Okta Reports 14% Revenue Growth to $665 Million, Achieves Net Income of $16 Million

Okta, Inc. reported significant financial improvements in its latest quarterly results, with total revenue reaching $665 million for the three months ended October 31, 2024, a 14% increase from $584 million in the same period last year. Subscription revenue, which constitutes the bulk of the company's income, rose to $651 million, up from $569 million, reflecting a 14% year-over-year growth. For the nine months ending October 31, 2024, total revenue was $1.928 billion, compared to $1.658 billion in the prior year, marking a 16% increase. The company achieved a net income of $16 million for the quarter, a notable recovery from a loss of $81 million in the same quarter of the previous year.

The filing also highlighted operational changes, including a restructuring plan that resulted in a workforce reduction of approximately 400 employees, aimed at improving efficiency and profitability. This restructuring was part of a broader strategy to streamline operations and reduce costs, which has already shown positive effects on the company's financial metrics. The company’s gross profit for the quarter was $508 million, yielding a gross margin of 76%, slightly up from 75% in the previous year.

Okta's customer base continues to expand, with over 19,450 customers reported as of October 31, 2024, an increase from 18,800 a year earlier. The number of customers with an annual contract value exceeding $100,000 also grew to 4,705, up from 4,365. The company reported a Dollar-Based Net Retention Rate of 108%, indicating that existing customers are increasing their spending, although this is a decline from 115% in the previous year. The remaining performance obligations stood at approximately $3.659 billion, with $2.062 billion expected to be recognized as revenue over the next 12 months.

Looking ahead, Okta expressed cautious optimism about its growth trajectory, despite acknowledging potential challenges from macroeconomic conditions and longer sales cycles. The company plans to continue investing in its product offerings and expanding its market presence, particularly in international markets. However, it also noted that future growth may be impacted by economic uncertainties, including inflation and interest rate fluctuations, which could affect customer spending on identity management solutions. The company remains focused on enhancing its technology and customer service to maintain its competitive edge in the identity management sector.