Okta held an Investor Day FY21 on April 1. It was very encouraging on many fronts: long-term tailwinds for identity/security; new product development announcements announced at their virtual Oktane20 user group; customer and partner success stories; international expansion; and their financial update.
https://okta.gcs-web.com/static-files/d49ac0aa-2f58-4acd-b76…
Their CFO Bill Losch reaffirmed Q1 and full-year fiscal 2021 revenue forecast. And they put out an improved forecast for non-GAAP operating loss and net loss per share. For the fiscal year operating loss moved down from previous $(65)M-$(57)M to new $(49)M-$(42)M. Net loss per share from previous $(0.42)-$(0.37) to new $(0.36)-$(0.31).
Losch pointed to new interest from companies, driven by work from home. But also delays to some deals creating “near-term headwinds to RPO and billings growth”. And he saw risks to highly impacted SMB (small-medium business) companies. But taking it all into account they maintained revenue guidance.
On the improved profitability side it should come from reduced sales and marketing expenses: less travel, savings on doing their user-group Oktane20 show virtually, etc. Also some reduced interest expenses.
Looks good to me. Losch said “Our highly recurring business model enables a high degree of predictability and allows us to maintain confidence in our revenue outlook…”
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I think that FCF will be impacted for many of our SaaS companies. Cisco is for instance offering payment deferrals until 2021: https://mobile.reuters.com/article/amp/idUSKCN21W1JH?__twitt…
I work for an airline supplier company and currently all costs are minimized as revenue is down by 90%. I am pretty sure that we are not paying any of our incoming SaaS invoices right now and this likely also applies for many other companies in the hardest hit sectors. If we don’t get payment deferrals or even discounts, we may have to cancel many of our SaaS subscriptions in order to preserve cash.
As we are a large company (5 billion revenue in steady state), I expect that most SaaS companies will do nearly everything to prevent losing us as a customer, with an expected hit in their FCF and OPEX (discounts).
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Hi Rubenslash,
Good point and more importantly one from your on-the-ground perspective; appreciated. I did hear at least OKTA officer - not sure whom - say OKTA are working with clients who truly can’t make payments now (while watching out for phony hardship claims). The OKTA person said they recognize the need to work with good clients needing cooperation during these times to make it through to the other side of the problem.
I trust they took this into consideration with their guidance though, so it’s not concerning me too much as an investor. But just my take.
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2100STJ
Your posts about vaccine companies keep getting deleted, you get zero recs and all the comments you’ve had from board members are to tell you your posts are inappropriate for our board. What don’t you understand about this? Do we need to ban you from the board?
Saul
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