Okta(OKTA) - 2024 Q3 - Quarterly Report

Revenue and Growth - Total revenue for the three months ended October 31, 2023, was $584 million, a 21.4$481 million in the same period of 2022[16] - Subscription revenue for the three months ended October 31, 2023, was $569 million, up from$466 million in the same period of 2022, representing a 21.9% growth[16] - Subscription revenue recognized during the three months ended October 31, 2023, was $519 million, up from$418 million in the same period of 2022[51] Profitability and Losses - Gross profit for the three months ended October 31, 2023, was $439 million, compared to$343 million in the same period of 2022, reflecting a gross margin increase[16] - Operating loss for the three months ended October 31, 2023, was $(111) million, an improvement from$(207) million in the same period of 2022[16] - Net loss for the three months ended October 31, 2023, was $(81) million, compared to$(209) million in the same period of 2022, indicating a reduction in losses[16] - For the nine months ended October 31, 2023, the net loss was $311 million, an improvement from a net loss of$662 million in the same period of 2022[26] - For the three months ended October 31, 2023, the company reported a net loss of $77 million, resulting in a basic and diluted net loss per share of$0.49[80] - For the nine months ended October 31, 2023, the company recorded a net loss of $297 million, with a basic and diluted net loss per share of$1.91[80] Cash and Investments - Cash and cash equivalents increased to $400 million as of October 31, 2023, from$264 million as of January 31, 2023[13] - The company reported a total cash, cash equivalents, and restricted cash of $408 million as of October 31, 2023, up from$259 million at the end of the previous period[26] - As of October 31, 2023, the company had cash, cash equivalents, and short-term investments totaling $2,130 million, with$2,017 million invested in U.S. treasury securities and other safe instruments[184] - The company’s total short-term investments amounted to $1,730 million as of October 31, 2023, with an amortized cost of$1,735 million[43] - The company’s cash equivalents included $287 million in money market funds as of October 31, 2023[43] Assets and Equity - Total assets decreased to$8,740 million as of October 31, 2023, from $9,307 million as of January 31, 2023[13] - Total stockholders' equity increased to$5,730 million as of October 31, 2023, compared to $5,466 million as of January 31, 2023[13] Expenses - Research and development expenses for the three months ended October 31, 2023, were$165 million, up from $148 million in the same period of 2022[16] - Stock-based compensation expense for the three months ended October 31, 2023, was$172 million, consistent with the same period in 2022[73] - The company incurred $803 million in payments for repurchases of convertible senior notes during the financing activities[26] - The company recognized$25 million in non-cash lease impairment charges during the nine months ended October 31, 2023, related to its real estate optimization plan[38] - The company’s cash paid for operating leases during the period was $34 million, compared to$30 million in the previous year[26] Employee and Restructuring - The company’s restructuring plan involved a reduction of approximately 300 full-time employees to improve profitability[39] - The company recognized an additional $4 million in severance and termination benefit costs related to workforce reduction in the three and nine months ended October 31, 2023[40] Securities and Debt - The company issued the 2025 Notes with a principal amount of$1,060 million, of which $552 million remains outstanding as of October 31, 2023[187] - The company also issued the 2026 Notes with a principal amount of$1,150 million, with $758 million remaining outstanding as of October 31, 2023[188] - The 2025 and 2026 Notes have fixed annual interest rates of 0.125$74 million[75] - The effective tax rate for the three and nine months ended October 31, 2022, was approximately (1.8)% and (1.5)%, respectively, primarily due to a full valuation allowance against U.S. deferred tax assets[79] Performance Obligations - Total remaining non-cancelable performance obligations under subscription contracts were approximately $3,073 million as of October 31, 2023, with an expected revenue recognition of$1,826 million, or 59%, over the next 12 months[55] Other Financial Metrics - The company reported a weighted-average share count of 164,381 thousand for the three months ended October 31, 2023[16] - The company had 22,833 thousand potentially dilutive securities that were not included in the diluted per share calculations due to being anti-dilutive as of October 31, 2023[80] - The company had 98 short-term investments in unrealized loss positions as of October 31, 2023, down from 159 as of January 31, 2023[46] - Unrecognized stock-based compensation expense related to outstanding equity awards was $1,139 million as of October 31, 2023[73] - As of October 31, 2023, the estimated fair value of U.S. treasury securities was$1,517 million with unrealized losses of $5 million, while corporate debt securities had an estimated fair value of$32 million with no unrealized losses[46] - The company has not entered into any hedging arrangements regarding foreign currency risk, and a hypothetical 10% change in foreign currency exchange rates would not have had a material impact on its financial statements[183] - The company’s operating expenses are primarily denominated in local currencies, which may be adversely affected by fluctuations in foreign currency exchange rates[183]