false000166013400016601342023-08-242023-08-24

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
___________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported)
August 24, 2023
___________________________________
Okta, Inc.
(Exact name of registrant as specified in its charter)
___________________________________
Delaware001-3804426-4175727
(State or other jurisdiction of incorporation or organization)(Commission File Number)(I.R.S. Employer Identification Number)

100 First Street, Suite 600
San Francisco, California 94105
(Address of principal executive offices)

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

___________________________________

___________________________________
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.0001 per shareOKTAThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.




Item 2.02 - Results of Operations and Financial Condition
On August 30, 2023, Okta, Inc. (the "Company") issued a press release announcing its financial results for the fiscal quarter ended July 31, 2023.

A copy of the press release is attached as Exhibit 99.1.

Item 5.02 - Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On August 24, 2023, J. Frederic Kerrest, the Company’s Executive Vice Chairman, Chief Operating Officer and Co-founder, notified the Company that he will not return as an employee from his current sabbatical, which ends on October 31, 2023. Mr. Kerrest will continue to serve as a member of the Company’s board of directors as Vice Chairman. In connection with the foregoing, in lieu of receiving an initial RSU grant as a non-employee director, Mr. Kerrest has agreed to forfeit 76,549 stock options that are out of the money, and his outstanding RSUs and 5,963 stock options will vest in accordance with their original terms.

Item 7.01 - Regulation FD Disclosures
On August 30, 2023, the Company posted supplemental investor materials on its investor.okta.com website. The Company uses its investor.okta.com and okta.com/blog websites as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the Company’s investor relations and okta.com/blog websites in addition to following its press releases, SEC filings and public conference calls and webcasts.

The information furnished in the current report on Form 8-K and in the accompanying Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing.

Item 9.01 - Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number
Description
 
Press release dated August 30, 2023, issued by Okta, Inc.
104Cover Page Interactive Data File—the cover page XBRL tags are embedded within the Inline XBRL document



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 30th day of August 2023.
Okta, Inc.
  
By:/s/ Brett Tighe
Name:Brett Tighe
Title:Chief Financial Officer
 (Principal Financial Officer)


Okta Announces Second Quarter Fiscal Year 2024 Financial Results
Q2 revenue grew 23% year-over-year; subscription revenue grew 24% year-over-year
Current remaining performance obligations (cRPO) grew 18% year-over-year to $1.77 billion
Operating cash flow of $53 million and free cash flow of $49 million

SAN FRANCISCO – August 30, 2023 – Okta, Inc. (Nasdaq: OKTA), the leading independent identity partner, today announced financial results for its second quarter ended July 31, 2023.
“Our focus on execution and efficiency has delivered solid top-line results with significant improvements to operating profit and cash flow year-over-year,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta. “We are building on our position as the leading independent identity partner. Both new and existing customers are getting tremendous value from the Okta platform as they seek to simplify their infrastructure while increasing security by integrating identity into their most important projects. We’re confident in our long-term opportunity and driving innovation for our customers, while delivering non-GAAP profitable growth to our shareholders.”

Second Quarter Fiscal 2024 Financial Highlights:
Revenue: Total revenue was $556 million, an increase of 23% year-over-year. Subscription revenue was $542 million, an increase of 24% year-over-year.
RPO: RPO, or subscription backlog, was $3.03 billion, an increase of 8% year-over-year. cRPO, which is subscription backlog expected to be recognized over the next 12 months, was $1.77 billion, up 18% compared to the second quarter of fiscal 2023.
GAAP Operating Loss: GAAP operating loss was $162 million, or (29)% of total revenue, compared to a GAAP operating loss of $208 million, or (46)% of total revenue, in the second quarter of fiscal 2023.
Non-GAAP Operating Income/Loss: Non-GAAP operating income was $59 million, or 11% of total revenue, compared to a non-GAAP operating loss of $15 million, or (3)% of total revenue, in the second quarter of fiscal 2023.
GAAP Net Loss: GAAP net loss was $111 million, compared to a GAAP net loss of $210 million in the second quarter of fiscal 2023. GAAP net loss per share was $0.68, compared to a GAAP net loss per share of $1.34 in the second quarter of fiscal 2023.
Non-GAAP Net Income/Loss: Non-GAAP net income was $56 million, compared to a non-GAAP net loss of $16 million in the second quarter of fiscal 2023. Non-GAAP basic and diluted net income per share were $0.34 and $0.31, respectively, compared to non-GAAP basic and diluted net loss per share of $0.10 in the second quarter of fiscal 2023.
Cash Flow: Net cash provided by operations was $53 million, or 10% of total revenue, compared to net cash used in operations of $19 million, or (4)% of total revenue, in the second quarter of fiscal 2023. Free cash flow was $49 million, or 9% of total revenue, compared to negative $24 million, or (5)% of total revenue, in the second quarter of fiscal 2023.
Cash, cash equivalents, and short-term investments were $2.11 billion at July 31, 2023. During the quarter, the company repurchased $142 million principal amount of the convertible senior notes due in
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2025, and $242 million principal amount of the convertible senior notes due in 2026, resulting in a gain on early extinguishment of debt of $42 million.

The section titled "Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures, and reconciliations between GAAP and non-GAAP information are contained in the tables below.
Financial Outlook:
For the third quarter of fiscal 2024, the Company expects:
Total revenue of $558 million to $560 million, representing a growth rate of 16% year-over-year;
Current RPO of $1.780 billion to $1.785 billion, representing a growth rate of 13% year-over-year;
Non-GAAP operating income of $53 million to $55 million; and
Non-GAAP diluted net income per share of $0.29 to $0.30, assuming diluted weighted-average shares outstanding of approximately 180 million and a non-GAAP tax rate of 26%.

For the full year fiscal 2024, the Company now expects:
Total revenue of $2.207 billion to $2.215 billion, representing a growth rate of 19% year-over-year;
Non-GAAP operating income of $215 million to $220 million;
Non-GAAP diluted net income per share of $1.17 to $1.20, assuming diluted weighted-average shares outstanding of approximately 179 million and a non-GAAP tax rate of 26%; and
Non-GAAP free cash flow margin of 15%.

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Okta has not reconciled its forward-looking non-GAAP financial measures to their most directly comparable GAAP measures because certain items are out of Okta’s control or cannot be reasonably predicted. Accordingly, reconciliations for forward-looking non-GAAP financial measures are not available without unreasonable effort.

Webcast Information:
Okta will host a live video webcast at 2:00 p.m. Pacific Time on August 30, 2023 to discuss the results and outlook. The news release with the financial results will be accessible from the Company’s website at investor.okta.com prior to the webcast. The live video webcast will be accessible from the Okta investor relations website at investor.okta.com. A replay will be available on the Okta investor relations website following the completion of the event.

Supplemental Financial and Other Information:
Supplemental financial and other information can be accessed through the Company’s investor relations website at investor.okta.com.
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Non-GAAP Financial Measures:
This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) per share, basic and diluted, non-GAAP tax rate, free cash flow and free cash flow margin. Certain of these non-GAAP financial measures exclude stock-based compensation, non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses, restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities, amortization of debt issuance costs and (gain) loss on early extinguishment of debt. Acquisition and integration-related expenses include transaction costs and other non-recurring incremental costs incurred through the one-year anniversary of the transaction close.
Stock-based compensation is non-cash in nature and is generally fixed at the time the stock-based instrument is granted and amortized over a period of several years. Although stock-based compensation is an important aspect of the compensation of our employees and executives, the expense for the fair value of the stock-based instruments we utilize may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards. We believe excluding stock-based compensation provides meaningful supplemental information regarding the long-term performance of our core business and facilitates comparison of our results to those of peer companies.
We also exclude non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses, restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities, amortization of debt issuance costs and (gain) loss on early extinguishment of debt from the applicable non-GAAP financial measures because these adjustments are considered by management to be outside of our core operating results.
In addition to these exclusions, starting in fiscal 2024, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate of 26% in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. The non-GAAP tax rate could be subject to change for a variety of reasons, including changes in tax laws and regulations, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. We will periodically reevaluate the projected long-term tax rate, as necessary, for significant events, based on our ongoing analysis of relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions.
We define free cash flow, a non-GAAP financial measure, as net cash provided by (used in) operating activities, less cash used for purchases of property and equipment, net of sales proceeds, and capitalized software. Free cash flow margin is calculated as free cash flow divided by total revenue. We use free cash flow as a measure of financial progress in our business, as it balances operating results, cash management, and capital efficiency. We believe information regarding free cash flow provides investors and others with an important perspective on the cash available to make strategic acquisitions and investments, to fund ongoing operations, and to fund other capital expenditures. Free cash flow can be volatile and is sensitive to many factors, including changes in working capital
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and timing of capital expenditures. Working capital at any specific point in time is subject to many variables, including seasonality, the discretionary timing of expense payments, discounts offered by vendors, vendor payment terms, and fluctuations in foreign exchange rates.
We periodically reassess the components of our non-GAAP adjustments for changes in how we evaluate our performance and changes in how we make financial and operational decisions, and consider the use of these measures by our competitors and peers to ensure the adjustments remain relevant and meaningful.
Okta believes that non-GAAP financial information, when taken collectively with GAAP financial measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.
The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by the Company's management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.
Okta encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.

4


Forward-Looking Statements: This press release 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, business strategy and plans, market trends and market size, opportunities and positioning. These forward-looking statements are based on current expectations, estimates, forecasts and projections. 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 and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. For example, the market for our products may develop more slowly than expected or than it has in the past; there may be significant fluctuations in our results of operations and cash flows related to our revenue recognition or otherwise; we may not achieve expected synergies and efficiencies of operations between Okta and Auth0, and we may not be able to successfully integrate the companies; global economic conditions could worsen; a network or data security incident that allows unauthorized access to our network or data or our customers’ data could damage our reputation and cause us to incur significant costs; we could experience interruptions or performance problems associated with our technology, including a service outage; and we may not be able to pay off our convertible senior notes when due. Further information on potential factors that could affect our financial results is included in our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission. The forward-looking statements included in this press release represent our views only as of the date of this press release and we assume no obligation and do not intend to update these forward-looking statements.
5


About Okta
Okta is the World’s Identity Company. As the leading independent Identity partner, we free everyone to safely use any technology—anywhere, on any device or app. The most trusted brands trust Okta to enable secure access, authentication, and automation. With flexibility and neutrality at the core of our Okta Workforce Identity and Customer Identity Clouds, business leaders and developers can focus on innovation and accelerate digital transformation, thanks to customizable solutions and more than 7,000 pre-built integrations. We’re building a world where Identity belongs to you. Learn more at okta.com.

Okta uses its investor.okta.com and okta.com/blog websites as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations and okta.com/blog websites in addition to following our press releases, SEC filings and public conference calls and webcasts.

Investor Contact:    
Dave Gennarelli
investor@okta.com

Media Contact:
Kyrk Storer
press@okta.com
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OKTA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, shares in thousands, except per share data)
(unaudited)
 Three Months Ended
July 31,
Six Months Ended
July 31,
 2023202220232022
Revenue:  
Subscription$542 $435 $1,045 $833 
Professional services and other14 17 29 34 
Total revenue556 452 1,074 867 
Cost of revenue:
Subscription(1)
128 117 250 228 
Professional services and other(1)
21 21 41 41 
Total cost of revenue149 138 291 269 
Gross profit407 314 783 598 
Operating expenses:  
Research and development(1)
172 156 335 318 
Sales and marketing(1)
261 265 517 517 
General and administrative(1)
119 101 229 211 
Restructuring and other charges17 — 24 — 
Total operating expenses569 522 1,105 1,046 
Operating loss(162)(208)(322)(448)
Interest expense(2)(3)(5)(6)
Interest income and other, net18 35 
Gain on early extinguishment of debt 42 — 73 — 
Interest and other, net58 103 
Loss before provision for income taxes(104)(206)(219)(447)
Provision for income taxes11 
Net loss$(111)$(210)$(230)$(453)
  
Net loss per share, basic and diluted$(0.68)$(1.34)$(1.42)$(2.89)
  
Weighted-average shares used to compute net loss per share, basic and diluted162,755 157,400 162,051 156,650 

(1) Amounts include stock-based compensation expense as follows:
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
Cost of subscription revenue$21 $18 $37 $35 
Cost of professional services and other
Research and development74 70 142 140 
Sales and marketing41 39 79 78 
General and administrative45 40 85 81 
Total stock-based compensation expense$185 $170 $351 $341 
7


OKTA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
 July 31,January 31,
20232023
Assets 
Current assets: 
Cash and cash equivalents$356 $264 
Short-term investments1,750 2,316 
Accounts receivable, net of allowances388 481 
Deferred commissions101 92 
Prepaid expenses and other current assets91 76 
Total current assets2,686 3,229 
Property and equipment, net49 59 
Operating lease right-of-use assets92 122 
Deferred commissions, noncurrent218 210 
Intangible assets, net211 241 
Goodwill5,406 5,400 
Other assets51 46 
Total assets$8,713 $9,307 
Liabilities and stockholders' equity 
Current liabilities: 
Accounts payable$13 $12 
Accrued expenses and other current liabilities95 112 
Accrued compensation123 99 
Deferred revenue1,225 1,242 
Total current liabilities1,456 1,465 
Convertible senior notes, net, noncurrent1,451 2,193 
Operating lease liabilities, noncurrent122 142 
Deferred revenue, noncurrent17 18 
Other liabilities, noncurrent27 23 
Total liabilities3,073 3,841 
 
Stockholders’ equity:
Preferred stock— — 
Class A common stock— — 
Class B common stock— — 
Additional paid-in capital8,359 7,974 
Accumulated other comprehensive loss(14)(33)
Accumulated deficit(2,705)(2,475)
Total stockholders’ equity5,640 5,466 
Total liabilities and stockholders' equity$8,713 $9,307 

8


OKTA, INC.
SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
(unaudited)
 Six Months Ended
July 31,
 20232022
Cash flows from operating activities:  
Net loss$(230)$(453)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation351 341 
Depreciation, amortization and accretion43 61 
Amortization of debt issuance costs
Amortization of deferred commissions49 39 
Deferred income taxes
Lease impairment charges25 — 
Gain on early extinguishment of debt(73)— 
Net gain on strategic investments— (2)
Other, net
Changes in operating assets and liabilities:
Accounts receivable92 74 
Deferred commissions(65)(50)
Prepaid expenses and other assets(14)(2)
Operating lease right-of-use assets12 14 
Accounts payable24 
Accrued compensation24 (55)
Accrued expenses and other liabilities(4)
Operating lease liabilities(20)(13)
Deferred revenue(18)15 
Net cash provided by operating activities182 — 
Cash flows from investing activities:
Capitalized software(7)(6)
Purchases of property and equipment(2)(7)
Purchases of securities available-for-sale and other(577)(571)
Proceeds from maturities and redemption of securities available-for-sale1,101 521 
Proceeds from sales of securities available-for-sale and other61 — 
Purchases of intangible assets— (2)
Payments for business acquisitions, net of cash acquired(22)(4)
Net cash provided by (used in) investing activities554 (69)
Cash flows from financing activities:
Payments for repurchases of convertible senior notes(671)— 
Payments for warrants related to convertible senior notes(4)— 
Proceeds from stock option exercises, net of repurchases
Proceeds from shares issued in connection with employee stock purchase plan26 19 
Net cash provided by (used in) financing activities(641)28 
Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash(6)
Net increase (decrease) in cash, cash equivalents and restricted cash97 (47)
Cash, cash equivalents and restricted cash at beginning of period271 273 
Cash, cash equivalents and restricted cash at end of period$368 $226 
9


OKTA, INC.
Reconciliation of GAAP to Non-GAAP Data
(dollars in millions, shares in thousands, except per share data)
(unaudited)

Non-GAAP Gross Profit and Non-GAAP Gross Margin
We define non-GAAP gross profit and non-GAAP gross margin as GAAP gross profit and GAAP gross margin, adjusted for stock-based compensation expense included in cost of revenue, amortization of acquired intangibles and acquisition and integration-related expenses.
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
Gross profit$407 $314 $783 $598 
Add:
Stock-based compensation expense included in cost of revenue25 21 45 42 
Amortization of acquired intangibles12 12 24 22 
Acquisition and integration-related expenses— — — 
Non-GAAP gross profit$444 $347 $852 $663 
Gross margin73 %70 %73 %69 %
Non-GAAP gross margin80 %77 %79 %76 %
Non-GAAP Operating Income (Loss) and Non-GAAP Operating Margin
We define non-GAAP operating income (loss) and non-GAAP operating margin as GAAP operating loss and GAAP operating margin, adjusted for stock-based compensation expense, non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses and restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities.
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
Operating loss$(162)$(208)$(322)$(448)
Add:
Stock-based compensation expense185 170 351 341 
Non-cash charitable contributions
Amortization of acquired intangibles18 22 41 42 
Acquisition and integration-related expenses— — — 
Restructuring costs17 — 24 — 
Non-GAAP operating income (loss)$59 $(15)$96 $(56)
Operating margin(29)%(46)%(30)%(52)%
Non-GAAP operating margin11 %(3)%%(6)%
10


Non-GAAP Net Income (Loss), Non-GAAP Net Margin and Non-GAAP Net Income (Loss) Per Share, Basic and Diluted
We define non-GAAP net income (loss) and non-GAAP net margin as GAAP net loss and GAAP net margin, adjusted for stock-based compensation expense, non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses, amortization of debt issuance costs, gain on early extinguishment of debt and restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities. In addition, starting in fiscal 2024, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate of 26% in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods.
We define non-GAAP net income (loss) per share, basic, as non-GAAP net income (loss) divided by GAAP weighted-average shares used to compute net loss per share, basic and diluted.
We define non-GAAP net income (loss) per share, diluted, as non-GAAP net income (loss) divided by GAAP weighted-average shares used to compute net loss per share, basic and diluted adjusted for the potentially dilutive effect of (i) employee equity incentive plans, excluding the impact of unrecognized stock-based compensation expense, and (ii) convertible senior notes outstanding and related warrants. In addition, non-GAAP net income (loss) per share, diluted, includes the impact of our note hedge and capped call agreements on convertible senior notes outstanding, as applicable. The note hedge and capped call agreements are intended to offset potential dilution to our Class A common stock upon any conversion or settlement of the convertible senior notes under certain circumstances. Accordingly, we did not record any adjustments for the potential impact of the convertible senior notes outstanding under the if-converted method.
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
Net loss$(111)$(210)$(230)$(453)
Add:
Stock-based compensation expense185 170 351 341 
Non-cash charitable contributions
Amortization of acquired intangibles18 22 41 42 
Acquisition and integration-related expenses— — — 
Amortization of debt issuance costs
Gain on early extinguishment of debt(42)— (73)— 
Restructuring costs17 — 24 — 
Tax adjustment(13)— (23)— 
Non-GAAP net income (loss)$56 $(16)$94 $(59)
Net margin(20)%(47)%(21)%(52)%
Non-GAAP net margin10 %(4)%%(7)%
Weighted-average shares used to compute net loss per share, basic and diluted162,755 157,400 162,051 156,650 
Non-GAAP weighted-average effect of potentially dilutive securities 15,987 — 15,430 — 
Non-GAAP weighted-average shares used to compute non-GAAP net income (loss) per share, diluted178,742 157,400 177,481 156,650 
Net loss per share, basic and diluted$(0.68)$(1.34)$(1.42)$(2.89)
Non-GAAP net income (loss) per share, basic$0.34 $(0.10)$0.58 $(0.37)
Non-GAAP net income (loss) per share, diluted$0.31 $(0.10)$0.53 $(0.37)

11




OKTA, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(dollars in millions)
(unaudited)

Free Cash Flow and Free Cash Flow Margin
We define free cash flow, a non-GAAP financial measure, as net cash provided by (used in) operating activities, less cash used for purchases of property and equipment, net of sales proceeds, and capitalized software. Free cash flow margin is calculated as free cash flow divided by total revenue.
In fiscal 2024, we updated our definition of free cash flow to include on-premise software purchases in addition to capitalized internal-use software costs within capitalized software.
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
Net cash provided by (used in) operating activities$53 $(19)$182 $— 
Less:
Purchases of property and equipment(2)(2)(2)(7)
Capitalized software(2)(3)(7)(6)
Free cash flow$49 $(24)$173 $(13)
Net cash provided by (used in) investing activities$495 $19 $554 $(69)
Net cash provided by (used in) financing activities$(315)$23 $(641)$28 
Operating cash flow margin10 %(4)%17 %— %
Free cash flow margin%(5)%16 %(2)%

12
v3.23.2
Cover Page
Aug. 24, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 24, 2023
Entity Registrant Name Okta, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-38044
Entity Tax Identification Number 26-4175727
Entity Address, Address Line One 100 First Street, Suite 600
Entity Address, City or Town San Francisco
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94105
City Area Code 888
Local Phone Number 722-7871
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A common stock, par value $0.0001 per share
Trading Symbol OKTA
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001660134

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