Okta beats Q2 estimates with strong enterprise sales

The identity management firm says it's benefiting from trends including concerns about security and the move to the cloud.
Written by Stephanie Condon, Senior Writer

Okta published its second quarter fiscal 2019 financial results on Thursday, beating market expectations thanks in part to strong enterprise sales.

The identity management firm posted a non-GAAP loss of 15 cents per share, compared to 15 cents in the second quarter of fiscal 2018. Revenue came to $94.6 million, up 57 percent year-over-year.

Wall Street was looking for a loss of 19 cents per share on revenue of $84.82 million.

Subscription revenue was $87.9 million, an increase of 59 percent year-over-year. Okta added 90 companies with over $100,000 in annual recurring revenue to its roster of customers, bringing the total to 837. That represents 55 percent year-over-year growth. In a statement, CEO Todd McKinnon called it "a testament to the increasing strategic need for an identity solution as organizations move to the cloud."

Along with the move to the cloud, COO Frederic Kerrest told ZDNet that Okta is riding a couple other "macro tailwinds." For one thing, all organizations are worried about security. Additionally, "every company has to become a technology company," he said, to better interact with customers and vendors.

Meanwhile, representing Okta's growth in sales from existing customers, the company's dollar-based retention rate for the past 12 months amounted to 121 percent.

Okta continues to invest in the "zero trust" approach to security, Kerrest said, through organic investments in research, engineering and technical operations. The company is also keeping an eye open for potential acquisitions, such as its purchase of the security firm ScaleFT.

For the third quarter, Okta expects a non-GAAP net loss per share between 12 cents and 11 cents, with revenue between $96 and $97 million.

For the full fiscal 2019, the company now expects a non-GAAP net loss per share between 48 cents and 46 cents, with revenue between $372 and $375 million.

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