Okta shares jump 25% following beat and raise quarter

Okta, Inc., a leading provider of identity and access management solutions, saw its stock rip 25% higher in after hours after posting a solid beat and raise quarter. OKTA shares broke above $91 resistance and the $100-psych level to rally to $107, its best level since August 2022. 

reported Q4 earnings of $0.63 per share, excluding non-recurring items, beating estimates of $0.51. Revenue for the quarter rose 18.6% year-over-year to $605 million, surpassing estimates of $587.2 million. 

Okta's financial performance in Q4 was driven by strong growth in subscription revenue, which increased by 20% year-over-year to $591 million. The company's subscription backlog, or RPO, was $3.385 billion, up 13% year-over-year, while current RPO, or cRPO, was $1.952 billion, up 16% compared to the fourth quarter of fiscal 2023.

Non-GAAP operating income was $129 million, or 21% of total revenue, compared to a non-GAAP operating income of $46 million, or 9% of total revenue, in the fourth quarter of fiscal 2023. Non-GAAP net income was $113 million, compared to non-GAAP net income of $52 million in the fourth quarter of fiscal 2023. 

The company generated $174 million in net cash from operations, or 29% of total revenue, compared to $76 million, or 15% of total revenue, in the fourth quarter of fiscal 2023. Free cash flow was $166 million, or 28% of total revenue, compared to $72 million, or 14% of total revenue, in the fourth quarter of fiscal 2023.

For the first quarter of fiscal 2025, Okta expects total revenue of $603 to $605 million, representing a growth rate of 16% to 17% year-over-year. The company expects non-GAAP operating income of $108 to $110 million, a non-GAAP operating margin of 18%, and non- GAAP diluted net income per share of $0.54 to $0.55. 

For the full year fiscal 2025, Okta expects total revenue of $2.495 to $2.505 billion, representing a growth rate of 10% to 11% year-over-year. The company expects non-GAAP operating income of $455 to $465 million, a non-GAAP operating margin of 18% to 19%, and non-GAAP diluted net income per share of $2.24 to $2.29. 

Okta's strong financial performance and upside guidance for Q1 and FY25 are a testament to the company's ability to deliver value to its shareholders. With a focus on innovation and customer satisfaction,Okta is well-positioned to capitalize on the growing demand for identity and access management solutions in today's digital world.