OKTA Readies for Q3 Earnings Release: What to Expect


Okta Inc. (NASDAQ:OKTA) is gearing up to unveil its performance for the third quarter of fiscal 2024 on November 29th.

In this fiscal quarter, the company foresees non-GAAP earnings ranging from 29 to 30 cents per share. The Zacks Consensus Estimate for earnings has held steady at 30 cents per share for the past 30 days.

Projections for revenues fall within the range of $558 million to $560 million, reflecting a 16% growth compared to the figures reported in the same period last year. The Zacks Consensus Estimate for revenues stands at $559.76 million, indicating a 16.37% increase from the year-ago quarter.

Okta has consistently outperformed the Zacks Consensus Estimate for earnings in the last four quarters, boasting an average earnings surprise of 107.74%.

A Pre-Announcement Overview

As we approach the earnings announcement, let’s delve into the factors shaping Okta’s performance:

Key Considerations

The third-quarter results are expected to showcase the advantages stemming from increased usage of identity solutions.

Okta Identity Cloud’s capacity to efficiently consolidate and integrate existing applications, prioritizing security and stability, has proven appealing to customers. The positive attributes of Okta products, such as process automation, data security, and cost reduction, have contributed to its success.

The expansion of the customer base has played a pivotal role. Despite a challenging macroeconomic environment, Okta concluded the fiscal second quarter with 18,400 customers, adding 350 new clients in the previous quarter. Customers with an Annual Contract Value exceeding $100K increased by 19% year over year.

The adoption of Okta’s Workforce and Customer Identity solutions has been gaining momentum, and this trend is expected to continue in the upcoming quarter.

Furthermore, the company’s growth is driven by an expanding partner network that includes giants like Google and Zoom, contributing to top-line growth in the third fiscal quarter.

Challenges Ahead

However, Okta’s results are expected to be impacted by macroeconomic challenges affecting contract term lengths and deal sizes, particularly in small and medium-sized businesses and enterprises. This is anticipated to have a sequential impact on the net retention rate.

As Okta navigates through these challenges, all eyes are on the forthcoming earnings report for a comprehensive understanding of its third-quarter performance.

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