Increasing demand for cybersecurity services saw three companies beat expectations in quarterly earnings reports today – Okta Inc., CrowdStrike Holding Inc. and Secureworks Corp.
For the quarter ending April 30, Okta reported a non-generally accepted accounting principles net loss of $43 million or 27 cents per share compared to a loss of $13 million or 10 cents per share in the same quarter last year. Revenue came in at $415 million, up 65% year-over-year.
Analysts had expected an EPS loss of 34 cents on revenue of $388.9 million.
Okta’s subscription revenue was up 66% to $398 million. Excluding $66 million attributable to Auth0 Inc., which Okta acquired last year, total revenue grew 39%. The company had $2.49 billion in cash, cash equivalents and short-term investments as of the end of April.
“We delivered solid first-quarter results highlighted by strength in new customer additions, dollar-based net retention rate and the success we’re having with large customers as they continue their journey to the cloud,” Todd McKinnon, chief executive officer and co-founder of Okta, said in a statement. “Organizations around the world have made it clear that identity is the foundation for their digital transformation projects and zero-trust security environments.”
For the second quarter, Okta predicted a non-GAAP EPS loss of 31 cents to 32 cents on revenue of $428 million to $430 million. Analysts had been predicting 34 cents and $422.7 million. For the full fiscal year of 2023, the company expects an EPS loss of $1.11 to $1.14 on revenue of $1.805 billion to $1.815 billion. Market analysts had expected $1.24 and $1.78 billion.
With a strong earnings beat and better-than-expected outlook, shares in Okta were up 17.78% in late trading to be sitting at $110.35 as of 7:54 p.m. EDT.
CrowdStrike reported a non-GAAP income of $74.8 million or 31 cents per share compared to $23.3 million or 10 cents per share in the same quarter last year. Revenue came in at $487.8 million, up 61% year-over-year. Analysts had predicted EPS of 23 cents on revenue of $464 million.
The company saw its subscription revenue increase 64% year-over-year to $459.8 million and annual recurring revenue was up 61% to $1.92 billion. CrowdStrike added $190.5 million in new ARR in the quarter.
“Robust growth at an increased scale along with our relentless focus on execution and unit economics drove significant year-over-year operating leverage and record cash generation even as we increased investments to capture the substantial market opportunity ahead of us,” CrowdStrike Chief Financial Officer Burt Podbere, said in a statement.
Looking forward, CrowdStrike predicted second-quarter fiscal 2023 non-GAAP EPS of 27 cents to 28 cents on revenue of $512.7 million to $516.8 million. Analysts had expected a revenue figure of $509.8 million. For the full fiscal year of 2023, CrowdStrikes guidance is EPS of $1.18 to $1.22 on revenue of $2.19 billion to $2.21 billion.
Despite a strong earnings beat and better-than-expected outlook, CrowdStrike shares dropped after the bell and were down 2.45% to $170.05 as of 8 p.m. EDT.
Rounding out the trio, Secureworks reported a non-GAAP net loss of $21.6 million or 26 cents per share compared to a profit of $6.4 million or eight cents a share in the year prior. Revenue came in at $121 million, down from $139.5 million in the first quarter of fiscal 2022. Analysts had expected an EPS loss of 15 cents on revenue of $120.9 million.
Secureworks’ ongoing decline in revenue is due to a shift by the company away from legacy systems to its Taegis cloud platform. Secureworks Taegis grew to $180 million in annual recurring revenue in the quarter, up 149% year-over-year, with 900 additional customers signing up to the platform, up 180%.
“Our customers recognize that Secureworks Taegis future proofs their security program,” Wendy Thomas, president and CEO of Secureworks, said in a statement. “Our customers are investing in Secureworks Taegis as a long-term security solution that can easily evolve with their technology environments and ever-changing adversarial attack tactics and techniques.”
For the second quarter, Secureworks predicts a non-GAAP EPS loss of 15 cents to 17 cents on revenue of $115 million to $117 million. For the fiscal year 2023, the company provided guidance of a non-GAAP EPS loss of 61 cents to 70 cents on revenue of $465 million to $490 million.
Secureworks released its earnings at the opening of trading and investors liked the numbers. The company’s shares closed regular trading up 6.36% to $12.37.