According to a recent Zion Market Research report, the global Identity and Access Management Market is estimated to grow 12.8% annually to reach $23.38 billion by 2025 from $10.12 billion in 2018. Okta (Nasdaq: OKTA), a leading player in the industry, recently announced its second quarter results that continued to outpace market expectations. But the recent volatility in the stock market sent the stock tumbling this week.

Okta’s Financials

Revenues for the second quarter increased 49% to $140.5 million, ahead of the market’s forecast of $131.2 million. Net loss was $43 million, compared to $39.2 million a year ago. Adjusted net loss was $5.5 million, or $0.05 cents a share, compared with previous year’s loss of $16.4 million and the Street’s forecast of a loss of $0.11 per share.

By segment, subscription services revenues increased 51% to $132.5 million. Professional services and the others segment revenues grew 19% to $8 million. Total calculated billings grew 42% to $155.8 million.

Among key metrics, Okta added 450 new customers in the quarter to end with 7,000 net customers, an increase of 36% over the year. Customers with more than $100,000 annual contract value (ACV) increased 46% to 1222, driven by new enterprise customers.

For the third quarter, Okta forecast revenues of $143-$144 million with a net loss of $0.13-$0.12 per share. It expects to end the year with $560-$563 million in revenues and non-GAAP net loss per share of $0.44-$0.42. The market was looking for revenues of $140.21 million for the quarter with a loss of $0.09 per share and revenues of $547.57 million for the year with a net loss of $0.46 per share.

Okta’s Product Focus

Okta is driving revenue growth through product innovation and by focusing on a platform driven approach. Earlier this year, it had introduced Okta Hooks, a new functionality of the Okta Identity Cloud that allows developers to create custom integrations for the Okta Integration Network. Developers can include identity proofing and verification into consumer registration decisions and automate IT Service Management actions.

Okta also opened up its platform into customizable blocks to allow developers to build unlimited use cases with the Okta Identity Engine. The platform features were launched earlier this year and Okta claims to be witnessing strong traction through the change.

Earlier this year, it had also launched Okta Advanced Server Access, a new way to secure access to critical infrastructure, and Okta Access Gateway to extend the Okta Identity Cloud to on-premise apps. Okta Advanced Server Access centralizes access controls for organizations leveraging on-premises, hybrid, and cloud infrastructure to mitigate the risk of credential theft, reuse, sprawl, and abandoned administrative account. The Access Gateway was another security feature that allowed organizations to secure access to on-premise applications and protect their hybrid cloud without changing how their apps worked.

Recently, Okta was ranked the leader, for the third consecutive quarter, in Gartner’s Magic Quadrant for Access Management.

The market was pleased with Okta’s result announcement last month and the stock gained 3% in the after-hours session. The stock has fallen since then, primarily due to market turbulence. Overall cloud computing stocks have taken a beating, and Okta is no exception. There is no clear reasoning on why the stocks declined, but there is a speculation that large investors are shifting their portfolio.

Okta’s stock is currently trading at $107.22 with a market capitalization of $12.5 billion. It touched a 52-week high of $141.85 in July this year. The stock was trading at a 52-week low of $41.88 nearly a year ago.