Okta reports solid Q4 results but growing expenses as it scales up
Cloud
Okta on Wednesday published its fourth quarter financial results, beating market expectations for the quarter but predicting greater net losses in Q1 as it continues to scale up its identity management business.
Okta's Q4 non-GAAP net loss was $29 million, compared to non-GAAP net income of $8 million a year prior. Non-GAAP basic and diluted net loss per share was 18 cents. Total revenue was $383 million, an increase of 63% year-over-year.
Analysts were expecting a net loss of 24 cents per share on revenue of $359.36 million.
For the full fiscal 2022, total revenue was $1.3 billion, an increase of 56% year-over-year.
"Identity management is at the forefront of today's rapidly evolving security environment," CEO and co-founder Todd McKinnon said in a statement. "Today, C-level executives and developers are increasingly turning to Okta to help provide their employees and customers the freedom to safely use any technology. We exited FY22 with accelerating top-line metrics driven by strong execution and robust demand across our workforce solutions and both Okta and Auth0 customer identity solutions. Okta brings an unparalleled platform of cloud native identity management solutions to a massive market that continues to move towards us, propelled by the three mega-trends of cloud and hybrid IT, digital transformation, and zero trust security."
The cloud-based company argues it has an attractive long-term financial profile, as it pursues customers along two routes --by providing tools to secure and manage employee identities, as well as identity management tools for customers. A year ago, the company spent $6.5 billion to acquire Auth0, an identity platform for developers, to bolster its customer identity business.
Okta's not done spending yet. Aside from investing in Auth0, the company is still investing in scaling Okta's tools. It's also increasing its headcount in sales and marketing -- especially internationally and within the public sector -- and it's increasing its R&D headcount.
Okta now has 15,000 customers, including $3,100 with an ACV (annual contract value) greater than $100,000. The company ended the year with 197 customers with an ACV greater than $1 million.
Its Workforce Identity customers account for 63% of total ACV, growing 37% year-over-year. Its Customer Identity accounted for 37% of total ACV, growing 59% year-over-year.
Okta's subscription revenue in Q4 was $369 million, an increase of 64% year-over-year. On an Okta standalone basis (excluding $56 million attributable to Auth0), total revenue grew 39%.
RPO, or subscription backlog, was $2.69 billion, an increase of 50% year-over-year. Current RPO, which is contracted subscription revenue expected to be recognized over the next 12 months, was $1.35 billion, up 60% compared to the fourth quarter of fiscal 2021.
For the first quarter of fiscal 2023, Okta expects total revenue of $388 million to $390 million, representing a growth rate of 55% year-over-year. It expects a non-GAAP net loss per share of 35 cents to 34 cents.
Analysts are expecting a net loss per share of 20 cents on revenue of $374.85 million.