Though earnings season is just about over, there are still some laggards reporting their quarterly results. One of the most interesting stocks to watch this week will be Okta (NASDAQ:OKTA), a technology company that provides identity management platforms for enterprises, enabling their employees to have single sign-on experiences across apps.

The growth stock is likely on many investors' radars for a number of reasons. First, some investors are likely expecting that the company is benefiting from work-from-home trends. Okta's identity management solutions are likely becoming mission-critical for a growing number of organizations during this time as more employees work from home. Second, shares have been on a tear, setting the bar high for the company's performance going into the earnings release.

Here's a look at some of the key metrics investors will want to watch when Okta reports earnings on Thursday. 

Someone securely logging into an application on a laptop

Image source: Getty Images.

Revenue growth

As organizations of all types continue to adopt a range of cloud-based solutions and aim to transform digitally, Okta is well-positioned to capitalize on these secular tailwinds. Its top line has soared recently. In fiscal Q4, for instance, revenue jumped 45% year over year.

Even more, management notably said it expected revenue to grow 37% to 38% year over year during fiscal Q1. While this would represent a deceleration compared to its fiscal fourth quarter, the company's guidance has historically proven to be very conservative. For instance, going into fiscal Q4, management forecast a 34% to 35% jump in revenue yet its top line actually grew 45%.

Free cash flow

Another key metric to check in on will be Okta's free cash flow, or its cash from operations less capital expenditures.

Free cash flow has importantly been growing as a percentage of revenue. In fiscal Q4, for instance, free cash flow was $18.1 million, or 10.8% of revenue. This compared to $4.8 million, or 4.1% of free cash flow in the year-ago quarter. Can Okta keep up this impressive trend?

The company's ability to balance rapid growth, investment in growth opportunities, and free cash flow margin expansion all at the same time is one of the things investors love about the stock.


Finally, investors will likely be looking to see if Okta updates its view for its full-year revenue. The company previously said it expected fiscal 2021 revenue to be between $770 million to $780 million, representing 31% to 33% year-over-year growth. Analysts seem to think the current circumstances could provide a headwind to growth, as the consensus forecast for the full year currently calls for fiscal 2021 revenue of $771 million -- a figure at the low end of this range. 

It's unclear yet whether revenue will be helped or hindered due to the unique circumstances surrounding COVID-19. But my hunch is that analysts are being a bit conservative with their outlook for Okta.

Okta reports its fiscal first-quarter results after market close on Thursday, May 28.

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