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Okta (OKTA) co-founder and CEO Todd McKinnon — a longtime competitive CrossFit athlete — said his latest earnings report out Monday definitely beats tossing wall balls.
He makes a good point.
"This is a blowout quarter," McKinnon told me in a Yahoo Finance Opening Bid podcast exclusive (see video above). "It's reflective of big deals in the quarter," McKinnon said, pointing to a 25% surge in subscription backlog to more than $4 billion.
New products represented 20% of total subscription bookings, its highest level ever, per McKinnon.
Okta beat analyst estimates on sales, earnings, and initial 2025 profit guidance.
The company appears to be benefiting from a step up in corporate spending for security protection. It's logical given the fast pace of AI development, which could expose businesses to new cybersecurity risks if not careful.
The solid spending backdrop has powered shares of Okta up 14% year to date. Shares of competitor Palo Alto Networks (PANW) are 5% on the year.
SailPoint (SAIL) debuted at the Nasdaq a few weeks ago and fetched a premium valuation in its return to public markets.
"Identity has increased in importance in a work from anywhere/zero trust world, and we believe Okta could be one of the largest beneficiaries," Jefferies analyst Joseph Gallo said in a client note.
(OKTA)
Earnings analysis: Beats across the board
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Net sales: Up 13% year over year to $682 million, vs. estimates for $669.3 million
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Operating income: Up 30.2% year over year to $168 million, vs. estimates for $155.2 million
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Diluted EPS: Up 24% year over year to $0.78, vs. estimates for $0.74
What else caught our attention: The bullish details
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Subscription backlog rose 25% from the prior year to $4.125 billion.
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Okta generated $750 million in operating cash flow last year, up from $512 million a year ago.
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Okta's cash balance of $2.5 billion is almost as much as its total liabilities of $3 billion.
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Full-year EPS is seen in a range of $3.15 to $3.20, well above estimates for $2.92 a share.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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