Shares in cloud identity management service provider Okta Inc. dropped in after-hours trading Wednesday after the company reported a mixed bag of results and guidance.

Okta beat market analyst predictions on earnings and revenue for its fiscal second quarter, reporting a 5-cent-per-share loss versus a prediction of a 10-cent loss and a 15-cent loss a year ago.

The company posted $140.48 million in revenue, up from $94.59 million a year ago. The company’s loss not including items such as stock compensation came in at $5.5 million. Net operating loss was $43.6 million, or 31% of total revenue, compared with $38.4 million, or 41% of total revenue, in the same quarter of 2018.

Cash flow used in operations was $1.1 million, or 0.8% of total revenue, compared with $5.3 million, or 5.6% of total revenue, a year ago. Free cash flow was a negative $4.3 million, or 3.1% of total revenue. Cash, cash equivalents and short-term investments sat at $557.5 million as of the end of July.

“Identity plays a foundational role as organizations look to adopt more cloud technologies and accelerate their businesses’ digital transformation in a highly secure and easy to use manner,” Okta Chief Executive Officer Todd McKinnon (pictured) said in a statement.

Despite beating market expectations in the second quarter, Okta’s forward projections didn’t match what analysts were expecting.

Okta is predicting revenue of $143 to $144 million with an adjusted loss of $16.5 million to $17.5 million, or 12 to 13 cents per share. Analysts had been predicting a 9-cent loss in the third quarter.

For the full year, the company is predicting total revenue of $560 million to $563 million, up 40% to 41% year-over-year with an adjusted loss of $62 to $64 million, or 42 to 44 cents per share.

Okta has continually outperformed market expectations since going public in 2017, but two years later remains unprofitable. That said, unlike many its fellow San Francisco Bay Area and Silicon Valley peers, at least it’s not bleeding an unsustainable amount of money.

Shares in Okta dropped about 2% in after-hours trading. Notably, Okta’s share price continues to deliver for investors, having floated in April 2017 at $17 per share and finishing its first day of trading at $23.51.

Photo: Okta