- Q3 revenue
grew 61% year-over-year; subscription revenue grew 63% year-over-year
- Remaining
performance obligations (RPO) grew 49% year-over-year to $2.35 billion
- Increases
revenue and operating profit outlook for fiscal 2022
- Okta and
Okta (Auth0) Both Named as Leaders in 2021 Gartner® Magic Quadrant™ for
Access Management; Okta positioned highest in Ability to Execute
SINGAPORE - Media
OutReach - 2 December 2021 - Okta, Inc. (Nasdaq: OKTA), the leading independent
identity provider, today announced financial results for its third quarter
ended October 31, 2021.
"Our strong third quarter
results reflect the continued shift to Identity-First architectures and the
critical adoption of Zero Trust security environments, which are both
propelling our market leading position," said Todd McKinnon, Chief Executive
Officer and co-founder of Okta. "We're maintaining the momentum of both
Okta and Auth0 and are making great progress on the integration. We're already
seeing early success cross-selling into each other's customer bases and are on
our way to capturing more of the massive identity market faster together."
Third Quarter Fiscal 2022
Financial Highlights:
- Revenue: Total
revenue was $351 million, an increase of 61% year-over-year. Subscription
revenue was $337 million, an increase of 63% year-over-year. On an Okta
standalone basis (excluding $46 million attributable to Auth0), total
revenue grew 40%.
- Remaining Performance Obligations (RPO): RPO, or subscription backlog, was $2.35 billion, an increase of 49%
year-over-year. Current RPO, which is contracted subscription revenue
expected to be recognized over the next 12 months, was $1.18 billion, up
57% compared to the third quarter of fiscal 2021.
- Calculated Billings: Total
calculated billings, net of acquired deferred revenue, was $389 million,
an increase of 54% year-over-year. Calculated billings includes the effect
of billings process improvements that were enacted at the end of the first
quarter of fiscal 2022. Excluding these changes, calculated billings would
have been $387 million, an increase of 53% year-over-year.
- GAAP Operating Loss: GAAP operating loss was $199 million, or 57% of total revenue,
compared to a GAAP operating loss of $52 million, or 24% of total revenue,
in the third quarter of fiscal 2021.
- Non-GAAP Operating Income/Loss: Non-GAAP operating loss was $10 million, or (3)% of total revenue,
compared to non-GAAP operating income of $6 million, or 3% of total
revenue, in the third quarter of fiscal 2021.
- GAAP Net Loss: GAAP net
loss was $221 million, compared to a GAAP net loss of $73 million in the
third quarter of fiscal 2021. GAAP net loss per share was $1.44, compared
to a GAAP net loss per share of $0.56 in the third quarter of fiscal 2021.
GAAP net loss and GAAP net loss per share include $120 million and $0.78,
respectively, attributable to Auth0 in the third quarter of fiscal 2022.
- Non-GAAP Net Income/Loss: Non-GAAP net loss was $11 million, compared to non-GAAP net income
of $6 million in the third quarter of fiscal 2021. Non-GAAP basic and
diluted net loss per share was $0.07, compared to non-GAAP basic and
diluted net income per share of $0.04 in the third quarter of fiscal 2021.
- Cash Flow: Net cash
provided by operations was $37 million, or 11% of total revenue, compared
to net cash provided by operations of $43 million, or 20% of total revenue,
in the third quarter of fiscal 2021. Free cash flow was $33 million, or
10% of total revenue, compared to $42 million, or 19% of total revenue, in
the third quarter of fiscal 2021.
- Cash, cash equivalents, and short-term investments were $2.48 billion at October 31, 2021.
- The section titled "Non-GAAP Financial Measures" below
contains a description of the non-GAAP financial measures, and reconciliations
between GAAP and non-GAAP information are contained in the tables below.
Financial Outlook:
Okta's financial outlook for the
fourth quarter and full year fiscal 2022 includes the expected contribution
from the acquisition of Auth0, net of purchase accounting adjustments.
For the fourth quarter of fiscal 2022, the Company expects:
- Total revenue of $358 million to $360 million,
representing a growth rate of 53% year-over-year;
- Non-GAAP operating loss of $35 million to $34
million; and
- Non-GAAP net loss per share of $0.25 to $0.24,
assuming weighted-average shares outstanding of approximately 154 million.
For the full year fiscal 2022,
the Company now expects:
- Total revenue of $1.275 billion to $1.277
billion, representing a growth rate of 53% year-over-year;
- Non-GAAP operating loss of $85 million to $84
million; and
- Non-GAAP net loss per share of $0.53 to $0.52,
assuming weighted-average shares outstanding of approximately 147 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 measures because certain items are out of
Okta's control or cannot be reasonably predicted. Accordingly, reconciliations
for forward-looking non-GAAP operating loss and non-GAAP net loss per share are
not available without unreasonable effort.
Gartner Magic Quadrant:
Finally, Okta is pleased to
highlight its recognition as a Leader in the 2021 Gartner Magic Quadrant for
Access Management. The report evaluated 12 vendors on 15 criteria and placed
both Okta and Okta (Auth0) in the Leaders Quadrant. This marks the fifth
consecutive year in which Okta has been named a Leader, and the first for Okta
(Auth0). A complimentary version of the full report can be found here.
Conference Call Information:
Okta will host a live video
webcast at 2:00 p.m. Pacific Time on December 1, 2021 to discuss the results
and outlook. The news release with the financial results will be accessible
from the Company's website at investor.okta.com prior to the conference call. The live video webcast of the conference
call will be accessible from the Okta investor relations website at investor.okta.com.
Gartner Disclaimers:
GARTNER and MAGIC QUADRANT are
registered trademarks and service marks of Gartner, Inc. and/or its affiliates
in the U.S. and internationally and are used herein with permission. All rights
reserved. 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 & Advisory
organization and should not be construed as statements of fact. Gartner
disclaims all warranties, expressed or implied, with respect to this research,
including any warranties of merchantability or fitness for a particular
purpose.
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 income (loss), non-GAAP
operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net
income (loss) per share, basic and diluted, free cash flow, free cash flow
margin, current calculated billings and calculated billings. Certain of these
non-GAAP financial measures exclude stock-based compensation, non-cash
charitable contributions, amortization of acquired intangibles, acquisition and
integration-related expenses, amortization of debt discount and debt issuance
costs and loss on early extinguishment and conversion of debt.
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 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 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.
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, business strategy and plans, market
trends and market size, opportunities and positioning and expected benefits
that will be derived from the Auth0 transaction. These forward-looking
statements are based on current expectations, estimates, forecasts and
projections. 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 and similar expressions are intended to identify
these forward-looking statements, although not all forward-looking statements
contain these identifying words. Forward-looking statements are subject to a
number of risks and uncertainties, many of which involve factors or
circumstances that are beyond our control. For example, the market for our
products may develop more slowly than expected or than it has in the past; our
results of operations may fluctuate more than expected; there may be
significant fluctuations in our results of operations and cash flows related to
our revenue recognition or otherwise; the impact of COVID-19, related public
health measures and any associated economic downturn on our business and
results of operations may be more than we expect; a network or data security
incident that allows unauthorized access to our network or data or our
customers' data could damage our reputation; we could experience interruptions
or performance problems associated with our technology, including a service
outage; we may not be able to pay off our convertible senior notes when due;
global economic conditions could deteriorate; we may not achieve expected
synergies and efficiencies of operations between Okta and Auth0, and we may not
be able to successfully integrate the companies. Further information on
potential factors that could affect our financial results is included in our
most recent Quarterly Report on Form 10-Q and our other filings with the
Securities and Exchange Commission. The forward-looking statements included in
this press release represent our views only as of the date of this press
release and we assume no obligation and do not intend to update these
forward-looking statements.
OKTA, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except
per share data)
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Subscription
|
|
$
|
336,702
|
|
|
|
$
|
206,743
|
|
|
|
$
|
879,881
|
|
|
|
$
|
571,213
|
|
|
Professional services and
other
|
|
13,978
|
|
|
|
10,636
|
|
|
|
37,305
|
|
|
|
29,471
|
|
|
Total revenue
|
|
350,680
|
|
|
|
217,379
|
|
|
|
917,186
|
|
|
|
600,684
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Subscription(1)
|
|
91,048
|
|
|
|
44,762
|
|
|
|
227,903
|
|
|
|
121,420
|
|
|
Professional services and
other(1)
|
|
18,626
|
|
|
|
12,146
|
|
|
|
49,000
|
|
|
|
35,121
|
|
|
Total cost of revenue
|
|
109,674
|
|
|
|
56,908
|
|
|
|
276,903
|
|
|
|
156,541
|
|
|
Gross profit
|
|
241,006
|
|
|
|
160,471
|
|
|
|
640,283
|
|
|
|
444,143
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and development(1)
|
|
130,535
|
|
|
|
58,150
|
|
|
|
321,805
|
|
|
|
160,510
|
|
|
Sales and marketing(1)
|
|
203,878
|
|
|
|
109,812
|
|
|
|
548,749
|
|
|
|
312,177
|
|
|
General and administrative(1)
|
|
105,149
|
|
|
|
44,485
|
|
|
|
322,406
|
|
|
|
121,019
|
|
|
Total operating expenses
|
|
439,562
|
|
|
|
212,447
|
|
|
|
1,192,960
|
|
|
|
593,706
|
|
|
Operating loss
|
|
(198,556
|
)
|
|
|
(51,976
|
)
|
|
|
(552,677
|
)
|
|
|
(149,563
|
)
|
|
Interest expense
|
|
(23,144
|
)
|
|
|
(22,368
|
)
|
|
|
(68,776
|
)
|
|
|
(50,063
|
)
|
|
Interest income and other,
net
|
|
1,056
|
|
|
|
1,878
|
|
|
|
7,622
|
|
|
|
10,737
|
|
|
Loss on early
extinguishment and conversion of debt
|
|
—
|
|
|
|
(89
|
)
|
|
|
(179
|
)
|
|
|
(2,263
|
)
|
|
Interest and other, net
|
|
(22,088
|
)
|
|
|
(20,579
|
)
|
|
|
(61,333
|
)
|
|
|
(41,589
|
)
|
|
Loss before provision for
(benefit from) income taxes
|
|
(220,644
|
)
|
|
|
(72,555
|
)
|
|
|
(614,010
|
)
|
|
|
(191,152
|
)
|
|
Provision for (benefit
from) income taxes
|
|
667
|
|
|
|
209
|
|
|
|
(6,785
|
)
|
|
|
(626
|
)
|
|
Net loss
|
|
$
|
(221,311
|
)
|
|
|
$
|
(72,764
|
)
|
|
|
$
|
(607,225
|
)
|
|
|
$
|
(190,526
|
)
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic
and diluted
|
|
$
|
(1.44
|
)
|
|
|
$
|
(0.56
|
)
|
|
|
$
|
(4.17
|
)
|
|
|
$
|
(1.51
|
)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
used to compute net loss per share, basic and diluted
|
|
153,756
|
|
|
|
128,813
|
|
|
|
145,782
|
|
|
|
126,222
|
|
|
(1) Amounts include
stock-based compensation expense as follows (in thousands):
|
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cost of subscription
revenue
|
|
$
|
13,455
|
|
|
$
|
6,090
|
|
|
$
|
33,843
|
|
|
$
|
15,229
|
|
Cost of professional
services and other
|
|
3,376
|
|
|
2,113
|
|
|
8,879
|
|
|
5,924
|
|
Research and development
|
|
56,573
|
|
|
17,546
|
|
|
129,998
|
|
|
44,434
|
|
Sales and marketing
|
|
39,248
|
|
|
14,368
|
|
|
101,602
|
|
|
38,693
|
|
General and administrative
|
|
43,133
|
|
|
13,535
|
|
|
133,289
|
|
|
35,494
|
|
Total stock-based
compensation expense
|
|
$
|
155,785
|
|
|
$
|
53,652
|
|
|
$
|
407,611
|
|
|
$
|
139,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OKTA, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
October 31,
|
|
January 31,
|
|
|
|
|
2021
|
|
|
2021
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
372,372
|
|
|
|
$
|
434,607
|
|
|
Short-term investments
|
|
|
|
2,109,687
|
|
|
|
2,121,584
|
|
|
Accounts receivable, net of
allowances
|
|
|
|
253,568
|
|
|
|
194,818
|
|
|
Deferred commissions
|
|
|
|
60,465
|
|
|
|
45,949
|
|
|
Prepaid expenses and other
current assets
|
|
|
|
56,776
|
|
|
|
81,609
|
|
|
Total current assets
|
|
|
|
2,852,868
|
|
|
|
2,878,567
|
|
|
Property and equipment, net
|
|
|
|
60,751
|
|
|
|
62,783
|
|
|
Operating lease
right-of-use assets
|
|
|
|
154,522
|
|
|
|
149,604
|
|
|
Deferred commissions,
noncurrent
|
|
|
|
145,655
|
|
|
|
108,555
|
|
|
Intangible assets, net
|
|
|
|
336,354
|
|
|
|
27,009
|
|
|
Goodwill
|
|
|
|
5,401,343
|
|
|
|
48,023
|
|
|
Other assets
|
|
|
|
45,480
|
|
|
|
24,256
|
|
|
Total assets
|
|
|
|
$
|
8,996,973
|
|
|
|
$
|
3,298,797
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
11,547
|
|
|
|
$
|
8,557
|
|
|
Accrued expenses and other
current liabilities
|
|
|
|
91,516
|
|
|
|
53,729
|
|
|
Accrued compensation
|
|
|
|
109,233
|
|
|
|
71,906
|
|
|
Convertible senior notes,
net
|
|
|
|
15,956
|
|
|
|
908,684
|
|
|
Deferred revenue
|
|
|
|
759,914
|
|
|
|
502,738
|
|
|
Total current liabilities
|
|
|
|
988,166
|
|
|
|
1,545,614
|
|
|
Convertible senior notes,
net, noncurrent
|
|
|
|
1,793,970
|
|
|
|
857,387
|
|
|
Operating lease
liabilities, noncurrent
|
|
|
|
179,205
|
|
|
|
179,518
|
|
|
Deferred revenue,
noncurrent
|
|
|
|
17,958
|
|
|
|
10,860
|
|
|
Other liabilities,
noncurrent
|
|
|
|
33,119
|
|
|
|
11,375
|
|
|
Total liabilities
|
|
|
|
3,012,418
|
|
|
|
2,604,754
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Preferred stock
|
|
|
|
—
|
|
|
|
—
|
|
|
Class A common stock
|
|
|
|
15
|
|
|
|
12
|
|
|
Class B common stock
|
|
|
|
1
|
|
|
|
1
|
|
|
Additional paid-in capital
|
|
|
|
7,558,816
|
|
|
|
1,656,096
|
|
|
Accumulated other
comprehensive income
|
|
|
|
404
|
|
|
|
5,390
|
|
|
Accumulated deficit
|
|
|
|
(1,574,681
|
)
|
|
|
(967,456
|
)
|
|
Total stockholders' equity
|
|
|
|
5,984,555
|
|
|
|
694,043
|
|
|
Total liabilities and
stockholders' equity
|
|
|
|
$
|
8,996,973
|
|
|
|
$
|
3,298,797
|
|
|
|
|
|
OKTA, INC.
SUMMARY OF
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
|
|
|
|
|
|
Nine Months
Ended October 31,
|
|
|
2021
|
|
|
2020(1)
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
Net loss
|
|
$
|
(607,225
|
)
|
|
|
$
|
(190,526
|
)
|
|
Adjustments to reconcile
net loss to net cash provided by operating activities:
|
|
|
|
|
Stock-based compensation
|
|
407,611
|
|
|
|
139,774
|
|
|
Depreciation, amortization
and accretion
|
|
76,631
|
|
|
|
23,694
|
|
|
Amortization of debt
discount and issuance costs
|
|
64,478
|
|
|
|
47,261
|
|
|
Amortization of deferred
commissions
|
|
40,041
|
|
|
|
28,428
|
|
|
Deferred income taxes
|
|
(13,606
|
)
|
|
|
(2,414
|
)
|
|
Non-cash charitable
contributions
|
|
5,649
|
|
|
|
4,662
|
|
|
Loss on early
extinguishment and conversion of debt
|
|
179
|
|
|
|
2,263
|
|
|
(Gain) loss on strategic
investments
|
|
(5,665
|
)
|
|
|
628
|
|
|
Other, net
|
|
(267
|
)
|
|
|
3,887
|
|
|
Changes in operating assets
and liabilities:
|
|
|
|
|
Accounts receivable
|
|
(29,561
|
)
|
|
|
(10,547
|
)
|
|
Deferred commissions
|
|
(92,183
|
)
|
|
|
(51,837
|
)
|
|
Prepaid expenses and other
assets
|
|
5,356
|
|
|
|
(6,794
|
)
|
|
Operating lease
right-of-use assets
|
|
16,564
|
|
|
|
13,979
|
|
|
Accounts payable
|
|
(195
|
)
|
|
|
1,377
|
|
|
Accrued compensation
|
|
19,488
|
|
|
|
37,863
|
|
|
Accrued expenses and other
liabilities
|
|
22,537
|
|
|
|
2,442
|
|
|
Operating lease liabilities
|
|
(17,280
|
)
|
|
|
(11,750
|
)
|
|
Deferred revenue
|
|
198,035
|
|
|
|
60,663
|
|
|
Net cash provided by
operating activities
|
|
90,587
|
|
|
|
93,053
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
Capitalization of
internal-use software costs
|
|
(2,348
|
)
|
|
|
(3,530
|
)
|
|
Purchases of property and
equipment
|
|
(5,800
|
)
|
|
|
(11,297
|
)
|
|
Purchases of securities
available for sale and other
|
|
(1,333,617
|
)
|
|
|
(1,845,958
|
)
|
|
Proceeds from maturities
and redemption of securities available for sale
|
|
1,118,448
|
|
|
|
386,774
|
|
|
Proceeds from sales of
securities available for sale and other
|
|
228,344
|
|
|
|
206,129
|
|
|
Payments for business acquisitions,
net of cash acquired
|
|
(215,129
|
)
|
|
|
—
|
|
|
Net cash used in investing
activities
|
|
(210,102
|
)
|
|
|
(1,267,882
|
)
|
|
Cash flows from financing
activities:
|
|
|
|
|
Proceeds from issuance of
convertible senior notes, net of issuance costs
|
|
—
|
|
|
|
1,134,841
|
|
|
Payments for repurchases
and conversions of convertible senior notes
|
|
(26
|
)
|
|
|
(447
|
)
|
|
Proceeds from hedges
related to convertible senior notes
|
|
2
|
|
|
|
195,046
|
|
|
Payments for warrants
related to convertible senior notes
|
|
—
|
|
|
|
(175,399
|
)
|
|
Purchases of capped calls
related to convertible senior notes
|
|
—
|
|
|
|
(133,975
|
)
|
|
Proceeds from stock option
exercises
|
|
41,054
|
|
|
|
33,570
|
|
|
Proceeds from shares issued
in connection with employee stock purchase plan
|
|
17,417
|
|
|
|
12,821
|
|
|
Net cash provided by
financing activities
|
|
58,447
|
|
|
|
1,066,457
|
|
|
Effects of changes in
foreign currency exchange rates on cash, cash equivalents and restricted cash
|
|
(494
|
)
|
|
|
121
|
|
|
Net decrease in cash, cash
equivalents and restricted cash
|
|
(61,562
|
)
|
|
|
(108,251
|
)
|
|
Cash, cash equivalents and
restricted cash at beginning of period
|
|
448,630
|
|
|
|
531,953
|
|
|
Cash, cash equivalents and
restricted cash at end of period
|
|
$
|
387,068
|
|
|
|
$
|
423,702
|
|
|
(1) The condensed
consolidated statement of cash flows for the prior period has been adjusted
to conform to current period presentation.
|
OKTA,
INC.
Reconciliation of GAAP to Non-GAAP Data
(In thousands, except percentages and
per share data)
(unaudited)
Non-GAAP Gross Profit and Non-GAAP Gross
Margin
We define Non-GAAP gross profit and Non-GAAP gross
margin as GAAP gross profit and GAAP gross margin, adjusted for stock-based
compensation expense included in cost of revenue, amortization of acquired
intangibles and acquisition and integration-related expenses.
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Gross profit
|
|
$
|
241,006
|
|
|
$
|
160,471
|
|
|
$
|
640,283
|
|
|
$
|
444,143
|
|
Add:
|
|
|
|
|
|
|
|
|
Stock-based compensation
expense included in cost of revenue(1)
|
|
16,831
|
|
|
8,203
|
|
|
42,722
|
|
|
21,153
|
|
Amortization of acquired
intangibles
|
|
11,335
|
|
|
1,593
|
|
|
23,056
|
|
|
4,780
|
|
Acquisition and
integration-related expenses(2)
|
|
658
|
|
|
—
|
|
|
1,316
|
|
|
—
|
|
Non-GAAP gross profit
|
|
$
|
269,830
|
|
|
$
|
170,267
|
|
|
$
|
707,377
|
|
|
$
|
470,076
|
|
Gross margin
|
|
69
|
%
|
|
74
|
%
|
|
70
|
%
|
|
74
|
%
|
Non-GAAP gross margin
|
|
77
|
%
|
|
78
|
%
|
|
77
|
%
|
|
78
|
%
|
(1)
|
|
See table in footnote (1)
to the condensed consolidated statements of operations above for breakdown of
stock-based compensation expense by line item.
|
(2)
|
|
Acquisition and
integration-related expenses include transaction costs and other
non-recurring incremental costs incurred through the one-year anniversary of
transaction close.
|
Non-GAAP Operating Income (Loss) and
Non-GAAP Operating Margin
We define Non-GAAP operating income (loss) and
Non-GAAP operating margin as GAAP operating loss and GAAP operating margin,
adjusted for stock-based compensation expense, non-cash charitable
contributions, amortization of acquired intangibles and acquisition and
integration-related expenses.
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Operating loss
|
|
$
|
(198,556
|
)
|
|
|
$
|
(51,976
|
)
|
|
|
$
|
(552,677
|
)
|
|
|
$
|
(149,563
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
Stock-based compensation
expense(1)
|
|
155,785
|
|
|
|
53,652
|
|
|
|
407,611
|
|
|
|
139,774
|
|
|
Non-cash charitable
contributions
|
|
1,986
|
|
|
|
2,245
|
|
|
|
5,649
|
|
|
|
4,662
|
|
|
Amortization of acquired
intangibles
|
|
21,204
|
|
|
|
1,593
|
|
|
|
42,795
|
|
|
|
4,780
|
|
|
Acquisition and
integration-related expenses(2)
|
|
10,060
|
|
|
|
—
|
|
|
|
46,664
|
|
|
|
—
|
|
|
Non-GAAP operating income
(loss)
|
|
$
|
(9,521
|
)
|
|
|
$
|
5,514
|
|
|
|
$
|
(49,958
|
)
|
|
|
$
|
(347
|
)
|
|
Operating margin
|
|
(57
|
)
|
%
|
|
(24
|
)
|
%
|
|
(60
|
)
|
%
|
|
(25
|
)
|
%
|
Non-GAAP operating margin
|
|
(3
|
)
|
%
|
|
3
|
|
%
|
|
(5
|
)
|
%
|
|
—
|
|
%
|
(1)
|
|
See table in footnote (1)
to the condensed consolidated statements of operations above for breakdown of
stock-based compensation expense by line item.
|
(2)
|
|
Acquisition and
integration-related expenses include transaction costs and other
non-recurring incremental costs incurred through the one-year anniversary of
transaction close.
|
Non-GAAP Net Income (Loss), Non-GAAP Net Margin and Non-GAAP Net Income (Loss)
Per Share, Basic and Diluted
We define Non-GAAP net income (loss) and Non-GAAP net
margin as GAAP net loss and GAAP net margin, adjusted for stock-based
compensation expense, non-cash charitable contributions, amortization of
acquired intangibles, acquisition and integration-related expenses,
amortization of debt discount and debt issuance costs and loss on early extinguishment
and conversion of debt.
We define Non-GAAP net income (loss) per share, basic,
as Non-GAAP net income (loss) divided by GAAP weighted-average shares used to
compute net loss per share, basic and diluted.
We define Non-GAAP net income (loss) per share,
diluted, as Non-GAAP net income (loss) divided by GAAP weighted-average shares
used to compute net loss per share, basic and diluted adjusted for the
potentially dilutive effect of (i) employee equity incentive plans, excluding
the impact of unrecognized stock-based compensation expense, and (ii)
convertible senior notes outstanding and related warrants. In addition,
Non-GAAP net income (loss) per share, diluted, includes the anti-dilutive
impact of our note hedge and capped call agreements on convertible senior notes
outstanding. Accordingly, we did not record any adjustments to Non-GAAP net
income (loss) for the potential impact of the convertible senior notes
outstanding under the if-converted method.
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net loss
|
|
$
|
(221,311
|
)
|
|
|
$
|
(72,764
|
)
|
|
|
$
|
(607,225
|
)
|
|
|
$
|
(190,526
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
Stock-based compensation
expense(1)
|
|
155,785
|
|
|
|
53,652
|
|
|
|
407,611
|
|
|
|
139,774
|
|
|
Non-cash charitable contributions
|
|
1,986
|
|
|
|
2,245
|
|
|
|
5,649
|
|
|
|
4,662
|
|
|
Amortization of acquired
intangibles
|
|
21,204
|
|
|
|
1,593
|
|
|
|
42,795
|
|
|
|
4,780
|
|
|
Acquisition and
integration-related expenses(2)
|
|
10,060
|
|
|
|
—
|
|
|
|
46,664
|
|
|
|
—
|
|
|
Amortization of debt
discount and debt issuance costs
|
|
21,698
|
|
|
|
20,931
|
|
|
|
64,478
|
|
|
|
47,261
|
|
|
Loss on early
extinguishment and conversion of debt
|
|
—
|
|
|
|
89
|
|
|
|
179
|
|
|
|
2,263
|
|
|
Non-GAAP net income (loss)
|
|
$
|
(10,578
|
)
|
|
|
$
|
5,746
|
|
|
|
$
|
(39,849
|
)
|
|
|
$
|
8,214
|
|
|
|
|
|
|
|
|
|
|
|
Net margin
|
|
(63
|
)
|
%
|
|
(33
|
)
|
%
|
|
(66
|
)
|
%
|
|
(32
|
)
|
%
|
Non-GAAP net margin
|
|
(3
|
)
|
%
|
|
3
|
|
%
|
|
(4
|
)
|
%
|
|
1
|
|
%
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
used to compute net loss per share, basic and diluted
|
|
153,756
|
|
|
|
128,813
|
|
|
|
145,782
|
|
|
|
126,222
|
|
|
Non-GAAP weighted-average
effect of potentially dilutive securities
|
|
—
|
|
|
|
14,579
|
|
|
|
—
|
|
|
|
15,714
|
|
|
Non-GAAP weighted-average
shares used to compute non-GAAP net income (loss) per share, diluted
|
|
153,756
|
|
|
|
143,392
|
|
|
|
145,782
|
|
|
|
141,936
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic
and diluted
|
|
$
|
(1.44
|
)
|
|
|
$
|
(0.56
|
)
|
|
|
$
|
(4.17
|
)
|
|
|
$
|
(1.51
|
)
|
|
Non-GAAP net income (loss)
per share, basic
|
|
$
|
(0.07
|
)
|
|
|
$
|
0.04
|
|
|
|
$
|
(0.27
|
)
|
|
|
$
|
0.07
|
|
|
Non-GAAP net income (loss)
per share, diluted
|
|
$
|
(0.07
|
)
|
|
|
$
|
0.04
|
|
|
|
$
|
(0.27
|
)
|
|
|
$
|
0.06
|
|
|
(1)
|
|
See table in footnote (1)
to the condensed consolidated statements of operations above for breakdown of
stock-based compensation expense by line item.
|
(2)
|
|
Acquisition and
integration-related expenses include transaction costs and other
non-recurring incremental costs incurred through the one-year anniversary of
transaction close.
|
OKTA,
INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except percentages)
(unaudited)
Free Cash Flow and Free Cash Flow Margin
We define Free cash flow as net cash provided by
operating activities, less cash used for purchases of property and equipment,
net of sales proceeds, and capitalized internal-use software costs. Free cash
flow margin is calculated as Free cash flow divided by total revenue.
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net cash provided by
operating activities
|
|
$
|
37,120
|
|
|
|
$
|
43,426
|
|
|
|
$
|
90,587
|
|
|
|
$
|
93,053
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Purchases of property and
equipment
|
|
(1,766
|
)
|
|
|
(628
|
)
|
|
|
(5,800
|
)
|
|
|
(11,297
|
)
|
|
Capitalization of
internal-use software costs
|
|
(1,970
|
)
|
|
|
(1,204
|
)
|
|
|
(2,348
|
)
|
|
|
(3,530
|
)
|
|
Free cash flow
|
|
$
|
33,384
|
|
|
|
$
|
41,594
|
|
|
|
$
|
82,439
|
|
|
|
$
|
78,226
|
|
|
Net cash provided by (used
in) investing activities
|
|
$
|
101,459
|
|
|
|
$
|
(595,621
|
)
|
|
|
$
|
(210,102
|
)
|
|
|
$
|
(1,267,882
|
)
|
|
Net cash provided by financing
activities
|
|
$
|
9,214
|
|
|
|
$
|
5,210
|
|
|
|
$
|
58,447
|
|
|
|
$
|
1,066,457
|
|
|
Free cash flow margin
|
|
10
|
|
%
|
|
19
|
|
%
|
|
9
|
|
%
|
|
13
|
|
%
|
Calculated Billings
We define Calculated billings as total revenue plus
the change in deferred revenue, net of acquired deferred revenue, and less the
change in unbilled receivables, net of acquired unbilled receivables, in the
period.
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Total revenue
|
|
$
|
350,680
|
|
|
|
$
|
217,379
|
|
|
|
$
|
917,186
|
|
|
|
$
|
600,684
|
|
|
Add:
|
|
|
|
|
|
|
|
|
Deferred revenue, current
(end of period)
|
|
759,914
|
|
|
|
424,765
|
|
|
|
759,914
|
|
|
|
424,765
|
|
|
Unbilled receivables,
current (beginning of period)
|
|
3,409
|
|
|
|
2,113
|
|
|
|
2,604
|
|
|
|
1,026
|
|
|
Acquired unbilled
receivables, current
|
|
—
|
|
|
|
—
|
|
|
|
2,327
|
|
|
|
—
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Deferred revenue, current
(beginning of period)
|
|
(721,808
|
)
|
|
|
(391,246
|
)
|
|
|
(502,738
|
)
|
|
|
(365,236
|
)
|
|
Unbilled receivables,
current (end of period)
|
|
(5,085
|
)
|
|
|
(2,427
|
)
|
|
|
(5,085
|
)
|
|
|
(2,427
|
)
|
|
Acquired deferred revenue,
current
|
|
(900
|
)
|
|
|
—
|
|
|
|
(61,422
|
)
|
|
|
—
|
|
|
Current calculated billings
|
|
386,210
|
|
|
|
250,584
|
|
|
|
1,112,786
|
|
|
|
658,812
|
|
|
Add:
|
|
|
|
|
|
|
|
|
Deferred revenue,
noncurrent (end of period)
|
|
17,958
|
|
|
|
7,349
|
|
|
|
17,958
|
|
|
|
7,349
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Deferred revenue,
noncurrent (beginning of period)
|
|
(15,489
|
)
|
|
|
(5,574
|
)
|
|
|
(10,860
|
)
|
|
|
(6,214
|
)
|
|
Acquired deferred revenue,
noncurrent
|
|
—
|
|
|
|
—
|
|
|
|
(4,817
|
)
|
|
|
—
|
|
|
Calculated billings
|
|
$
|
388,679
|
|
|
|
$
|
252,359
|
|
|
|
$
|
1,115,067
|
|
|
|
$
|
659,947
|
|
|
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