Prime Highlights:
Okta’s shares jumped 24.3%, marking its best day since December 2022.
The company reported adjusted earnings of 78 cents per share, exceeding estimates of 73 cents, and revenue of $682 million, up 13% year-over-year.
Key Background:
Okta’s stock price surged 24.3% on Tuesday following the company’s impressive fourth-quarter earnings report and stronger-than-expected guidance, marking its best performance since December 1, 2022. The cloud-based identity management company reported adjusted earnings of 78 cents per share, exceeding analyst estimates of 73 cents. Revenue for the quarter rose 13% year-over-year, reaching $682 million, surpassing expectations of $669.6 million.
CEO Todd McKinnon hailed the quarter as a “blowout” as Okta achieved a significant milestone, surpassing $1 billion in bookings for the first time in a single period. The company also provided an optimistic outlook for the first quarter, forecasting revenue between $678 million and $680 million, which also beat analyst estimates.
McKinnon emphasized the company’s growth momentum, stating that Okta is well-positioned to strengthen its leadership in the identity management market. He noted the increasing demand from businesses to consolidate their identity systems, positioning Okta’s comprehensive identity security platform to address those needs.
Despite a challenging 2024, during which Okta’s stock dropped 13%, the company’s shares have rallied approximately 35% this year, buoyed by the positive results and market outlook. Okta, which specializes in providing tools like single sign-on and multifactor authentication, faced a high-profile data breach in late 2023, but the company appears to have stabilized since.
Following the results, Wall Street analysts have become more optimistic about Okta’s prospects. Firms like D.A. Davidson and Mizuho upgraded their ratings, with D.A. Davidson highlighting the company’s potential for sustained double-digit growth. Mizuho’s Gregg Moskowitz noted Okta’s expanding product portfolio and its ability to drive significant revenue contributions moving forward, further solidifying its position as a leader in the identity management sector.
