Delaware (State or other jurisdiction of incorporation or organization) | 001-38044 (Commission File Number) | 26-4175727 (I.R.S. Employer Identification Number) |
301 Brannan Street San Francisco, California 94107 | ||
(Address of principal executive offices and zip code) | ||
(888) 722-7871 | ||
(Registrant's telephone number, including area code) | ||
___________________________________ |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description | |
99.1 | Press release dated March 7, 2018, issued by Okta, Inc. |
Okta, Inc. | ||
By: | /s/ William E. Losch | |
Name: | William E. Losch | |
Title: | Chief Financial Officer | |
Exhibit Number | Description | |
99.1 |
• | Fiscal year 2018 total revenue grows 62% year-over-year; subscription revenue grows 67% year-over-year |
• | Q4 total revenue grows 59% year-over-year; subscription revenue grows 64% year-over-year |
• | Q4 operating cash flow margin improves 14 percentage points year-over-year; free cash flow margin improves 17 percentage points year-over-year |
• | Revenue: Total revenue was $77.8 million, an increase of 59% year-over-year. Subscription revenue was $72.0 million, an increase of 64% year-over-year. |
• | Operating Loss: GAAP operating loss was $25.3 million, or 32.6% of total revenue, compared to $18.0 million in the fourth quarter of fiscal 2017, or 36.8% of total revenue. Non-GAAP operating loss was $10.8 million, or 13.9% of total revenue, compared to $12.7 million in the fourth quarter of fiscal 2017, or 25.9% of total revenue. |
• | Net Loss: GAAP net loss was $24.7 million, compared to $18.2 million in the fourth quarter of fiscal 2017. GAAP net loss per share was $0.24, compared to $0.93 in the fourth quarter of fiscal 2017. Non-GAAP net loss was $10.1 million, compared to $12.9 million in the fourth quarter of fiscal 2017. Non-GAAP net loss per share was $0.10, compared to $0.66 in the fourth quarter of fiscal 2017. |
• | Cash Flow: Net cash provided by operations was $0.2 million or 0.2% of total revenue, compared to cash used in operations of $6.7 million or 13.7% of total revenue, in the fourth quarter of fiscal 2017. Free cash flow was negative $2.2 million, or 2.8% of total revenue, compared to negative $9.8 million, or 20.1% of total revenue, in the fourth quarter of fiscal 2017. |
• | Cash, cash equivalents and short-term investments were $229.7 million as of January 31, 2018. |
• | Revenue: Total revenue was $260.0 million, an increase of 62% year-over-year. Subscription revenue was $239.2 million, an increase of 67% year-over-year. |
• | Operating Loss: GAAP operating loss was $116.4 million, or 44.8% of total revenue, compared to $83.1 million for fiscal year 2017, or 51.8% of total revenue. Non-GAAP operating loss was $65.7 million, or 25.3% of total revenue, compared to $65.8 million for fiscal year 2017, or 41.0% of total revenue. |
• | Net Loss: GAAP net loss was $114.4 million, compared to $83.5 million for fiscal 2017. GAAP net loss per share was $1.38, compared to $4.39 for fiscal year 2017. Non-GAAP net loss was $63.7 million, compared to $66.2 million for fiscal year 2017. Non-GAAP net loss per share was $0.77, compared to $3.48 for fiscal year 2017. |
• | Cash Flow: Net cash used in operations was $25.2 million, compared to $42.1 million for fiscal year 2017. Free cash flow was negative $37.2 million, or 14.3% of total revenue, compared to negative $53.8 million, or 33.6% of total revenue, for fiscal year 2017. |
• | Completed its initial public offering in April 2017, receiving proceeds of $194 million, net of underwriting discounts and commissions and other offering expenses. |
• | Had record attendance at Oktane17, the company’s annual customer and partner conference. Registration for the conference grew more than 50% over the previous year. |
• | Was named a leader by Gartner in its inaugural Magic Quadrant for Access Management, Worldwide and was positioned highest in “ability to execute.” The new report evaluated 15 companies, looking at both on-premises and cloud-delivered solutions. |
• | Was named a leader by Forrester Research in The Forrester Wave™: Identity-As-A-Service, Q4 2017 report. The report evaluated seven Identity-as-a-Service (IDaaS) vendors across strategy, market presence and current offering, and Okta was positioned as a Leader, earning the highest ranking in both the “current offering” and “strategy” categories. |
• | In February 2018, completed a private offering of convertible senior notes due 2023, receiving proceeds of $334 million net of underwriter discounts and commissions and other offering costs. The Company used approximately $27.6 million of the net proceeds to pay the cost of bond hedge transactions offset by proceeds from warrant transactions. |
• | Total revenue of $78 to $79 million, representing a growth rate of 49 to 50% year-over-year |
• | Non-GAAP operating loss of $17.1 to $16.1 million |
• | Non-GAAP net loss per share of $0.16 to $0.15, assuming shares outstanding of approximately 103 million |
• | Total revenue of $343 to $348 million, representing a growth rate of 33 to 35% year-over-year |
• | Non-GAAP operating loss of $72.0 to $67.0 million |
• | Non-GAAP net loss per share of $0.67 to $0.62, assuming shares outstanding of approximately 106 million |
Three Months Ended January 31, | Year Ended January 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
Revenue | |||||||||||||||
Subscription | $ | 72,035 | $ | 44,011 | $ | 239,177 | $ | 143,136 | |||||||
Professional services and other | 5,715 | 4,809 | 20,813 | 17,190 | |||||||||||
Total revenue | 77,750 | 48,820 | 259,990 | 160,326 | |||||||||||
Cost of revenue | |||||||||||||||
Subscription (1) | 15,080 | 9,688 | 52,481 | 34,211 | |||||||||||
Professional services and other (1) | 7,407 | 5,999 | 28,274 | 21,738 | |||||||||||
Total cost of revenue | 22,487 | 15,687 | 80,755 | 55,949 | |||||||||||
Gross profit | 55,263 | 33,133 | 179,235 | 104,377 | |||||||||||
Operating expenses | |||||||||||||||
Research and development (1) | 19,349 | 10,532 | 70,821 | 38,659 | |||||||||||
Sales and marketing (1) | 46,590 | 31,478 | 172,973 | 118,742 | |||||||||||
General and administrative (1) | 14,670 | 9,090 | 51,803 | 30,099 | |||||||||||
Total operating expenses | 80,609 | 51,100 | 295,597 | 187,500 | |||||||||||
Operating loss | (25,346 | ) | (17,967 | ) | (116,362 | ) | (83,123 | ) | |||||||
Other income (expense), net | 810 | (99 | ) | 1,682 | 39 | ||||||||||
Loss before income taxes | (24,536 | ) | (18,066 | ) | (114,680 | ) | (83,084 | ) | |||||||
Provision for (benefit from) income taxes | 142 | 158 | (321 | ) | 425 | ||||||||||
Net loss | $ | (24,678 | ) | $ | (18,224 | ) | $ | (114,359 | ) | $ | (83,509 | ) | |||
Net loss per share, basic and diluted | $ | (0.24 | ) | $ | (0.93 | ) | $ | (1.38 | ) | $ | (4.39 | ) | |||
Weighted-average shares outstanding used to compute net loss per share | 100,969 | 19,596 | 83,004 | 19,038 |
Three Months Ended January 31, | Year Ended January 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cost of subscription revenue | $ | 1,437 | $ | 562 | $ | 4,600 | $ | 1,979 | |||||||
Cost of professional services and other revenue | 951 | 393 | 3,137 | 1,283 | |||||||||||
Research and development | 5,194 | 830 | 18,107 | 2,992 | |||||||||||
Sales and marketing | 3,952 | 1,644 | 13,242 | 6,029 | |||||||||||
General and administrative | 3,034 | 1,829 | 10,774 | 4,844 | |||||||||||
Total share-based compensation expense | $ | 14,568 | $ | 5,258 | $ | 49,860 | $ | 17,127 |
January 31, 2018 | January 31, 2017 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 127,949 | $ | 23,282 | |||
Short-term investments | 101,765 | 14,390 | |||||
Accounts receivable, net of allowances of $1,472 and $1,306 | 52,248 | 34,544 | |||||
Deferred commissions | 16,481 | 13,549 | |||||
Prepaid expenses and other current assets | 16,973 | 7,025 | |||||
Total current assets | 315,416 | 92,790 | |||||
Property and equipment, net | 12,540 | 11,026 | |||||
Deferred commissions, noncurrent | 10,971 | 10,050 | |||||
Intangible assets, net | 11,761 | 9,155 | |||||
Goodwill | 6,282 | 2,630 | |||||
Other assets | 10,427 | 4,984 | |||||
Total assets | $ | 367,397 | $ | 130,635 | |||
Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | |||||||
Current liabilities: | |||||||
Accounts payable (1) | $ | 9,566 | $ | 9,387 | |||
Accrued expenses and other current liabilities (1) | 6,187 | 8,363 | |||||
Accrued compensation (1) | 12,374 | 8,734 | |||||
Deferred revenue | 162,633 | 108,012 | |||||
Total current liabilities | 190,760 | 134,496 | |||||
Deferred revenue, noncurrent | 6,034 | 5,711 | |||||
Other liabilities, noncurrent (1) | 7,017 | 6,079 | |||||
Total liabilities | 203,811 | 146,286 | |||||
Commitments and contingencies | |||||||
Redeemable convertible preferred stock | — | 227,954 | |||||
Stockholders’ equity (deficit): | |||||||
Preferred stock | — | — | |||||
Class A common stock | 7 | — | |||||
Class B common stock | 3 | 2 | |||||
Additional paid-in capital | 565,653 | 44,469 | |||||
Accumulated other comprehensive loss | 391 | (167 | ) | ||||
Accumulated deficit | (402,468 | ) | (287,909 | ) | |||
Total stockholders’ equity (deficit) | 163,586 | (243,605 | ) | ||||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ | 367,397 | $ | 130,635 |
Year Ended January 31, | |||||||
2018 | 2017 | ||||||
(unaudited) | |||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (114,359 | ) | $ | (83,509 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation, amortization and accretion | 7,001 | 4,568 | |||||
Stock-based compensation | 49,860 | 17,127 | |||||
Amortization of deferred commissions | 17,584 | 13,734 | |||||
Deferred income taxes | (534 | ) | — | ||||
Non-cash charitable contributions | 708 | — | |||||
Write-off of intangible assets | 1,114 | — | |||||
Other | 719 | 704 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (18,321 | ) | (11,993 | ) | |||
Deferred commissions | (21,437 | ) | (19,391 | ) | |||
Prepaid expenses and other assets | (10,128 | ) | (3,422 | ) | |||
Accounts payable (1) | 3,505 | 1,529 | |||||
Accrued compensation | 3,582 | 1,967 | |||||
Accrued expenses and other liabilities (1) | 521 | 2,387 | |||||
Deferred revenue | 54,945 | 34,198 | |||||
Net cash used in operating activities | (25,240 | ) | (42,101 | ) | |||
Cash flows from investing activities: | |||||||
Capitalization of internal-use software costs | (5,431 | ) | (5,489 | ) | |||
Purchases of property and equipment and other | (6,550 | ) | (6,253 | ) | |||
Purchases of securities available for sale | (129,086 | ) | — | ||||
Proceeds from maturities and redemption of securities available for sale | 39,825 | 12,500 | |||||
Proceeds from sales of securities available for sale | 1,538 | 6,207 | |||||
Net cash provided by (used in) investing activities | (99,704 | ) | 6,965 | ||||
Cash flows from financing activities: | |||||||
Proceeds from initial public offering, net of underwriters' discounts and commissions | 199,948 | — | |||||
Payments of deferred offering costs | (4,038 | ) | (1,584 | ) | |||
Proceeds from stock option exercises, net of repurchases, and other | 33,646 | 2,437 | |||||
Proceeds from shares issued in connection with employee stock purchase plan | 8,369 | — | |||||
Other | (517 | ) | (396 | ) | |||
Net cash provided by financing activities | 237,408 | 457 | |||||
Effects of changes in foreign currency exchange rates on cash and cash equivalents | 487 | (120 | ) | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 112,951 | (34,799 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 23,282 | 58,081 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 136,233 | $ | 23,282 |
Year Ended January 31, 2018 | ||||||||||||||||||||
GAAP | Stock-based compensation | Charitable contributions | Amortization of acquired intangibles | Non-GAAP | ||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Cost of subscription services | $ | 52,481 | $ | (4,600 | ) | $ | — | $ | (4 | ) | $ | 47,877 | ||||||||
Cost of professional services | 28,274 | (3,137 | ) | — | — | 25,137 | ||||||||||||||
Gross profit | 179,235 | 7,737 | — | 4 | 186,976 | |||||||||||||||
Gross margin | 69 | % | 3 | % | — | — | 72 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 70,821 | (18,107 | ) | — | — | 52,714 | ||||||||||||||
Sales and marketing | 172,973 | (13,242 | ) | — | — | 159,731 | ||||||||||||||
General and administrative | 51,803 | (10,774 | ) | (754 | ) | — | 40,275 | |||||||||||||
Operating loss | (116,362 | ) | 49,860 | 754 | 4 | (65,744 | ) | |||||||||||||
Operating margin | (45 | )% | 20 | % | — | % | — | (25 | )% | |||||||||||
Net loss | $ | (114,359 | ) | $ | 49,860 | $ | 754 | $ | 4 | $ | (63,741 | ) | ||||||||
Net loss per share (1) | $ | (1.38 | ) | $ | 0.60 | $ | 0.01 | $ | — | $ | (0.77 | ) |
Year Ended January 31, 2017 | ||||||||||||||||||||
GAAP | Stock-based compensation | Charitable contributions | Amortization of acquired intangibles | Non-GAAP | ||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Cost of subscription services | $ | 34,211 | $ | (1,979 | ) | $ | — | $ | (190 | ) | $ | 32,042 | ||||||||
Cost of professional services | 21,738 | (1,283 | ) | — | — | 20,455 | ||||||||||||||
Gross profit | 104,377 | 3,262 | — | 190 | 107,829 | |||||||||||||||
Gross margin | 65 | % | 2 | % | — | — | 67 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 38,659 | (2,992 | ) | — | — | 35,667 | ||||||||||||||
Sales and marketing | 118,742 | (6,029 | ) | — | — | 112,713 | ||||||||||||||
General and administrative | 30,099 | (4,844 | ) | — | — | 25,255 | ||||||||||||||
Operating loss | (83,123 | ) | 17,127 | — | 190 | (65,806 | ) | |||||||||||||
Operating margin | (52 | )% | 11 | % | — | — | % | (41 | )% | |||||||||||
Net loss | $ | (83,509 | ) | $ | 17,127 | $ | — | $ | 190 | $ | (66,192 | ) | ||||||||
Net loss per share (1) | $ | (4.39 | ) | $ | 0.90 | $ | — | $ | 0.01 | $ | (3.48 | ) |
Three Months Ended January 31, 2018 | ||||||||||||||||
GAAP | Stock-based compensation | Amortization of acquired intangibles | Non-GAAP | |||||||||||||
Cost of revenue: | ||||||||||||||||
Cost of subscription services | $ | 15,080 | $ | (1,437 | ) | $ | — | $ | 13,643 | |||||||
Cost of professional services | 7,407 | (951 | ) | — | 6,456 | |||||||||||
Gross profit | 55,263 | 2,388 | — | 57,651 | ||||||||||||
Gross margin | 71 | % | 3 | % | — | 74 | % | |||||||||
Operating expenses: | ||||||||||||||||
Research and development | 19,349 | (5,194 | ) | — | 14,155 | |||||||||||
Sales and marketing | 46,590 | (3,952 | ) | — | 42,638 | |||||||||||
General and administrative | 14,670 | (3,034 | ) | — | 11,636 | |||||||||||
Operating loss | (25,346 | ) | 14,568 | — | (10,778 | ) | ||||||||||
Operating margin | (33 | )% | 19 | % | — | (14 | )% | |||||||||
Net loss | $ | (24,678 | ) | $ | 14,568 | $ | — | $ | (10,110 | ) | ||||||
Net loss per share (1) | $ | (0.24 | ) | $ | 0.14 | $ | — | $ | (0.10 | ) |
Three Months Ended January 31, 2017 | ||||||||||||||||
GAAP | Stock-based compensation | Amortization of acquired intangibles | Non-GAAP | |||||||||||||
Cost of revenue: | ||||||||||||||||
Cost of subscription services | $ | 9,688 | $ | (562 | ) | $ | (47 | ) | $ | 9,079 | ||||||
Cost of professional services | 5,999 | (393 | ) | — | 5,606 | |||||||||||
Gross profit | 33,133 | 955 | 47 | 34,135 | ||||||||||||
Gross margin | 68 | % | 2 | % | — | 70 | % | |||||||||
Operating expenses: | ||||||||||||||||
Research and development | 10,532 | (830 | ) | — | 9,702 | |||||||||||
Sales and marketing | 31,478 | (1,644 | ) | — | 29,834 | |||||||||||
General and administrative | 9,090 | (1,829 | ) | — | 7,261 | |||||||||||
Operating loss | (17,967 | ) | 5,258 | 47 | (12,662 | ) | ||||||||||
Operating margin | (37 | )% | 11 | % | — | % | (26 | )% | ||||||||
Net loss | $ | (18,224 | ) | $ | 5,258 | $ | 47 | $ | (12,919 | ) | ||||||
Net loss per share (1) | $ | (0.93 | ) | $ | 0.27 | $ | — | $ | (0.66 | ) |
Free Cash Flow | |||||||||||||||
Three Months Ended January 31, | Year Ended January 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net cash provided by (used in) operating activities | $ | 155 | $ | (6,702 | ) | $ | (25,240 | ) | $ | (42,101 | ) | ||||
Less: | |||||||||||||||
Purchases of property and equipment | (980 | ) | (1,606 | ) | (6,550 | ) | (6,253 | ) | |||||||
Capitalized internal-use software costs | (1,359 | ) | (1,497 | ) | (5,431 | ) | (5,489 | ) | |||||||
Free Cash Flow | $ | (2,184 | ) | $ | (9,805 | ) | $ | (37,221 | ) | $ | (53,843 | ) | |||
Net cash provided by (used in) investing activities | $ | (18,241 | ) | $ | 4,397 | $ | (99,704 | ) | $ | 6,965 | |||||
Net cash provided by (used in) financing activities | 16,041 | (5 | ) | 237,408 | 457 | ||||||||||
Operating Cash Flow Margin | — | % | (14 | )% | (10 | )% | (26 | )% | |||||||
Free Cash Flow Margin | (3 | )% | (20 | )% | (14 | )% | (34 | )% |
Calculated Billings | |||||||||||||||
Three Months Ended January 31, | Year Ended January 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total revenue | $ | 77,750 | $ | 48,820 | $ | 259,990 | $ | 160,326 | |||||||
Add: | |||||||||||||||
Deferred revenue, current (end of period) | 162,633 | 108,012 | 162,633 | 108,012 | |||||||||||
Less: | |||||||||||||||
Deferred revenue, current (beginning of period) | (138,460 | ) | (93,103 | ) | (108,012 | ) | (67,818 | ) | |||||||
Current Calculated Billings | 101,923 | 63,729 | 314,611 | 200,520 | |||||||||||
Add: | |||||||||||||||
Deferred revenue, noncurrent (end of period)(1) | 6,034 | 5,711 | 6,034 | 5,711 | |||||||||||
Less: | |||||||||||||||
Deferred revenue, noncurrent (beginning of period) | (3,188 | ) | (6,715 | ) | (5,711 | ) | (11,707 | ) | |||||||
Calculated Billings | $ | 104,769 | $ | 62,725 | $ | 314,934 | $ | 194,524 | |||||||