According to a recent report, the global identity and access management market is estimated to grow at 14.5% CAGR from $13.41 billion in 2021 to reach $34.52 billion by 2028. Corporate identity management software company Okta (Nasdaq: OKTA) recently reported its fourth-quarter results that surpassed market expectations. But the outlook of bigger than expected losses did not please the market.

Okta’s Financials

Revenues for the fourth quarter grew 63% to $383 million, surging ahead of the market’s forecast of $359.38. Net loss per share was $0.18, significantly better than the Street’s estimated loss of $0.24 per share.

By segment, subscription services revenues increased 64% to $369 million. Professional services and the other segment revenues grew 46.5% to $13.7 million.

For the year, revenues grew 56% to $1.3 billion and net loss was $0.46 per share.

Among key metrics, Remaining Performance Obligations (RPO) grew 50% to $2.69 billion.

For the first quarter, it forecast revenues of $388-$390 million and a net loss of $0.35-$0.34 per share. It expects to end fiscal 2023 with revenues of $1.78-$1.79 billion and non-GAAP net loss of $1.27-$1.24. The market was looking for revenues of $381.26 million and a net loss of $0.20 per share for the quarter and revenues of $1.75 billion and a net loss of $0.48 per share for the year.

Okta’s Product Upgrade

Recently, Okta announced the launch of new capabilities including Device Authorization Grant, Branding, and Customer Administrator Roles. Device Authorization Grant simplifies and secures the registration and access for end uses across input-constrained, shared, and IoT devices to improve user experience, reduce abandoned registrations, and increase security for users. The improved customization capabilities allow customers to communicate and go live quicker with consistent branding across login, error pages, and email templates without wasting developer time. Customers are able to deploy brand templates without adding custom code to provide ease of implementation. Super Admins follows the principle of least privilege by creating granular roles for admins to manage their users, groups, and applications. It is a flexible approach to the administration that suits every unique organization structure, providing each admin with the level of access that they require.

It completed the beta testing of its new identity governance offering and will be initiating early access to a limited number of customers. Okta Identity Governance will be launched in North America by mid-year and globally by year-end. The solution is a single platform for identity governance that will provide privileged access, collect audit logs for compliance, simplify setup and management while enhancing the user experience. Customers will be able to manage end-to-end identity governance processes across applications and infrastructure at any level of scale using its extensible APIs and no-code workflows.

Despite the multiple product upgrades, the market was not very pleased with Okta. Its bigger than expected losses for the current quarter sent the stock falling. Okta’s net operating loss grew to $214 million for the quarter, and it ended the year with a loss of $848 million, compared with $266 million in the prior year. The significant increase in losses in the current year were attributed to the Auth0 acquisition and continued business investments. But even adjusted operating margin fell to a loss of 6% compared to a gain of 1% last year.

Okta’s product upgrades are helping it expand its market presence. It added a record 1,000 new customers last quarter and ended with a total customer base at 15,000, growing 50% over the year. The growth in the customers was across all segments. Customers with $100,000-plus annual contract value (ACV) grew 60% to over 3,100. It also added a record number of new customers with both $500,000+ and $1 million+ in ACV. It now has 600 customers with an ACV of $500,000+ and nearly 200 customers with an ACV of $1 million+. Both of these groups grew approximately 60% as well.

Its stock is currently trading at $159.55 with a market cap of $24.8 billion. It touched a 52-week high of $287.44 in April last year and a 52-week low of $152.51 earlier this month.