Okta Inc. (NASDAQ:OKTA) is coming off an impressive third-quarter and looks set to finish the year on a high at the back of strong demand for its identity software. The identity software company is one of the biggest beneficiaries of the working from home trend as employee’s transition to the cloud to stay clear of the coronavirus.
Identity Software Demand
The company has maintained a swift revenue growth trajectory amid the pandemic, spurred by greater use of its products. The company’s security products, which help employees who need to access corporate systems as well as students who must use remote learning app, continue to elicit strong demand. The strong demand stems from the accelerated adoption of cloud-based applications.
Facing stiff competition from the likes of Microsoft Corporation (NASDAQ:MSFT), the company has inked a strategic partnership with cloud heavyweight Amazon.com, Inc. (NASDAQ: AMZN). Conversely, Okta identity Cloud will now be available on Amazon Web Services Marketplace.
Partnering with a big cloud company is part of the company’s push to reach a massive customer base as well as a strengthened revenue base. In the recent quarter, sales were up 42% to $217 million above consensus estimates of $203 million.
Revenue Growth
The Identity software company registered an adjusted profit of 4 cents, way above an expected net loss of 1 cent a share. Likewise, the company exited the quarter with $2.5 billion in cash and short term investments.
Strong revenue growth and record cash flows attest to success with large enterprise customers and co secular tailwinds that continue to drive the core business. Buoyed by strong performance in the third quarter, management has raised the outlook for the fiscal year.
The fourth quarter's revenue is expected to come in at between $221 million and $222 million, representing a 32% to 33% year-over-year growth. For the full year, the identity software company projects a 40% increase in revenue at between $822 and $823 million.
Okta is up by more than 70% for the year at the back of solid underlying fundamentals that continue to fuel the upward momentum.