—OKTA—
(READ THIS)
Following is a very compelling and insightful analysis of a lesser obvious result from OKTA’s recent quarterly release from a friend of mine in NY:
In fact RPO (Remaining Performance Obligations), or contracts signed, but not yet recognized as revenue, was up 68%. In fact, it’s now $914 million !!! Think of that compared to quarterly revenue of $140 million !!!
I just thought of the best little factoid yet: This quarter compared to a year ago, Okta’s RPO went from $544 million to $914 million year-over-year. That means they added $370 million more in signed contracts with unrecognized revenue than a year ago. If you compare that to the $45 million growth in revenue that they were able to take credit for (from $95 million to $140 million) you can see how huge that RPO growth is, and why they feel that their business is booming.
And here is a very interesting way of looking at this. Their TTM (Trailing twelve months) revenues were $486 million. The year before at this time they were $325 million. That means recognized revenue was up $161 million in the 12 months. But they put away $370 million additional in unrecognized revenue in their RPO (which will be recognized going forward). If they could have recognized it in this quarter that is was booked, it would have more than tripled their revenue gain! No wonder they were euphoric!!!!
And no wonder people are willing to pay higher EV/S ratios for SaaS stocks.
User comment: Wow that really is incredible. Thanks for the perspective
Victor:
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