Okta Posts Lower-than-Feared Q3 Loss, Revenue Beats Estimates

Okta, Inc. (OKTA), a publicly-traded identity and access management company, has reported a smaller-than-expected loss for the third quarter of Fiscal 2022 on the back of top-line growth.

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Following the results, shares of the company rose 1.5% in the extended trading session on Wednesday after closing 8% lower on the day.

Results in Detail

The company reported a loss of $0.07 per share against the consensus loss estimate of $0.23 per share. It reported a loss of $0.04 per share in the same quarter last year.

Additionally, total revenue of $351 million surpassed the Street’s estimate of $327.01 million and rose 61% year-over-year. Subscription revenue was $337 million, up 63%. On an Okta standalone basis (excluding $46 million attributable to Auth0), total revenue increased by 40%. (See Okta stock charts on TipRanks)

The company recorded remaining performance obligations (RPO) of $2.35 billion, up 49% year-over-year, while total calculated billings, net of acquired deferred revenue, stood at $389 million, up 54%.

As of October 31, 2021, the company’s cash and cash equivalents, along with short-term investments stood at $2.48 billion.

Outlook

For Fiscal Q4, the company projects total revenue to be in the range of $358 million to $360 million, versus the consensus estimate of $354.8 million. Adjusted loss per share is expected to land between $0.25 and $0.24, versus a loss of $0.28 per share estimated by analysts.

For Fiscal 2022, the company projects an adjusted loss in the range of $0.53 to $0.52 per share. Total revenue is expected to land between $1.275 billion and $1.277 billion.

CEO Comments

The CEO of Okta, Todd McKinnon, said, “Our strong third quarter results reflect the continued shift to Identity-First architectures and the critical adoption of Zero Trust security environments, which are both propelling our market leading position. We’re maintaining the momentum of both Okta and Auth0 and are making great progress on the integration. We’re already seeing early success cross-selling into each other’s customer bases and are on our way to capturing more of the massive identity market faster together.”

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Wall Street’s Take

The Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 12 Buys and 5 Holds. The average Okta price target of $295.31 implies 49.1% upside potential from current levels. Shares have lost 8.2% over the past six months.

Bloggers Weigh In

TipRanks data shows that financial blogger opinions are 92% Bullish on OKTA, compared to a sector average of 69%.