Okta Announces Strong Third Quarter Results December 2, 2020 Increases revenue and operating profit outlook for fiscal 2021 Q3 revenue grew 42% year-over-year; subscription revenue grew 43% year-over-year Remaining performance obligations (RPO), or subscription revenue backlog, grew 53% year-over-year Record quarterly operating and free cash flows Appoints Board Member Mike Kourey to succeed Bill Losch, who is retiring, as Chief Financial Officer in March 2021 SAN FRANCISCO–(BUSINESS WIRE)–Dec. 2, 2020-- Okta, Inc. (NASDAQ: OKTA), the leading independent provider of identity for the enterprise, today announced financial results for its third quarter ended October 31, 2020.
"We are seeing the importance of a modern identity platform like the Okta Identity Cloud grow as businesses around the world accelerate their adoption of cloud-based applications and re-imagine their digital customer experiences,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta. “Our strong third quarter results reflect Okta’s leading position in identity and access management and our continued ability to execute and drive industry-leading performance.”
+27% number of customers
+34% number of customers with more than $100k
+50% number of customers with more than $500k (from Q&A)
+53% RPO
A few of minor things that put together bodes well:
123% Best TTM net retention rate in two years
56% Best rule of 40 in two years
78.3% Second best total gross margin in two years
I now assume that Okta will now continue to expand rapidly and that they will gain pace in 2021 as the effects of 2020’s digitalisation efforts now need better identity solutions. They seem confident that customers share their view that ID is cross platform/cloud and that they are well positioned
Growth drivers from the call:
-They did not break out consumer ID, I believe it is expanding rapidly. Last number I saw was 70% yoy.
-They were very confident about their channels and their ability to make use of their partners and super excited about being on the AWS market place (Kerrister said a gamechanger)
Okta has remained 100% remote since mid-March, and we continue to execute at a high level.
CFO Bill Losch announced his retirement effective next year
NRR 123% (up from 121% Q2)
Free Cash Flow Margin 19.1% (up from 3.4% Q2)
ended the third quarter with $2.5 billion in cash, cash equivalents and short term investments
estimated FT 2022 total revenue to exceed $1 billion
A few notable quotes:
“a lot of our customers are relatively speaking, just getting started with our products”
“people are just starting to figure out how they can really take advantage of this service. I think we’re also right in the middle of transforming really from a products company to a platform company”
“I think the next three, five years as we open up the platform and provide more solutions for our customers they are going to continue to be very, very exciting for us”