shares are trading sharply higher Thursday, one day after the company met with investors in connection with its latest users’ conference. At the event, Okta reiterated its guidance for the year—and announced two new product launches that together expand the company’s addressable market.
Okta (ticker: OKTA) makes identity-management software, with two primary target audiences. The company’s largest business is controlling employee access to applications and resources. (Barron’s is a customer. I go through Okta to access the publishing network on which this story now lives.) It also makes customer identity software, to insure secure access of online resources to customers, suppliers, and other related parties.
At yesterday’s event, the company announced a new service called Okta Privileged Management, which controls the level of access to specific resources provided to individual users; it noted in unveiling the software that credentialing issues played a role in the recent SolarWinds hack. The company also announced Okta Identity Governance, a tool to provide cloud-based administration of user access software.
Okta said it continues to see revenue for the fiscal first quarter, which ended this morning, of $237 million to $239 million, up 30% to 31% from a year ago, with a non-GAAP loss of 20 to 21 cents a share. For the January 2022 fiscal year, Okta continues to see revenue of $1.08 billion to $1.09 billion, with a non-GAAP loss of 44 to 49 cents a share.
In an interview with Barron’s, Chief Financial Officer
said he told investors the company expects top-line growth for the medium term of about 30% a year, or at least 35% if you include the company’s pending $6.5 billion acquisition of the identity-management software firm Auth0 (pronounced Auth Zero). He also said that the two new product launches significantly expand the company’s total addressable market—he sees Okta with an overall TAM of $80 billion.
The event was well received by the Street. BTIG analyst Gray Powell keeps his Neutral rating on Okta shares, but says the event “was positive” and that he was pleased to see the company reiterate its guidance, with the potential for growth of better than 35% including Auth0. He also think the privileged management and identity governance announcements “make sense.… [We] see these markets as natural expansion opportunities.”
Baird analyst Jonathan Ruykhaver, who is Neutral-rated on the stock, had a similar reaction to the event. “Growth is clearly management’s top priority, which we appreciate given the company’s strong market positioning and sizable potential TAM.,” he writes. “Overall, we believe Okta continues to differentiate its cloud platform and look to see management execute to its vision over time.”
Okta stock is up 7.9%, at $240.20, in recent trading. The
is up 0.4%.
Write to Eric J. Savitz at [email protected]