Okta report better-than-expected Q3 results

Six months after acquiring Auth0, the cloud-based identity management firm said the integration is on track with cross-selling to their respective customer bases under way.
Written by Stephanie Condon, Senior Writer

Okta on Wednesday published better-than-expected third quarter financial results and raised its full-year outlook. 

The cloud-based identity management firm reported a non-GAAP net loss of $11 million, or 7 cents per share. Total revenue was $351 million, an increase of 61% year-over-year.

Analysts were expecting a net loss of 24 cents on revenue of $327 million.

"Our strong third quarter results reflect the continued shift to Identity-First architectures and the critical adoption of Zero Trust security environments, which are both propelling our market leading position," CEO Todd McKinnon said in a statement. "We're maintaining the momentum of both Okta and Auth0 and are making great progress on the integration. We're already seeing early success cross-selling into each other's customer bases and are on our way to capturing more of the massive identity market faster together." 

Back in May, Okta acquired Auth0, the identity platform for developers, for $6.5 billion. Q3 marked their second quarter as a combined company. 

Subscription revenue was $337 million, an increase of 63% year-over-year. On an Okta standalone basis (excluding $46 million attributable to Auth0), total revenue grew 40%. 

Remaining performance obligations (RPO) grew 49% year-over-year to $2.35 billion

RPO, or subscription backlog, was $2.35 billion, an increase of 49% year-over-year. Current RPO, which is contracted subscription revenue expected to be recognized over the next 12 months, was $1.18 billion, up 57% compared to the third quarter of fiscal 2021. 

Okta's financial outlook for the fourth quarter and full year fiscal 2022 includes the expected contribution from Auth0, net of purchase accounting adjustments. For Q4, the company expects total revenue of $358 million to $360 million, representing a growth rate of 53% year-over-year. 

For FY22, it expects total revenue of $1.275 billion to $1.277 billion, representing a growth rate of 53% year-over-year.

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