Okta's stock tumbles after earnings beat is offset by mixed guidance

By Ciara Linnane

Cloud company updates guidance to reflect a challenging macro environment and potential impacts related to a 2023 security incident

Okta Inc.'s stock tumbled 9% in after-hours trade Wednesday, after the secure-identity cloud company's fiscal second-quarter earnings beat estimates, but guidance was mixed.

San Francisco-based Otka (OKTA) had net income of $9 million, or 15 cents a share, for the quarter to July 31, after a loss of $111 million, or 68 cents a share, in the year-earlier period. Adjusted for one-time items, EPS came to 72 cents, ahead of the 61-cent FactSet consensus.

Revenue rose to $646 million from $556 million a year ago, ahead of the $635 million FactSet consensus.

Subscription revenue rose 17% to $632 million. RPO, subscription backlog, was $3.505 billion, up 16%.

The company tweaked its guidance to reflect a challenging macro environment and potential impacts related to an October 2023 security incident when its systems were breached.

The company expects third-quarter revenue to range from $648 million to $650 million, while FactSet is expecting $639 million. It expects adjusted EPS to range from 57 cents to 58 cents, while FactSet is expecting 59 cents.

For the full year, it expects revenue of $2.555 billion to $2.565 billion, while FactSet is expecting $2.542 billion. Adjusted EPS is now forecast at $2.58 to $2.63, while FactSet is expecting $2.41.

The stock has gained 6.6% in the year to date, while the S&P 500 SPX has gained 18%.

-Ciara Linnane

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08-28-24 2014ET

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