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Okta Projects In-Line Revenue on Remote-Working Demand

Nico Grant

(Bloomberg) -- Okta Inc. projected revenue in the current quarter in line with Wall Street estimates, suggesting that a swell of remote workers has created steady demand for its security software.

Sales will be $185 million to $187 million in the period ending in July, the San Francisco-based company said Thursday in a statement. Analysts, on average, projected $185 million, according to data compiled by Bloomberg. Okta expects a loss, excluding some items, of 1 cent to 2 cents a share, better than analysts’ projection of a loss of 9 cents.

The company affirmed its annual revenue forecast of as much as $780 million. The company now projects a narrower adjusted loss in the fiscal year of as much as 23 cents a share compared with an earlier forecast of 36 cents.

Okta makes identity-management software used to log in to various systems. The company has benefited from businesses’ need to have employees remotely access corporate systems in a secure way. Chief Executive Officer Todd McKinnon has sought to integrate his technology with programs from various other companies in a bid to compete against larger rival Microsoft Corp. In April, Okta expanded an alliance with onetime foe VMware Inc. to help protect networks and applications from unsafe software and devices. The company announced similar pacts with CrowdStrike Holdings Inc. and Tanium Inc.

“The good news for us is only 12% of our business is in Covid-19 impacted industries,” McKinnon said in an interview. “There are other companies going quickly to remote work and doing contracts that got fast-tracked.”

Okta’s revenue climbed 46% to $183 million in the period that ended April 30, beating analysts’ estimates of $172 million. Excluding some items, the company lost $8.1 million in the quarter, or 7 cents a share. Analysts projected a loss of 18 cents.

Okta’s remaining performance obligations, a measure of future business, jumped 57% in the quarter to $1.2 billion.

(Corrects explanation of remaining performance obligations in final paragraph.)

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