- Cybersecurity firm sees stock plunge to year lows overnight
- Posts Q2 EPS loss of -$0.10 versus -$0.31 expected
- Nasdaq has lost 10% in two weeks as recession fears re-emerge
San Francisco-based cybersecurity firm Okta (OKTA:NASDAQ) saw its shares slammed in overnight trading despite beating second quarter forecasts on almost every metric.
The company, which provides cloud identity authentication management software, saw its stock tank 14% in pre-market trading to a year low $78.55 is a session that will puzzle fund managers and analysts alike.
Okta reported Q2 adjusted earnings losses of -$0.10 per share, far better than the -$0.31 consensus estimate, on a 43% year-on-year jump in revenue. Sales came in at $452 million, beating the consensus estimate of $430.6 million by more than 5%. Subscription revenue grew 44% year-over-year to $435 million.
That guidance was also better than analyst estimates only deepens the investor reaction mystery.
35% BEAT ON 2023 LOSS REDUCTION
The company expects Q3 2023 revenue to be in the range of $463 million to $465 million, representing rough 33% year-on-year growth, with EPS losses of -$0.25, versus -$0.28 forecast.
‘Looking at the second half of the fiscal year, we’re focused on refining the go-to-market strategy for the combined Auth0 and Okta sales organisation, strengthening our teams, and making strategic reductions to our spend to improve profitability,’ said Todd McKinnon, CEO and co-founder of Okta.
For the full year, to 31 January 2023, Okta expects EPS losses in the range of -$0.73 to -$0.70, on revenue around the $1.81 billion to $1.82 billion mark. That would represent a massive 35% beat on consensus EPS estimates pitched at -$1.11.
The most obvious explanation for the share price response is the frayed nerves of investors, whose mood has turned gloomy again. The Nasdaq Composite has fallen 10% since the middle of August as recession worries re-escalate.
