Okta, Inc. (OKTA): history, ownership, mission, how it works & makes money

A Brief History of Okta, Inc.

Okta, Inc. was founded in 2009, focusing on identity and access management solutions. The company has grown significantly over the years, adapting to the evolving needs of businesses in securing user access to applications and data.

Financial Performance

In fiscal year 2024, Okta reported total revenue of $2,263 million, a 22% increase from $1,858 million in fiscal year 2023. The company generated subscription revenue of $1,235 million for the six months ended July 31, 2024, compared to $1,045 million for the same period in 2023.

Customer Base Growth

As of July 31, 2024, Okta had approximately 19,300 customers, up from 18,400 in 2023. The number of customers with annual contract values above $100,000 rose to 4,620, compared to 4,205 in the previous year. This reflects the company’s increasing market penetration and the growing demand for its services.

Research & Development and Operating Expenses

Okta's investment in research and development (R&D) for the six months ended July 31, 2024, was $327 million, slightly down from $335 million in the same period of 2023. This represents 25% of total revenue for the current fiscal year, compared to 31% in the prior year.

Operating expenses totaled $1,026 million for the six months ended July 31, 2024, down from $1,105 million in the same period of 2023. The breakdown includes:

Cash Flow and Liquidity Position

As of July 31, 2024, Okta's cash, cash equivalents, and short-term investments totaled $2,358 million. The company reported a net cash provided by operating activities of $305 million for the six months ended July 31, 2024, an increase from $182 million in the prior year.

Recent Acquisitions

On February 1, 2024, Okta acquired Spera, an identity security platform provider, for a cash consideration of $58 million. This acquisition is expected to enhance Okta's capabilities in identity threat detection and security posture management.

Future Outlook

Okta continues to focus on expanding its customer base and enhancing its product offerings. The company anticipates sustained growth driven by increasing demand for identity and access management solutions as businesses continue to transition to cloud-based services.

A Who Owns Okta, Inc. (OKTA)

Major Shareholders

As of 2024, the ownership structure of Okta, Inc. is comprised of institutional investors, individual shareholders, and company executives. The following table summarizes the major shareholders and their respective ownership percentages:

Class Structure

Okta, Inc. has two classes of common stock: Class A and Class B. The following table outlines the shares outstanding for each class as of July 31, 2024:

Performance Metrics

As of July 31, 2024, Okta reported the following key performance metrics that reflect its financial health and growth:

Recent Developments

In February 2024, Okta completed the acquisition of Spera, an identity security platform provider, for $58 million in cash. This acquisition was aimed at enhancing Okta's identity threat detection and security capabilities.

As of July 31, 2024, Okta's total stockholders’ equity was reported at $6,133 million, reflecting an increase from previous periods. The company continues to experience growth in its subscription revenue, which was $1,235 million for the six months ended July 31, 2024.

Okta, Inc. (OKTA) Mission Statement

As of 2024, Okta, Inc. emphasizes its commitment to being the leading independent identity partner, focusing on the importance of secure connections between people and technology. The mission statement underlines the provision of a robust platform that enables organizations to manage identity and access securely, thereby enhancing productivity and security across various applications and services.

Key Metrics

Financial Performance Overview

In the fiscal quarter ending July 31, 2024, Okta reported a total revenue of $646 million, an increase from $556 million in the same quarter of 2023, reflecting a growth rate of 16.2%. This revenue growth was primarily driven by an increase in subscription revenues, which amounted to $632 million compared to $542 million in the previous year.

Operating Expenses

Operating loss for the quarter was reported at $19 million, a significant improvement from a loss of $162 million in the same quarter of 2023. The net income for the quarter was $29 million, compared to a net loss of $111 million in the prior year.

Cash Flow and Liquidity

As of July 31, 2024, Okta had cash, cash equivalents, and short-term investments totaling $2,358 million. For the six months ended July 31, 2024, net cash provided by operating activities was $305 million, an increase of $123 million compared to $182 million in the same period of 2023.

Recent Developments

On February 1, 2024, Okta acquired Spera, an identity security platform provider, for a total consideration of $58 million. This acquisition is expected to enhance Okta's capabilities in identity threat detection and security posture management.

With these metrics and developments, Okta continues to position itself as a leader in the identity management space, focusing on innovation and strategic acquisitions to enhance its service offerings.

How Okta, Inc. (OKTA) Works

Business Model

Okta, Inc. operates under a Software as a Service (SaaS) model, providing cloud-based identity management solutions. The company generates revenue primarily through multi-year subscriptions for its services, which include Workforce Identity Cloud and Customer Identity Cloud offerings. Approximately 98% of total revenue comes from subscription fees, with the remainder from professional services and other sources.

Financial Performance Overview

For the six months ended July 31, 2024, Okta reported:

• Total revenue: $1,263 million, up from $1,074 million in the same period of 2023, representing an 18% increase.
• Subscription revenue: $1,235 million, compared to $1,045 million in 2023, also an 18% increase.
• Gross profit: $960 million, compared to $783 million in 2023, resulting in a gross margin of 76%.

Key Business Metrics

As of July 31, 2024, Okta reported the following key metrics:

• Number of customers: 19,300, up from 18,400 in 2023.
• Customers with annual contract value (ACV) above $100,000: 4,620, compared to 4,205 in 2023.
• Dollar-Based Net Retention Rate: 110%, down from 115%.

Cost Structure

For the six months ended July 31, 2024, Okta's operating expenses included:

• Research and Development: $327 million, or 25% of revenue.
• Sales and Marketing: $474 million, or 38% of revenue.
• General and Administrative: $225 million, or 18% of revenue.

Cash Flow Analysis

For the six months ended July 31, 2024, Okta's cash flow statement indicated:

• Net cash provided by operating activities: $305 million, compared to $182 million in 2023.
• Net cash used in investing activities: ($38 million), a decrease from $554 million in 2023.
• Net cash used in financing activities: ($87 million), down from ($641 million) in 2023.

Recent Acquisitions

On February 1, 2024, Okta acquired Spera, an identity security platform provider, for $58 million in cash. This acquisition is expected to enhance Okta's identity threat detection and security capabilities.

Market Position and Future Outlook

Okta's market presence continues to grow, bolstered by increasing demand for identity management solutions across various industries. The company focuses on expanding its customer base and enhancing the value provided to existing customers through additional products and services.

How Okta, Inc. (OKTA) Makes Money

Revenue Model

Okta, Inc. primarily generates revenue through a subscription-based model, with subscription fees accounting for approximately 98% of total revenue as of July 31, 2024. The company sells multi-year subscriptions to its cloud-based identity solutions, which include the Workforce Identity Cloud and Customer Identity Cloud.

The breakdown of revenue for the six months ended July 31, 2024, is as follows:

Customer Base

As of July 31, 2024, Okta had over 19,300 customers, an increase from 18,400 customers in 2023. Among them, 4,620 customers had an annual contract value (ACV) exceeding $100,000, compared to 4,205 customers in the previous year.

Dollar-Based Net Retention Rate

Okta's Dollar-Based Net Retention Rate was reported at 110% as of July 31, 2024, reflecting the company's ability to expand revenue within its existing customer base despite churn.

Cost Structure

The cost of revenue for the six months ended July 31, 2024, was as follows:

The gross profit for this period was $960 million, resulting in a gross margin of 76%.

Operating Expenses

For the six months ended July 31, 2024, Okta's operating expenses were:

Net Income and Cash Flow

Okta reported a net loss of $11 million for the six months ended July 31, 2024. The net cash provided by operating activities for the same period was $305 million, an increase from $182 million in 2023.

Deferred Revenue

As of July 31, 2024, Okta had deferred revenue of $1,415 million, with $1,394 million classified as a current liability expected to be recognized as revenue within the next 12 months.

Remaining Performance Obligations

The total remaining performance obligations (RPO) as of July 31, 2024, amounted to $3,505 million, with $1,995 million expected to be recognized over the next 12 months.

Conclusion of Financial Overview

Okta continues to leverage a strong subscription model while expanding its customer base and improving its gross margins. The company's focus on maintaining high customer retention rates and increasing the value provided to existing customers remains central to its revenue growth strategy.