California-based identity and access management specialist Okta posted strong results late Thursday as it continued to expand rapidly in order to capture market share from large enterprises struggling with cloud security.
The identity security company, which now names over 6,550 customers including 20th Century Fox, JetBlue, Nordstrom, Slack, and Twilio, saw its revenue increase by 50 percent year-over-year to $125.2 (£99 million)
The company posted an operating loss of £41 ($51.8) million, driven by operational expenses amid a growth push, and investments. Bill Losch, Okta’s Chief Financial Officer, commented in an investors call that: “The increase is primarily driven by sales and marketing investments as we look to capture more of our large addressable market win more of the world’s largest organizations and expand geographically.
The company is hiring aggressively for both its R&D departments and customer facing roles. In the first quarter of the year it saw its headcount grow by 40 percent, scaling up to 1,770 employees. Losch told investors that they should expect that growth to accelerate in the second quarte, saying there are “very strong strategic opportunities we want to capitalize on.”
“We are having strong success attracting and retaining talent, and we want to continue that. We’re going to continue to make those prudent investments as we try to capitalize on what we think is a huge market opportunity and maximize growth.”
Okta Q1 Sees Subscriber Increase
In Q1 Okta added 450 new customers, bringing its total customer count to over 6,550.
In this financial period it saw subscriber revenue grow by 52 percent year-on-year to $117 million. Subscription revenue represents 94 percent of the company’s total revenue.
CEO Todd McKinnon told investors: “We made broad additions across our enterprise customer base with 53 percent growth in customers with annual contract value greater than $100,000.”
McKinnon points to a lot of trends that organisation are going through, noting that: “Everyone, companies large and small, every industry is figuring out how they can do more with the cloud, how they can transform digitally and then how they can do that all securely.” He believes that this trend, especially with regards to larger organisations, is driving the momentum behind new subscriptions for the company.
However when asked by an analysts how Okta is doing in terms of midsize enterprises in comparison to its success with larger organisations McKinnon said: “We don’t break it out like that”, adding “We’re still doing very well in the mid-market or even the commercial market. So I would say it’s balanced.”
Okta’s CFO Bill Losch noted that, interestingly, Chief Security Officers are becoming one of the most important parts of enterprises’ sales and buying processes in recent years.
“They’re looking for partners who can help them address some of these major concerns quickly, efficiently, effectively, and identity is at the core of that. So typically, we engage with these Chief Security Officers. We help them understand what we do. We show them quickly how we can help them solve specific problems and then we get rolling. And they become not only strong advocates of ours, but also great partners in terms of helping us,” Losch notes.