01—Abstract
Summary
Summary of the 10-K filed March 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Okta, Inc. reported fiscal 2024 (year ended January 31, 2024) total revenue of $2,263 milliona, up from $1,858 million in fiscal 2023, with subscription revenue making up approximately 97% of total revenue.
The company narrowed its net loss to $355 millionb from $815 million in fiscal 2023, and operating loss improved to $516 million from $812 million. Gross margin rose to 74% from 71%, and the company generated $512 million in net cash from operating activities versus $86 million the prior year. The Dollar-Based Net Retention Rate declined to 111% from 120%, which management attributes primarily to the macroeconomic environment, while the customer count grew to more than 18,950 and customers with ACV above $100,000 rose to 4,485.
The balance sheet shows cash, cash equivalents and short-term investments of $2,202 millionc against convertible senior notes outstanding of $552 million (2025 Notes) and $608 million (2026 Notes) in principal. During fiscal 2024 the company repurchased $508 million of 2025 Notes and $542 million of 2026 Notes, producing a $106 million gain on early extinguishment of debt. Remaining performance obligations were $3,385 million, with $1,952 million expected to be recognized over the next 12 months.
The filing also highlights ongoing risks: a securities class action and several derivative lawsuits tied to cybersecurity controls, the January 2022 third-party compromise, and an October 2023 incident in which a threat actor accessed the customer support system. Restructuring plans in fiscal 2024 and 2025 target reductions of approximately 300 and 400 full-time employees, respectively. Founders and directors hold 40.4%d of voting power through the dual-class structure.
02—Key points
Key Highlights
- Total revenue of $2,263 million, up 22% from $1,858 million; subscription revenue was $2,205 million, about 97% of total.
- Net loss narrowed to $355 million from $815 million; operating loss improved to $516 million from $812 million.
- Gross margin improved to 74% from 71%; subscription gross margin rose to 77% from 74%.
- Net cash provided by operating activities was $512 million, versus $86 million in fiscal 2023.
- Dollar-Based Net Retention Rate fell to 111% from 120%, which management attributes primarily to the macroeconomic environment; customers grew to over 18,950.
- Repurchased $508 million of 2025 Notes and $542 million of 2026 Notes in fiscal 2024, producing a $106 million gain on early extinguishment of debt.
- Ongoing litigation includes a securities class action and derivative suits related to cybersecurity controls, the January 2022 compromise, and Auth0 integration; the October 2023 customer support system incident is also disclosed.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2024, Okta lost $0.16.
- Revenue$2.26B100.0%
- Cost of revenue−$581.0M25.7%
- Gross profit$1.68B74.3%
- Operating costs−$2.20B97.1%
- Operating income−$516.0M22.8%
- Interest, other & tax$161.0M7.1%
- Net income−$355.0M15.7%
04—Financials
Financial Highlights
Figures from 10-KFY2024filed March 1, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $2.26B$1.86B | +21.8% |
| Cost of Revenue | $581.00M$546.00M | +6.4% |
| Gross Profit | $1.68B$1.31B | +28.2% |
| R&D Expenses | $656.00M$620.00M | +5.8% |
| Operating Expenses | $2.20B$2.12B | +3.5% |
| Operating Income | -$516.00M-$812.00M | +36.5% |
| Interest Expense | $8.00M$11.00M | −27.3% |
| Net Income | -$355.00M-$815.00M | +56.4% |
| EPS (Basic) | $-2.17$-5.16 | +57.9% |
| EPS (Diluted) | $-2.17$-5.16 | +57.9% |
| Shares Outstanding (Basic) | 163.63M158.02M | +3.6% |
| Shares Outstanding (Diluted) | 163.63M158.02M | +3.6% |
05—Questions
Frequently Asked Questions
How much cash does Okta have, and how much convertible debt remains?
As of January 31, 2024, cash, cash equivalents and short-term investments totaled $2,202 million. Principal outstanding was $552 million on the 2025 Notes and $608 million on the 2026 Notes.
Why did the Dollar-Based Net Retention Rate decline?
The filing states the decrease from 120% to 111% was primarily a result of the macroeconomic environment, with ACV from existing customers increasing at a slower rate in the current period.
What restructuring actions has the company taken?
A 2023 Restructuring Plan reduced the workforce by approximately 300 full-time employees. A 2024 Restructuring Plan, approved in the fourth quarter of fiscal 2024, involves approximately 400 full-time employees, with aggregate costs estimated at approximately $24 million.
What legal and security risks does the filing disclose?
The company faces a putative securities class action filed May 20, 2022, plus several derivative lawsuits, all tied to allegations about cybersecurity controls, data breach vulnerability and the Auth0 integration. The filing also discloses the January 2022 third-party service provider compromise and an October 2023 incident in which a threat actor stole information from the customer support system. The company states that to date no prior incident has materially affected it.
Who controls voting power at Okta?
Directors, executive officers and their affiliates held, in aggregate, 40.4% of the voting power as of January 31, 2024. Class B shares carry ten votes per share, and this concentrated control is expected to continue until April 12, 2027.
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