Okta Projects Sales Topping Estimates on Remote-Work Demand

(Bloomberg) -- Okta Inc. gave a revenue forecast for the current quarter that topped analysts’ estimates, signaling steady demand for its identity software while corporate employees log on to work from home during the pandemic.

Sales will be as much as $222 million in the period ending in January, the San Francisco-based company said Wednesday in a statement. Analysts, on average, estimated $216.7 million, according the data compiled by Bloomberg. In the current fiscal year, Okta raised its projected revenue to as much as $823 million from a previous high of $803 million.

Chief Executive Officer Todd McKinnon has tried to maintain Okta’s swift revenue growth during the coronavirus pandemic, which has spurred greater use of its products. Okta’s security software helps workers who need to access corporate systems, students who must use remote-learning apps and consumers who are required to authenticate their identity online, but the company has strong competition from Microsoft Corp. Okta announced Wednesday that its Identity Cloud will become available on Amazon Web Services’ Marketplace, fulfilling McKinnon’s goal to partner more with major public cloud providers.

“In a far from normal environment, demand for our products and services continue to grow well,” McKinnon said in an interview. But the pandemic has somewhat constrained the company’s performance and uncertainty remains.

“The big story is how fast does it return to normal?” he added. “And we’re being cautious. We don’t want to get ahead of ourselves in terms of overthinking a recovery.”

Okta shares gained more than 11% to about $257 in the first hour of trading in New York. The stock has doubled this year.

The company expects a loss, excluding some items, of 1 to 2 cents a share in the fourth fiscal quarter. Analysts projected a loss of 2 cents.

Sales jumped 42% to $217.4 million in the fiscal third quarter, which ended Oct. 31. Analysts, on average, estimated $203.2 million. The company recorded an adjusted profit of 4 cents a share, beating an expected loss of 1 cent a share.

Separately, the software maker announced the retirement of Chief Financial Officer Bill Losch in early March after seven years in his role. He will stay on as an adviser through the end of fiscal 2022 and be replaced by Okta board member Michael Kourey, 61, who previously served as Vlocity Inc.’s CFO.

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