According to a Grand View Research report, the global identity access management (IAM) market is expected to grow 13% annually over the next few years to $24.12 billion by 2025 driven by the continuing adoption of BYOD policies across organizations. Recently, Okta (Nasdaq: OKTA) announced its quarterly results that outpaced market expectations.
Revenues for the third quarter increased 45% over the year to $153 million, ahead of the market’s forecast of $143.7 million. Adjusted loss of $0.07 per share was also better than the Street’s estimated loss of $0.12 per share. A year ago, the company had reported a loss of $0.04 per share.
By segment, subscription services revenues increased 48% over the year to $144.5 million. Professional services and the others segment revenues grew 8% to $8.5 million. Total calculated billings grew 42% to $175.6 million. The market was looking for subscription revenues of $135.3 million and billings of $165.8 million for the quarter.
Among key metrics, Okta added 400 new customers in the quarter to end with 7,400 net customers. Customers with more than $100,000 annual contract value (ACV) increased 40% to 1,300 driven by the continued adoption by enterprise customers.
For the fourth quarter, Okta forecast revenues of $155-$156 million with a net loss of $0.04-$0.05 per share. It expects to end the year with $574-$575 million in revenues and non-GAAP net loss per share of $0.34-$0.35. The market was looking for revenues of $152.6 million for the quarter with a loss of $0.07 per share and revenues of $562.16 million for the year with a net loss of $0.43 per share.
Okta’s Product Focus
Okta is focusing on attracting the enterprise customers through several product enhancements. Recently, it announced a strategic partnership with Atlassian that will integrate Okta’s authentication technology into Atlassian cloud products. As part of the partnership, Okta’s IAM tools will be available to Atlassian customers through the admin hub for SCIM provisioning and single sign-on.
The organizations believe that the integration will help IT admins to automate provisioning from onboarding through offboarding and allow them to set access policies centrally instead of provisioning end users individually. Employees will also have access to single sign-on to access Atlassian apps. For Atlassian apps not part of Atlassian Access, the Okta integration will allow for user lifecycle management and a single sign-on for users via direct integrations to apps.
Additionally, Okta also announced the launch of Okta DynamicScale, a new high capacity customer identity solution that allows for transformative scale for large businesses and highly-trafficked apps and sites on the Internet. Dynamic Scale supports traffic bursts and extended use of up to 500,000 authentications per minute to meet any peak of burst authentication needed within the entire spectrum of identity use cases. It takes care of use cases such as a new product release or a viral marketing campaign to allow for access management. The product has been receiving positive feedback. Soon after its launch, companies like Athenahealth announced plans to sign up for Dynamic Scale to support its users including patients, caregivers, providers, and staff.
Finally, Okta also released Okta SecurityInsights, a solution that provides global organizations with personalized security detection and remediation capabilities at the end user, administrator and customer network levels.
The stock is currently trading at $118.31 with a market capitalization of $14.2 billion. It touched a 52-week high of $141.85 in July this year. The stock was trading at a 52-week low of $54.59 in December last year.
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