Okta (OKTA) Beats Q3 Views; Cybersecurity Firm’s Fiscal 2025 Guidance Mixed
Okta (OKTA) early Wednesday posted third-quarter earnings and revenue that topped analyst estimates, but the stock fell on fresh details about a recent data breach affecting more customers.
The San Francisco-based cybersecurity firm said per-share earnings were 48 cents on an adjusted basis for the quarter ending Oct. 31, up from zero cents a year earlier. Revenue climbed 21% to $584 million, Okta said. Analysts polled by FactSet had expected Okta earnings of 30 cents a share on revenue of $560.6 million.
For the current quarter ending in January, Okta forecast $586 million in revenue, above Wall Street’s estimate of $580.4 million. For fiscal 2025, Okta predicted at least 10% revenue growth to between $2.46 billion and $2.47 billion, below FactSet’s estimates for 15% growth. But it forecast 17% operating margins, above the estimates of 11.9%.
But Okta stock fell 2.5% to close at 70.77 on Wednesday amid news of a data breach. Hackers accessed names and email addresses of all Okta customer support system users for Okta’s Workforce and Customer Identity Clouds, the company said Tuesday.
The higher-than-expected impact of the security incident contributed to the stock’s drop, said Raymond James analyst Adam Tindle.
Okta disclosed the data breach after the market close on Tuesday. The company had moved up its earnings release to before the market open, from after the close as expected.
OKTA Stock Pressured By Data Breaches
Okta provides security software to monitor and manage privileged accounts. Hackers often target employees or management with administrative access to company computer systems.
On the stock market today, Okta stock fell 2.5% to close at 70.77. The company released earnings before the market open rather than after the close as expected. Meanwhile, OKTA had climbed 7% in 2023 prior to the earnings report.
Data breaches have pressured the cybersecurity stock. The company disclosed late Tuesday that a recent hacking incident impacted more customers than previously disclosed.
“Okta’s security incident update states that the malicious actor pilfered the names and email addresses of all Okta customer support system users for Okta Workforce and Customer Identity Clouds,” said Raymond James analyst Adam Tindle in a report.
Okta’s security software monitors and manages privileged accounts. Hackers often target employees or management with administrative access to company computer systems.
Heading into the earnings report, Okta owned a Relative Strength Rating of 67 out of a possible 99, according to IBD Stock Checkup.
Also, growing competition from Microsoft (MSFT) is another issue.
Last year, Okta stock dived nearly 70% amid sales challenges and a nettlesome acquisition.
Okta earnings follow strong results from cybersecurity peers Zscaler (ZS) and CrowdStrike (CRWD) earlier in the week.
Follow Reinhardt Krause for updates on artificial intelligence, cybersecurity and cloud computing.
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