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Okta Announces Strong Third Quarter Financial Results

  • Q3 revenue grew 45% year-over-year; subscription revenue grew 48% year-over-year
  • Total remaining performance obligations, or subscription revenue backlog, surpasses $1 billion
  • The only identity company named a Leader in Zero Trust by Independent Research Firm

Okta, Inc. (NASDAQ: OKTA), the leading independent provider of identity for the enterprise, today announced financial results for its third quarter ended October 31, 2019.

"Our strong third quarter results reflect our expanding leadership position and the growing importance of identity," said Todd McKinnon, Chief Executive Officer and co-founder of Okta. "Industry leading growth in subscription revenue, remaining performance obligations, and billings were driven by strong execution and the continued secular tailwinds of increasing adoption of cloud applications, digital transformation as companies improve how they connect with their employees and customers, and deployment of zero trust security environments. Businesses of all sizes around the world are turning to Okta's cloud-based solutions for a modern, highly customizable identity platform that meets their business needs and security challenges. We've made great progress and continue to innovate to address this large and growing market opportunity."

Third Quarter Fiscal 2020 Financial Highlights:

  • Revenue: Total revenue was $153.0 million, an increase of 45% year-over-year. Subscription revenue was $144.5 million, an increase of 48% year-over-year.
  • Remaining Performance Obligations (RPO): Total RPO was $1.03 billion, an increase of 68% year-over-year. Current RPO, which is revenue expected to be recognized over the next 12 months, was $515.9 million, up 52% compared to the third quarter of fiscal 2019.
  • Calculated Billings: Total calculated billings were $175.6 million, an increase of 42% year-over-year.
  • Operating Loss: GAAP operating loss was $45.7 million, or 30% of total revenue, compared to $28.5 million, or 27% of total revenue, in the third quarter of fiscal 2019. Non-GAAP operating loss was $8.1 million, or 5% of total revenue, compared to $6.5 million, or 6% of total revenue, in the third quarter of fiscal 2019.
  • Net Loss: GAAP net loss was $63.5 million, compared to $29.5 million in the third quarter of fiscal 2019. GAAP net loss per share was $0.53, compared to $0.27 in the third quarter of fiscal 2019. Non-GAAP net loss was $8.1 million, compared to $3.9 million in the third quarter of fiscal 2019. Non-GAAP net loss per share was $0.07, compared to $0.04 in the third quarter of fiscal 2019.
  • Cash Flow: Net cash provided by operations was $10.6 million, or 7% of total revenue, compared to net cash used in operations of $6.4 million, or 6% of total revenue, in the third quarter of fiscal 2019. Free cash flow was $9.2 million, or 6% of total revenue, compared to $1.4 million, or 1% of total revenue, in the third quarter of fiscal 2019.
  • Cash, cash equivalents, and short-term investments were $1.37 billion.

The section titled "Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures and reconciliations between GAAP and non-GAAP information are contained in the tables below.

Financial Outlook:

For the fourth quarter of fiscal 2020, the company expects:

  • Total revenue of $155 million to $156 million, representing a growth rate of 34% to 35% year-over-year
  • Non-GAAP operating loss of $10.1 to $9.1 million
  • Non-GAAP net loss per share of $0.05 to $0.04, assuming weighted shares outstanding of approximately 122 million

For the full year fiscal 2020, the company now expects:

  • Total revenue of $574 million to $575 million, representing a growth rate of 44% year-over-year
  • Non-GAAP operating loss of $53.1 to $52.1 million
  • Non-GAAP net loss per share of $0.35 to $0.34, assuming weighted shares outstanding of approximately 117 million

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Okta has not reconciled its expectations as to non-GAAP operating loss and non-GAAP net loss per share to their most directly comparable GAAP measure because certain items are out of Okta’s control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP operating loss and non-GAAP net loss per share is not available without unreasonable effort.

Named a Leader in Zero Trust:

Okta was recognized as a Leader in The Forrester WaveTM: Zero Trust eXtended Ecosystem Platform Providers, Q4 2019, a report published by Forrester Research, Inc. on October 29, 2019. In the Forrester report, Okta earned the highest possible scores across half of the criteria upon which it was evaluated including "network security," "people/workforce security," "automation and orchestration," "manageability and usability," "ZTX vision and strategy," "ZTX advocacy," "customers investing in portfolio," and "portfolio growth rate."

Conference Call Information:

Okta will host a conference call and live webcast for analysts and investors at 2:00 p.m. Pacific Time on December 5, 2019. The news release with the financial results will be accessible from the Company’s website at investor.okta.com prior to the conference call. Interested parties can access the call by dialing (800) 458-4148 or (323) 794-2093 and using the passcode 7651253.

A live webcast of the conference call will be accessible from the Okta investor relations website at investor.okta.com.

Supplemental Financial and Other Information:

Supplemental financial and other information can be accessed through the Company’s investor relations website at investor.okta.com.

Non-GAAP Financial Measures:

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, current calculated billings and calculated billings. Certain of these non-GAAP financial measures exclude stock-based compensation, amortization of debt discount, charitable contributions, amortization of intangible assets, acquisition-related expenses and loss on early extinguishment of debt, net of debt issuance costs.

Okta believes that non-GAAP financial information, when taken collectively with GAAP financial measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by the Company's management about which expenses and income are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Okta encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business. Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.

Forward-Looking Statements: This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, product development, business strategy and plans and market trends, opportunities and positioning. These forward-looking statements are based on current expectations, estimates, forecasts and projections. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall" and variations of these terms and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. For example, the market for our products may develop more slowly than expected or than it has in the past; our operating results may fluctuate more than expected; there may be significant fluctuations in our results of operations and cash flows related to our revenue recognition or otherwise; a network or data security incident that allows unauthorized access to our network or data or our customers’ data could damage our reputation; we could experience interruptions or performance problems associated with our technology, including a service outage; we may not be able to pay off our convertible senior notes when due; and global economic conditions could deteriorate. Further information on potential factors that could affect our financial results is included in our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission. The forward-looking statements included in this press release represent our views only as of the date of this press release and we assume no obligation and do not intend to update these forward-looking statements.

About Okta

Okta is the leading independent provider of identity for the enterprise. The Okta Identity Cloud enables organizations to securely connect the right people to the right technologies at the right time. With over 6,500 pre-built integrations to applications and infrastructure providers, Okta customers can easily and securely use the best technologies for their business. Over 7,400 organizations, including 20th Century Fox, JetBlue, Nordstrom, Slack, Teach for America and Twilio, trust Okta to help protect the identities of their workforces and customers.

OKTA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

 

Three Months Ended
October 31,

 

Nine Months Ended
October 31,

 

2019

 

2018

 

2019

 

2018

Revenue:

 

 

 

 

 

 

 

Subscription

$

144,517

 

 

$

97,698

 

 

$

394,174

 

 

$

262,393

 

Professional services and other

8,520

 

 

7,878

 

 

24,566

 

 

21,390

 

Total revenue

153,037

 

 

105,576

 

 

418,740

 

 

283,783

 

Cost of revenue:

 

 

 

 

 

 

 

Subscription (1)

30,124

 

 

20,265

 

 

82,581

 

 

55,808

 

Professional services and other (1)

10,700

 

 

9,435

 

 

32,118

 

 

26,227

 

Total cost of revenue

40,824

 

 

29,700

 

 

114,699

 

 

82,035

 

Gross profit

112,213

 

 

75,876

 

 

304,041

 

 

201,748

 

Operating expenses:

 

 

 

 

 

 

 

Research and development (1)

41,832

 

 

27,596

 

 

115,909

 

 

72,354

 

Sales and marketing (1)

87,224

 

 

56,911

 

 

247,721

 

 

165,408

 

General and administrative (1)

28,887

 

 

19,848

 

 

81,540

 

 

55,873

 

Total operating expenses

157,943

 

 

104,355

 

 

445,170

 

 

293,635

 

Operating loss

(45,730

)

 

(28,479

)

 

(141,129

)

 

(91,887

)

Interest expense

(7,826

)

 

(4,118

)

 

(16,371

)

 

(10,893

)

Other income, net

4,982

 

 

2,413

 

 

11,346

 

 

6,211

 

Loss on early extinguishment of debt

(14,572

)

 

 

 

(14,572

)

 

 

Interest expense and other income, net

(17,416

)

 

(1,705

)

 

(19,597

)

 

(4,682

)

Loss before provision for (benefit from) income taxes

(63,146

)

 

(30,184

)

 

(160,726

)

 

(96,569

)

Provision for (benefit from) income taxes

349

 

 

(667

)

 

(2,285

)

 

(1,883

)

Net loss

$

(63,495

)

 

$

(29,517

)

 

$

(158,441

)

 

$

(94,686

)

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

$

(0.53

)

 

$

(0.27

)

 

$

(1.37

)

 

$

(0.89

)

 

 

 

 

 

 

 

 

Weighted-average shares used to compute net loss per share, basic and diluted

118,976

 

 

108,776

 

 

115,598

 

 

106,587

 

 

(1) Amounts include share-based compensation expense as follows (in thousands):

 

 

Three Months Ended
October 31,

 

Nine Months Ended
October 31,

 

2019

 

2018

 

2019

 

2018

Cost of subscription revenue

$

3,604

 

 

$

2,383

 

 

$

9,137

 

 

$

5,813

 

Cost of professional services and other revenue

1,900

 

 

1,305

 

 

5,292

 

 

3,277

 

Research and development

10,894

 

 

6,291

 

 

26,322

 

 

15,776

 

Sales and marketing

10,937

 

 

6,228

 

 

26,959

 

 

15,852

 

General and administrative

8,400

 

 

5,335

 

 

21,984

 

 

13,181

 

Total share-based compensation expense

$

35,735

 

 

$

21,542

 

 

$

89,694

 

 

$

53,899

 

OKTA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

 

 

October 31,
2019

 

January 31,
2019

 

 

 

 

As Adjusted (1)

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

1,039,626

 

 

$

298,394

 

Short-term investments

 

326,629

 

 

265,374

 

Accounts receivable, net of allowances

 

101,778

 

 

91,926

 

Deferred commissions

 

29,544

 

 

24,185

 

Prepaid expenses and other current assets

 

29,023

 

 

28,237

 

Total current assets

 

1,526,600

 

 

708,116

 

Property and equipment, net

 

51,730

 

 

52,921

 

Operating lease right-of-use assets

 

126,746

 

 

121,389

 

Deferred commissions, noncurrent

 

65,466

 

 

54,812

 

Intangible assets, net

 

33,826

 

 

13,897

 

Goodwill

 

47,964

 

 

18,089

 

Other assets

 

18,445

 

 

15,089

 

Total assets

 

$

1,870,777

 

 

$

984,313

 

Liabilities and stockholders' equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

4,924

 

 

$

2,431

 

Accrued expenses and other current liabilities

 

33,288

 

 

33,653

 

Accrued compensation

 

34,212

 

 

19,770

 

2023 Convertible senior notes, net

 

99,227

 

 

271,628

 

Deferred revenue

 

306,743

 

 

245,622

 

Total current liabilities

 

478,394

 

 

573,104

 

2025 Convertible senior notes, net

 

828,237

 

 

 

Operating lease liabilities, noncurrent

 

153,960

 

 

147,046

 

Deferred revenue, noncurrent

 

7,013

 

 

8,768

 

Other liabilities, noncurrent

 

4,779

 

 

3,018

 

Total liabilities

 

1,472,383

 

 

731,936

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock

 

 

 

 

Class A common stock

 

11

 

 

10

 

Class B common stock

 

1

 

 

1

 

Additional paid-in capital

 

1,048,899

 

 

744,896

 

Accumulated other comprehensive income (loss)

 

135

 

 

(319

)

Accumulated deficit

 

(650,652

)

 

(492,211

)

Total stockholders’ equity

 

398,394

 

 

252,377

 

Total liabilities and stockholders' equity

 

$

1,870,777

 

 

$

984,313

 

(1)

The condensed consolidated balance sheet for the prior period has been adjusted to reflect the adoption of ASC 842.

OKTA, INC.

SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

 

Nine Months Ended October 31,

 

2019

 

2018

 

 

As Adjusted (1)

Cash flows from operating activities:

 

 

 

Net loss

$

(158,441

)

 

$

(94,686

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Stock-based compensation

89,691

 

 

53,899

 

Depreciation, amortization and accretion

12,336

 

 

5,824

 

Amortization of debt discount and issuance costs

15,653

 

 

10,315

 

Amortization of deferred commissions

20,541

 

 

14,963

 

Deferred income taxes

(3,069

)

 

(2,269

)

Non-cash charitable contributions

1,162

 

 

1,008

 

Loss on early extinguishment of debt

14,572

 

 

 

Other

84

 

 

153

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(9,393

)

 

(17,539

)

Deferred commissions

(36,641

)

 

(25,907

)

Prepaid expenses and other assets

(1,518

)

 

(2,822

)

Operating lease right-of-use assets

7,851

 

 

12,209

 

Accounts payable

1,962

 

 

(334

)

Accrued compensation

17,352

 

 

7,973

 

Accrued expenses and other liabilities

4,017

 

 

1,859

 

Operating lease liabilities

(4,128

)

 

(5,614

)

Deferred revenue

58,737

 

 

46,036

 

Net cash provided by operating activities

30,768

 

 

5,068

 

Cash flows from investing activities:

 

 

 

Capitalization of internal-use software costs

(2,659

)

 

(2,329

)

Purchases of property and equipment

(9,980

)

 

(14,253

)

Purchases of securities available for sale and other

(321,462

)

 

(478,138

)

Proceeds from maturities of securities available for sale

244,393

 

 

219,650

 

Proceeds from sales of securities available for sale and other

17,329

 

 

12,470

 

Purchases of intangible assets

(8,500

)

 

 

Payments for business acquisition, net of cash acquired

(44,223

)

 

(15,616

)

Net cash used in investing activities

(125,102

)

 

(278,216

)

Cash flows from financing activities:

 

 

 

Proceeds from issuance of convertible senior notes, net of issuance costs

1,040,760

 

 

334,980

 

Payments for repurchases of 2023 convertible senior notes

(224,414

)

 

 

Purchases of hedges related to 2023 convertible senior notes

 

 

(80,040

)

Proceeds from hedges related to 2023 convertible senior notes

405,851

 

 

 

Proceeds from issuance of warrants related to 2023 convertible senior notes

 

 

52,440

 

Payments for warrants related to 2023 convertible senior notes

(358,622

)

 

 

Purchases of capped calls related to 2025 convertible senior notes

(74,094

)

 

 

Proceeds from stock option exercises, net of repurchases

36,371

 

 

28,524

 

Proceeds from shares issued in connection with employee stock purchase plan

9,005

 

 

6,654

 

Other, net

(126

)

 

(206

)

Net cash provided by financing activities

834,731

 

 

342,352

 

Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash

(241

)

 

(990

)

Net increase in cash, cash equivalents and restricted cash

740,156

 

 

68,214

 

Cash, cash equivalents and restricted cash at beginning of period

311,215

 

 

136,233

 

Cash, cash equivalents and restricted cash at end of period

$

1,051,371

 

 

$

204,447

 

(1)

The condensed consolidated statement of cash flows for the prior period has been adjusted to reflect the adoption of ASC 842.

OKTA, INC.

Reconciliation of GAAP to Non-GAAP Data

(In thousands, except percentages and per share data)

(unaudited)

 

 

 

Three Months Ended October 31, 2019

 

 

GAAP

 

Stock-based
compensation

 

Charitable
contributions

 

Amortization
of acquired
intangibles

 

Amortization
of debt
discount

 

Loss on early
extinguishment
of debt
(2)

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription services

 

$

30,124

 

 

$

(3,604

)

 

$

 

 

$

(1,347

)

 

$

 

 

$

 

 

$

25,173

 

Cost of professional services

 

10,700

 

 

(1,900

)

 

 

 

 

 

 

 

 

 

8,800

 

Gross profit

 

112,213

 

 

5,504

 

 

 

 

1,347

 

 

 

 

 

 

119,064

 

Gross margin

 

73.3

%

 

3.6

%

 

 

 

0.9

%

 

 

 

 

 

77.8

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

41,832

 

 

(10,894

)

 

 

 

 

 

 

 

 

 

30,938

 

Sales and marketing

 

87,224

 

 

(10,937

)

 

 

 

 

 

 

 

 

 

76,287

 

General and administrative

 

28,887

 

 

(8,400

)

 

(510

)

 

 

 

 

 

 

 

19,977

 

Operating loss

 

(45,730

)

 

35,735

 

 

510

 

 

1,347

 

 

 

 

 

 

(8,138

)

Operating margin

 

(29.9

)%

 

23.4

%

 

0.3

%

 

0.9

%

 

 

 

 

 

(5.3

)%

Interest expense and other Income, net

 

(17,416

)

 

 

 

 

 

 

 

7,052

 

 

10,794

 

 

430

 

Net loss

 

$

(63,495

)

 

$

35,735

 

 

$

510

 

 

$

1,347

 

 

$

7,052

 

 

$

10,794

 

 

$

(8,057

)

Net loss per share (1)

 

$

(0.53

)

 

$

0.30

 

 

$

 

 

$

0.01

 

 

$

0.06

 

 

$

0.09

 

 

$

(0.07

)

(1)

GAAP and Non-GAAP net loss per share calculated based upon 118,976 basic and diluted weighted-average shares of common stock.

(2)

Excludes debt issuance costs.

 

 

Three Months Ended October 31, 2018

 

 

GAAP

 

Stock-based
compensation

 

Amortization of
acquired
intangibles

 

Amortization of
debt discount

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

Cost of subscription services

 

$

20,265

 

 

$

(2,383

)

 

$

(449

)

 

$

 

 

$

17,433

 

Cost of professional services

 

9,435

 

 

(1,305

)

 

 

 

 

 

8,130

 

Gross profit

 

75,876

 

 

3,688

 

 

449

 

 

 

 

80,013

 

Gross margin

 

71.9

%

 

3.4

%

 

0.5

%

 

 

 

75.8

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Research and development

 

27,596

 

 

(6,291

)

 

 

 

 

 

21,305

 

Sales and marketing

 

56,911

 

 

(6,228

)

 

 

 

 

 

50,683

 

General and administrative

 

19,848

 

 

(5,335

)

 

 

 

 

 

14,513

 

Operating loss

 

(28,479

)

 

21,542

 

 

449

 

 

 

 

(6,488

)

Operating margin

 

(27.0

)%

 

20.5

%

 

0.4

%

 

 

 

(6.1

)%

Interest expense and other Income, net

 

(1,705

)

 

 

 

 

 

3,604

 

 

1,899

 

Net loss

 

$

(29,517

)

 

$

21,542

 

 

$

449

 

 

$

3,604

 

 

$

(3,922

)

Net loss per share (1)

 

 

$

(0.27

)

 

$

0.20

 

 

$

 

 

$

0.03

 

 

$

(0.04

)

(1)

GAAP and Non-GAAP net loss per share calculated based upon 108,776 basic and diluted weighted-average shares of common stock.

OKTA, INC.

Reconciliation of GAAP to Non-GAAP Data

(In thousands, except percentages and per share data)

(unaudited)

 

 

 

Nine Months Ended October 31, 2019

 

 

GAAP

 

Stock-based
compensation

 

Charitable
contributions

 

Amortization
of acquired
intangibles

 

Amortization
of debt
discount

 

Acquisition-
related
expenses

 

Loss on
early
extinguishment
of debt
(2)

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription services

 

$

82,581

 

 

$

(9,137

)

 

$

 

 

$

(3,895

)

 

$

 

 

$

 

 

$

 

 

$

69,549

 

Cost of professional services

 

32,118

 

 

(5,292

)

 

 

 

 

 

 

 

 

 

 

 

26,826

 

Gross profit

 

304,041

 

 

14,429

 

 

 

 

3,895

 

 

 

 

 

 

 

 

322,365

 

Gross margin

 

72.6

%

 

3.4

%

 

 

 

0.9

%

 

 

 

 

 

 

 

77.0

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

115,909

 

 

(26,322

)

 

 

 

 

 

 

 

 

 

 

 

89,587

 

Sales and marketing

 

247,721

 

 

(26,959

)

 

 

 

 

 

 

 

 

 

 

 

220,762

 

General and administrative

 

81,540

 

 

(21,984

)

 

(1,162

)

 

 

 

 

 

(3,449

)

 

 

 

54,945

 

Operating loss

 

(141,129

)

 

89,694

 

 

1,162

 

 

3,895

 

 

 

 

3,449

 

 

 

 

(42,929

)

Operating margin

 

(33.7

)%

 

21.4

%

 

0.3

%

 

0.9

%

 

 

 

0.8

%

 

 

 

(10.3

)%

Interest expense and other Income, net

 

(19,597

)

 

 

 

 

 

 

 

14,517

 

 

 

 

10,794

 

 

5,714

 

Net loss

 

$

(158,441

)

 

$

89,694

 

 

$

1,162

 

 

$

3,895

 

 

$

14,517

 

 

$

3,449

 

 

10,794

 

 

$

(34,930

)

Net loss per share (1)

 

 

$

(1.37

)

 

$

0.78

 

 

$

0.01

 

 

$

0.03

 

 

$

0.13

 

 

$

0.03

 

 

$

0.09

 

 

$

(0.30

)

(1)

GAAP and Non-GAAP net loss per share calculated based upon 115,598 basic and diluted weighted-average shares of common stock.

(2)

Excludes debt issuance costs.

 

 

Nine Months Ended October 31, 2018

 

 

GAAP

 

Stock-based
compensation

 

Charitable
contributions

 

Amortization of
acquired
intangibles

 

Amortization of
debt discount

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription services

 

$

55,808

 

 

$

(5,813

)

 

$

 

 

$

(449

)

 

$

 

 

$

49,546

 

Cost of professional services

 

26,227

 

 

(3,277

)

 

 

 

 

 

 

 

22,950

 

Gross profit

 

201,748

 

 

9,090

 

 

 

 

449

 

 

 

 

211,287

 

Gross margin

 

71.1

%

 

3.2

%

 

 

 

0.2

%

 

 

 

74.5

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

72,354

 

 

(15,776

)

 

 

 

 

 

 

 

56,578

 

Sales and marketing

 

165,408

 

 

(15,852

)

 

 

 

 

 

 

 

149,556

 

General and administrative

 

55,873

 

 

(13,181

)

 

(1,008

)

 

 

 

 

 

41,684

 

Operating loss

 

(91,887

)

 

53,899

 

 

1,008

 

 

449

 

 

 

 

(36,531

)

Operating margin

 

(32.4

)%

 

18.9

%

 

0.4

%

 

0.2

%

 

 

 

(12.9

)%

Interest expense and other Income, net

 

(4,682

)

 

 

 

 

 

 

 

9,539

 

 

4,857

 

Net loss

 

$

(94,686

)

 

$

53,899

 

 

$

1,008

 

 

$

449

 

 

$

9,539

 

 

$

(29,791

)

Net loss per share (1)

 

 

$

(0.89

)

 

$

0.51

 

 

$

0.01

 

 

$

 

 

$

0.09

 

 

$

(0.28

)

(1)

GAAP and Non-GAAP net loss per share calculated based upon 106,587 basic and diluted weighted-average shares of common stock.

OKTA, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(dollars in thousands)

(unaudited)

 

Free Cash Flow

 

 

 

 

 

 

 

 

Three Months Ended
October 31,

 

Nine Months Ended
October 31,

 

2019

 

2018

 

2019

 

2018

Net cash provided by (used in) operating activities

$

10,640

 

 

$

6,439

 

 

$

30,768

 

 

$

5,068

 

Less:

 

 

 

 

 

 

 

Purchases of property and equipment

(63

)

 

(4,463

)

 

(9,980

)

 

(14,253

)

Capitalization of internal-use software costs

(1,329

)

 

(604

)

 

(2,659

)

 

(2,329

)

Free cash flow

$

9,248

 

 

$

1,372

 

 

$

18,129

 

 

$

(11,514

)

Net cash provided by (used in) investing activities

$

22,888

 

 

$

(10,545

)

 

$

(125,102

)

 

$

(278,216

)

Net cash provided by financing activities

$

798,399

 

 

$

7,469

 

 

$

834,731

 

 

$

342,352

 

Free cash flow margin

6.0%

 

1.3%

 

4.3%

 

(4.1)%

 

Calculated Billings

 

 

 

 

 

 

 

 

Three Months Ended
October 31,

 

Nine Months Ended
October 31,

 

2019

 

2018

 

2019

 

2018

Total revenue

$

153,037

 

 

$

105,576

 

 

$

418,740

 

 

$

283,783

 

Add:

 

 

 

 

 

 

 

Unbilled receivables, current (beginning of period)

1,004

 

 

818

 

 

1,457

 

 

809

 

Deferred revenue, current (end of period)

306,743

 

 

206,146

 

 

306,743

 

 

206,146

 

Less:

 

 

 

 

 

 

 

Unbilled receivables, current (end of period)

(1,028

)

 

(1,581

)

 

(1,028

)

 

(1,581

)

Deferred revenue, current (beginning of period)

(283,724

)

 

(186,427

)

 

(245,622

)

 

(159,816

)

Current calculated billings

176,032

 

 

124,532

 

 

480,290

 

 

329,341

 

Add:

 

 

 

 

 

 

 

Deferred revenue, noncurrent (end of period)

7,013

 

 

4,977

 

 

7,013

 

 

4,977

 

Less:

 

 

 

 

 

 

 

Deferred revenue, noncurrent (beginning of period)

(7,469

)

 

(5,471

)

 

(8,768

)

 

(4,963

)

Calculated billings

$

175,576

 

 

$

124,038

 

 

$

478,535

 

 

$

329,355

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20191205005300/en/

Contacts

Investor Contact:
Dave Gennarelli
investor@okta.com
415-699-0143

Media Contact:
Jenna Kozel
press@okta.com
415-418-9600