Identity management platform provider Okta (NASDAQ:OKTA) has been on a tear this year. Year to date, shares of Okta are up 57%, crushing the S&P 500's 1% decline during this same period. The company has been perfectly positioned to benefit from the broad secular tailwind of companies in all industries going through digital transformations and the more near-term trend, fueled by COVID-19, of a growing number of employees working from home.

Here's a closer look at what's behind this growth stock's momentum.

A person securely logging into an application on a laptop.

Image source: Getty Images.

1. Strong growth in $100,000-plus customers

To help put Okta's strong underlying business growth into perspective, consider that the tech company's fiscal first-quarter revenue jumped 46% year over year. While a number of factors helped drive this growth, perhaps one of the most important catalysts was the company's continued momentum, with customers generating $100,000 or more of annual revenue.

"One of the areas that we've been investing in is growing our base of large enterprise customers," explained Okta CEO Todd McKinnon in the company's fiscal first-quarter earnings call. "We're seeing those investments pay off, and it's reflected in the addition of 113 customers with an annual contract value greater than $100,000 in the first quarter."

Impressively, over half of these customers were brand-new customers. Okta now has almost 1,600 customers with an annual contract value of $100,000.

2. The value of large customers is soaring

What's equally as notable as Okta's surging growth in $100,000-plus customers is that these large customers are getting bigger and bigger. "[T]he annual contract value of this cohort increased nearly 50% [year over year]," explained McKinnon. He added that these large customers "come from a wide range of industries."

3. Record free cash flow

Also worth noting is the company's strong cash position, bolstered by record free cash flow (cash from operations less capital expenditures) in Okta's most recent quarter. The company generated $30 million of free cash flow during the period. This free cash flow was equal to 16% of sales for the quarter.

"The strong free cash flow was driven by strong collections from business booked in the fourth quarter, which is typically our largest quarter of activity, as well as the lower cash outlays due to a reduction in expenses related to the pandemic," explained Okta CFO Bill Losch during the fiscal first-quarter earnings call.

This free cash flow helped the company end the period with $1.45 billion of cash, cash equivalents, and short-term investments on its balance sheet.

4. An optimistic outlook

Investors can look forward to more strong growth ahead. Management guided for full-year fiscal 2021 revenue to be between $770 million, representing 31% to 33% year-over-year growth. Further, Okta said it anticipates being free cash flow positive for the full fiscal year.

"Okta has developed a strong foundation and market leadership position, and we plan to further capitalize on the tremendous market opportunity in front of us," said Losch during the earnings call.