Okta's Fiscal 2025 First Quarter Financial Performance

In a recent press release, Okta, Inc. (Nasdaq: OKTA), the forefront independent identity partner, unveiled its financial results for the first quarter ended April 30, 2024.

Todd McKinnon, Chief Executive Officer, and co-founder of Okta, expressed optimism, stating, “We began the new fiscal year with record non-Generally Accepted Accounting Principles (GAAP) profitability and cash flow as we continue to benefit from the operating efficiency actions we’ve taken over the past several quarters. Identity is security and Okta is critical for organizations to modernize identity for today’s threat landscape. With the advancements we’ve made on Okta’s Secure Identity Commitment and our growing product pipeline, we remain well positioned to advance our market leadership position and win more of the massive opportunity in both the workforce and customer identity markets.”

Stay tuned as we delve deeper into Okta's impressive performance and the strategic moves positioning them for continued success.

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Analyzing Okta's Fiscal 2025 First Quarter Financial Performance

Okta's first quarter fiscal 2025 financial highlights underscore the company's robust growth trajectory and financial strength:

Revenue: Total revenue reached $617 million, marking a significant 19% year-over-year increase. Subscription revenue, a key metric for Okta, surged to $603 million, up by 20% compared to the previous year.

• Remaining Performance Obligation (RPO): Reflecting Okta's strong subscription backlog, RPO stood at $3.364 billion, a notable 14% increase year-over-year. The current RPO, representing subscription backlog expected to be recognized over the next 12 months, saw a substantial rise to $1.949 billion, up by 15% compared to the first quarter of fiscal 2024.

• Operating Performance: Okta showcased impressive improvements in its operating metrics. The GAAP operating loss narrowed to $47 million, or 8% of total revenue, a significant improvement from the GAAP operating loss of $160 million, or 31% of total revenue, in the first quarter of fiscal 2024. Meanwhile, non-GAAP operating income surged to $133 million, representing 22% of total revenue, compared to $37 million, or 7% of total revenue, in the same period last year.

• Net Income and Cash Flow: Okta's financial health was further highlighted by its net income and cash flow metrics. The GAAP net loss decreased to $40 million, compared to $119 million in the first quarter of fiscal 2024. Conversely, non-GAAP net income soared to $117 million, a significant increase from $38 million in the same period last year. Notably, the company demonstrated robust cash flow generation, with net cash provided by operations reaching $219 million, or 36% of total revenue, compared to $129 million, or 25% of total revenue, in the first quarter of fiscal 2024. Free cash flow also witnessed substantial growth, totaling $214 million, or 35% of total revenue, compared to $124 million, or 24% of total revenue, in the same period last year.

• Cash Reserves: Okta maintained a solid cash position, with cash, cash equivalents, and short-term investments totaling $2.320 billion as of April 30, 2024.

Okta's stellar financial performance in the first quarter of fiscal 2025 reflects its continued market leadership and operational excellence. As the company advances its Secure Identity Commitment and expands its product pipeline, it remains well-positioned to capitalize on the vast opportunities in both workforce and customer identity markets. Stay tuned as we delve deeper into Okta's strategic initiatives driving its growth trajectory.

Okta's Fiscal 2025 Financial Projections

As Okta moves forward into fiscal 2025, the company provides a comprehensive financial outlook, taking into account both macroeconomic conditions and potential impacts stemming from the October 2023 security incident.

For the second quarter of fiscal 2025, Okta anticipates:

• Total revenue expected between $631 million and $633 million, a growth rate of 13% to 14% year-over-year.

• Current RPO projected at $1.955 billion to $1.960 billion, a growth rate of 10% to 11% year-over-year.

• Non-GAAP operating income forecasted between $123 million and $125 million, yielding a margin of 19% to 20%.

• Non-GAAP diluted net income per share estimated at $0.60 to $0.61, with approximately 182 million diluted weighted-average shares outstanding and a non-GAAP tax rate of 26%.

• Non-GAAP free cash flow margin anticipated to be around 5%.

Looking ahead to the full year fiscal 2025:

• Total revenue expected to range from $2.530 billion to $2.540 billion, reflecting a growth rate of 12% year-over-year.

• Non-GAAP operating income projected between $490 million and $500 million, with a corresponding margin of 19% to 20%.

• Non-GAAP diluted net income per share forecasted between $2.35 and $2.40, based on approximately 182 million diluted weighted-average shares outstanding and a non-GAAP tax rate of 26%.

• Non-GAAP free cash flow margin anticipated to be approximately 22%.

While these projections provide insight into Okta's anticipated performance, it's important to note that forward-looking statements may differ from actual results.

As Okta continues to navigate evolving market dynamics and execute its strategic initiatives, investors should closely monitor the company's progress against these projections.

Webcast

Discover crucial insights shared by Okta's leadership team about the company's recent financial achievements and strategic vision. Head over to Okta's investor relations website at investor.okta.com to access the replay of the webcast. Take this opportunity to immerse yourself in the discussions and gain a deeper understanding of Okta's position in the market and its plans for the future.

Analyst Ratings

JP Morgan maintained neutral to neutral, and increased price target from $105 to $110.

Goldman Sachs Group maintained buy to buy, and increase price target from $105 to $120.

Citigroup maintained neutral to neutral, and increased price target from $75 to $85.

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