Okta, Inc. (NASDAQ: OKTA), the leading independent provider of identity for the enterprise, today announced financial results for its fourth quarter and fiscal year ended January 31, 2020.
"Our strong fourth quarter performance caps another fantastic year of growth and expansion," said Todd McKinnon, Chief Executive Officer and co-founder of Okta. "We continue to post industry leading growth for subscription revenue, remaining performance obligations, and billings, while achieving positive operating and free cash flows for the year. Our unparalleled cloud-based platform and continued execution is allowing us to achieve this exceptional growth at scale. We’re still in the early days of a massive addressable market to modernize identity for the workforce and customers and we are in the leading position to capitalize on the opportunity for many years to come."
Fourth Quarter Fiscal 2020 Financial Highlights:
- Revenue: Total revenue was $167.3 million, an increase of 45% year-over-year. Subscription revenue was $158.5 million, an increase of 46% year-over-year.
- Remaining Performance Obligations (RPO): RPO was $1.21 billion, an increase of 66% year-over-year. Current RPO, which is subscription revenue expected to be recognized over the next 12 months, was $592.3 million, up 54% compared to the fourth quarter of fiscal 2019.
- Calculated Billings: Total calculated billings were $225.0 million, an increase of 42% year-over-year.
- Operating Loss: GAAP operating loss was $44.7 million, or 26.7% of total revenue, compared to $27.7 million, or 24.0% of total revenue, in the fourth quarter of fiscal 2019. Non-GAAP operating loss was $5.6 million, or 3.3% of total revenue, compared to $4.9 million, or 4.3% of total revenue, in the fourth quarter of fiscal 2019.
- Net Loss: GAAP net loss was $50.5 million, compared to $30.8 million in the fourth quarter of fiscal 2019. GAAP net loss per share was $0.42, compared to $0.28 in the fourth quarter of fiscal 2019. Non-GAAP net loss was $1.7 million, compared to $4.4 million in the fourth quarter of fiscal 2019. Non-GAAP net loss per share was $0.01, compared to $0.04 in the fourth quarter of fiscal 2019.
- Cash Flow: Net cash provided by operations was $24.8 million, or 14.8% of total revenue, compared to net cash provided by operations of $10.1 million, or 8.8% of total revenue, in the fourth quarter of fiscal 2019. Free cash flow was $18.1 million, or 10.8% of total revenue, compared to $4.8 million, or 4.1% of total revenue, in the fourth quarter of fiscal 2019.
- Cash, cash equivalents, and short-term investments were $1.40 billion.
Full Year Fiscal 2020 Financial Highlights:
- Revenue: Total revenue was $586.1 million, an increase of 47% year-over-year. Subscription revenue was $552.7 million, an increase of 49% year-over-year.
- Calculated Billings: Total calculated billings were $703.6 million, an increase of 44% year-over-year.
- Operating Loss: GAAP operating loss was $185.8 million, or 31.7% of total revenue, compared to $119.6 million, or 30.0% of total revenue for fiscal 2019. Non-GAAP operating loss was $48.5 million, or 8.3% of total revenue, compared to $41.5 million, or 10.4% of total revenue for fiscal 2019.
- Net Loss: GAAP net loss was $208.9 million, compared to $125.5 million for fiscal 2019. GAAP net loss per share was $1.78, compared to $1.17 for fiscal 2019. Non-GAAP net loss was $36.7 million, compared to $34.1 million for fiscal 2019. Non-GAAP net loss per share was $0.31, compared to $0.32 for fiscal 2019.
- Cash Flow: Net cash provided by operations was $55.6 million, or 9.5% of total revenue, compared to net cash provided by operations of $15.2 million, or 3.8% of total revenue for fiscal 2019. Free cash flow was $36.3 million, or 6.2% of total revenue, compared to negative $6.8 million, or 1.7% of total revenue for fiscal 2019.
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 first quarter of fiscal 2021, the Company expects:
- Total revenue of $171 million to $173 million, representing a growth rate of 37% to 38% year-over-year
- Non-GAAP operating loss of $33.2 million to $32.2 million
- Non-GAAP net loss per share of $0.24 to $0.23, assuming weighted shares outstanding of approximately 123 million
For the full year fiscal 2021, the Company expects:
- Total revenue of $770 million to $780 million, representing a growth rate of 31% to 33% year-over-year
- Non-GAAP operating loss of $65.0 million to $57.0 million
- Non-GAAP net loss per share of $0.42 to $0.37, assuming weighted shares outstanding of approximately 125 million
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 expectations as to non-GAAP operating loss and non-GAAP net loss per share to its most directly comparable GAAP measure because certain items are out of Okta’s control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP operating loss and non-GAAP net loss per share is not available without unreasonable effort.
Conference Call Information:
Okta will host a conference call and live webcast for analysts and investors at 2:00 p.m. Pacific Time on March 5, 2020. The news release with the financial results will be accessible from the Company’s website at investor.okta.com prior to the conference call. Interested parties can access the call by dialing (800) 458-4121 or (323) 794-2093 and using the passcode 4522098.
A live webcast of the conference call will be accessible from the Okta investor relations website at investor.okta.com.
Supplemental Financial and Other Information:
Supplemental financial and other information can be accessed through the Company’s investor relations website at investor.okta.com.
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 loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net margin, non-GAAP net loss per share, free cash flow, current calculated billings and calculated billings. Certain of these non-GAAP financial measures exclude stock-based compensation, amortization of debt discount, charitable contributions, amortization of acquired intangibles, acquisition-related expenses and loss on early extinguishment of debt, net of debt issuance costs.
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.
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, product development, 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; our operating results may fluctuate more than expected; there may be significant fluctuations in our results of operations and cash flows related to our revenue recognition or otherwise; a network or data security incident that allows unauthorized access to our network or data or our customers’ data could damage our reputation; we could experience interruptions or performance problems associated with our technology, including a service outage; we may not be able to pay off our convertible senior notes when due; and global economic conditions could deteriorate. 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.
About Okta
Okta is the leading independent provider of identity for the enterprise. The Okta Identity Cloud enables organizations to securely connect the right people to the right technologies at the right time. With over 6,500 pre-built integrations to applications and infrastructure providers, Okta customers can easily and securely use the best technologies for their business. Over 7,950 organizations, including 20th Century Fox, JetBlue, Nordstrom, Slack, Teach for America and Twilio, trust Okta to help protect the identities of their workforces and customers.
Okta uses its investor.okta.com website 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 website in addition to following our press releases, SEC filings and public conference calls and webcasts.
OKTA, INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended
| Twelve Months Ended
| |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenue: | ||||||||||||||||
Subscription | $ | 158,514 | $ | 108,462 | $ | 552,688 | $ | 370,855 | ||||||||
Professional services and other | 8,813 | 7,009 | 33,379 | 28,399 | ||||||||||||
Total revenue | 167,327 | 115,471 | 586,067 | 399,254 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Subscription(1) | 33,864 | 21,546 | 116,445 | 77,354 | ||||||||||||
Professional services and other(1) | 10,819 | 9,840 | 42,937 | 36,067 | ||||||||||||
Total cost of revenue | 44,683 | 31,386 | 159,382 | 113,421 | ||||||||||||
Gross profit | 122,644 | 84,085 | 426,685 | 285,833 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development(1) | 43,360 | 30,031 | 159,269 | 102,385 | ||||||||||||
Sales and marketing(1) | 92,635 | 62,552 | 340,356 | 227,960 | ||||||||||||
General and administrative(1) | 31,352 | 19,237 | 112,892 | 75,110 | ||||||||||||
Total operating expenses | 167,347 | 111,820 | 612,517 | 405,455 | ||||||||||||
Operating loss | (44,703 | ) | (27,735 | ) | (185,832 | ) | (119,622 | ) | ||||||||
Interest expense | (10,646 | ) | (4,179 | ) | (27,017 | ) | (15,072 | ) | ||||||||
Interest income and other, net | 5,743 | 2,969 | 17,089 | 9,180 | ||||||||||||
Loss on early extinguishment of debt | — | — | (14,572 | ) | — | |||||||||||
Interest expense and other, net | (4,903 | ) | (1,210 | ) | (24,500 | ) | (5,892 | ) | ||||||||
Loss before provision for (benefit from) income taxes | (49,606 | ) | (28,945 | ) | (210,332 | ) | (125,514 | ) | ||||||||
Provision for (benefit from) income taxes | 866 | 1,866 | (1,419 | ) | (17 | ) | ||||||||||
Net loss | $ | (50,472 | ) | $ | (30,811 | ) | $ | (208,913 | ) | $ | (125,497 | ) | ||||
Net loss per share, basic and diluted | $ | (0.42 | ) | $ | (0.28 | ) | $ | (1.78 | ) | $ | (1.17 | ) | ||||
Weighted-average shares used to compute net loss per share, basic and diluted | 121,562 | 110,223 | 117,221 | 107,504 | ||||||||||||
(1) Amounts include stock-based compensation expense as follows (in thousands): | ||||||||||||||||
Three Months Ended
| Twelve Months Ended
| |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Cost of subscription revenue | $ | 3,786 | $ | 2,024 | $ | 12,923 | $ | 7,837 | ||||||||
Cost of professional services and other revenue | 1,872 | 1,706 | 7,164 | 4,983 | ||||||||||||
Research and development | 11,361 | 6,866 | 37,683 | 22,642 | ||||||||||||
Sales and marketing | 11,118 | 7,064 | 38,077 | 22,916 | ||||||||||||
General and administrative | 8,793 | 4,761 | 30,777 | 17,942 | ||||||||||||
Total share-based compensation expense | $ | 36,930 | $ | 22,421 | $ | 126,624 | $ | 76,320 | ||||||||
OKTA, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
(unaudited) | ||||||||
As of January 31, | ||||||||
2020 | 2019 | |||||||
As Adjusted(1) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 520,048 | $ | 298,394 | ||||
Short-term investments | 882,976 | 265,374 | ||||||
Accounts receivable, net of allowances | 130,115 | 91,926 | ||||||
Deferred commissions | 33,636 | 24,185 | ||||||
Prepaid expenses and other current assets | 32,950 | 28,237 | ||||||
Total current assets | 1,599,725 | 708,116 | ||||||
Property and equipment, net | 53,535 | 52,921 | ||||||
Operating lease right-of-use assets | 125,204 | 121,389 | ||||||
Deferred commissions, noncurrent | 77,874 | 54,812 | ||||||
Intangible assets, net | 32,529 | 13,897 | ||||||
Goodwill | 48,023 | 18,089 | ||||||
Other assets | 18,505 | 15,089 | ||||||
Total assets | $ | 1,955,395 | $ | 984,313 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,837 | $ | 2,431 | ||||
Accrued expenses and other current liabilities | 36,887 | 33,653 | ||||||
Accrued compensation | 40,300 | 19,770 | ||||||
2023 Convertible senior notes, net | 100,703 | 271,628 | ||||||
Deferred revenue | 365,236 | 245,622 | ||||||
Total current liabilities | 546,963 | 573,104 | ||||||
2025 Convertible senior notes, net | 837,002 | — | ||||||
Operating lease liabilities, noncurrent | 154,511 | 147,046 | ||||||
Deferred revenue, noncurrent | 6,214 | 8,768 | ||||||
Other liabilities, noncurrent | 5,361 | 3,018 | ||||||
Total liabilities | 1,550,051 | 731,936 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock | — | — | ||||||
Class A common stock | 11 | 10 | ||||||
Class B common stock | 1 | 1 | ||||||
Additional paid-in capital | 1,105,564 | 744,896 | ||||||
Accumulated other comprehensive income (loss) | 892 | (319 | ) | |||||
Accumulated deficit | (701,124 | ) | (492,211 | ) | ||||
Total stockholders’ equity | 405,344 | 252,377 | ||||||
Total liabilities and stockholders' equity | $ | 1,955,395 | $ | 984,313 | ||||
(1) | The condensed consolidated balance sheet for the prior period has been adjusted to reflect the adoption of ASC 842. |
OKTA, INC. | ||||||||
SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(unaudited) | ||||||||
Twelve Months Ended January 31, | ||||||||
2020 | 2019 | |||||||
As Adjusted(1) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (208,913 | ) | $ | (125,497 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Stock-based compensation | 126,624 | 76,320 | ||||||
Depreciation, amortization and accretion | 17,815 | 8,001 | ||||||
Amortization of debt discount and issuance costs | 25,892 | 14,279 | ||||||
Amortization of deferred commissions | 28,588 | 20,852 | ||||||
Deferred income taxes | (2,253 | ) | (765 | ) | ||||
Non-cash charitable contributions | 1,746 | 1,008 | ||||||
Loss on early extinguishment of debt | 14,572 | — | ||||||
Other, net | (130 | ) | 640 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (37,515 | ) | (39,682 | ) | ||||
Deferred commissions | (61,224 | ) | (41,342 | ) | ||||
Prepaid expenses and other assets | (4,080 | ) | (10,334 | ) | ||||
Operating lease right-of-use assets | 12,951 | 17,239 | ||||||
Accounts payable | 1,689 | (1,437 | ) | |||||
Accrued compensation | 23,034 | 7,429 | ||||||
Accrued expenses and other liabilities | 9,972 | 5,800 | ||||||
Operating lease liabilities | (9,716 | ) | (6,642 | ) | ||||
Deferred revenue | 116,432 | 89,303 | ||||||
Net cash provided by operating activities | 55,603 | 15,172 | ||||||
Cash flows from investing activities: | ||||||||
Capitalization of internal-use software costs | (3,888 | ) | (2,851 | ) | ||||
Purchases of property and equipment | (15,442 | ) | (19,811 | ) | ||||
Proceeds from sales of property and equipment | — | 740 | ||||||
Purchases of securities available for sale and other | (999,387 | ) | (631,488 | ) | ||||
Proceeds from maturities and redemption of securities available for sale | 356,277 | 298,650 | ||||||
Proceeds from sales of securities available for sale and other | 27,271 | 173,072 | ||||||
Purchases of intangible assets | (8,589 | ) | — | |||||
Payments for business acquisition, net of cash acquired | (44,283 | ) | (15,632 | ) | ||||
Net cash used in investing activities | (688,041 | ) | (197,320 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs | 1,040,660 | 334,980 | ||||||
Payments for repurchases of 2023 convertible senior notes | (224,414 | ) | — | |||||
Purchases of hedges related to 2023 convertible senior notes | — | (80,040 | ) | |||||
Proceeds from hedges related to 2023 convertible senior notes | 405,851 | — | ||||||
Proceeds from issuance of warrants related to 2023 convertible senior notes | — | 52,440 | ||||||
Payments for warrants related to 2023 convertible senior notes | (358,622 | ) | — | |||||
Purchases of capped calls related to 2025 convertible senior notes | (74,094 | ) | — | |||||
Proceeds from stock option exercises, net of repurchases | 45,363 | 36,861 | ||||||
Proceeds from shares issued in connection with employee stock purchase plan | 18,767 | 13,727 | ||||||
Other, net | (126 | ) | (206 | ) | ||||
Net cash provided by financing activities | 853,385 | 357,762 | ||||||
Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash | (209 | ) | (632 | ) | ||||
Net increase in cash, cash equivalents and restricted cash | 220,738 | 174,982 | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 311,215 | 136,233 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 531,953 | $ | 311,215 | ||||
| (1) | The condensed consolidated statement of cash flows for the prior period has been adjusted to reflect the adoption of ASC 842. |
OKTA, INC.
Reconciliation of GAAP to Non-GAAP Data
(In thousands, except percentages and 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 and amortization of acquired intangibles.
Three Months Ended
| Twelve Months Ended
| |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Gross profit | $ | 122,644 | $ | 84,085 | $ | 426,685 | $ | 285,833 | ||||||||
Add: | ||||||||||||||||
Stock-based compensation expense included in cost of revenue(1) | 5,658 | 3,730 | 20,087 | 12,820 | ||||||||||||
Amortization of acquired intangibles | 1,593 | 383 | 5,488 | 832 | ||||||||||||
Non-GAAP gross profit | $ | 129,895 | $ | 88,198 | $ | 452,260 | $ | 299,485 | ||||||||
Gross margin | 73 | % | 73 | % | 73 | % | 72 | % | ||||||||
Non-GAAP gross margin | 78 | % | 76 | % | 77 | % | 75 | % | ||||||||
| (1) | See table above for breakdown of stock-based compensation expense by line item. |
Non-GAAP Operating Loss and Non-GAAP Operating Margin
We define non-GAAP operating loss and non-GAAP operating margin as GAAP operating loss and GAAP operating margin, adjusted for stock-based compensation expense, charitable contributions, amortization of acquired intangibles and acquisition-related expenses.
Three Months Ended
| Twelve Months Ended
| |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Operating loss | $ | (44,703 | ) | $ | (27,735 | ) | $ | (185,832 | ) | $ | (119,622 | ) | ||||
Add: | ||||||||||||||||
Stock-based compensation expense(1) | 36,930 | 22,421 | 126,624 | 76,320 | ||||||||||||
Charitable contributions | 584 | — | 1,746 | 1,008 | ||||||||||||
Amortization of acquired intangibles | 1,593 | 383 | 5,488 | 832 | ||||||||||||
Acquisition-related expenses(2) | — | — | 3,449 | — | ||||||||||||
Non-GAAP operating loss | $ | (5,596 | ) | $ | (4,931 | ) | $ | (48,525 | ) | $ | (41,462 | ) | ||||
Operating margin | (27 | )% | (24 | )% | (32 | )% | (30 | )% | ||||||||
Non-GAAP operating margin | (3 | )% | (4 | )% | (8 | )% | (10 | )% | ||||||||
| (1) | See table above for breakdown of stock-based compensation expense by line item. | |
| (2) | We define acquisition-related expenses as costs associated with acquisitions, including transaction costs and other non-recurring incremental costs incurred. |
Non-GAAP Net Loss and Non-GAAP Net Margin
We define non-GAAP net loss and non-GAAP net margin as GAAP net loss and GAAP net margin, adjusted for stock-based compensation expense, charitable contributions, amortization of acquired intangibles, acquisition-related expenses, amortization of debt discount and loss on early extinguishment of debt, net of debt issuance costs.
Three Months Ended
| Twelve Months Ended
| |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net loss | $ | (50,472 | ) | $ | (30,811 | ) | $ | (208,913 | ) | $ | (125,497 | ) | ||||
Add: | ||||||||||||||||
Stock-based compensation expense(1) | 36,930 | 22,421 | 126,624 | 76,320 | ||||||||||||
Charitable contributions | 584 | — | 1,746 | 1,008 | ||||||||||||
Amortization of acquired intangibles | 1,593 | 383 | 5,488 | 832 | ||||||||||||
Acquisition-related expenses(2) | — | — | 3,449 | — | ||||||||||||
Amortization of debt discount | 9,621 | 3,655 | 24,138 | 13,194 | ||||||||||||
Loss on early extinguishment of debt, net of debt issuance costs | — | — | 10,794 | — | ||||||||||||
Non-GAAP net loss | $ | (1,744 | ) | $ | (4,352 | ) | $ | (36,674 | ) | $ | (34,143 | ) | ||||
Net margin | (30 | )% | (27 | )% | (36 | )% | (31 | )% | ||||||||
Non-GAAP net margin | (1 | )% | (4 | )% | (6 | )% | (9 | )% | ||||||||
Net loss per share | $ | (0.42 | ) | $ | (0.28 | ) | $ | (1.78 | ) | $ | (1.17 | ) | ||||
Non-GAAP net loss per share | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.31 | ) | $ | (0.32 | ) | ||||
| (1) | See table in footnote 1 in the condensed consolidated statements of operations above for breakdown of stock-based compensation expense by line item. | |
| (2) | We define acquisition-related expenses as costs associated with acquisitions, including transaction costs and other non-recurring incremental costs incurred. |
OKTA, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except percentages)
(unaudited)
Free Cash Flow and Free Cash Flow Margin
We define Free Cash Flow as net cash provided by operating activities, less cash used for purchases of property and equipment, net of sales proceeds, and capitalized internal-use software costs. Free cash flow margin is calculated as free cash flow divided by total revenue.
Free Cash Flow | ||||||||||||||||
Three Months Ended
| Twelve Months Ended
| |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net cash provided by operating activities | $ | 24,835 | $ | 10,104 | $ | 55,603 | $ | 15,172 | ||||||||
Less: | ||||||||||||||||
Purchases of property and equipment | (5,462 | ) | (5,558 | ) | (15,442 | ) | (19,811 | ) | ||||||||
Capitalization of internal-use software costs | (1,229 | ) | (522 | ) | (3,888 | ) | (2,851 | ) | ||||||||
Proceeds from sales of property and equipment | — | 740 | — | 740 | ||||||||||||
Free cash flow | $ | 18,144 | $ | 4,764 | $ | 36,273 | $ | (6,750 | ) | |||||||
Net cash provided by (used in) investing activities | $ | (562,939 | ) | $ | 80,896 | $ | (688,041 | ) | $ | (197,320 | ) | |||||
Net cash provided by financing activities | $ | 18,654 | $ | 15,410 | $ | 853,385 | $ | 357,762 | ||||||||
Free cash flow margin | 10.8% | 4.1% | 6.2% | (1.7)% | ||||||||||||
Calculated Billings
We define Calculated Billings as total revenue plus the change in deferred revenue and less the change in unbilled receivables during the period.
Calculated Billings | ||||||||||||||||
Three Months Ended
| Twelve Months Ended
| |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Total revenue | $ | 167,327 | $ | 115,471 | $ | 586,067 | $ | 399,254 | ||||||||
Add: | ||||||||||||||||
Unbilled receivables, current (beginning of period) | 1,028 | 1,581 | 1,457 | 809 | ||||||||||||
Deferred revenue, current (end of period) | 365,236 | 245,622 | 365,236 | 245,622 | ||||||||||||
Less: | ||||||||||||||||
Unbilled receivables, current (end of period) | (1,026 | ) | (1,457 | ) | (1,026 | ) | (1,457 | ) | ||||||||
Deferred revenue, current (beginning of period) | (306,743 | ) | (206,146 | ) | (245,622 | ) | (159,816 | ) | ||||||||
Current calculated billings | 225,822 | 155,071 | 706,112 | 484,412 | ||||||||||||
Add: | ||||||||||||||||
Deferred revenue, noncurrent (end of period) | 6,214 | 8,768 | 6,214 | 8,768 | ||||||||||||
Less: | ||||||||||||||||
Deferred revenue, noncurrent (beginning of period) | (7,013 | ) | (4,977 | ) | (8,768 | ) | (4,963 | ) | ||||||||
Calculated billings | $ | 225,023 | $ | 158,862 | $ | 703,558 | $ | 488,217 | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20200305005782/en/
Contacts:
Dave Gennarelli
investor@okta.com
415-851-4744
