What happened
Shares of Okta (OKTA -1.79%) were up as high as 15% in the early morning hours on Friday following the cloud identify management company's better-than-expected earnings results. However, on a day when the broader market was trading down on negative views about the economy, the stock gave back much of its early-morning gains. As of 12:30 p.m. ET on Friday, the stock was up 7.5%.
Revenue grew 65% year over year, while the company reported an adjusted net loss of $0.27 per share compared to $0.10 per share in the year-ago quarter. Investors were more pleased to see continued demand for cloud identity management services, especially following the security breach in March that exposed data from a small percentage of Okta's 15,000 customers.
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So what
"We delivered solid first quarter results highlighted by strength in new customer additions, dollar-based net retention rate, and the success we're having with large customers as they continue their journey to the cloud," CEO Todd McKinnon said.
The strong growth highlights the need for companies to shore up their security for employees, especially with more people working remotely following the pandemic. Despite the security breach, all the key metrics looked strong, with revenue performance obligations up 43% year over year and growth from large customers.
Now what
For the fiscal second quarter, the company expects revenue to decelerate to a growth rate of 36% year over year, with adjusted loss per share in the range of $0.32 to $0.31 per share. Management clearly continues to invest to gain market share at the expense of reporting short-term profits.
The stock is 71% off the all-time high of $294 in 2021, so the shares will hit a bottom at some point and move higher again. The company is still growing relatively fast with a massive $80 billion addressable market ahead.
