Summary
Okta closed fiscal 2021 with strong top-line growth. Fourth quarter revenue was $234.7 million, up 40.3% from the prior-year quarter. Full-year revenue was $835.4 million, up 42.5%. RPO, or subscription backlog, reached $1.80 billion, up 48.5% from the prior-year quarter. Current deferred revenue was $502.7 million, up 37.6%. Calculated billings for the fourth quarter were $316.0 million, up 40%. The company ended the year with more than 10,000 customers and more than 7,000 integrations. Customers with annual contract value above $100,000 totaled 1,950. Dollar-based net retention rate for the trailing 12 months was 121%.
Margins improved while GAAP losses widened. Fourth quarter gross margin was 74.0%, up 0.7 percentage points from the prior-year quarter. GAAP operating loss was $54.6 million, or -23.3% of revenue, and the loss widened 22.1% from the prior-year quarter. Operating margin was up 3.5 percentage points. Full-year GAAP operating loss was $204.2 million, or -24.4% of revenue, and the loss widened 9.9%. Full-year operating margin was up 7.3 percentage points. Fourth quarter GAAP net loss was $75.8 million, and the loss widened 50.2%. Full-year GAAP net loss was $266.3 million, and the loss widened 27.5%. Full-year GAAP net loss per share was $2.09, and the loss widened $0.31. On a non-GAAP basis, fourth quarter operating income was $8.0 million, or 3.4% of revenue, compared with a non-GAAP operating loss of $5.6 million, or 3.3% of revenue. Fourth quarter non-GAAP net income was $8.0 million, compared with a non-GAAP net loss of $1.1 million. Full-year non-GAAP operating income was $7.7 million, compared with a non-GAAP operating loss of $48.5 million. Full-year non-GAAP net income was $16.2 million, compared with a non-GAAP net loss of $31.1 million.
Cash generation improved. Fourth quarter operating cash flow was $34.9 million, up 40.6% from the prior-year quarter. Full-year operating cash flow was $128.0 million, up 130.1%. Fourth quarter free cash flow was $32.5 million, compared with $18.1 million in the prior-year quarter. Full-year free cash flow was $110.7 million, compared with $36.3 million. Capital expenditures were $1.8 million in the fourth quarter, down 67.3% from the prior-year quarter. Full-year capital expenditures were $13.1 million, down 15.3%. The cash flow improvement came alongside continued GAAP losses.
Guidance for fiscal 2022 excludes any impact from the proposed Auth0 acquisition. For the first quarter of fiscal 2022, Okta guided to total revenue growth of 30% to 31% year over year. It expects a non-GAAP operating loss of $28.0 million to $27.0 million and a non-GAAP net loss per share of $0.21 to $0.20, assuming weighted-average shares outstanding of approximately 133 million. For the full year fiscal 2022, Okta guided to total revenue growth of 29% to 30% year over year. It expects a non-GAAP operating loss of $61.0 million to $55.0 million and a non-GAAP net loss per share of $0.49 to $0.44, assuming weighted-average shares outstanding of approximately 135 million.
The largest strategic item is the definitive agreement to acquire Auth0 for approximately $6.5 billion in stock. The transaction is based on a fixed number of Okta shares and an Okta share price of $276.21, or $276.2147 per share in the MD&A. It is expected to close in the second quarter of fiscal 2022, the quarter ending July 31, 2021, subject to customary closing conditions and approvals. Integration risk and share price movement between signing and closing are notable. The company also flagged risks tied to COVID-19, including longer sales cycles, delays in deals closing, and near-term headwinds for cash flow, RPO and billings growth, as well as potential future impacts on revenue growth and other key metrics. Other named risks include a network or data security incident, service outages, the ability to pay off convertible notes when due, and deteriorating global economic conditions. Okta said it expects to continue incurring operating losses and that cash flows from operations may fluctuate between positive and negative amounts for the foreseeable future.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $234.7M | $217.4M | +8.0% | $167.3M | +40.3% |
| Gross profit | $173.6M | $160.5M | +8.2% | $122.6M | +41.5% |
| Gross margin | 74.0% | 73.8% | +0.1 pp | 73.3% | +0.7 pp |
| Research & development | $62.3M | $58.1M | +7.2% | $43.4M | +43.7% |
| Sales & marketing | $115.2M | $109.8M | +4.9% | $92.6M | +24.3% |
| General & administrative | $50.7M | $44.5M | +14.0% | $31.4M | +61.7% |
| Total operating expenses | $228.2M | $212.4M | +7.4% | $167.3M | +36.4% |
| Operating income (loss) | -$54.6M | -$52.0M | -5.0% | -$44.7M | -22.1% |
| Operating margin | -23.3% | -23.9% | +0.6 pp | -26.7% | +3.5 pp |
| Net income (loss) | -$75.8M | -$72.8M | -4.2% | -$50.5M | -50.2% |
| Net margin | -32.3% | -33.5% | +1.2 pp | -30.2% | -2.1 pp |
Risks
The COVID-19 pandemic has materially affected Okta's operations, with offices temporarily closed, employees required to work from home, and events including Oktane20 Live and Oktane21 Live shifted to virtual-only formats. It may continue to affect IT spending and customer purchasing decisions, delay deal closings, lengthen payment terms, or reduce contract value or duration.
Okta's sales cycles are lengthening in certain circumstances and becoming less predictable, especially as it focuses on larger organizations and amid the COVID-19 environment. MD&A states longer sales cycles could create near-term headwinds for cash flow, remaining performance obligations, and billings growth.
Okta faces intense competition from larger, well-established companies, with Microsoft named as its principal competitor. Larger competitors can bundle functionality, sell at zero or negative margins, or acquire new offerings to gain business and pressure pricing.
Okta entered a definitive agreement on March 3, 2021 to acquire Auth0 for $6.5 billion in Class A common stock and assumed awards, with closing expected in the second quarter of fiscal 2022. Risks include integration challenges, stockholder dilution, and a significant potential impact on liquidity, financial condition, and results of operations.
The conditional conversion features of the 2023 Notes and 2025 Notes were triggered as of January 31, 2021, and those notes are convertible at holder option between February 1, 2021 and April 30, 2021. They were classified as current liabilities on the January 31, 2021 balance sheet, creating potential liquidity and dilution risk if holders convert.
As a well-known identity and security provider, Okta is an attractive target for sophisticated nation-state and nation-state supported actors using advanced persistent threat intrusions. A breach of customer data on its platform could lead to significant liability, enforcement actions, reputational harm, and loss of customers.
Okta's Dollar-Based Net Retention Rate was 121% for the trailing 12 months ended January 31, 2021, but any material decline would harm future results. Customers have no obligation to renew, and customer growth could fall below expectations as Okta increases its focus on sales to the world's largest organizations.
Okta depends on its executive officers and key employees, and it faces the recent retirement of its former President, Worldwide Field Operations, and the upcoming retirement of its Chief Financial Officer. Competition for engineers and experienced sales personnel in the San Francisco Bay Area and other locations is intense.
Any actual or perceived failure to comply with privacy or security provisions of Okta's privacy policy, contracts, or legal requirements could result in proceedings, actions, or penalties. The risk factors specifically cite compliance with the General Data Protection Regulation and California Consumer Privacy Act.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Current Remaining Performance Obligations (cRPO)
Free Cash Flow Margin
Free Cash Flow
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Customers with annual contract value (ACV) above $100,000
Total Customers
Calculated Billings
Dollar-Based Net Retention Rate
Summary, forecast, risks and KPIs are extracted from Okta, Inc.'s SEC filings for Q4 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.