The global work from home conditions have increased the need for IT teams to ensure higher safety and security of their digital assets. Corporate identity management software company Okta (NASDAQ: OKTA) is benefitting from this transition as was evident in its second quarter results.
Revenues for the second quarter grew 42.7% to $200.4 million, surging ahead of the market’s forecast of $186.4 million. EPS was $0.07, significantly better than the Street’s estimated loss of $0.02 per share.
By segment, subscription services revenues increased 43.9% to $190.7 million. Professional services and other segment revenues grew 22.2% to $9.8 million.
Among key metrics, Remaining Performance Obligations (RPO) grew 56% to $1.43 billion. Dollar-based net retention remained at 121%.
Okta expects to end fiscal 2021 with $800-$803 million in revenues and non-GAAP net loss per share of $0.03-$0.01. For the third quarter, Okta forecast revenues of $202 million with a net loss of $0.02-$0.01 per share. Market estimates Q3 revenue of $196 million and a net loss of $0.19 per share.
Okta’s Growing Partnerships
Okta is continuing to focus on growing its base of large enterprise customers. For the recently reported quarter, Okta added 105 customers with an annual contract value (ACV) of more than $100,000 of which more than half of these additions were from new customers. The total number of customers with more than $100,000 in ACV are now close to 1,700. During the quarter, Okta also crossed a milestone of obtaining more than 100 customers with an ACV of more than $1 million. Okta is counting on driving these metrics higher by entering into strategic alliances.
It recently announced a tie-up between Crowdstrike, Netksope, and Proofpoint to help organizations use and integrate a Zero Trust security strategy. The security strategy will help protect organizations both in the dynamic and remote working environments. The need for the alliance was spurred by the growing transition to work-at-home working models.
To ensure that organizations maintain their security levels, IT teams were expected to deliver robust security solutions with fewer resources and at an accelerated pace. As part of the alliance, CrowdStrike will help protect all endpoints that access the enterprise; Netskope will provide web, cloud, and data-centric security to protect enterprise assets anywhere; Okta will establish Zero Trust to securely connect the right people to the right technologies; and Proofpoint will protect against complex people-based attacks.
Its stock is currently trading at $224.5 with a market cap of $28.76 billion. It touched a 52-week high of $226.89 in July. It hit a 52-week low of $88.66 in March this year following the COVID-19 crisis.
This segment is a part in the series : Cloud Stocks