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.  

Earlier this month, Okta announced the availability of its Identity Cloud and other products in AWS Marketplace. Customers will now be able to purchase both Customer Identity and Workforce Identity products within AWS Marketplace and benefit from new integrations that leverage both Okta and AWS Control Tower. Through the integration with AWS Control Tower, organizations will be able to optimize identity management with simplified single sign-on experiences, user provisioning, and password management to solve multi-cloud access management challenges.

In keeping with its API-based platform approach, it announced an API and SDK for its devices platform service. The embeddable developer tool simplifies and secures logins without passwords for omni-channel customer experiences. It also allows developers to customize operations, such as creating one integration for embedding MFA directly into the app. These features help simplify the user experience, while simultaneously increasing the overall security posture.

For the fourth year in a row, Okta was named a leader in Gartner’s Magic Quadrant for Access Management. The recognition reaffirms the strength of Okta’s products. Its recent upgrades continue to build on this strong portfolio.

Some recent analyst reports on Okta aren’t very promising. They believe that with the development of the vaccines, lockdown conditions will lift and companies like Okta may not have much to continue to drive growth. The increasing costs to support current revenue growth will also hurt their financials. I think that remote working conditions are here to stay, and Okta will continue to benefit from this transition. It is a good opportunity to buy Okta.

Its stock is currently trading at $232.38 with a market cap of $30.1 billion. It touched a 52-week high of $258.75 in October. It hit a 52-week low of $88.66 in March this year following the COVID-19 crisis.