Okta, Inc. (NASDAQ: OKTA), the leading independent provider of identity for the enterprise, today announced financial results for its third quarter ended October 31, 2019.
"Our strong third quarter results reflect our expanding leadership position and the growing importance of identity," said Todd McKinnon, Chief Executive Officer and co-founder of Okta. "Industry leading growth in subscription revenue, remaining performance obligations, and billings were driven by strong execution and the continued secular tailwinds of increasing adoption of cloud applications, digital transformation as companies improve how they connect with their employees and customers, and deployment of zero trust security environments. Businesses of all sizes around the world are turning to Okta's cloud-based solutions for a modern, highly customizable identity platform that meets their business needs and security challenges. We've made great progress and continue to innovate to address this large and growing market opportunity."
Third Quarter Fiscal 2020 Financial Highlights:
- Revenue: Total revenue was $153.0 million, an increase of 45% year-over-year. Subscription revenue was $144.5 million, an increase of 48% year-over-year.
- Remaining Performance Obligations (RPO): Total RPO was $1.03 billion, an increase of 68% year-over-year. Current RPO, which is revenue expected to be recognized over the next 12 months, was $515.9 million, up 52% compared to the third quarter of fiscal 2019.
- Calculated Billings: Total calculated billings were $175.6 million, an increase of 42% year-over-year.
- Operating Loss: GAAP operating loss was $45.7 million, or 30% of total revenue, compared to $28.5 million, or 27% of total revenue, in the third quarter of fiscal 2019. Non-GAAP operating loss was $8.1 million, or 5% of total revenue, compared to $6.5 million, or 6% of total revenue, in the third quarter of fiscal 2019.
- Net Loss: GAAP net loss was $63.5 million, compared to $29.5 million in the third quarter of fiscal 2019. GAAP net loss per share was $0.53, compared to $0.27 in the third quarter of fiscal 2019. Non-GAAP net loss was $8.1 million, compared to $3.9 million in the third quarter of fiscal 2019. Non-GAAP net loss per share was $0.07, compared to $0.04 in the third quarter of fiscal 2019.
- Cash Flow: Net cash provided by operations was $10.6 million, or 7% of total revenue, compared to net cash used in operations of $6.4 million, or 6% of total revenue, in the third quarter of fiscal 2019. Free cash flow was $9.2 million, or 6% of total revenue, compared to $1.4 million, or 1% of total revenue, in the third quarter of fiscal 2019.
- Cash, cash equivalents, and short-term investments were $1.37 billion.
The section titled "Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures and reconciliations between GAAP and non-GAAP information are contained in the tables below.
Financial Outlook:
For the fourth quarter of fiscal 2020, the company expects:
- Total revenue of $155 million to $156 million, representing a growth rate of 34% to 35% year-over-year
- Non-GAAP operating loss of $10.1 to $9.1 million
- Non-GAAP net loss per share of $0.05 to $0.04, assuming weighted shares outstanding of approximately 122 million
For the full year fiscal 2020, the company now expects:
- Total revenue of $574 million to $575 million, representing a growth rate of 44% year-over-year
- Non-GAAP operating loss of $53.1 to $52.1 million
- Non-GAAP net loss per share of $0.35 to $0.34, assuming weighted shares outstanding of approximately 117 million
These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Okta has not reconciled its expectations as to non-GAAP operating loss and non-GAAP net loss per share to their most directly comparable GAAP measure because certain items are out of Okta’s control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP operating loss and non-GAAP net loss per share is not available without unreasonable effort.
Named a Leader in Zero Trust:
Okta was recognized as a Leader in The Forrester WaveTM: Zero Trust eXtended Ecosystem Platform Providers, Q4 2019, a report published by Forrester Research, Inc. on October 29, 2019. In the Forrester report, Okta earned the highest possible scores across half of the criteria upon which it was evaluated including “network security,” “people/workforce security,” “automation and orchestration,” “manageability and usability,” “ZTX vision and strategy,” “ZTX advocacy,” “customers investing in portfolio,” and “portfolio growth rate.”
Conference Call Information:
Okta will host a conference call and live webcast for analysts and investors at 2:00 p.m. Pacific Time on December 5, 2019. The news release with the financial results will be accessible from the Company’s website at investor.okta.com prior to the conference call. Interested parties can access the call by dialing (800) 458-4148 or (323) 794-2093 and using the passcode 7651253.
A live webcast of the conference call will be accessible from the Okta investor relations website at investor.okta.com.
Supplemental Financial and Other Information:
Supplemental financial and other information can be accessed through the Company’s investor relations website at investor.okta.com.
Non-GAAP Financial Measures:
This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, current calculated billings and calculated billings. Certain of these non-GAAP financial measures exclude stock-based compensation, amortization of debt discount, charitable contributions, amortization of intangible assets, acquisition-related expenses and loss on early extinguishment of debt, net of debt issuance costs.
Okta believes that non-GAAP financial information, when taken collectively with GAAP financial measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.
The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by the Company's management about which expenses and income are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.
Okta encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business. Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.
Forward-Looking Statements: This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, product development, business strategy and plans and market trends, opportunities and positioning. These forward-looking statements are based on current expectations, estimates, forecasts and projections. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall" and variations of these terms and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. For example, the market for our products may develop more slowly than expected or than it has in the past; our operating results may fluctuate more than expected; there may be significant fluctuations in our results of operations and cash flows related to our revenue recognition or otherwise; a network or data security incident that allows unauthorized access to our network or data or our customers’ data could damage our reputation; we could experience interruptions or performance problems associated with our technology, including a service outage; we may not be able to pay off our convertible senior notes when due; and global economic conditions could deteriorate. Further information on potential factors that could affect our financial results is included in our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission. The forward-looking statements included in this press release represent our views only as of the date of this press release and we assume no obligation and do not intend to update these forward-looking statements.
About Okta
Okta is the leading independent provider of identity for the enterprise. The Okta Identity Cloud enables organizations to securely connect the right people to the right technologies at the right time. With over 6,500 pre-built integrations to applications and infrastructure providers, Okta customers can easily and securely use the best technologies for their business. Over 7,400 organizations, including 20th Century Fox, JetBlue, Nordstrom, Slack, Teach for America and Twilio, trust Okta to help protect the identities of their workforces and customers.
OKTA, INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended
| Nine Months Ended
| |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue: | ||||||||||||||||
Subscription | $ | 144,517 | $ | 97,698 | $ | 394,174 | $ | 262,393 | ||||||||
Professional services and other | 8,520 | 7,878 | 24,566 | 21,390 | ||||||||||||
Total revenue | 153,037 | 105,576 | 418,740 | 283,783 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Subscription (1) | 30,124 | 20,265 | 82,581 | 55,808 | ||||||||||||
Professional services and other (1) | 10,700 | 9,435 | 32,118 | 26,227 | ||||||||||||
Total cost of revenue | 40,824 | 29,700 | 114,699 | 82,035 | ||||||||||||
Gross profit | 112,213 | 75,876 | 304,041 | 201,748 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development (1) | 41,832 | 27,596 | 115,909 | 72,354 | ||||||||||||
Sales and marketing (1) | 87,224 | 56,911 | 247,721 | 165,408 | ||||||||||||
General and administrative (1) | 28,887 | 19,848 | 81,540 | 55,873 | ||||||||||||
Total operating expenses | 157,943 | 104,355 | 445,170 | 293,635 | ||||||||||||
Operating loss | (45,730 | ) | (28,479 | ) | (141,129 | ) | (91,887 | ) | ||||||||
Interest expense | (7,826 | ) | (4,118 | ) | (16,371 | ) | (10,893 | ) | ||||||||
Other income, net | 4,982 | 2,413 | 11,346 | 6,211 | ||||||||||||
Loss on early extinguishment of debt | (14,572 | ) | — | (14,572 | ) | — | ||||||||||
Interest expense and other income, net | (17,416 | ) | (1,705 | ) | (19,597 | ) | (4,682 | ) | ||||||||
Loss before provision for (benefit from) income taxes | (63,146 | ) | (30,184 | ) | (160,726 | ) | (96,569 | ) | ||||||||
Provision for (benefit from) income taxes | 349 | (667 | ) | (2,285 | ) | (1,883 | ) | |||||||||
Net loss | $ | (63,495 | ) | $ | (29,517 | ) | $ | (158,441 | ) | $ | (94,686 | ) | ||||
Net loss per share, basic and diluted | $ | (0.53 | ) | $ | (0.27 | ) | $ | (1.37 | ) | $ | (0.89 | ) | ||||
Weighted-average shares used to compute net loss per share, basic and diluted | 118,976 | 108,776 | 115,598 | 106,587 | ||||||||||||
(1) Amounts include share-based compensation expense as follows (in thousands): | ||||||||||||||||
Three Months Ended
| Nine Months Ended
| |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Cost of subscription revenue | $ | 3,604 | $ | 2,383 | $ | 9,137 | $ | 5,813 | ||||||||
Cost of professional services and other revenue | 1,900 | 1,305 | 5,292 | 3,277 | ||||||||||||
Research and development | 10,894 | 6,291 | 26,322 | 15,776 | ||||||||||||
Sales and marketing | 10,937 | 6,228 | 26,959 | 15,852 | ||||||||||||
General and administrative | 8,400 | 5,335 | 21,984 | 13,181 | ||||||||||||
Total share-based compensation expense | $ | 35,735 | $ | 21,542 | $ | 89,694 | $ | 53,899 | ||||||||
OKTA, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
(unaudited) | ||||||||
October 31,
| January 31,
| |||||||
As Adjusted (1) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,039,626 | $ | 298,394 | ||||
Short-term investments | 326,629 | 265,374 | ||||||
Accounts receivable, net of allowances | 101,778 | 91,926 | ||||||
Deferred commissions | 29,544 | 24,185 | ||||||
Prepaid expenses and other current assets | 29,023 | 28,237 | ||||||
Total current assets | 1,526,600 | 708,116 | ||||||
Property and equipment, net | 51,730 | 52,921 | ||||||
Operating lease right-of-use assets | 126,746 | 121,389 | ||||||
Deferred commissions, noncurrent | 65,466 | 54,812 | ||||||
Intangible assets, net | 33,826 | 13,897 | ||||||
Goodwill | 47,964 | 18,089 | ||||||
Other assets | 18,445 | 15,089 | ||||||
Total assets | $ | 1,870,777 | $ | 984,313 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 4,924 | $ | 2,431 | ||||
Accrued expenses and other current liabilities | 33,288 | 33,653 | ||||||
Accrued compensation | 34,212 | 19,770 | ||||||
2023 Convertible senior notes, net | 99,227 | 271,628 | ||||||
Deferred revenue | 306,743 | 245,622 | ||||||
Total current liabilities | 478,394 | 573,104 | ||||||
2025 Convertible senior notes, net | 828,237 | — | ||||||
Operating lease liabilities, noncurrent | 153,960 | 147,046 | ||||||
Deferred revenue, noncurrent | 7,013 | 8,768 | ||||||
Other liabilities, noncurrent | 4,779 | 3,018 | ||||||
Total liabilities | 1,472,383 | 731,936 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock | — | — | ||||||
Class A common stock | 11 | 10 | ||||||
Class B common stock | 1 | 1 | ||||||
Additional paid-in capital | 1,048,899 | 744,896 | ||||||
Accumulated other comprehensive income (loss) | 135 | (319 | ) | |||||
Accumulated deficit | (650,652 | ) | (492,211 | ) | ||||
Total stockholders’ equity | 398,394 | 252,377 | ||||||
Total liabilities and stockholders' equity | $ | 1,870,777 | $ | 984,313 | ||||
| (1) | The condensed consolidated balance sheet for the prior period has been adjusted to reflect the adoption of ASC 842. |
OKTA, INC. | ||||||||
SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(unaudited) | ||||||||
Nine Months Ended October 31, | ||||||||
2019 | 2018 | |||||||
As Adjusted (1) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (158,441 | ) | $ | (94,686 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Stock-based compensation | 89,691 | 53,899 | ||||||
Depreciation, amortization and accretion | 12,336 | 5,824 | ||||||
Amortization of debt discount and issuance costs | 15,653 | 10,315 | ||||||
Amortization of deferred commissions | 20,541 | 14,963 | ||||||
Deferred income taxes | (3,069 | ) | (2,269 | ) | ||||
Non-cash charitable contributions | 1,162 | 1,008 | ||||||
Loss on early extinguishment of debt | 14,572 | — | ||||||
Other | 84 | 153 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (9,393 | ) | (17,539 | ) | ||||
Deferred commissions | (36,641 | ) | (25,907 | ) | ||||
Prepaid expenses and other assets | (1,518 | ) | (2,822 | ) | ||||
Operating lease right-of-use assets | 7,851 | 12,209 | ||||||
Accounts payable | 1,962 | (334 | ) | |||||
Accrued compensation | 17,352 | 7,973 | ||||||
Accrued expenses and other liabilities | 4,017 | 1,859 | ||||||
Operating lease liabilities | (4,128 | ) | (5,614 | ) | ||||
Deferred revenue | 58,737 | 46,036 | ||||||
Net cash provided by operating activities | 30,768 | 5,068 | ||||||
Cash flows from investing activities: | ||||||||
Capitalization of internal-use software costs | (2,659 | ) | (2,329 | ) | ||||
Purchases of property and equipment | (9,980 | ) | (14,253 | ) | ||||
Purchases of securities available for sale and other | (321,462 | ) | (478,138 | ) | ||||
Proceeds from maturities of securities available for sale | 244,393 | 219,650 | ||||||
Proceeds from sales of securities available for sale and other | 17,329 | 12,470 | ||||||
Purchases of intangible assets | (8,500 | ) | — | |||||
Payments for business acquisition, net of cash acquired | (44,223 | ) | (15,616 | ) | ||||
Net cash used in investing activities | (125,102 | ) | (278,216 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs | 1,040,760 | 334,980 | ||||||
Payments for repurchases of 2023 convertible senior notes | (224,414 | ) | — | |||||
Purchases of hedges related to 2023 convertible senior notes | — | (80,040 | ) | |||||
Proceeds from hedges related to 2023 convertible senior notes | 405,851 | — | ||||||
Proceeds from issuance of warrants related to 2023 convertible senior notes | — | 52,440 | ||||||
Payments for warrants related to 2023 convertible senior notes | (358,622 | ) | — | |||||
Purchases of capped calls related to 2025 convertible senior notes | (74,094 | ) | — | |||||
Proceeds from stock option exercises, net of repurchases | 36,371 | 28,524 | ||||||
Proceeds from shares issued in connection with employee stock purchase plan | 9,005 | 6,654 | ||||||
Other, net | (126 | ) | (206 | ) | ||||
Net cash provided by financing activities | 834,731 | 342,352 | ||||||
Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash | (241 | ) | (990 | ) | ||||
Net increase in cash, cash equivalents and restricted cash | 740,156 | 68,214 | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 311,215 | 136,233 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,051,371 | $ | 204,447 | ||||
| (1) | The condensed consolidated statement of cash flows for the prior period has been adjusted to reflect the adoption of ASC 842. |
OKTA, INC. | ||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Data | ||||||||||||||||||||||||||||
(In thousands, except percentages and per share data) | ||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Three Months Ended October 31, 2019 | ||||||||||||||||||||||||||||
GAAP | Stock-based
| Charitable
| Amortization
| Amortization
| Loss on early
| Non-GAAP | ||||||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||||||||||
Cost of subscription services | $ | 30,124 | $ | (3,604 | ) | $ | — | $ | (1,347 | ) | $ | — | $ | — | $ | 25,173 | ||||||||||||
Cost of professional services | 10,700 | (1,900 | ) | — | — | — | — | 8,800 | ||||||||||||||||||||
Gross profit | 112,213 | 5,504 | — | 1,347 | — | — | 119,064 | |||||||||||||||||||||
Gross margin | 73.3 | % | 3.6 | % | — | 0.9 | % | — | — | 77.8 | % | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Research and development | 41,832 | (10,894 | ) | — | — | — | — | 30,938 | ||||||||||||||||||||
Sales and marketing | 87,224 | (10,937 | ) | — | — | — | — | 76,287 | ||||||||||||||||||||
General and administrative | 28,887 | (8,400 | ) | (510 | ) | — | — | — | 19,977 | |||||||||||||||||||
Operating loss | (45,730 | ) | 35,735 | 510 | 1,347 | — | — | (8,138 | ) | |||||||||||||||||||
Operating margin | (29.9 | )% | 23.4 | % | 0.3 | % | 0.9 | % | — | — | (5.3 | )% | ||||||||||||||||
Interest expense and other Income, net | (17,416 | ) | — | — | — | 7,052 | 10,794 | 430 | ||||||||||||||||||||
Net loss | $ | (63,495 | ) | $ | 35,735 | $ | 510 | $ | 1,347 | $ | 7,052 | $ | 10,794 | $ | (8,057 | ) | ||||||||||||
Net loss per share (1) | $ | (0.53 | ) | $ | 0.30 | $ | — | $ | 0.01 | $ | 0.06 | $ | 0.09 | $ | (0.07 | ) | ||||||||||||
(1) | GAAP and Non-GAAP net loss per share calculated based upon 118,976 basic and diluted weighted-average shares of common stock. | |
(2) | Excludes debt issuance costs. |
Three Months Ended October 31, 2018 | ||||||||||||||||||||
GAAP | Stock-based
| Amortization of
| Amortization of
| Non-GAAP | ||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Cost of subscription services | $ | 20,265 | $ | (2,383 | ) | $ | (449 | ) | $ | — | $ | 17,433 | ||||||||
Cost of professional services | 9,435 | (1,305 | ) | — | — | 8,130 | ||||||||||||||
Gross profit | 75,876 | 3,688 | 449 | — | 80,013 | |||||||||||||||
Gross margin | 71.9 | % | 3.4 | % | 0.5 | % | — | 75.8 | % | |||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 27,596 | (6,291 | ) | — | — | 21,305 | ||||||||||||||
Sales and marketing | 56,911 | (6,228 | ) | — | — | 50,683 | ||||||||||||||
General and administrative | 19,848 | (5,335 | ) | — | — | 14,513 | ||||||||||||||
Operating loss | (28,479 | ) | 21,542 | 449 | — | (6,488 | ) | |||||||||||||
Operating margin | (27.0 | )% | 20.5 | % | 0.4 | % | — | (6.1 | )% | |||||||||||
Interest expense and other Income, net | (1,705 | ) | — | — | 3,604 | 1,899 | ||||||||||||||
Net loss | $ | (29,517 | ) | $ | 21,542 | $ | 449 | $ | 3,604 | $ | (3,922 | ) | ||||||||
Net loss per share (1) | $ | (0.27 | ) | $ | 0.20 | $ | — | $ | 0.03 | $ | (0.04 | ) | ||||||||
(1) | GAAP and Non-GAAP net loss per share calculated based upon 108,776 basic and diluted weighted-average shares of common stock. |
OKTA, INC. | ||||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Data | ||||||||||||||||||||||||||||||||
(In thousands, except percentages and per share data) | ||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||
Nine Months Ended October 31, 2019 | ||||||||||||||||||||||||||||||||
GAAP | Stock-based
| Charitable
| Amortization
| Amortization
| Acquisition-
| Loss on
| Non-GAAP | |||||||||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||||||||||||||
Cost of subscription services | $ | 82,581 | $ | (9,137 | ) | $ | — | $ | (3,895 | ) | $ | — | $ | — | $ | — | $ | 69,549 | ||||||||||||||
Cost of professional services | 32,118 | (5,292 | ) | — | — | — | — | — | 26,826 | |||||||||||||||||||||||
Gross profit | 304,041 | 14,429 | — | 3,895 | — | — | — | 322,365 | ||||||||||||||||||||||||
Gross margin | 72.6 | % | 3.4 | % | — | 0.9 | % | — | — | — | 77.0 | % | ||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Research and development | 115,909 | (26,322 | ) | — | — | — | — | — | 89,587 | |||||||||||||||||||||||
Sales and marketing | 247,721 | (26,959 | ) | — | — | — | — | — | 220,762 | |||||||||||||||||||||||
General and administrative | 81,540 | (21,984 | ) | (1,162 | ) | — | — | (3,449 | ) | — | 54,945 | |||||||||||||||||||||
Operating loss | (141,129 | ) | 89,694 | 1,162 | 3,895 | — | 3,449 | — | (42,929 | ) | ||||||||||||||||||||||
Operating margin | (33.7 | )% | 21.4 | % | 0.3 | % | 0.9 | % | — | 0.8 | % | — | (10.3 | )% | ||||||||||||||||||
Interest expense and other Income, net | (19,597 | ) | — | — | — | 14,517 | — | 10,794 | 5,714 | |||||||||||||||||||||||
Net loss | $ | (158,441 | ) | $ | 89,694 | $ | 1,162 | $ | 3,895 | $ | 14,517 | $ | 3,449 | 10,794 | $ | (34,930 | ) | |||||||||||||||
Net loss per share (1) | $ | (1.37 | ) | $ | 0.78 | $ | 0.01 | $ | 0.03 | $ | 0.13 | $ | 0.03 | $ | 0.09 | $ | (0.30 | ) | ||||||||||||||
(1) | GAAP and Non-GAAP net loss per share calculated based upon 115,598 basic and diluted weighted-average shares of common stock. | |
(2) | Excludes debt issuance costs. |
Nine Months Ended October 31, 2018 | ||||||||||||||||||||||||
GAAP | Stock-based
| Charitable
| Amortization of
| Amortization of
| Non-GAAP | |||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||||||
Cost of subscription services | $ | 55,808 | $ | (5,813 | ) | $ | — | $ | (449 | ) | $ | — | $ | 49,546 | ||||||||||
Cost of professional services | 26,227 | (3,277 | ) | — | — | — | 22,950 | |||||||||||||||||
Gross profit | 201,748 | 9,090 | — | 449 | — | 211,287 | ||||||||||||||||||
Gross margin | 71.1 | % | 3.2 | % | — | 0.2 | % | — | 74.5 | % | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Research and development | 72,354 | (15,776 | ) | — | — | — | 56,578 | |||||||||||||||||
Sales and marketing | 165,408 | (15,852 | ) | — | — | — | 149,556 | |||||||||||||||||
General and administrative | 55,873 | (13,181 | ) | (1,008 | ) | — | — | 41,684 | ||||||||||||||||
Operating loss | (91,887 | ) | 53,899 | 1,008 | 449 | — | (36,531 | ) | ||||||||||||||||
Operating margin | (32.4 | )% | 18.9 | % | 0.4 | % | 0.2 | % | — | (12.9 | )% | |||||||||||||
Interest expense and other Income, net | (4,682 | ) | — | — | — | 9,539 | 4,857 | |||||||||||||||||
Net loss | $ | (94,686 | ) | $ | 53,899 | $ | 1,008 | $ | 449 | $ | 9,539 | $ | (29,791 | ) | ||||||||||
Net loss per share (1) | $ | (0.89 | ) | $ | 0.51 | $ | 0.01 | $ | — | $ | 0.09 | $ | (0.28 | ) | ||||||||||
(1) | GAAP and Non-GAAP net loss per share calculated based upon 106,587 basic and diluted weighted-average shares of common stock. |
OKTA, INC. | ||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Free Cash Flow | ||||||||||||||||
Three Months Ended
| Nine Months Ended
| |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net cash provided by (used in) operating activities | $ | 10,640 | $ | 6,439 | $ | 30,768 | $ | 5,068 | ||||||||
Less: | ||||||||||||||||
Purchases of property and equipment | (63 | ) | (4,463 | ) | (9,980 | ) | (14,253 | ) | ||||||||
Capitalization of internal-use software costs | (1,329 | ) | (604 | ) | (2,659 | ) | (2,329 | ) | ||||||||
Free cash flow | $ | 9,248 | $ | 1,372 | $ | 18,129 | $ | (11,514 | ) | |||||||
Net cash provided by (used in) investing activities | $ | 22,888 | $ | (10,545 | ) | $ | (125,102 | ) | $ | (278,216 | ) | |||||
Net cash provided by financing activities | $ | 798,399 | $ | 7,469 | $ | 834,731 | $ | 342,352 | ||||||||
Free cash flow margin | 6.0% | 1.3% | 4.3% | (4.1)% | ||||||||||||
Calculated Billings | ||||||||||||||||
Three Months Ended
| Nine Months Ended
| |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Total revenue | $ | 153,037 | $ | 105,576 | $ | 418,740 | $ | 283,783 | ||||||||
Add: | ||||||||||||||||
Unbilled receivables, current (beginning of period) | 1,004 | 818 | 1,457 | 809 | ||||||||||||
Deferred revenue, current (end of period) | 306,743 | 206,146 | 306,743 | 206,146 | ||||||||||||
Less: | ||||||||||||||||
Unbilled receivables, current (end of period) | (1,028 | ) | (1,581 | ) | (1,028 | ) | (1,581 | ) | ||||||||
Deferred revenue, current (beginning of period) | (283,724 | ) | (186,427 | ) | (245,622 | ) | (159,816 | ) | ||||||||
Current calculated billings | 176,032 | 124,532 | 480,290 | 329,341 | ||||||||||||
Add: | ||||||||||||||||
Deferred revenue, noncurrent (end of period) | 7,013 | 4,977 | 7,013 | 4,977 | ||||||||||||
Less: | ||||||||||||||||
Deferred revenue, noncurrent (beginning of period) | (7,469 | ) | (5,471 | ) | (8,768 | ) | (4,963 | ) | ||||||||
Calculated billings | $ | 175,576 | $ | 124,038 | $ | 478,535 | $ | 329,355 | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20191205005300/en/
Contacts:
Dave Gennarelli
investor@okta.com
415-699-0143
