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Tech Stocks News: Zoom and Okta Report Earnings

By Daniel Sparks - Mar 7, 2020 at 3:44PM

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The two tech stocks both posted better-than-expected financial results.

The coronavirus continued to be the main headline across the world this week. Fears about how the virus will affect businesses led to more market volatility as stocks moved up and down viciously.

Looking beyond this broader-market news, however, was some interesting financial updates from two fast-growing technology companies: videoconferencing specialist Zoom Video Communications (ZM 2.78%) and identity-management company Okta (OKTA 6.17%) both reported their most recent quarterly results.

The word, technology, on top of computer codes

Image source: Getty Images.

Zoom Video Communications

Shares of Zoom Video Communications soared on Thursday, following the company's fiscal fourth-quarter update. Zoom reported top- and bottom-line results that crushed analysts' estimates.

Revenue during the period soared 78% year over year to $188.3 million, bringing total fiscal 2020 revenue to $622.7 million -- up 88% year over year. Non-GAAP (adjusted) earnings per share was $0.15, up from $0.04 in the year-ago period.

Cash flow was also a strong point for Zoom. Cash from operating activities rose from $16 million in the year-ago period to $36.6 million. Over the same time frame, free cash flow skyrocketed from $5.7 million to $26.6 million.

Zoom's better-than-expected revenue and profit growth was driven by a 62% year-over-year jump in customers with more than 10 employees and an 86% increase in customers contributing $100,000 or more in trailing-12-month sales to Zoom's top line.

Okta

Identity-management technology company Okta also reported better-than-expected fiscal fourth-quarter results. Revenue jumped 45% year over year, in line with the strong 45% year-over-year growth rate Okta saw in fiscal Q3. This put total revenue for the period at $167.3 million. Okta's top-line growth was primarily fueled by a 46% year-over-year increase in subscription revenue. Subscription revenue during fiscal Q4 was $158.5 million.

Okta's cash from operations was $24.8 million, or $14.8% of revenue. This compared to $10.1. million, or 8.8% of revenue, in the year-ago period. Free cash flow jumped from $4.8 million in the year-ago quarter to $18.1 million.

"We continue to post industry leading growth for subscription revenue, remaining performance obligations, and billings, while achieving positive operating and free cash flows for the year," said Okta CEO Todd McKinnon in the company's fourth-quarter earnings release. "Our unparalleled cloud-based platform and continued execution is allowing us to achieve this exceptional growth at scale."

The company is optimistic about the growth opportunity ahead, providing guidance for revenue to increase 32% to 33% year over year in fiscal 2021.

"We're still in the early days of a massive addressable market to modernize identity for the workforce and customers and we are in the leading position to capitalize on the opportunity for many years to come," said McKinnon.

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Stocks Mentioned

Okta Stock Quote
Okta
OKTA
$95.98 (6.17%) $5.58
Zoom Video Communications Stock Quote
Zoom Video Communications
ZM
$110.97 (2.78%) $3.00

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