Summary
Okta reported first-quarter fiscal 2021 revenue of $182.9 million, up 46.0% from the prior-year quarter. Subscription revenue was $173.8 million, up 48%, and professional services and other revenue was $9.1 million, up 13%. Remaining performance obligations reached $1.24 billion, up 56.6% year over year. Current RPO, the portion of that backlog expected to be recognized over the next 12 months, was $619.1 million. Calculated billings totaled $209.5 million, up 42%. Subscription revenue made up over 95% of total revenue in the quarter, which management said makes the business relatively predictable.
The customer base passed 8,400 organizations, and the Okta Integration Network held more than 6,500 integrations. Customers with annual contract value above $100,000 numbered 1,580, up from 1,142 a year earlier. Dollar-based net retention for the trailing 12 months stayed strong. Management tied the quarter to demand for secure remote access as workforces moved home, and it argued that organizations will not fully revert to earlier working patterns when the crisis ends. Okta also booked cost savings from slower hiring, an online-only sales format and a virtual Oktane20 conference.
Margins improved while GAAP losses persisted. Gross margin was 73.5%, up 1.5 percentage points from the prior-year quarter. GAAP operating loss was $52.2 million, a wider loss than the prior-year quarter, yet operating margin improved 12.8 percentage points to -28.5%. GAAP net loss was $57.7 million, also a wider loss, and diluted net loss per share was $0.47. Excluding stock-based compensation and other items, non-GAAP operating loss was $12.3 million, or 6.7% of revenue, against $24.9 million, or 19.9% of revenue, a year earlier. Non-GAAP net loss was $8.1 million, or $0.07 per share, compared with $0.19.
Cash generation set records. Operating cash flow was $38.7 million, up 82.0% from the prior-year quarter. Free cash flow was $29.8 million, compared with $13.2 million a year earlier. Capital expenditures were $7.9 million, up 2.9%. Current deferred revenue was $392.1 million, up 46.3%. Cash, cash equivalents and short-term investments stood at $1.45 billion at April 30, 2020.
Guidance covers the second quarter and the full fiscal year. For the second quarter, Okta guided to revenue growth of 32% to 33% year over year, a non-GAAP operating loss of $5.0 million to $4.0 million and non-GAAP net loss per share of $0.02 to $0.01, assuming roughly 125 million weighted shares. For the full fiscal year, the company kept its revenue outlook and improved its operating profit outlook, pointing to growth of 31% to 33%, a non-GAAP operating loss of $37.0 million to $30.0 million and non-GAAP net loss per share of $0.23 to $0.18.
Pandemic risk runs through that outlook. Okta has seen longer sales cycles that could delay deal closings and pressure cash flow, RPO and billings growth. It raised its allowance for doubtful accounts and sales reserves because of uncertainty in economic forecasts and customer concession requests, and it sees the most exposure among harder-hit industries. The company also named slower market development, a network or data security breach, service outages, repayment of convertible notes when due, and a worsening global economy among its risks. Management expects interest income from the short-term investment portfolio to fall in fiscal 2021 as rates stay low.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $182.9M | $167.3M | +9.3% | $125.2M | +46.0% |
| Gross profit | $134.4M | $122.6M | +9.6% | $90.1M | +49.1% |
| Gross margin | 73.5% | 73.3% | +0.2 pp | 72.0% | +1.5 pp |
| Research & development | $48.5M | $43.4M | +11.8% | $34.0M | +42.5% |
| Sales & marketing | $104.0M | $92.6M | +12.3% | $82.1M | +26.7% |
| General & administrative | $34.0M | $31.4M | +8.6% | $25.8M | +32.1% |
| Total operating expenses | $186.6M | $167.3M | +11.5% | $141.9M | +31.5% |
| Operating income (loss) | -$52.2M | -$44.7M | -16.8% | -$51.8M | -0.8% |
| Operating margin | -28.6% | -26.7% | -1.8 pp | -41.4% | +12.8 pp |
| Net income (loss) | -$57.7M | -$50.5M | -14.2% | -$52.0M | -11.0% |
| Net margin | -31.5% | -30.2% | -1.4 pp | -41.5% | +10.0 pp |
| Customers | 147,195 | — | — | — | — |
Risks
Okta states the COVID-19 pandemic has materially affected how it and its customers operate and may delay purchasing decisions, lengthen payment terms, reduce subscription contract value or duration, and affect attrition. MD&A also flags longer sales cycles and near-term headwinds for cash flow, RPO and billings growth.
Okta says sales cycles are lengthening and becoming less predictable as it focuses on larger organizations and amid COVID-19, which can delay expected significant transactions and harm period results. MD&A states longer sales cycles could delay deals closing and create near-term headwinds for cash flow, RPO and billings growth.
The conditional conversion feature of the 2023 Notes was triggered as of April 30, 2020, making them currently convertible at holder option between May 1, 2020 and July 31, 2020, and they were classified as current liabilities. If holders convert, Okta may need cash settlement, pressuring liquidity, and interest expense increased 154% for the quarter ended April 30, 2020 compared with the prior-year quarter due to the 2025 Notes.
Okta says as a well-known provider of identity and security solutions it is an attractive target for sophisticated nation-state and nation-state supported attacks, and a breach could compromise customer systems, trigger liability, regulatory actions, service credits, and customer loss. It maintains cybersecurity insurance that may be insufficient.
Okta faces intense competition, especially from larger well-established companies, and names Microsoft as its principal competitor. Larger competitors can bundle products, sell at zero or negative margins, or leverage existing relationships, which may cause pricing pressure and reduced revenue or gross margins.
Okta says customer growth may fall below analyst or investor expectations as its customer base grows and it focuses on the world's largest organizations, and it does not expect customer growth to continue at prior pace. Customers with annual contract value above $100,000 rose to 1,580 as of April 30, 2020 from 1,142 as of April 30, 2019.
Privacy and data security laws are evolving, including the California Consumer Privacy Act effective January 1, 2020 and the EU General Data Protection Regulation, and some customers rely on Okta's FedRAMP authorization. Noncompliance could lead to enforcement actions, fines, customer loss, and increased costs.
Adverse general economic and market conditions and reductions in workforce identity and customer identity spending could reduce demand, cause customers to renegotiate contracts on less favorable terms, default on payments, or not renew. Okta says prolonged economic slowdowns may harm revenue, results of operations and cash flows.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Current Remaining Performance Obligations (cRPO)
Free Cash Flow Margin
Free Cash Flow
Non-GAAP Gross Margin
Customers with annual contract value (ACV) above $100,000
Total Customers
Calculated Billings
Summary, forecast, risks and KPIs are extracted from Okta, Inc.'s SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.