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Okta Announces Second Quarter Fiscal Year 2023 Financial Results

  • Q2 revenue grew 43% year-over-year; subscription revenue grew 44% year-over-year
  • Remaining performance obligations (RPO) grew 25% year-over-year to $2.79 billion; current remaining performance obligations (cRPO) grew 36% year-over-year to $1.50 billion

Okta, Inc. (Nasdaq: OKTA), the leading independent identity provider, today announced financial results for its second quarter ended July 31, 2022.

“Identity has become a critical component of every organization's strategy around zero trust security, digital transformation, and cloud adoption. These three mega trends continue to drive the identity market,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta. “Looking at the second half of the fiscal year, we’re focused on refining the go-to-market strategy for the combined Auth0 and Okta sales organization, strengthening our teams, and making strategic reductions to our spend to improve profitability.”

Second Quarter Fiscal 2023 Financial Highlights:

  • Revenue: Total revenue was $452 million, an increase of 43% year-over-year. Subscription revenue was $435 million, an increase of 44% year-over-year.
  • RPO: RPO, or subscription backlog, was $2.79 billion, an increase of 25% year-over-year. cRPO, which is contracted subscription revenue expected to be recognized over the next 12 months, was $1.50 billion, up 36% compared to the second quarter of fiscal 2022.
  • Calculated Billings: Total calculated billings was $491 million, an increase of 36% year-over-year.
  • GAAP Operating Loss: GAAP operating loss was $208 million, or 46% of total revenue, compared to a GAAP operating loss of $263 million, or 83% of total revenue, in the second quarter of fiscal 2022.
  • Non-GAAP Operating Loss: Non-GAAP operating loss was $15 million, or 3% of total revenue, compared to non-GAAP operating loss of $25 million, or 8% of total revenue, in the second quarter of fiscal 2022.
  • GAAP Net Loss: GAAP net loss was $210 million, compared to a GAAP net loss of $277 million in the second quarter of fiscal 2022. GAAP net loss per share was $1.34, compared to a GAAP net loss per share of $1.83 in the second quarter of fiscal 2022.
  • Non-GAAP Net Loss: Non-GAAP net loss was $16 million, compared to non-GAAP net loss of $16 million in the second quarter of fiscal 2022. Non-GAAP basic and diluted net loss per share was $0.10, compared to non-GAAP basic and diluted net loss per share of $0.11 in the second quarter of fiscal 2022.
  • Cash Flow: Net cash used in operations was $19 million, or (4)% of total revenue, compared to net cash used in operations of $3 million, or (1)% of total revenue, in the second quarter of fiscal 2022. Free cash flow was negative $24 million, or (5)% of total revenue, compared to negative $4 million, or (1)% of total revenue, in the second quarter of fiscal 2022.
  • Cash, cash equivalents, and short-term investments were $2.48 billion at July 31, 2022.

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:

For the third quarter of fiscal 2023, the Company expects:

  • Total revenue of $463 million to $465 million, representing a growth rate of 32% to 33% year-over-year;
  • Current RPO of $1.54 billion to $1.55 billion, representing a growth rate of 30% to 31% year-over-year;
  • Non-GAAP operating loss of $37 million to $36 million; and
  • Non-GAAP net loss per share of $0.25 to $0.24, assuming weighted-average shares outstanding of approximately 158 million.

For the full year fiscal 2023, the Company now expects:

  • Total revenue of $1.812 billion to $1.820 billion, representing a growth rate of 39% to 40% year-over-year;
  • Non-GAAP operating loss of $110 million to $105 million; and
  • Non-GAAP net loss per share of $0.73 to $0.70, assuming weighted-average shares outstanding of approximately 157 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.

Webcast Information:

Okta will host a live video webcast at 2:00 p.m. Pacific Time on August 31, 2022 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 webcast. The live video webcast will be accessible from the Okta investor relations website at investor.okta.com.

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 loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net margin, non-GAAP net 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. Non-GAAP financial measures reflect the adoption of ASU 2020-06 under the modified retrospective method as of February 1, 2022, as applicable.

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. 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; there may be significant fluctuations in our results of operations and cash flows related to our revenue recognition or otherwise; 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; global economic conditions could worsen; a network or data security incident that allows unauthorized access to our network or data or our customers’ data could damage our reputation and cause us to incur significant costs; we could experience interruptions or performance problems associated with our technology, including a service outage; 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; and we may not be able to pay off our convertible senior notes when due. 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.

About Okta

Okta is the leading independent identity provider. The Okta Identity Cloud enables organizations to securely connect the right people to the right technologies at the right time. With more than 7,000 pre-built integrations to applications and infrastructure providers, Okta provides simple and secure access to people and organizations everywhere, giving them the confidence to reach their full potential. More than 16,400 organizations, including JetBlue, Nordstrom, Siemens, Slack, Takeda, and Teach for America, trust Okta to help protect the identities of their workforces and customers.

Okta uses its investor.okta.com website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website in addition to following our press releases, SEC filings and public conference calls and webcasts.

 

OKTA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

 

 

 

 

Three Months Ended

July 31,

Six Months Ended

July 31,

 

2022

2021

2022

2021

Revenue:

 

 

 

 

Subscription

$

435,384

 

$

303,121

 

$

833,325

 

$

543,179

 

Professional services and other

 

16,423

 

 

12,379

 

 

33,425

 

 

23,327

 

Total revenue

 

451,807

 

 

315,500

 

 

866,750

 

 

566,506

 

Cost of revenue:

 

 

 

 

Subscription(1)

 

116,342

 

 

84,457

 

 

227,218

 

 

136,855

 

Professional services and other(1)

 

21,352

 

 

16,649

 

 

41,641

 

 

30,374

 

Total cost of revenue

 

137,694

 

 

101,106

 

 

268,859

 

 

167,229

 

Gross profit

 

314,113

 

 

214,394

 

 

597,891

 

 

399,277

 

Operating expenses:

 

 

 

 

Research and development(1)

 

155,836

 

 

122,407

 

 

317,487

 

 

191,270

 

Sales and marketing(1)

 

264,653

 

 

198,350

 

 

517,126

 

 

344,871

 

General and administrative(1)

 

101,686

 

 

157,077

 

 

211,029

 

 

217,257

 

Total operating expenses

 

522,175

 

 

477,834

 

 

1,045,642

 

 

753,398

 

Operating loss

 

(208,062

)

 

(263,440

)

 

(447,751

)

 

(354,121

)

Interest expense

 

(2,915

)

 

(22,872

)

 

(5,783

)

 

(45,632

)

Interest income and other, net

 

4,721

 

 

2,211

 

 

6,425

 

 

6,566

 

Loss on conversion of debt

 

 

 

(43

)

 

 

 

(179

)

Interest and other, net

 

1,806

 

 

(20,704

)

 

642

 

 

(39,245

)

Loss before provision for (benefit from) income taxes

 

(206,256

)

 

(284,144

)

 

(447,109

)

 

(393,366

)

Provision for (benefit from) income taxes

 

4,216

 

 

(7,462

)

 

6,076

 

 

(7,452

)

Net loss

$

(210,472

)

$

(276,682

)

$

(453,185

)

$

(385,914

)

 

 

 

 

 

Net loss per share, basic and diluted

$

(1.34

)

$

(1.83

)

$

(2.89

)

$

(2.72

)

 

 

 

 

 

Weighted-average shares used to compute net loss per share, basic and diluted

 

157,400

 

 

151,357

 

 

156,650

 

 

141,720

 

(1) Amounts include stock-based compensation expense as follows (in thousands):

 

 

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

Cost of subscription revenue

$

17,778

 

 

$

13,138

 

 

$

34,403

 

 

$

20,388

 

Cost of professional services and other

 

3,816

 

 

 

3,161

 

 

 

7,453

 

 

 

5,503

 

Research and development

 

70,078

 

 

 

53,332

 

 

 

139,122

 

 

 

73,425

 

Sales and marketing

 

38,982

 

 

 

41,288

 

 

 

78,784

 

 

 

62,354

 

General and administrative

 

40,525

 

 

 

76,795

 

 

 

80,940

 

 

 

90,156

 

Total stock-based compensation expense

$

171,179

 

 

$

187,714

 

 

$

340,702

 

 

$

251,826

 

 

OKTA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

 

 

 

 

 

July 31,

 

January 31,

 

2022

 

2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

216,022

 

 

$

260,134

 

Short-term investments

 

2,260,956

 

 

 

2,241,657

 

Accounts receivable, net of allowances

 

323,377

 

 

 

397,509

 

Deferred commissions

 

80,657

 

 

 

74,728

 

Prepaid expenses and other current assets

 

64,490

 

 

 

66,605

 

Total current assets

 

2,945,502

 

 

 

3,040,633

 

Property and equipment, net

 

66,958

 

 

 

65,488

 

Operating lease right-of-use assets

 

141,940

 

 

 

147,940

 

Deferred commissions, noncurrent

 

191,309

 

 

 

191,029

 

Intangible assets, net

 

281,470

 

 

 

316,968

 

Goodwill

 

5,400,275

 

 

 

5,401,343

 

Other assets

 

46,553

 

 

 

42,294

 

Total assets

$

9,074,007

 

 

$

9,205,695

 

Liabilities and stockholders' equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

43,708

 

 

$

20,203

 

Accrued expenses and other current liabilities

 

106,477

 

 

 

89,315

 

Accrued compensation

 

87,094

 

 

 

143,805

 

Convertible senior notes, net

 

5,209

 

 

 

16,194

 

Deferred revenue

 

994,097

 

 

 

973,289

 

Total current liabilities

 

1,236,585

 

 

 

1,242,806

 

Convertible senior notes, net, noncurrent

 

2,190,110

 

 

 

1,815,714

 

Operating lease liabilities, noncurrent

 

158,577

 

 

 

170,611

 

Deferred revenue, noncurrent

 

17,187

 

 

 

22,933

 

Other liabilities, noncurrent

 

18,532

 

 

 

31,775

 

Total liabilities

 

3,620,991

 

 

 

3,283,839

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock

 

 

 

 

 

Class A common stock

 

15

 

 

 

15

 

Class B common stock

 

1

 

 

 

1

 

Additional paid-in capital

 

7,607,382

 

 

 

7,749,716

 

Accumulated other comprehensive loss

 

(41,186

)

 

 

(12,009

)

Accumulated deficit

 

(2,113,196

)

 

 

(1,815,867

)

Total stockholders’ equity

 

5,453,016

 

 

 

5,921,856

 

Total liabilities and stockholders' equity

$

9,074,007

 

 

$

9,205,695

 

 

OKTA, INC.

SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

 

 

 

 

 

Six Months Ended July 31,

 

 

2022

 

2021(1)

Cash flows from operating activities:

 

 

 

Net loss

$

(453,185

)

 

$

(385,914

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Stock-based compensation

 

340,702

 

 

 

251,826

 

Depreciation, amortization and accretion

 

59,748

 

 

 

44,903

 

Amortization of debt discount and issuance costs

 

2,895

 

 

 

42,780

 

Amortization of deferred commissions

 

39,537

 

 

 

25,135

 

Deferred income taxes

 

1,539

 

 

 

(11,506

)

Non-cash charitable contributions

 

2,014

 

 

 

3,663

 

Loss on conversion of debt

 

 

 

 

179

 

Gain on strategic investments

 

(1,965

)

 

 

(5,271

)

Other, net

 

461

 

 

 

(290

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

74,015

 

 

 

(14,798

)

Deferred commissions

 

(50,123

)

 

 

(55,102

)

Prepaid expenses and other assets

 

(2,236

)

 

 

718

 

Operating lease right-of-use assets

 

13,568

 

 

 

10,732

 

Accounts payable

 

24,632

 

 

 

(2,044

)

Accrued compensation

 

(55,219

)

 

 

(6,507

)

Accrued expenses and other liabilities

 

1,144

 

 

 

10,092

 

Operating lease liabilities

 

(12,807

)

 

 

(13,489

)

Deferred revenue

 

15,062

 

 

 

158,360

 

Net cash provided by (used in) operating activities

 

(218

)

 

 

53,467

 

Cash flows from investing activities:

 

 

 

Capitalization of internal-use software costs

 

(5,396

)

 

 

(378

)

Purchases of property and equipment

 

(7,493

)

 

 

(4,034

)

Purchases of securities available for sale and other

 

(571,081

)

 

 

(923,507

)

Proceeds from maturities and redemption of securities available for sale

 

521,815

 

 

 

763,607

 

Proceeds from sales of securities available for sale and other

 

 

 

 

906

 

Purchases of intangible assets

 

(2,497

)

 

 

(113

)

Payments for business acquisitions, net of cash acquired

 

(4,060

)

 

 

(148,042

)

Net cash used in investing activities

 

(68,712

)

 

 

(311,561

)

Cash flows from financing activities:

 

 

 

Payments for conversions of convertible senior notes

 

(6

)

 

 

(15

)

Proceeds from hedges related to convertible senior notes

 

1

 

 

 

2

 

Proceeds from stock option exercises

 

8,977

 

 

 

31,829

 

Proceeds from shares issued in connection with employee stock purchase plan

 

18,960

 

 

 

17,417

 

Net cash provided by financing activities

 

27,932

 

 

 

49,233

 

Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash

 

(6,072

)

 

 

193

 

Net decrease in cash, cash equivalents and restricted cash

 

(47,070

)

 

 

(208,668

)

Cash, cash equivalents and restricted cash at beginning of period

 

272,656

 

 

 

448,630

 

Cash, cash equivalents and restricted cash at end of period

$

225,586

 

 

$

239,962

 

(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

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

Gross profit

$

314,113

 

 

$

214,394

 

 

$

597,891

 

 

$

399,277

 

Add:

 

 

 

 

 

 

 

Stock-based compensation expense included in cost of revenue(1)

 

21,594

 

 

 

16,299

 

 

 

41,856

 

 

 

25,891

 

Amortization of acquired intangibles

 

11,374

 

 

 

10,128

 

 

 

22,709

 

 

 

11,721

 

Acquisition and integration-related expenses(2)

 

 

 

 

658

 

 

 

459

 

 

 

658

 

Non-GAAP gross profit

$

347,081

 

 

$

241,479

 

 

$

662,915

 

 

$

437,547

 

Gross margin

 

70

%

 

 

68

%

 

 

69

%

 

 

70

%

Non-GAAP gross margin

 

77

%

 

 

77

%

 

 

76

%

 

 

77

%

(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 Loss and Non-GAAP Operating Margin

We define Non-GAAP operating 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

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

Operating loss

$

(208,062

)

 

$

(263,440

)

 

$

(447,751

)

 

$

(354,121

)

Add:

 

 

 

 

 

 

 

Stock-based compensation expense(1)

 

171,179

 

 

 

187,714

 

 

 

340,702

 

 

 

251,826

 

Non-cash charitable contributions

 

633

 

 

 

1,639

 

 

 

2,014

 

 

 

3,663

 

Amortization of acquired intangibles

 

21,244

 

 

 

19,998

 

 

 

42,449

 

 

 

21,591

 

Acquisition and integration-related expenses(2)

 

 

 

 

29,550

 

 

 

6,555

 

 

 

36,604

 

Non-GAAP operating loss

$

(15,006

)

 

$

(24,539

)

 

$

(56,031

)

 

$

(40,437

)

Operating margin

 

(46

)%

 

 

(83

)%

 

 

(52

)%

 

 

(63

)%

Non-GAAP operating margin

 

(3

)%

 

 

(8

)%

 

 

(6

)%

 

 

(7

)%

(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 Loss, Non-GAAP Net Margin and Non-GAAP Net Loss Per Share, Basic and Diluted

We define Non-GAAP net 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. Adjustments reflect the adoption of ASU 2020-06 under the modified retrospective method as of February 1, 2022, as applicable.

We define Non-GAAP net loss per share, basic, as Non-GAAP net loss divided by GAAP weighted-average shares used to compute net loss per share, basic and diluted.

We define Non-GAAP net loss per share, diluted, as Non-GAAP net 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 loss per share, diluted, includes the anti-dilutive impact of our note hedge and capped call agreements on convertible senior notes outstanding, as applicable. Accordingly, we did not record any adjustments to Non-GAAP net loss for the potential impact of the convertible senior notes outstanding under the if-converted method.

 

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

Net loss

$

(210,472

)

 

$

(276,682

)

 

$

(453,185

)

 

$

(385,914

)

Add:

 

 

 

 

 

 

 

Stock-based compensation expense(1)

 

171,179

 

 

 

187,714

 

 

 

340,702

 

 

 

251,826

 

Non-cash charitable contributions

 

633

 

 

 

1,639

 

 

 

2,014

 

 

 

3,663

 

Amortization of acquired intangibles

 

21,244

 

 

 

19,998

 

 

 

42,449

 

 

 

21,591

 

Acquisition and integration-related expenses(2)

 

 

 

 

29,550

 

 

 

6,555

 

 

 

36,604

 

Amortization of debt discount and debt issuance costs(3)

 

1,446

 

 

 

21,449

 

 

 

2,895

 

 

 

42,780

 

Loss on conversion of debt(3)

 

 

 

 

43

 

 

 

 

 

 

179

 

Non-GAAP net loss

$

(15,970

)

 

$

(16,289

)

 

$

(58,570

)

 

$

(29,271

)

 

 

 

 

 

 

 

 

Net margin

 

(47

)%

 

 

(88

)%

 

 

(52

)%

 

 

(68

)%

Non-GAAP net margin

 

(4

)%

 

 

(5

)%

 

 

(7

)%

 

 

(5

)%

 

 

 

 

 

 

 

 

Weighted-average shares used to compute net loss per share, basic and diluted

 

157,400

 

 

 

151,357

 

 

 

156,650

 

 

 

141,720

 

Non-GAAP weighted-average effect of potentially dilutive securities

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP weighted-average shares used to compute non-GAAP net loss per share, diluted

 

157,400

 

 

 

151,357

 

 

 

156,650

 

 

 

141,720

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

$

(1.34

)

 

$

(1.83

)

 

$

(2.89

)

 

$

(2.72

)

Non-GAAP net loss per share, basic and diluted

$

(0.10

)

 

$

(0.11

)

 

$

(0.37

)

 

$

(0.21

)

(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.

 

(3)

Reflects the adoption of ASU 2020-06 under the modified retrospective method effective February 1, 2022.

 

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 (used in) 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

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

Net cash provided by (used in) operating activities

$

(19,049

)

 

$

(2,608

)

 

$

(218

)

 

$

53,467

 

Less:

 

 

 

 

 

 

 

Purchases of property and equipment

 

(2,165

)

 

 

(775

)

 

 

(7,493

)

 

 

(4,034

)

Capitalization of internal-use software costs

 

(2,909

)

 

 

(368

)

 

 

(5,396

)

 

 

(378

)

Free cash flow

$

(24,123

)

 

$

(3,751

)

 

$

(13,107

)

 

$

49,055

 

Net cash provided by (used in) investing activities

$

19,630

 

 

$

(463,466

)

 

$

(68,712

)

 

$

(311,561

)

Net cash provided by financing activities

$

22,550

 

 

$

33,054

 

 

$

27,932

 

 

$

49,233

 

Free cash flow margin

 

(5

)%

 

 

(1

)%

 

 

(2

)%

 

 

9

%

 

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

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

Total revenue

$

451,807

 

 

$

315,500

 

 

$

866,750

 

 

$

566,506

 

Add:

 

 

 

 

 

 

 

Deferred revenue, current (end of period)

 

994,097

 

 

 

721,808

 

 

 

994,097

 

 

 

721,808

 

Unbilled receivables, current (beginning of period)

 

4,039

 

 

 

894

 

 

 

3,228

 

 

 

2,604

 

Acquired unbilled receivables, current

 

 

 

 

2,327

 

 

 

 

 

 

2,327

 

Less:

 

 

 

 

 

 

 

Deferred revenue, current (beginning of period)

 

(952,190

)

 

 

(613,167

)

 

 

(973,289

)

 

 

(502,738

)

Unbilled receivables, current (end of period)

 

(4,530

)

 

 

(3,409

)

 

 

(4,530

)

 

 

(3,409

)

Acquired deferred revenue, current

 

 

 

 

(60,522

)

 

 

 

 

 

(60,522

)

Current Calculated Billings

 

493,223

 

 

 

363,431

 

 

 

886,256

 

 

 

726,576

 

Add:

 

 

 

 

 

 

 

Deferred revenue, noncurrent (end of period)

 

17,187

 

 

 

15,489

 

 

 

17,187

 

 

 

15,489

 

Less:

 

 

 

 

 

 

 

Deferred revenue, noncurrent (beginning of period)

 

(19,074

)

 

 

(11,745

)

 

 

(22,933

)

 

 

(10,860

)

Acquired deferred revenue, noncurrent

 

 

 

 

(4,817

)

 

 

 

 

 

(4,817

)

Calculated Billings

$

491,336

 

 

$

362,358

 

 

$

880,510

 

 

$

726,388

 

 

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