Okta Share Drop 12% Despite Massive Q2 & Raised Guidance

  • Okta presented a massive Q2, and the firm raised future guidance.
  • Okta shares still dropped 12% during the following hours.
  • The stock lost more than 60% since the year started.

Okta Inc announced market-beating earnings for its Q2 on Wednesday. Moreover, the firm raised future financial guidance. The stock (NASDAQ: OKTA) lost 12% after the announcement.

Why Okta Shares Dipped

Extended trading saw Okta shares plummeting for two reasons. First and foremost, it predicts up to $1.55B of pending performance obligations at the current quarter’s end. That indicates a massive 25% sequential dip.

Secondly, the company revealed about struggling to integrate Auth0 – a Washington-based software firm it acquired for $6.50 billion last year.

Earnings Snapshot

  • Revenue – revenue stood at $452m, a 43% year-on-year increase, whereas subscription revenue increased by 44% (year-over-year) to $435 million.
  • RPO – subscription backlog, or RPO, increased by 25% Y/Y to $2.79 billion. cRPO contracted subscription revenue, expected over the coming twelve months, gained 36% from last 2nd quarter to $1.50 billion.
  • Calculated Billings – total calculated billings increased by 36% Y/Y to $491 million.
  • GAAP Operating Loss – GAAP operating loss hovered at $208 million (46% of overall revenue), whereas the previous Q2 stood at $263 million (83% of overall revenue).
  • Non-GAAP Operating loss – $15 million, represented 3% of overall revenue. The same stood at $25 million (8% of overall revenue) in the previous 2nd quarter.
  • GAAP Net Loss – GAAP net loss stood at $210 million, compared to $277 in the past Q2.
  • Near-term investments, cash equivalents, and cash were $2.48B by 31 July 2022.

The California-based firm concluded the quarter with remaining performance obligations of $2.79 billion -25% up. Okta shares have dropped over 60% year to date. That comes as the stock market deteriorated due to rate hikes this year.

Future Guidance

Okta predicts 73 cents adjusted per-share loss amid $1.812B to $1.820B in revenue for the full fiscal year. It anticipated revenue to drop between $463M and $465M in the quarter on 25cts adjusted per share loss. Meanwhile, analysts called for $464M and 28cts a share.

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