U.S. Markets closed

Okta Announces Strong Second Quarter Financial Results

SAN FRANCISCO--(BUSINESS WIRE)--

  • Q2 revenue grew 49% year-over-year; subscription revenue grew 51% year-over-year
  • GAAP operating margin improved 10 percentage points year-over-year; Non-GAAP operating margin improved 13 percentage points year-over-year
  • Named a Leader and placed highest for ability to execute and furthest for completeness of vision in the 2019 Gartner Magic Quadrant for Access Management*

Okta, Inc. (OKTA), the leading independent provider of identity for the enterprise, today announced financial results for its second quarter ended July 31, 2019.

"We had another exceptional quarter with strong growth in subscription revenue, billings, and remaining performance obligation," said Todd McKinnon, Chief Executive Officer and co-founder of Okta. "Identity plays a foundational role as organizations look to adopt more cloud technologies and accelerate their businesses' digital transformation in a highly secure and easy to use manner. The recent recognition we received from notable industry research providers further validates our view that Okta has become the identity standard for organizations worldwide ranging from fast-growing businesses to the world's largest organizations. Our success is achieved by helping these organizations with their mission-critical initiatives with our growing platform of identity solutions. We couldn't be more excited about the tremendous market opportunity ahead of us.”

Second Quarter Fiscal 2020 Financial Highlights:

  • Revenue: Total revenue was $140.5 million, an increase of 49% year-over-year. Subscription revenue was $132.5 million, an increase of 51% year-over-year.
  • Calculated Billings: Total calculated billings were $155.8 million, an increase of 42% year-over-year.
  • Operating Loss: GAAP operating loss was $43.6 million, or 31.0% of total revenue, compared to $38.4 million, or 40.6% of total revenue, in the second quarter of fiscal 2019. Non-GAAP operating loss was $9.9 million, or 7.1% of total revenue, compared to $19.2 million, or 20.3% of total revenue, in the second quarter of fiscal 2019.
  • Net Loss: GAAP net loss was $43.0 million, compared to $39.2 million in the second quarter of fiscal 2019. GAAP net loss per share was $0.37, compared to $0.37 in the second quarter of fiscal 2019. Non-GAAP net loss was $5.5 million, compared to $16.4 million in the second quarter of fiscal 2019. Non-GAAP net loss per share was $0.05, compared to $0.15 in the second quarter of fiscal 2019.
  • Cash Flow: Net cash used in operations was $1.1 million, or 0.8% of total revenue, compared to net cash used in operations of $5.3 million, or 5.6% of total revenue, in the second quarter of fiscal 2019. Free cash flow was negative $4.3 million, or 3.1% of total revenue, compared to negative $11.3 million, or 12.0% of total revenue, in the second quarter of fiscal 2019.
  • Cash, cash equivalents, and short-term investments were $557.5 million as of July 31, 2019.
  • Remaining Performance Obligation (RPO): Total RPO was $913.6 million, an increase of 68% year-over-year. Current RPO, which is RPO expected to be recognized over the next 12 months, grew 52% compared to the second quarter of fiscal 2019, and represented 50% of total RPO.

The section titled "Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures and reconciliations between historical GAAP and non-GAAP information are contained in the tables below.

Financial Outlook:

For the third quarter of fiscal 2020, the Company currently expects:

  • Total revenue of $143 million to $144 million, representing a growth rate of 35% to 36% year-over-year
  • Non-GAAP operating loss of $17.5 to $16.5 million
  • Non-GAAP net loss per share of $0.13 to $0.12, assuming shares outstanding of approximately 117 million

For the full year fiscal 2020, the Company expects:

  • Total revenue of $560 to $563 million, representing a growth rate of 40% to 41% year-over-year
  • Non-GAAP operating loss of $64.0 to $62.0 million
  • Non-GAAP net loss per share of $0.44 to $0.42, assuming shares outstanding of approximately 116 million

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Okta has not reconciled its expectations as to non-GAAP operating loss and non-GAAP net loss per share to their most directly comparable GAAP measure because certain items are out of Okta’s control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP operating loss and non-GAAP net loss per share is not available without unreasonable effort.

Conference Call Information:

Okta will host a conference call and live webcast for analysts and investors at 2:00 p.m. Pacific Time on August 28, 2019. The news release with the financial results will be accessible from the Company’s website at investor.okta.com prior to the conference call. Interested parties can access the call by dialing (800) 458-4121 or (323) 794-2093 and using the passcode 5055242.

A live webcast of the conference call will be accessible from the Okta investor relations website at investor.okta.com.

Supplemental Financial and Other Information:

Supplemental financial and other information can be accessed through the Company’s investor relations website at investor.okta.com.

Non-GAAP Financial Measures:

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, current calculated billings and calculated billings. Certain of these non-GAAP financial measures exclude stock-based compensation, amortization of debt discount, charitable contributions, amortization of intangible assets and acquisition-related expenses.

Okta believes that non-GAAP financial information, when taken collectively with GAAP financial measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by the Company's management about which expenses and income are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Okta encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.

Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.

Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and market positioning. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Okta’s control. Okta’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in the Company's filings and reports with the Securities and Exchange Commission (SEC), including our Form 10-Q for the fiscal quarter ended April 30, 2019, as well as other filings and reports that may be filed by the Company from time to time with the SEC. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the market for our products may develop more slowly than expected or than it has in the past; quarterly and annual operating results may fluctuate more than expected; variations related to our revenue recognition may cause significant fluctuations in our results of operations and cash flows; assertions by third parties that we violate their intellectual property rights could substantially harm our business; any unreleased products, features or functionality referenced in this or other presentations, press releases or public statements are not currently available and may not be delivered on time or at all; a network or data security incident that allows unauthorized access to our network or data or our customers’ data could harm our reputation, create additional liability and adversely impact our financial results; the risk of interruptions or performance problems, including a service outage, associated with our technology; intense competition in our market; weakened global economic conditions may adversely affect our industry; the risk of losing key employees; changes in foreign exchange rates; general political or destabilizing events, including war, conflict or acts of terrorism; our ability to successfully identify and integrate acquisitions, strategic investments, partnerships or alliances; our ability to pay off our convertible senior notes when due; and other risks and uncertainties. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent Okta’s views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. Okta undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Okta’s views as of any date subsequent to the date of this press release.

Gartner Disclaimer

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

*Gartner, Magic Quadrant for Access Management, Michael Kelley, Abhyuday Data, Henrique Teixeira, 12 August 2019

About Okta

Okta is the leading independent provider of identity for the enterprise. The Okta Identity Cloud enables organizations to securely connect the right people to the right technologies at the right time. With over 6,000 pre-built integrations to applications and infrastructure providers, Okta customers can easily and securely use the best technologies for their business. Over 7,000 organizations, including 20th Century Fox, JetBlue, Nordstrom, Slack, Teach for America and Twilio, trust Okta to help protect the identities of their workforces and customers.

 

OKTA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

 

Three Months Ended
July 31,

 

Six Months Ended
July 31,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Subscription

$

132,494

 

 

$

87,854

 

 

$

249,657

 

 

$

164,695

 

Professional services and other

7,986

 

 

6,732

 

 

16,046

 

 

13,512

 

Total revenue

140,480

 

 

94,586

 

 

265,703

 

 

178,207

 

Cost of revenue:

 

 

 

 

 

 

 

Subscription (1)

27,917

 

 

19,211

 

 

52,457

 

 

35,543

 

Professional services and other (1)

10,863

 

 

9,017

 

 

21,418

 

 

16,792

 

Total cost of revenue

38,780

 

 

28,228

 

 

73,875

 

 

52,335

 

Gross profit

101,700

 

 

66,358

 

 

191,828

 

 

125,872

 

Operating expenses:

 

 

 

 

 

 

 

Research and development (1)

40,045

 

 

24,829

 

 

74,077

 

 

44,758

 

Sales and marketing (1)

78,385

 

 

59,004

 

 

160,497

 

 

108,497

 

General and administrative (1)

26,887

 

 

20,955

 

 

52,653

 

 

36,025

 

Total operating expenses

145,317

 

 

104,788

 

 

287,227

 

 

189,280

 

Operating loss

(43,617

)

 

(38,430

)

 

(95,399

)

 

(63,408

)

Interest expense

(4,304

)

 

(4,058

)

 

(8,545

)

 

(6,775

)

Other income, net

3,464

 

 

2,296

 

 

6,364

 

 

3,798

 

Loss before benefit from income taxes

(44,457

)

 

(40,192

)

 

(97,580

)

 

(66,385

)

Benefit from income taxes

(1,477

)

 

(985

)

 

(2,634

)

 

(1,216

)

Net loss

$

(42,980

)

 

$

(39,207

)

 

$

(94,946

)

 

$

(65,169

)

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

$

(0.37

)

 

$

(0.37

)

 

$

(0.83

)

 

$

(0.62

)

 

 

 

 

 

 

 

 

Weighted-average shares used to compute net loss per share, basic and diluted

115,033

 

 

106,702

 

 

114,042

 

 

105,475

 

 

 

 

 

 

 

 

 

___________________________________

(1) Amounts include share-based compensation expense as follows (in thousands):

 

 

 

 

 

Three Months Ended
July 31,

 

Six Months Ended
July 31,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

Cost of subscription revenue

$

3,111

 

 

$

1,901

 

 

$

5,533

 

 

$

3,430

 

Cost of professional services and other revenue

1,873

 

 

1,083

 

 

3,392

 

 

1,972

 

Research and development

9,082

 

 

5,272

 

 

15,428

 

 

9,485

 

Sales and marketing

9,236

 

 

5,471

 

 

16,022

 

 

9,624

 

General and administrative

7,972

 

 

4,495

 

 

13,584

 

 

7,846

 

Total share-based compensation expense

$

31,274

 

 

$

18,222

 

 

$

53,959

 

 

$

32,357

 

OKTA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands) (unaudited)

 

July 31,
2019

 

January 31,
2019

 

 

 

As Adjusted (1)

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

206,753

 

 

$

298,394

 

Short-term investments

350,712

 

 

265,374

 

Accounts receivable, net of allowances of $1,331 and $2,098

87,851

 

 

91,926

 

Deferred commissions

27,062

 

 

24,185

 

Prepaid expenses and other current assets

24,642

 

 

28,237

 

Total current assets

697,020

 

 

708,116

 

Property and equipment, net

51,858

 

 

52,921

 

Operating lease right-of-use assets

116,706

 

 

121,389

 

Deferred commissions, noncurrent

59,560

 

 

54,812

 

Intangible assets, net

34,712

 

 

13,897

 

Goodwill

47,964

 

 

18,089

 

Other assets

18,990

 

 

15,089

 

Total assets

$

1,026,810

 

 

$

984,313

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

3,492

 

 

$

2,431

 

Accrued expenses and other current liabilities

31,843

 

 

33,653

 

Accrued compensation

21,869

 

 

19,770

 

Convertible senior notes, net

279,741

 

 

271,628

 

Deferred revenue

283,724

 

 

245,622

 

Total current liabilities

620,669

 

 

573,104

 

Operating lease liabilities, noncurrent

143,706

 

 

147,046

 

Deferred revenue, noncurrent

7,469

 

 

8,768

 

Other liabilities, noncurrent

4,241

 

 

3,018

 

Total liabilities

776,085

 

 

731,936

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock

 

 

 

Class A common stock

11

 

 

10

 

Class B common stock

1

 

 

1

 

Additional paid-in capital

839,523

 

 

744,896

 

Accumulated other comprehensive loss

(1,653

)

 

(319

)

Accumulated deficit

(587,157

)

 

(492,211

)

Total stockholders’ equity

250,725

 

 

252,377

 

Total liabilities and stockholders’ equity

$

1,026,810

 

 

$

984,313

 

(1)

The condensed consolidated balance sheet for the prior period has been adjusted to reflect the adoption of ASC 842.

 

OKTA, INC.

SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

 

Six Months Ended July 31,

 

2019

 

2018

 

 

As Adjusted (1)

Cash flows from operating activities:

 

 

 

Net loss

$

(94,946

)

 

$

(65,169

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Stock-based compensation

53,959

 

 

32,357

 

Depreciation, amortization and accretion

7,916

 

 

3,699

 

Amortization of debt discount and issuance costs

8,113

 

 

6,413

 

Amortization of deferred commissions

13,192

 

 

9,613

 

Deferred income taxes

(3,057

)

 

(1,575

)

Non-cash charitable contributions

652

 

 

1,008

 

Other

84

 

 

18

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

4,459

 

 

(7,240

)

Deferred commissions

(21,372

)

 

(14,240

)

Prepaid expenses and other assets

1,534

 

 

622

 

Operating lease right-of-use assets

6,189

 

 

7,540

 

Accounts payable

1,368

 

 

767

 

Accrued compensation

4,717

 

 

498

 

Accrued expenses and other liabilities

1,304

 

 

2,061

 

Operating lease liabilities

(159

)

 

(4,554

)

Deferred revenue

36,175

 

 

26,811

 

Net cash provided by (used in) operating activities

20,128

 

 

(1,371

)

Cash flows from investing activities:

 

 

 

Capitalization of internal-use software costs

(1,330

)

 

(1,725

)

Purchases of property and equipment

(9,917

)

 

(9,790

)

Purchases of securities available for sale and other

(237,693

)

 

(320,018

)

Proceeds from maturities of securities available for sale

136,344

 

 

79,500

 

Proceeds from sales of securities available for sale and other

17,329

 

 

 

Purchases of intangible assets

(8,500

)

 

 

Payments for business acquisition, net of cash acquired

(44,223

)

 

(15,638

)

Net cash used in investing activities

(147,990

)

 

(267,671

)

Cash flows from financing activities:

 

 

 

Proceeds from issuance of convertible senior notes, net of issuance costs

 

 

334,980

 

Purchase of convertible senior notes hedge

 

 

(80,040

)

Proceeds from issuance of warrants related to convertible notes

 

 

52,440

 

Proceeds from stock option exercises, net of repurchases

27,453

 

 

21,055

 

Proceeds from shares issued in connection with employee stock purchase plan

9,005

 

 

6,654

 

Other, net

(126

)

 

(206

)

Net cash provided by financing activities

36,332

 

 

334,883

 

Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash

(1,187

)

 

(632

)

Net increase (decrease) in cash, cash equivalents and restricted cash

(92,717

)

 

65,209

 

Cash, cash equivalents and restricted cash at beginning of period

311,215

 

 

136,233

 

Cash, cash equivalents and restricted cash at end of period

$

218,498

 

 

$

201,442

 

(1)

The condensed consolidated statement of cash flows for the prior period has been adjusted to reflect the adoption of ASC 842.

 

OKTA, INC.

Reconciliation of GAAP to Non-GAAP Data

(In thousands, except percentages and per share data)

(unaudited)

 

 

Three Months Ended July 31, 2019

 

 

GAAP

 

Stock-based
compensation

 

Charitable
contributions

 

Amortization
of acquired
intangibles

 

Amortization
of debt
discount

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription services

 

$

27,917

 

 

$

(3,111

)

 

$

 

 

$

(1,785

)

 

$

 

 

$

23,021

 

Cost of professional services

 

10,863

 

 

(1,873

)

 

 

 

 

 

 

 

8,990

 

Gross profit

 

101,700

 

 

4,984

 

 

 

 

1,785

 

 

 

 

108,469

 

Gross margin

 

72.4

%

 

3.5

%

 

 

 

1.3

%

 

%

 

77.2

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

40,045

 

 

(9,082

)

 

 

 

 

 

 

 

30,963

 

Sales and marketing

 

78,385

 

 

(9,236

)

 

 

 

 

 

 

 

69,149

 

General and administrative

 

26,887

 

 

(7,972

)

 

(652

)

 

 

 

 

 

18,263

 

Operating loss

 

(43,617

)

 

31,274

 

 

652

 

 

1,785

 

 

 

 

(9,906

)

Operating margin

 

(31.0

)%

 

22.2

%

 

0.4

%

 

1.3

%

 

%

 

(7.1

)%

Interest expense

 

(4,304

)

 

 

 

 

 

 

 

3,759

 

 

(545

)

Net loss

 

$

(42,980

)

 

$

31,274

 

 

$

652

 

 

$

1,785

 

 

$

3,759

 

 

$

(5,510

)

Net loss per share (1)

 

$

(0.37

)

 

$

0.27

 

 

$

0.01

 

 

$

0.01

 

 

$

0.03

 

 

$

(0.05

)

(1)

GAAP and Non-GAAP net loss per common share calculated based upon 115,033 basic and diluted weighted-average shares of common stock.

 

 

 

Three Months Ended July 31, 2018

 

 

GAAP

 

Stock-based
compensation

 

Charitable
contributions

 

Amortization
of debt
discount

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

Cost of subscription services

 

$

19,211

 

 

$

(1,901

)

 

$

 

 

$

 

 

$

17,310

 

Cost of professional services

 

9,017

 

 

(1,083

)

 

 

 

 

 

7,934

 

Gross profit

 

66,358

 

 

2,984

 

 

 

 

 

 

69,342

 

Gross margin

 

70.2

%

 

3.1

%

 

 

 

 

 

73.3

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Research and development

 

24,829

 

 

(5,272

)

 

 

 

 

 

19,557

 

Sales and marketing

 

59,004

 

 

(5,471

)

 

 

 

 

 

53,533

 

General and administrative

 

20,955

 

 

(4,495

)

 

(1,008

)

 

 

 

15,452

 

Operating loss

 

(38,430

)

 

18,222

 

 

1,008

 

 

 

 

(19,200

)

Operating margin

 

(40.6

)%

 

19.3

%

 

1.1

%

 

 

 

(20.3

)%

Interest expense

 

(4,058

)

 

 

 

 

 

3,554

 

 

(504

)

Net loss

 

$

(39,207

)

 

$

18,222

 

 

$

1,008

 

 

$

3,554

 

 

$

(16,423

)

Net loss per share (1)

 

$

(0.37

)

 

$

0.17

 

 

$

0.01

 

 

$

0.04

 

 

$

(0.15

)

(1)

GAAP and Non-GAAP net loss per common share calculated based upon 106,702 basic and diluted weighted-average shares of common stock.

OKTA, INC.

Reconciliation of GAAP to Non-GAAP Data

(In thousands, except percentages and per share data)

(unaudited)

 

 

Six Months Ended July 31, 2019

 

 

GAAP

 

Stock-based
compensation

 

Charitable
contributions

 

Amortization
of acquired
intangibles

 

Amortization
of debt
discount

 

Acquisition-
related
expenses

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription services

 

$

52,457

 

 

$

(5,533

)

 

$

 

 

$

(2,548

)

 

$

 

 

$

 

 

$

44,376

 

Cost of professional services

 

21,418

 

 

(3,392

)

 

 

 

 

 

 

 

 

 

18,026

 

Gross profit

 

191,828

 

 

8,925

 

 

 

 

2,548

 

 

 

 

 

 

203,301

 

Gross margin

 

72.2

%

 

3.3

%

 

%

 

1.0

%

 

%

 

%

 

76.5

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

74,077

 

 

(15,428

)

 

 

 

 

 

 

 

 

 

58,649

 

Sales and marketing

 

160,497

 

 

(16,022

)

 

 

 

 

 

 

 

 

 

144,475

 

General and administrative

 

52,653

 

 

(13,584

)

 

(652

)

 

 

 

 

 

(3,449

)

 

34,968

 

Operating loss

 

(95,399

)

 

53,959

 

 

652

 

 

2,548

 

 

 

 

3,449

 

 

(34,791

)

Operating margin

 

(35.9

)%

 

20.3

%

 

0.2

%

 

1.0

%

 

%

 

1.3

%

 

(13.1

)%

Interest expense

 

(8,545

)

 

 

 

 

 

 

 

7,465

 

 

 

 

(1,080

)

Net loss

 

$

(94,946

)

 

$

53,959

 

 

$

652

 

 

$

2,548

 

 

$

7,465

 

 

$

3,449

 

 

$

(26,873

)

Net loss per share (1)

 

$

(0.83

)

 

$

0.47

 

 

$

0.01

 

 

$

0.02

 

 

$

0.06

 

 

$

0.03

 

 

$

(0.24

)

(1)

GAAP and Non-GAAP net loss per common share calculated based upon 114,042 basic and diluted weighted-average shares of common stock.

 

 

Six Months Ended July 31, 2018

 

 

GAAP

 

Stock-based
compensation

 

Charitable
contributions

 

Amortization
of debt
discount

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

Cost of subscription services

 

$

35,543

 

 

$

(3,430

)

 

$

 

 

$

 

 

$

32,113

 

Cost of professional services

 

16,792

 

 

(1,972

)

 

 

 

 

 

14,820

 

Gross profit

 

125,872

 

 

5,402

 

 

 

 

 

 

131,274

 

Gross margin

 

70.6

%

 

3.1

%

 

%

 

%

 

73.7

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Research and development

 

44,758

 

 

(9,485

)

 

 

 

 

 

35,273

 

Sales and marketing

 

108,497

 

 

(9,624

)

 

 

 

 

 

98,873

 

General and administrative

 

36,025

 

 

(7,846

)

 

(1,008

)

 

 

 

27,171

 

Operating loss

 

(63,408

)

 

32,357

 

 

1,008

 

 

 

 

(30,043

)

Operating margin

 

(35.6

)%

 

18.2

%

 

0.5

%

 

%

 

(16.9

)%

Interest expense

 

(6,775

)

 

 

 

 

 

5,935

 

 

(840

)

Net loss

 

$

(65,169

)

 

$

32,357

 

 

$

1,008

 

 

$

5,935

 

 

$

(25,869

)

Net loss per share (1)

 

$

(0.62

)

 

$

0.31

 

 

$

0.01

 

 

$

0.05

 

 

$

(0.25

)

(1)

GAAP and Non-GAAP net loss per common share calculated based upon 105,475 basic and diluted weighted-average shares of common stock.

 

OKTA, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(dollars in thousands)

(unaudited)

 

Free Cash Flow

 

 

 

 

 

 

 

 

Three Months Ended
July 31,

 

Six Months Ended

July 31,

 

2019

 

2018

 

2019

 

2018

Net cash provided by (used in) operating activities

$

(1,134

)

 

$

(5,343

)

 

$

20,128

 

 

$

(1,371

)

Less:

 

 

 

 

 

 

 

Purchases of property and equipment

(2,207

)

 

(5,313

)

 

(9,917

)

 

(9,790

)

Capitalization of internal-use software costs

(961

)

 

(674

)

 

(1,330

)

 

(1,725

)

Free Cash Flow

$

(4,302

)

 

$

(11,330

)

 

$

8,881

 

 

$

(12,886

)

Net cash provided by (used in) investing activities

$

(22,383

)

 

$

(28,729

)

 

$

(147,990

)

 

$

(267,671

)

Net cash provided by financing activities

23,070

 

 

15,438

 

 

36,332

 

 

334,883

 

Free cash flow margin

 

(3.1

)%

 

 

(12.0

 

)%

 

 

3.3

%

 

 

(7.2

)%

 

 

 

 

 

 

 

 

 

Calculated Billings

 

 

 

 

 

 

 

 

Three Months Ended
July 31,

 

Six Months Ended

July 31,

 

2019

 

2018

 

2019

 

2018 (1)

Total revenue

$

140,480

 

 

$

94,586

 

 

$

265,703

 

 

$

178,207

 

Add:

 

 

 

 

 

 

 

Unbilled receivables, current (beginning of period)

799

 

 

1,619

 

 

1,457

 

 

809

 

Deferred revenue, current (end of period)

283,724

 

 

186,427

 

 

283,724

 

 

186,427

 

Less:

 

 

 

 

 

 

 

Unbilled receivables, current (end of period)

(1,004

)

 

(818

)

 

(1,004

)

 

(818

)

Deferred revenue, current (beginning of period)

(268,033

)

 

(173,548

)

 

(245,622

)

 

(159,816

)

Current calculated billings

155,966

 

 

108,266

 

 

304,258

 

 

204,809

 

Add:

 

 

 

 

 

 

 

Deferred revenue, noncurrent (end of period)

7,469

 

 

5,471

 

 

7,469

 

 

5,471

 

Less:

 

 

 

 

 

 

 

Deferred revenue, noncurrent (beginning of period)

(7,671

)

 

(4,346

)

 

(8,768

)

 

(4,963

)

Calculated billings

$

155,764

 

 

$

109,391

 

 

$

302,959

 

 

$

205,317

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20190828005695/en/