okta-20231031

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________

FORM 10-Q

_____________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38044

_____________________________________

Okta, Inc.

(Exact Name of Registrant as Specified in its Charter)

_____________________________________

Delaware

100 First Street, Suite 600

26-4175727

(State or Other Jurisdiction of

Incorporation or Organization)

San Francisco

(I.R.S. Employer

Identification Number)

California

94105

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (888) 722-7871

___________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

OKTA

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 27, 2023, the number of shares of registrant’s Class A common stock outstanding was 158,045,390 and the number of shares of the registrant’s Class B common stock outstanding was 7,299,891.

Okta, Inc.

Table of Contents


		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets as of October 31, 2023 and January 31, 2023	4
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 31, 2023 and 2022	5
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended October 31, 2023 and 2022	6
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended October 31, 2023 and 2022	7
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 31, 2023 and 2022	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	32
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 5.	Other Information	66
Item 6.	Exhibits	66
	Signatures	68

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, product development, business strategy, plans, market trends, opportunities, positioning and the macroeconomic environment. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements include these identifying words. The forward-looking statements are contained principally in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.”

Forward-looking statements contained in this Form 10-Q include, but are not limited to, statements about:

•our future financial performance, including our revenue, costs of revenue, gross profits, margins and operating expenses;

•the impact of general economic, business and market conditions, including general economic downturn or recession, market volatility, and the inflation and interest rate environment;

•the impact of past or future cybersecurity incidents;

•trends in our key business metrics;

•our growth strategy and ability to compete;

•the sufficiency of our cash and cash equivalents, investments and cash provided by sales of our products and services to meet our liquidity needs;

•market or other opportunities arising from business combinations; and

•the impact of recent accounting pronouncements on our financial statements.

Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in “Risk Factors” in this Quarterly Report on Form 10-Q as well as other documents that may be filed by us from time to time with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations.

PART I

Item. 1 Financial Statements

OKTA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in millions, shares in thousands, except per share data)


	October 31, 2023		January 31, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	400	$	264
Short-term investments	1,730		2,316
Accounts receivable, net of allowances of $7 and $8	418		481
Deferred commissions	104		92
Prepaid expenses and other current assets	75		76
Total current assets	2,727		3,229
Property and equipment, net	50		59
Operating lease right-of-use assets	91		122
Deferred commissions, noncurrent	220		210
Intangible assets, net	197		241
Goodwill	5,406		5,400
Other assets	49		46
Total assets	$	8,740	$	9,307
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	11	$	12
Accrued expenses and other current liabilities	108		112
Accrued compensation	168		99

Deferred revenue	1,256		1,242
Total current liabilities	1,543		1,465
Convertible senior notes, net, noncurrent	1,302		2,193
Operating lease liabilities, noncurrent	119		142
Deferred revenue, noncurrent	18		18
Other liabilities, noncurrent	28		23
Total liabilities	3,010		3,841
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, par value $0.0001 per share; 100,000 shares authorized; no shares issued and outstanding as of October 31, 2023 and January 31, 2023	—		—
Class A Common stock, par value $0.0001 per share; 1,000,000 shares authorized; 158,024 and 154,009 shares issued and outstanding as of October 31, 2023 and January 31, 2023, respectively	—		—
Class B Common stock, par value $0.0001 per share; 120,000 shares authorized; 7,300 shares issued and outstanding as of October 31, 2023 and January 31, 2023	—		—
Additional paid-in capital	8,534		7,974
Accumulated other comprehensive loss	(18)		(33)
Accumulated deficit	(2,786)		(2,475)
Total stockholders’ equity	5,730		5,466
Total liabilities and stockholders' equity	$	8,740	$	9,307

See Notes to Condensed Consolidated Financial Statements.

OKTA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in millions, shares in thousands, except per share data)

(unaudited)


	Three Months Ended October 31,				Nine Months Ended October 31,
	2023		2022		2023		2022
Revenue:
Subscription	$	569	$	466	$	1,614	$	1,299
Professional services and other	15		15		44		49
Total revenue	584		481		1,658		1,348
Cost of revenue:
Subscription	126		117		376		345
Professional services and other	19		21		60		62
Total cost of revenue	145		138		436		407
Gross profit	439		343		1,222		941
Operating expenses:
Research and development	165		148		500		466
Sales and marketing	270		290		787		807
General and administrative	111		98		340		309
Restructuring and other charges	4		14		28		14
Total operating expenses	550		550		1,655		1,596

SEC Form 10-Q filed by Okta Inc.