Okta (NASDAQ:OKTA), an identity management platform provider, has morphed into a Wall Street darling recently. Following a sudden sharp decline in its stock price when the coronavirus market crash first started, Okta shares have rebounded to new highs recently. Investors have turned to high-growth tech stocks like Okta in a bet on the acceleration of digital trends as consumers shelter at home and as many companies are enabling their employees to work virtually.
Investors weren't wrong about their optimism for Okta during these uncertain times. Revenue growth actually accelerated slightly during its fiscal first quarter -- a period that ended on April 30 -- as companies continued to choose Okta's Identity Cloud to help securely connect their workforces to needed technologies.
Here's a closer look at this growth stock's latest earnings report.
Okta's revenue in its first quarter of fiscal 2021 rose 46% year over year -- an acceleration from 45% revenue growth in the fourth quarter of fiscal 2020. Subscription revenue, which accounted for 95% of total revenue, increased 48% year over year. This is compared to a 46% jump in subscription revenue in the prior quarter.
Total revenue for the period was $182.9 million. Okta's non-GAAP (adjusted) net loss improved from $21.4 million in the year-ago period to $8.1 million in the first quarter of fiscal 2021. This translated to a non-GAAP loss per share of $0.07, narrower than a non-GAAP loss per share of $0.19 in the first quarter of fiscal 2020.
Okta's fiscal first-quarter results easily beat analysts' average forecast for the two metrics. The Street was modeling for a non-GAAP loss per share of $0.17 on revenue of $171.4 million.
Seizing an opportunity
The quarter reflected Okta's strong positioning amid an uncertain environment. Since the company's technology makes organizations' digital transformations easier, Okta's identity management solution was unsurprisingly in high demand.
"Okta is at the forefront of helping organizations adapt to the current environment where secure remote access has become a top priority across industries," said Okta CEO Todd McKinnon in the company's fiscal first-quarter earnings release. "Our strong first-quarter performance reflects our market leadership and ability to effectively and quickly shift to a fully remote workforce."
The company maintained its full-year outlook for fiscal 2021 revenue to grow 31% to 33% year over year. Further, management said it expected its fiscal second-quarter revenue to rise 32% to 33%.
Importantly, Okta is convinced that organizations will continue to lean into Okta Identity Management for remote access solutions.
"This shift is enabled through our core technology, which allows secure access to any technology from anywhere," McKinnon said. "When this crisis is over, we don't expect organizations to revert to their prior ways of working." Ultimately, the CEO believes Okta can not only "seize the opportunity" in front of it but also "emerge in an even stronger position."