Corporate identity management software company Okta (Nasdaq: OKTA) reported a strong first quarter recently that beat estimates. Like several cloud stocks, Okta’s stock has also benefited from the work-from-home transition following the COVID-19 pandemic outbreak.

Okta’s Financials

Revenues for the first quarter grew 46% to $182.9 million, ahead of the market’s forecast of $171.4 million. GAAP net loss was $57.7 million compared with a loss of $52 million a year ago. Adjusted loss narrowed to $0.07 per share from $0.19 a year ago and was also better than the Street’s estimated loss of $0.07 per share. Billings grew 42% to $209.5 million. Cash, cash equivalents, and short-term investments were $1.45 billion at April 30, 2020.

By segment, subscription services revenues increased 48% to $173.8 million. Professional services and the others segment revenues grew 12% to $9.1 million.

Among key metrics, Remaining Performance Obligations (RPO) grew 57% to $1.24 billion. Dollar-based net retention also improved to 121% compared with 119% a quarter ago. During the quarter, it added 113 large enterprise customers with ACV over $100,000 taking the total count to 1,600. Over 50% of the additions were from new customers like Parsons Corporation. A much smaller portion of Okta’s overall business is generated from SMBs. As a result, the slowdown in this sector has less impact.

Based on its performance, Okta reiterated its revenue outlook for the year. It expects to end fiscal 2021 with $770-$780 million in revenues at a growth rate of 31%-33% and non-GAAP net loss per share of $0.23-$0.18. For the second quarter, Okta forecast revenues of $185-$187 million or a growth rate of 32%-33% with a net loss of $0.02-$0.01 per share in line with analyst estimates.

Okta’s Acquisitions, New Offerings, and Partnerships

In March, Okta announced its plans to acquire Seattle-based workflow automation startup Azuqua for $52.5 million. Founded in 2013, Azuqua has raised $16 million. Its customers include Airbnb, McDonald’s, VMware, and HubSpot. San Francisco-based Okta plans to move the Azuqua team to its Bellevue office and increase its presence in the Northwest.

Okta has been focused on expanding its platform. It recently introduced Okta Platform Services, a foundational part of the Okta Identity Cloud, that enables Okta to meet unlimited workforce and customer identity use cases. The core technologies in the suite include Identity Engine for authentication, Directories for user management, Integrations to build on top of its platform, Insights for analyzying Okta data, Workflows to automate complex business processes, and Devices for seamless security across all devices. Features powered by Okta Identity Engine and Okta Devices will be available in Early Access in Q4 2020.

Okta also announced Okta Lifecycle Management Workflows for automating the most complex processes across the enterprise without code. It  is generally available through Okta’s Advanced Lifecycle Management offering. 

Okta also announced important new strategic technology partnerships with leading endpoint protection and management providers VMWare, Carbon Black, CrowdStrike, and Tanium. The new integration partnerships provide a broad set of device risk signals to the Okta Identity Cloud, enabling enterprises to combine endpoint risk detection with user identity to deliver unparalleled security and open the door to innovative ways to deliver on the promise of Zero Trust security.

The megatrends of increased adoption of cloud and hybrid IT, digital transformation, and Zero Trust security had been driving Okta’s business in the past, and these trends are expected to accelerate after the crisis stage of the pandemic passes.

Its stock is currently trading at $179.24 with a market cap of $22.33 billion. It touched a 52-week high of $205.71 early this month. It hit a 52-week low of $88.66 in March this year following the COVID-19 crisis.