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Okta Annual Report, Year Ended Jan 31, 2022

Filing Date
Filed March 7, 2022
Period End
January 31, 2022
Security
OKTA
In the record · 2017–202610-K910-Q298-K83

OKTA filed 9 annual reports (10-K), 29 quarterly reports (10-Q) and 83 current reports (8-K) between 2017 and 2026.

  1. Material agreement8-K · Feb ’18Feb ’18
  2. Material agreement8-K · Mar ’21Mar ’21
  3. Leadership change8-K · Apr ’23Apr ’23
  4. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 10-K filed March 7, 2022. Cited figures are marked; the original filing is the authoritative source.

Okta, Inc. (Nasdaq: OKTA) reported fiscal 2022 (year ended January 31, 2022) revenue of $1,300.2 milliona, up from $835.4 million in fiscal 2021, with subscription revenue of $1,249.2 million making up about 96% of total revenue.

The company remained unprofitable: net loss was $848.4 millionb, compared with $266.3 million in fiscal 2021, and operating loss was $767.1 million. Results were heavily affected by the May 3, 2021 acquisition of Auth0, Inc., which contributed $139.7 million of revenue and a net loss of $385.3 million from the acquisition date through year-end. Total stock-based compensation rose to $565.5 million from $196.2 million.

The balance sheet expanded substantially. Goodwill increased to $5,401.3 millionc from $48.0 million, and total assets reached $9,205.7 million. Cash, cash equivalents and short-term investments totaled $2,501.8 million at year-end.

Calculated billings rose to $1,718.3 milliond, and the Dollar-Based Net Retention Rate was 124%. Customers with annual contract value above $100,000 numbered 3,100, and total customers exceeded 15,000. Free cash flow was $87.5 million, compared with $110.7 million in the prior year.

Management cites the Auth0 integration, rising sales and marketing and research and development spending, and the ongoing COVID-19 pandemic as key factors for investors to monitor. The company also has $3,100 million of convertible senior notes outstanding across the 2023, 2025 and 2026 series, with the 2023 notes classified as current liabilities. Class B shares give insiders and pre-IPO holders 42.6% of voting power.

02—Key points

Key Highlights

  1. Revenue rose 56% to $1,300.2 million in fiscal 2022, with subscription revenue at $1,249.2 million, about 96% of total revenue.
  2. Net loss widened to $848.4 million from $266.3 million, and operating loss was $767.1 million, versus $204.2 million in fiscal 2021.
  3. The Auth0 acquisition, completed May 3, 2021 for a total fair value of about $5,671.0 million, contributed $139.7 million of revenue and a $385.3 million net loss from the acquisition date.
  4. Goodwill increased to $5,401.3 million from $48.0 million, reflecting the Auth0 and atSpoke acquisitions.
  5. Calculated billings grew to $1,718.3 million from $976.0 million, though management said billing-process changes favorably affected the year; absent those changes, growth would have been 60% year-over-year.
  6. Dollar-Based Net Retention Rate was 124% and customers above $100,000 in annual contract value rose to 3,100 from 1,950.
  7. Cash, cash equivalents and short-term investments totaled $2,501.8 million, while convertible senior notes are carried at about $1.8 billion noncurrent plus $16.2 million current.

03—One dollar

Follow one dollar

For each $1.00 of revenue in FY2022, Okta lost $0.65.

  1. Revenue$1.30B100.0%
  2. Cost of revenue−$396.0M30.5%
  3. Gross profit$904.0M69.5%
  4. Operating costs−$1.67B128.6%
  5. Operating income−$768.0M59.1%
  6. Interest, other & tax−$80.0M6.2%
  7. Net income−$848.0M65.2%
Computed from 10-KFY2022filed March 7, 2022Computed from this filing’s revenue, gross profit, operating income and net income · right columngrey figure: share of revenue

04—Financials

Financial Highlights

Figures from 10-KFY2022filed March 7, 2022
Revenue$1.30B69.5% Gross MarginNet Income-$848.00M-65.2% Net MarginEPS (Diluted)$-5.73Total Assets$9.21BCash & Equivalents$260.00MFree Cash Flow$91.00M

Financial Statements

FY2022 against FY2021

Line itemFY2022FY2021Change
Revenue$1.30B$835.00M+55.7%
Cost of Revenue$396.00M$218.00M+81.7%
Gross Profit$904.00M$617.00M+46.5%
R&D Expenses$469.00M$223.00M+110.3%
Operating Expenses$1.67B$821.00M+103.7%
Operating Income-$768.00M-$204.00M−276.5%
Interest Expense$91.00M$73.00M+24.7%
Net Income-$848.00M-$266.00M−218.8%
EPS (Basic)$-5.73$-2.09−174.2%
EPS (Diluted)$-5.73$-2.09−174.2%
Shares Outstanding (Basic)148.04M127.21M+16.4%
Shares Outstanding (Diluted)148.04M127.21M+16.4%

05—Questions

Frequently Asked Questions

  1. How did the Auth0 acquisition affect Okta's financial results?

    Auth0 contributed $139.7 million of revenue from May 3, 2021 through January 31, 2022, but also a net loss of $385.3 million over the same period. Acquisition-related costs and stock-based compensation tied to revesting agreements added to operating expenses. Goodwill rose to $5,401.3 million as a result of the deal.

  2. Is Okta moving toward profitability?

    Not yet on a GAAP basis. The net loss was $848.4 million in fiscal 2022 and the filing states the company expects to keep incurring losses for the foreseeable future. Non-GAAP operating loss was $73.7 million and non-GAAP net loss was $68.4 million, and management expects operating expenses to increase significantly.

  3. What is the company's liquidity position and debt profile?

    Cash, cash equivalents and short-term investments totaled $2,501.8 million as of January 31, 2022. Convertible senior notes include $17.2 million principal due 2023 (classified as current), $1,060.0 million due 2025 and $1,150.0 million due 2026, all with low fixed coupons of 0.25%, 0.125% and 0.375%, respectively.

  4. Who controls voting power at Okta?

    Holders of Class B common stock, which carries ten votes per share, hold significant control. Directors, executive officers and their affiliates held 42.6% of the voting power as of January 31, 2022, and the Class B structure can persist until April 12, 2027.

06—Continue

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