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Investing.com --Okta Inc surpassed Wall Street estimates for second-quarter earnings and revenue on Tuesday and issued an upbeat full-year forecast.
Shares of the identity management company were up more than 5% in premarket trading Wednesday.
The posted earnings of $0.91 per share, above analysts’ expectations of $0.84.
Revenue rose to $728 million, topping estimates of $711.2 million.
The current remaining performance obligations (cRPO) rose 13.5% year-over-year to $2.265 billion, topping the midpoint of guidance by 2.8%. cRPO bookings accelerated to 11% year-over-year growth vs 9% in the first quarter.
Okta expects earnings of $0.74 to $0.75 per share, in line with consensus, for the third quarter. For the same period, it expects revenue between $728 million and $730 million, above estimates of $723 million.
The company guided Q3 cRPO to $2.263 billion, up 10% year-on-year at the midpoint.
According to Jefferies analysts, this "implies a $2.5M qoq decline vs the $67M" reported in the same quarter last year.
"F3Q cRPO guide implies bookings growth was down 1% yoy vs up 11% in F2Q (on a 4 pt tougher comp), seemingly prudent," the analyst said.
"OKTA remains a low-double-digit grower with improving profitability, which feels fairly priced at 19x EV/’26 FCF until key metrics accelerate," they wrote.
Okta indicated it will take a less conservative approach to guidance going forward.
For the full year, the company forecast earnings of $3.33 to $3.38 per share.
It lifted its revenue guidance to $2.88 billion to $2.89 billion, up from the previous range of $2.85-2.86 billion, compared with analyst estimates of $2.86 billion.
“Okta’s unified identity platform is winning customers ranging from the world’s largest global organizations to massive government agencies,” said Todd McKinnon CEO.
“Our solid Q2 results are highlighted by continued strength in new product adoption, the public sector, Auth0, and cash flow. In the age of AI."
Guggenheim analysts reiterated a Buy rating on Okta with a $138 price target, saying their thesis from March 2024 is beginning to unfold.
They described the current valuation as “a very attractive entry point,” noting the stock trades at 5.4 times enterprise value to next twelve months recurring revenue and 19 times next twelve months free cash flow.
(Pratyush Thakur contributed to this report.)