What happened
Shares of Okta (OKTA 0.39%) were moving higher today along with a number of high-growth tech stocks as interest rates fell in response to a higher-than-expected reading on the September consumer price index. Additionally, Okta held its annual Showcase event today, which generally features new product releases and other updates on the business.
As of 1:44 p.m. EDT, the stock was up 4.6%.
Okta CEO Todd McKinnon giving a fist bump to chief operating officer Frederic Kerrest. Image source: Okta.
So what
At the same time, the yield on the 10-year Treasury fell 2.5% to 1.54%, showing that investors were betting that the Federal Reserve would take a conservative approach to raising rates as inflation remains higher than expected, above 5%. The central bank seems to want the economy to make a full recovery before it tackles inflation. In general, lower interest rates are good for growth stocks, as it encourages money to move out of the bond market and into stocks, and makes long-dated earnings, or those in the distant future, more valuable because of the discounted cash flow model.
Separately, Okta held its annual Showcase event today, saying it would maintain two separate customer identity access management (CIAM) units following its acquisition of Auth0, which closed in May. It also released new capabilities for CIAM, including device authorization grant, branding, and custom administrator roles, helping companies allow customers to more seamlessly and securely register and log in to their accounts.
The company also announced an improved version of Okta Workflows and said it is making it a stand-alone offering outside of its Lifecycle Management product.
Now what
Following its closing of the Auth0 acquisition, Okta has been focused on integrating the two companies and leveraging Auth0's assets, which include an almost entirely distinct customer base and its strength in international markets. After a quarter when the combined business's revenue grew 57%, or 38% for stand-alone Okta, it's clear that the combined company has significant momentum. With a new round of product updates and an addressable market estimated at $80 billion ahead of it, the company looks set to continue leading the shift to cloud-based identity management software.
