Okta (OKTA) raised its revenue forecast for fiscal 2023 and boosted its profitability outlook by “approximately $66 million at the high end.”
Okta Inc. executives on Wednesday predicted profitability for all of next fiscal year, trumping profit concerns stemming from recent sales-operation issues. CFO Brett Tighe said Okta expects a non-GAAP operating loss of $39 million to $41 million. Factoring in an uncertain macro environment Chief Executive and co-founder Todd McKinnon said the company is not providing any forecasts past 2024.
Sales-rep attrition has been the lowest it has been in the past several quarters, following a spike last quarter.
“What we’ve done over the last six months is what a lot of companies are doing, slowing hiring, re-evaluating real estate, doubling down on the things we know are high value. And some of the things that are maybe less value we’re doing less of, so that’s where we see the profitability come from,” McKinnon.
Much of that comes from addressing the company’s struggle in combining Okta’s salesforce with sales reps acquired in the May 2021 acquisition of identity-platform Auth0, which is more focused on direct-to-user sales than Okta’s corporate focus.
“We still have work to do,” McKinnon said. “We don’t think we’ve solved it after one quarter of a positive trend but I do think it’s progress.”
“The biggest factor: We’ve really done a much better job clarifying the products and the positioning and saying we have two clouds: We have Workforce Identity Cloud and Customer Identity Cloud and it’s very clear what to sell when,” he said. (Source: Marketwatch)
Could this be an inflection point for the company that has fallen 76% YTD? Shares currently up 26%.
Protective options trade idea for bullish outlook on $OKTA: buy 1 $65 c, Sell 1 $70 c, Sell 1 $55 p, all exp 2/17/23
This can make up to 10% (57% annualized). Start to lose only if OKTA falls to below $54.47 at maturity. If it continues climbing, can most likely exit early at higher IRR.
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