Cloud Stocks: Can Okta Keep The Momentum Going?

According to a recent report by Verified Market Research, the Global Identity and Access Management Market is estimated to grow at 13% CAGR from $11.8 billion in 2019 to reach $29.8 billion by 2027. The continuing global lockdown conditions and the adoption of cloud computing technologies are driving the stellar growth in the industry. Okta (NASDAQ: OKTA) is witnessing the benefits of this growth first hand.

Okta’s Financials

Revenues for the third quarter grew 42% to $217.4 million, surging ahead of the market’s forecast by 7.1%.  EPS was $0.04, significantly better than the Street’s estimated loss of $0.38 per share.

By segment, subscription services revenues increased 43% to $206.7 million. Professional services and the others segment revenues grew 24.8% to $10.6 million.

Among key metrics, Remaining Performance Obligations (RPO) grew 53% to $1.58 billion. Dollar-based net retention grew to 123%. Okta expects to end fiscal 2021 with $822-$823 million in revenues and non-GAAP EPS of $0.04-$0.05.

For the fourth quarter, Okta forecast revenues of $221-$222 million with a net loss of $0.02-$0.01 per share. The market was looking for revenues of $216.28 million for the quarter with a net loss of $0.02 per share and revenues of $802.34 million for the year with a net loss of $0.02 per share.

Okta’s Product Upgrades

During the quarter, Okta announced several enhancements to its Customer Identity Access Management (CIAM) solutions. It released automated complex identity processes that connect to every part of the customer experience, including user registration and progressive profile development, thus allowing companies to make fully programmable identity actions without needing to write code. For its Advanced Server Access (ASA) solution, Okta announced enhancements that will accelerate the deployment of cloud infrastructure as well as automate manual provisioning and de-provisioning of developer accounts and production environments.  

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