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 June 6, 2018, issued by Okta, Inc. |
Okta, Inc. | ||
By: | /s/ William E. Losch | |
Name: | William E. Losch | |
Title: | Chief Financial Officer | |
Exhibit Number | Description | |
• | Q1 revenue totaled $83.6 million, growing 60% year-over-year |
• | Positive Q1 operating cash flow |
• | Q1 operating cash flow margin improved 23 percentage points year-over-year; free cash flow margin improved 24 percentage points year-over-year |
• | Revenue: Total revenue was $83.6 million, an increase of 60% year-over-year. Subscription revenue was $76.8 million, an increase of 59% year-over-year. |
• | Operating Loss: GAAP operating loss was $25.0 million, or 29.9% of total revenue, compared to $27.4 million in the first quarter of fiscal 2018, or 52.4% of total revenue. Non-GAAP operating loss was $10.8 million, or 13.0% of total revenue, compared to $18.5 million in the first quarter of fiscal 2018, or 35.4% of total revenue. |
• | Net Loss: GAAP net loss was $26.0 million, compared to $27.7 million in the first quarter of fiscal 2018. GAAP net loss per share was $0.25, compared to $0.70 in the first quarter of fiscal 2018. Non-GAAP net loss was $9.4 million, compared to $18.8 million in the first quarter of fiscal 2018. Non-GAAP net loss per share was $0.09, compared to $0.47 in the first quarter of fiscal 2018. |
• | Cash Flow: Net cash provided by operations was $4.0 million, or 4.8% of total revenue, compared to cash used in operations of $9.7 million, or 18.5% of total revenue, in the first quarter of fiscal 2018. Free cash flow was negative $1.6 million, or 1.9% of total revenue, compared to negative $13.3 million, or 25.5% of total revenue, in the first quarter of fiscal 2018. |
• | Cash, cash equivalents and short-term investments were $547.0 million as of April 30, 2018. |
• | Total revenue of $84 to $85 million, representing a growth rate of 39 to 41% year-over-year |
• | Non-GAAP operating loss of $23 to $22 million |
• | Non-GAAP net loss per share of $0.21 to $0.20, assuming shares outstanding of approximately 106 million |
• | Total revenue of $353 to $357 million, representing a growth rate of 38 to 39% year-over-year |
• | Non-GAAP operating loss of $67 to $62 million |
• | Non-GAAP net loss per share of $0.58 to $0.54, assuming shares outstanding of approximately 107 million |
Three Months Ended April 30, | |||||||
2018 | 2017 | ||||||
As Adjusted (1) | |||||||
Revenue: | |||||||
Subscription | $ | 76,841 | $ | 48,279 | |||
Professional services and other | 6,780 | 4,046 | |||||
Total revenue | 83,621 | 52,325 | |||||
Cost of revenue: | |||||||
Subscription (2) | 16,332 | 11,157 | |||||
Professional services and other (2) | 7,775 | 6,306 | |||||
Total cost of revenue | 24,107 | 17,463 | |||||
Gross profit | 59,514 | 34,862 | |||||
Operating expenses: | |||||||
Research and development (2) | 19,929 | 15,359 | |||||
Sales and marketing (2) | 49,493 | 35,303 | |||||
General and administrative (2) | 15,070 | 11,639 | |||||
Total operating expenses | 84,492 | 62,301 | |||||
Operating loss | (24,978 | ) | (27,439 | ) | |||
Other expense, net | (1,215 | ) | (19 | ) | |||
Loss before provision for (benefit from) income taxes | (26,193 | ) | (27,458 | ) | |||
Provision for (benefit from) income taxes | (231 | ) | 248 | ||||
Net loss | $ | (25,962 | ) | $ | (27,706 | ) | |
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.25 | ) | $ | (0.70 | ) | |
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted | 104,203 | 39,783 | |||||
(1) | The condensed consolidated statement of operations for the prior period presented above has been adjusted to reflect the adoption of ASC 606. |
(2) | Amounts include share-based compensation expense as follows (in thousands): |
Three Months Ended April 30, | |||||||
2018 | 2017 | ||||||
Cost of subscription revenue | $ | 1,529 | $ | 686 | |||
Cost of professional services and other revenue | 889 | 469 | |||||
Research and development | 4,213 | 3,301 | |||||
Sales and marketing | 4,153 | 2,375 | |||||
General and administrative | 3,351 | 2,075 | |||||
Total share-based compensation expense | $ | 14,135 | $ | 8,906 |
April 30, 2018 | January 31, 2018 | ||||||
As Adjusted (1) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 211,756 | $ | 127,949 | |||
Short-term investments | 335,285 | 101,765 | |||||
Accounts receivable, net of allowances of $1,569 and $1,472 | 50,368 | 52,248 | |||||
Deferred commissions | 18,551 | 17,755 | |||||
Prepaid expenses and other current assets | 20,203 | 17,781 | |||||
Total current assets | 636,163 | 317,498 | |||||
Property and equipment, net | 19,176 | 12,540 | |||||
Deferred commissions, noncurrent | 41,077 | 40,755 | |||||
Intangible assets, net | 11,863 | 11,761 | |||||
Goodwill | 6,282 | 6,282 | |||||
Other assets | 12,343 | 10,427 | |||||
Total assets | $ | 726,904 | $ | 399,263 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 11,830 | $ | 9,566 | |||
Accrued expenses and other current liabilities | 4,896 | 6,187 | |||||
Accrued compensation | 12,652 | 12,374 | |||||
Deferred revenue | 173,548 | 159,816 | |||||
Total current liabilities | 202,926 | 187,943 | |||||
Convertible senior notes, net | 259,920 | — | |||||
Deferred revenue, noncurrent | 4,346 | 4,963 | |||||
Other liabilities, noncurrent | 10,095 | 7,017 | |||||
Total liabilities | 477,287 | 199,923 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock | — | — | |||||
Class A common stock | 9 | 7 | |||||
Class B common stock | 2 | 3 | |||||
Additional paid-in capital | 642,460 | 565,653 | |||||
Accumulated other comprehensive income (loss) | (178 | ) | 391 | ||||
Accumulated deficit | (392,676 | ) | (366,714 | ) | |||
Total stockholders’ equity | 249,617 | 199,340 | |||||
Total liabilities and stockholders’ equity | $ | 726,904 | $ | 399,263 |
(1) | The condensed consolidated balance sheet for the prior period has been adjusted to reflect the adoption of ASC 606. |
Three Months Ended April 30, | |||||||
2018 | 2017 | ||||||
As Adjusted (1) | |||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (25,962 | ) | $ | (27,706 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Stock-based compensation | 14,135 | 8,906 | |||||
Depreciation, amortization and accretion | 2,069 | 1,575 | |||||
Amortization of debt discount and issuance costs | 2,571 | — | |||||
Amortization of deferred commissions | 4,572 | 2,162 | |||||
Deferred income taxes | (348 | ) | — | ||||
Other | 161 | 270 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 1,719 | 2,243 | |||||
Deferred commissions | (5,693 | ) | (3,033 | ) | |||
Prepaid expenses and other assets | (3,983 | ) | (3,756 | ) | |||
Accounts payable | 2,339 | 3,236 | |||||
Accrued compensation | 329 | (2,121 | ) | ||||
Accrued expenses and other liabilities | (1,051 | ) | 323 | ||||
Deferred revenue | 13,114 | 8,215 | |||||
Net cash provided by (used in) operating activities | 3,972 | (9,686 | ) | ||||
Cash flows from investing activities: | |||||||
Capitalization of internal-use software costs | (1,051 | ) | (1,208 | ) | |||
Purchases of property and equipment | (4,477 | ) | (2,448 | ) | |||
Purchases of securities available for sale | (252,914 | ) | — | ||||
Proceeds from maturities of securities available for sale | 19,500 | 10,335 | |||||
Proceeds from sales of securities available for sale | — | 1,538 | |||||
Net cash provided by (used in) investing activities | (238,942 | ) | 8,217 | ||||
Cash flows from financing activities: | |||||||
Proceeds from initial public offering, net of underwriters' discounts and commissions | — | 199,997 | |||||
Proceeds from issuance of convertible senior notes, net of issuance costs | 335,055 | — | |||||
Purchase of convertible senior notes hedge | (80,040 | ) | — | ||||
Proceeds from issuance of warrants related to convertible notes | 52,440 | — | |||||
Payments of deferred offering costs | — | (2,246 | ) | ||||
Proceeds from stock option exercises, net of repurchases | 12,196 | 2,564 | |||||
Other | (206 | ) | (207 | ) | |||
Net cash provided by financing activities | 319,445 | 200,108 | |||||
Effects of changes in foreign currency exchange rates on cash and cash equivalents | (387 | ) | 68 | ||||
Net increase in cash, cash equivalents and restricted cash | 84,088 | 198,707 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 136,233 | 23,282 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 220,321 | $ | 221,989 | |||
(1) | The condensed consolidated statement of cash flows for the prior period has been adjusted to reflect the adoption of ASC 606. |
Three Months Ended April 30, 2018 | ||||||||||||||||
GAAP | Stock-based compensation | Amortization of debt discount | Non-GAAP | |||||||||||||
Cost of revenue: | ||||||||||||||||
Cost of subscription services | $ | 16,332 | $ | (1,529 | ) | $ | — | $ | 14,803 | |||||||
Cost of professional services | 7,775 | (889 | ) | — | 6,886 | |||||||||||
Gross profit | 59,514 | 2,418 | — | 61,932 | ||||||||||||
Gross margin | 71 | % | 3 | % | — | % | 74 | % | ||||||||
Operating expenses: | ||||||||||||||||
Research and development | 19,929 | (4,213 | ) | — | 15,716 | |||||||||||
Sales and marketing | 49,493 | (4,153 | ) | — | 45,340 | |||||||||||
General and administrative | 15,070 | (3,351 | ) | — | 11,719 | |||||||||||
Operating loss | (24,978 | ) | 14,135 | — | (10,843 | ) | ||||||||||
Operating margin | (30 | )% | 17 | % | — | % | (13 | )% | ||||||||
Other expense, net | (1,215 | ) | — | 2,381 | 1,166 | |||||||||||
Net loss | $ | (25,962 | ) | $ | 14,135 | $ | 2,381 | $ | (9,446 | ) | ||||||
Net loss per share (1) | $ | (0.25 | ) | $ | 0.14 | $ | 0.02 | $ | (0.09 | ) |
(1) | GAAP and Non-GAAP net loss per common share calculated based upon 104,203 basic and diluted weighted-average shares of common stock. |
Three Months Ended April 30, 2017 | ||||||||||||||||
GAAP (2) | Stock-based compensation | Amortization of acquired intangibles | Non-GAAP (2) | |||||||||||||
Cost of revenue: | ||||||||||||||||
Cost of subscription services | $ | 11,157 | $ | (686 | ) | $ | (4 | ) | $ | 10,467 | ||||||
Cost of professional services | 6,306 | (469 | ) | — | 5,837 | |||||||||||
Gross profit | 34,862 | 1,155 | 4 | 36,021 | ||||||||||||
Gross margin | 67 | % | 2 | % | — | % | 69 | % | ||||||||
Operating expenses: | ||||||||||||||||
Research and development | 15,359 | (3,301 | ) | — | 12,058 | |||||||||||
Sales and marketing | 35,303 | (2,375 | ) | — | 32,928 | |||||||||||
General and administrative | 11,639 | (2,075 | ) | — | 9,564 | |||||||||||
Operating loss | (27,439 | ) | 8,906 | 4 | (18,529 | ) | ||||||||||
Operating margin | (52 | )% | 17 | % | — | % | (35 | )% | ||||||||
Other expense, net | (19 | ) | — | — | (19 | ) | ||||||||||
Net loss | $ | (27,706 | ) | $ | 8,906 | $ | 4 | $ | (18,796 | ) | ||||||
Net loss per share (1) | $ | (0.70 | ) | $ | 0.23 | $ | — | $ | (0.47 | ) |
(1) | GAAP and Non-GAAP net loss per common share calculated based upon 39,783 basic and diluted weighted-average shares of common stock. |
(2) | Financial information for prior period presented above has been adjusted to reflect the adoption of ASC 606. |
Free Cash Flow | |||||||
Three Months Ended April 30, | |||||||
2018 | 2017 | ||||||
Net cash provided by (used in) operating activities | $ | 3,972 | $ | (9,686 | ) | ||
Less: | |||||||
Purchases of property and equipment | (4,477 | ) | (2,448 | ) | |||
Capitalization of internal-use software costs | (1,051 | ) | (1,208 | ) | |||
Free Cash Flow | $ | (1,556 | ) | $ | (13,342 | ) | |
Net cash provided by (used in) investing activities | (238,942 | ) | 8,217 | ||||
Net cash provided by financing activities | 319,445 | 200,108 | |||||
Free Cash Flow Margin | (2)% | (26)% | |||||
Calculated Billings | |||||||
Three Months Ended April 30, | |||||||
2018 | 2017 (1) | ||||||
Total revenue | $ | 83,621 | $ | 52,325 | |||
Add: | |||||||
Unbilled receivables, current (beginning of period) | 809 | 1,537 | |||||
Deferred revenue, current (end of period) | 173,548 | 111,759 | |||||
Less: | |||||||
Unbilled receivables, current (end of period) | (1,619 | ) | (2,151 | ) | |||
Deferred revenue, current (beginning of period) | (159,816 | ) | (102,966 | ) | |||
Current calculated billings | 96,543 | 60,504 | |||||
Add: | |||||||
Deferred revenue, noncurrent (end of period) | 4,346 | 3,578 | |||||
Less: | |||||||
Deferred revenue, noncurrent (beginning of period) | (4,963 | ) | (4,154 | ) | |||
Calculated billings | $ | 95,926 | $ | 59,928 | |||
(1) | Current calculated billings and calculated billings for the three months ended April 30, 2017 presented above have been modified to conform with the adoption of ASC 606, which now includes unbilled receivables. |