Earnings Analysis for OKTA
Revenue Analysis:
Total and Operating Revenue: OKTA’s operating revenue has steadily increased over the considered periods, from $518 million in 2023-Q2 to $605 million in 2024-Q1. This indicates a growth trajectory in core business operations.
Gross Profit Margins: Gross profit also shows a positive trend, rising from $376 million in 2023-Q2 to $460 million in 2024-Q1. This growth in gross profit is consistent with the increase in revenue, suggesting effective revenue generation relative to direct costs.
Cost Management:
Cost of Revenue: The cost of revenue has been moderately stable, from $142 million in 2023-Q2 to $145 million in 2024-Q1, indicating controlled direct costs relative to revenue.
Operating Expense: Operating expenses have increased from $529 million in 2023-Q2 to $546 million in 2023-Q4 but slightly reduced to $515 million in 2024-Q1, illustrating a potential emphasis on cost efficiency in recent periods.
Total Expenses: Total expenses rose from $671 million in 2023-Q2 to $701 million in 2023-Q3 but then slightly decreased to $691 million in 2023-Q4 and further down to $660 million in 2024-Q1, indicating some degree of successful cost management.
Profitability Analysis:
EBITDA: EBITDA has improved from -$87 million in 2023-Q2 to -$23 million in 2024-Q1, pointing towards better operational efficiency over time.
Operating Income: Operating Income shows negative figures, but improving from -$153 million in 2023-Q2 to -$55 million in 2024-Q1, indicating reduced operational losses.
Pretax Income: Pretax income shows a gradual improvement in losses, from -$115 million in 2023-Q2 to -$44 million in 2024-Q1.
Net Income: Net income remains negative; however, it shows an improvement over the periods, with losses reducing from -$119 million in 2023-Q2 to -$44 million in 2024-Q1.
Cash Flow Indicators:
Reconciled Depreciation: Reconciled depreciation, a measure impacting cash flow, has seen variations but overall shows substantial figures appropriate for a tech company’s asset depreciation requirements.
Interest Expense: Interest expense is relatively controlled and small compared to other metrics, implying that debt-related costs are not substantially affecting OKTA’s financials.
Taxation:
Tax Rate: The general tax rate calculation for unusual items remains around 0.21, which shows standard taxation considerations.
Tax Provision: Tax provision has been fluctuating, which can be associated with changes in pre-tax income and fiscal adjustments.
Tax Effect of Unusual Items: These effects reveal additional fiscal impacts from non-recurring events, which have varied over the periods.
Shareholder Metrics:
Diluted and Basic EPS: EPS figures are negative but show improvement; Diluted EPS improved from -0.74 in 2023-Q2 to -0.26 in 2024-Q1.
Average Shares: Diluted and basic average shares counts have remained relatively stable, ensuring that the per-share measurements are grounded on a stable shares base.
Net Income Available to Common Stockholders: This metric aligns with the net income figures, consistently displaying losses that are reflective of operational challenges but show a diminishing negative trend.
Conclusion:
OKTA has demonstrated a pattern of improving financial performance despite reported losses. The reduction in operating loss, stable cost management, and improved gross profitability all reflect potential for turning profitable. Continued focus on operational efficiencies and revenue growth will be crucial for future financial health. Investments in technologies and markets that could enhance profitability should be considered, along with potential cost optimizations in aspects where expenses have been consistently high.