According to a recent Fortune Business Insights report, the global identity access management (IAM) market is estimated to grow to $24.76 billion by 2026 at a CAGR of over 13%. Corporate identity management services provider Okta (Nasdaq: OKTA) recently announced its quarterly results that surpassed market expectations. Okta also recently made its biggest acquisition, as it strives to make bigger inroads within the customer identity access management (CIAM) market.

Okta’s Financials

Revenues for the fourth quarter grew 40.3% to $234.7 million, surging ahead of the market’s forecast by 5.8%. EPS was $0.06, significantly better than the Street’s estimated loss of $0.01 per share.

By segment, subscription services revenues increased 42.2% to $225.4 million. Professional Services and Other segment revenues grew 6% to $9.3 million.

For the full fiscal year 2021, revenues grew 43% to $835 million and EPS was $0.11.

Among key metrics, Remaining Performance Obligations (RPO) grew 49% to $1.8 billion. Dollar-based net retention grew to 121%.

Okta expects to end fiscal 2022 with $1.08-$1.09 billion in revenues and non-GAAP net loss of $0.44-$0.49. For the first quarter, Okta forecast revenues of $237-$239 million with a net loss of $0.20-$0.21 per share. The market was looking for revenues of $238.43 million for the first quarter with a net loss of $0.20 per share and revenues of $1.09 billion for the year with a net loss of $0.45 per share.

Okta’s Acquisition

Recently, Okta announced the acquisition of Bellevue-based cloud identity startup Auth0 for $6.5 billion. Founded in 2013 by Eugenio Pace and Matias Woloski, Auth0 addresses complex and large-scale identity use cases for global enterprises with its easy-to-integrate platform. The acquisition will allow both companies to address identity use cases and will accelerate the shared vision of the safe use of technology. Okta will leverage the acquisition to accelerate its growth in the identity market and offer organizations a wider range of identity solutions. Auth0 will continue to remain as an independent business inside Okta, and over time, they will be supported, invested, and integrated.

Prior to the acquisition, Auth0 had raised $332.3 million in eight rounds of funding from investors including Salesforce Ventures, Meritech Capital Partners, Bessemer Venture Partners, DTCP, Trinity Ventures, World Innovation Lab, Sapphire Ventures, Telstra Ventures, and K9 Ventures. A $120 million funding round held in July last year had valued Auth0 at $1.9 billion. Reports suggest that Auth0 was expected to reach $200 million in revenues this year.

Auth0 has been a formidable competitor in the past in the customer identity market, and Okta just decided to buy out the competition with this move.

Okta’s PaaS Strategy

Okta currently has an open platform known as Okta Platform Services. It is a set of modular components that allow customers, developers, and partners to access and build various use cases using out-of-the-box products, APIs, and integrations. Its technology partners design and develop identity-based integrations that become a part of the Okta Integration Network (OIN). The OIN has a library of over 7,065 pre-integrated apps that include use cases ranging from security analytics to enforcement. Okta currently does not have an ISV-focused PaaS strategy

Its stock is currently trading at $239.29 with a market cap of $31.4 billion. It touched a 52-week high of $294.00 in February. It hit a 52-week low of $88.66 in March last year following the COVID-19 crisis.