On November 29, 2023, Okta Inc (OKTA, Financial) released its 8-K filing, announcing financial results for the third quarter of fiscal year 2024. The company reported a significant 21% increase in total revenue, reaching $584 million, with subscription revenue growing by 22% to $569 million compared to the same period last year. This growth is a testament to the company's robust performance and the increasing demand for its identity management solutions.
Financial Performance Overview
Okta Inc (OKTA, Financial) achieved a substantial year-over-year growth in current remaining performance obligations (cRPO), which grew 16% to $1.83 billion. The company's operating cash flow and free cash flow both reached record highs of $156 million and $150 million, respectively, representing significant improvements from the third quarter of fiscal 2023.
Despite a challenging macro environment and the potential impact of the October 2023 security incident, Okta Inc (OKTA, Financial) delivered a strong financial performance. The GAAP operating loss improved to $111 million, or 19% of total revenue, a substantial reduction from the $207 million, or 43% of total revenue, reported in the third quarter of fiscal 2023. Non-GAAP operating income reached a record $85 million, or 15% of total revenue, a stark contrast to the break-even non-GAAP operating income in the prior year's quarter.
Net Income and Earnings Per Share
Okta Inc (OKTA, Financial) reported a GAAP net loss of $81 million, with a net loss per share of $0.49. This is an improvement from the GAAP net loss of $209 million and a net loss per share of $1.32 in the third quarter of fiscal 2023. Non-GAAP net income was $79 million, with basic and diluted net income per share of $0.48 and $0.44, respectively, compared to a non-GAAP net loss per share of $0.00 in the same quarter of the previous fiscal year.
Balance Sheet and Cash Flow Highlights
As of October 31, 2023, Okta Inc (OKTA, Financial) had $2.13 billion in cash, cash equivalents, and short-term investments. The company also repurchased $150 million principal amount of convertible senior notes due in 2026, resulting in a gain on early extinguishment of debt of $18 million.
Forward-Looking Financial Outlook
For the fourth quarter of fiscal 2024, Okta Inc (OKTA, Financial) expects total revenue of $585 million to $587 million, representing a growth rate of 15% year-over-year. The company anticipates a non-GAAP operating income of $102 million to $104 million, with a non-GAAP operating margin of 17% to 18%, and a non-GAAP diluted net income per share of $0.50 to $0.51.
For the full fiscal year 2024, Okta Inc (OKTA, Financial) now expects total revenue of $2.243 billion to $2.245 billion, a 21% increase year-over-year, with a non-GAAP operating income of $283 million to $285 million and a non-GAAP diluted net income per share of $1.47 to $1.48.
The company also provided a preliminary outlook for fiscal 2025, projecting total revenue of $2.460 billion to $2.470 billion, representing a growth rate of 10% year-over-year, with a non-GAAP operating margin of 17% and a non-GAAP free cash flow margin of at least 19%.
Conclusion
Okta Inc (OKTA, Financial)'s third quarter fiscal year 2024 results reflect a company that is not only growing its top-line revenue but also improving its profitability and cash flow generation. The record non-GAAP operating profit and free cash flow underscore the company's operational efficiency and financial health. With a positive outlook for the coming quarters, Okta Inc (OKTA) appears well-positioned to continue its growth trajectory and deliver value to its stakeholders.
Explore the complete 8-K earnings release (here) from Okta Inc for further details.