We are missing something with Okta! The continual refrain I hear on the board is “they are slowing down, they are slowing down, they are slowing down, I’m selling out, I’m reducing my position, I’m selling out, I’m reducing my position!” I haven’t sold out, but I have reduced my position too. It’s just a 6.2% position at present (which is certainly not a trivial position though).
However, OKTA, the stock, just doesn’t seem to care. Other companies go up and down, up and down, but Okta just seems to go up, plodding along, resting for a while near its top and then moving up again, and up another 3.5% today. When I look at my graphs it is astounding how consistent it has been. What is the market seeing that we aren’t seeing? Granted, they are “only” up 111% ytd while Zoom, Crowd, and Datadog are up considerably more, but Okta never seems to go down (granted, except in the mid-March pandemic panic when everything went down for a few days).
Here’s what they said in the August Conference Call:
“During this crisis, our customers are using our platform more than ever. There was a 1-day record of over 145 million logins, and the number of unique app logins increased almost 70% to nearly 16 billion. Total MFA usage increased nearly 3x over the same period last year. These numbers reflect the massive number of new remote workers around the world and our strong growth in total customers, especially large enterprise companies.
Our ongoing focus to grow our base of large enterprise customers continues to yield results and is reflected in the addition of 105 customers with an annual contract value greater than $100,000 in the second quarter. Once again, over half of these additions were from new customers. The total number of $100,000-plus customers is now nearing 1,700. We also crossed a significant milestone and now have over a hundred $1 million customers.
In our long-term vision, we see Okta establishing itself as a standard for digital identity. In order to achieve this, we will continue to grow aggressively by adding more users, more customers, particularly large enterprise customers, expanding internationally, adding more strategic partners and increasing the use cases that come from building out our platform and accelerating the network effects. I hope that gives you a little better understanding of how we’re thinking about building Okta into the next iconic cloud company.
We couldn’t be more enthusiastic about our near-term and long-term opportunities. Having said that, we continue to be mindful that many organizations are going through incredibly difficult times, and we’re doing what we can to lend our support to the business community.”
That seems very positive to me!
Here are some figures from their earnings report:
• Revenue up 43%
• Subscription revenue up 44%
• Remaining performance obligations (RPO), or subscription revenue backlog, up 56%
• Adj operating income was $6.5 million, or 3.2% of revenue, up from a LOSS of $9.9 million, or 7.1% of revenue, a year ago
• Adj net income was $9.9 million, up from a LOSS of $5.2 million.
• Adj EPS was 7 cents, up from a LOSS of 5 cents.
• Op Cash Flow was $10.9 million, or 5.5% of revenue, up from $1.1 million, or 0.8% of revenue. in the second quarter of fiscal 2020.
• Free cash flow was $6.9 million, or 3.4% of revenue, up from a LOSS of $4.3 million, or 3.1% of revenue.
• Cash was $2.5 billion.
I’d love to hear your point of view. What are we missing? Or do you think the market is wrong?
Saul