 FY18, Okta’s subscription’s revenue totaled $48.4 million, reflecting an increase of 75.4% compared to subscription’s revenue of $27.56 million. The Company’s Professional services’ revenue grew 10% to $4.65 million compared with $4.22 million in the prior year’s corresponding quarter.

Okta’s gross profit was $36.7 million for Q1 FY18, up 82% on a y-o-y basis. The Company’s total gross margin was 69.2%, up 594 basis points versus the year ago comparable period. The Company expects its overall gross margin to trend higher over time as more of its revenues come from subscriptions. For Q1 FY18, subscription’s gross margin was 78.4%, up 382 basis points compared to the year ago same period. Okta’s professional services’ gross margin was negative 25.5% compared to negative 10% in Q1 FY17.

For Q1 FY18, Okta’s R&D expense was $12.1 million compared to $8.1 million in Q1 FY17. As a percentage of total revenue, R&D was 23% in the reported quarter compared to 26% in the prior year’s same period.

For Q1 FY18, Okta’s GAAP operating loss was $28.6 million, or 54.0% of total revenue, compared to $22.7 million in Q1 FY17, or 71.4% of total revenue. The Company’s non-GAAP operating loss was $19.7 million, or 37.2% of total revenue, compared to $19.3 million, or 60.7% of total revenue, in the prior year’s corresponding quarter.

Okta’s GAAP net loss was $28.9 million or $0.73 per share, in Q1 FY18 compared to $22.8 million, or $1.22 per share, for Q1 FY17. The Company’s non-GAAP net loss was $20.0 million or $0.50 per share compared to $19.3 million, or $1.04 per share, in the prior year’s same quarter. Okta’s net loss was wider than Wall Street’s expectations for a loss of $0.61 per share.

Billing

Okta’s calculated billings in Q1 FY18 were $59.9 million, an increase of 75% on a y-o-y basis. The Company attributed the high growth rate in the reported quarter to a number of large user expansions in enterprise that benefitted billings in Q1 FY18 due to the timing of the invoicing. From a trailing 12-month perspective, Okta’s calculated billings growth ending Q1 FY18 was 69%.

As of the end of Q1 FY18, Okta had over 3,350 customers and continue to see strong momentum with new customer additions. The Company ended the reported quarter with 493 customers with an annual contract value above $100,000, up 64% compared to Q1 of fiscal 2017. The Company’s dollar base retention rate was 123% for the trailing 12 months.

Cash Matters

During Q1 FY18, Okta’s net cash used in operations was $9.7 million compared to $15.0 million for Q1 FY17. The Company’s free cash flow was negative $13.3 million, or 25.2% of total revenue, compared to negative $17.2 million, or 54.1% of total revenue, in the prior year’s same quarter.

As of April 30, 2017, Okta’s cash and cash equivalents and short-term investments were $224.2 million. The Company raised approximately $200 million through its initial public offering in April 2017. Okta, ended the quarter with a total headcount of 1,020, growing at 43% on a y-o-y basis.

Outlook

For Q2 FY18, Okta is forecasting total revenue between $55.0 million to $56.0 million. The Company is expecting non-GAAP operating loss of $24.0 million to $23.0 million and non-GAAP net loss per share of $0.26 to $0.25.

For FY18, Okta is projecting total revenue of $233.0 million to $236.0 million and is expecting non-GAAP operating loss of $91.2 million to $88.2 million, while the Company is estimating non-GAAP net loss per share of $1.15 to $1.11.

Stock Performance

On Monday, June 26, 2017, the stock closed the trading session at $25.28, marginally falling 0.98% from its previous closing price of $25.53. A total volume of 436.65 thousand shares have exchanged hands. Okta’s stock price advanced 0.88% in the last one month. Furthermore, since the start of the year, shares of the Company have gained 7.53%. The stock currently has a market cap of $2.26 billion.

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