Okta shares drop despite better-than-expected earnings
Shares in cloud identity management service provider Okta Inc. dropped in after-hours trading today despite the company topping analysts estimates in its fiscal first-quarter earnings.
For the quarter ended April 30, Okta reported revenue jumped 46%, to $182.9 million, from a year ago, with a loss adjusted for stock option and other expenses of $8.1 million, or seven cents per share. Analysts had been predicting revenue of $171.8 million and a loss of 18 cents per share.
Okta’s subscription revenue came in at $173.8 million in the quarter, up 48% from a year ago, and billings rose 42%, to $209.6 million. Net loss totaled $57.7 million, or 47 cents a share, compared $52 million or 46 cents a share a year ago.
Net cash flow came in at a company record of $38.6 million or 21.7% of total revenue, up from $21.3 million or 17% of total revenue in the first quarter of 2019.
For the second quarter, Okta forecast revenue of $185 million to $187 million, representing a growth rate of between 32% and 33% year-over-year. It’s also forecasting an adjusted operating loss of $4 million to $5 million, or one to two cents per share. Analysts had been predicting revenue of $186.5 million on a loss of nine cents per share.
“Our strong first-quarter performance reflects our market leadership and ability to effectively and quickly shift to a fully remote workforce,” Okta co-founder and Chief Executive Officer Todd McKinnon said in a statement. “This shift is enabled through our core technology, which allows secure access to any technology from anywhere. When this crisis is over, we don’t expect organizations to revert to their prior ways of working.”
Okta shares were down about 1.6% in after-hours trading after having dropped as much as 4.9%.
Along with its earnings release, Okta also announced new native identity integration with Amazon Web Services Inc. The integration with AWS Single Sign-On is said to provide Okta customers with improved security, user experience and provisioning capabilities.
The service works to make AWS identity management easier for Okta and AWS customers by allowing enterprises to automatically synchronize users and groups between Okta and AWS while also managing corresponding authentication and authorization policies through each platform. Using Okta Lifecycle Management, IT teams can facilitate access to AWS accounts and services while development teams and define specific roles in AWS accounts.
The native integration also provides greater usability for organizations that want to add programmatic access. Developers can now use the native AWS Command Line Interface to sign in via their Okta credentials and there’s support for Okta multifactor authentication.
The service is available immediately for existing customers through the Okta Integration Network in-app catalog.
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