Business Wire | Aug 27, 2020 04:05PM EDT

Okta Announces Strong Second Quarter Results

Aug. 27, 2020

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 27, 2020--Okta, Inc. (NASDAQ: OKTA), the leading independent provider of identity for the enterprise, today announced financial results for its second quarter ended July 31, 2020.

"The three mega-trends that have been driving our business for the past several years - the adoption of cloud and hybrid IT, digital transformation, and zero trust security - are all being accelerated globally by the current environment," said Todd McKinnon, Chief Executive Officer and co-founder of Okta. "These trends are reflected in our strong second quarter results and reflect the work that Okta is doing to help organizations around the world accelerate their adoption and deployment of cloud applications, and remote access, and re-imagine their digital customer experiences. As part of this process, organizations are re-evaluating their roadmap to modernize their identity systems and Okta's platform is the linchpin of the new cloud technology stack. We believe that the world will not return to the pre-COVID work environment and Okta is committed to helping our customers on their journeys."

Second Quarter Fiscal 2021 Financial Highlights:

* Revenue: Total revenue was $200.4 million, an increase of 43% year-over-year. Subscription revenue was $190.7 million, an increase of 44% year-over-year. * Remaining Performance Obligations (RPO): RPO was $1.43 billion, an increase of 56% year-over-year. Current RPO, which is contracted subscription revenue expected to be recognized over the next 12 months, was $684.5 million, up 48% compared to the second quarter of fiscal 2020. * Calculated Billings: Total calculated billings were $198.1 million, an increase of 27% year-over-year. * GAAP Operating Loss: GAAP operating loss was $45.4 million, or 22.6% of total revenue, compared to $43.6 million, or 31.0% of total revenue, in the second quarter of fiscal 2020. * Non-GAAP Operating Income/Loss: Non-GAAP operating income was $6.5 million, or 3.2% of total revenue, compared to a non-GAAP operating loss of $9.9 million, or 7.1% of total revenue, in the second quarter of fiscal 2020. * GAAP Net Loss: GAAP net loss was $60.1 million, compared to $43.0 million in the second quarter of fiscal 2020. GAAP net loss per share was $0.48, compared to $0.37 in the second quarter of fiscal 2020. * Non-GAAP Net Income/Loss: Non-GAAP net income was $9.9 million, compared to a non-GAAP net loss of $5.2 million in the second quarter of fiscal 2020. Non-GAAP basic net income per share was $0.08, compared to a non-GAAP basic net loss per share of $0.05 in the second quarter of fiscal 2020. Non-GAAP diluted net income per share was $0.07, compared to a non-GAAP diluted net loss per share of $0.05 in the second quarter of fiscal 2020. * Cash Flow: Net cash provided by operations was $10.9 million, or 5.5% of total revenue, compared to net cash provided by operations of $1.1 million, or 0.8% of total revenue, in the second quarter of fiscal 2020. Free cash flow was $6.9 million, or 3.4% of total revenue, compared to negative $4.3 million, or 3.1% of total revenue, in the second quarter of fiscal 2020. * Cash, cash equivalents, and short-term investments were $2.5 billion at July 31, 2020.

The section titled "Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures, and reconciliations between GAAP and non-GAAP information are contained in the tables below.

Financial Outlook:

"We are pleased with our continued execution and excellent second quarter results," said Bill Losch, Chief Financial Officer of Okta. "We believe it's prudent to continue to expect some near-term economic uncertainty as the business impacts stemming from the pandemic further unfold; however, our strong first half results give us confidence in raising our fiscal year 2021 outlook for both revenue and profitability."

For the third quarter of fiscal 2021, the Company expects:

* Total revenue of $202 million to $203 million, representing a growth rate of 32% to 33% year-over-year * Non-GAAP operating loss of $3.0 million to $2.0 million * Non-GAAP net loss per share of $0.02 to $0.01, assuming weighted shares outstanding of approximately 129 million

For the full year fiscal 2021, the Company now expects:

* Total revenue of $800 million to $803 million, representing a growth rate of 37% year-over-year * Non-GAAP operating loss of $13.0 million to $11.0 million * Non-GAAP net loss per share of $0.03 to $0.01, assuming weighted shares outstanding of approximately 127 million

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Okta has not reconciled its expectations as to non-GAAP operating loss and non-GAAP net loss per share to its most directly comparable GAAP measure because certain items are out of Okta's control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP operating loss and non-GAAP net loss per share is not available without unreasonable effort.

Conference Call Information:

Okta will host a live video webcast at 2:00 p.m. Pacific Time on August 27, 2020 to discuss the results and outlook. The news release with the financial results will be accessible from the Company's website at investor.okta.com prior to the conference call. The live video webcast of the conference call will be accessible from the Okta investor relations website at investor.okta.com.

Supplemental Financial and Other Information:

Supplemental financial and other information can be accessed through the Company's investor relations website at investor.okta.com.

Non-GAAP Financial Measures:

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) per share, basic and diluted, free cash flow, free cash flow margin, current calculated billings and calculated billings. Certain of these non-GAAP financial measures exclude stock-based compensation, amortization of debt discount and debt issuance costs, non-cash charitable contributions, amortization of acquired intangibles, acquisition-related expenses and loss on early extinguishment of debt.

Okta believes that non-GAAP financial information, when taken collectively with GAAP financial measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by the Company's management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Okta encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company's business.

Forward-Looking Statements: This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, business strategy and plans, market trends and market size, opportunities and positioning. These forward-looking statements are based on current expectations, estimates, forecasts and projections. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall" and variations of these terms and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. For example, the market for our products may develop more slowly than expected or than it has in the past; our results of operations may fluctuate more than expected; there may be significant fluctuations in our results of operations and cash flows related to our revenue recognition or otherwise; the impact of COVID-19, related public health measures and any associated economic downturn on our business and results of operations may be more than we expect; a network or data security incident that allows unauthorized access to our network or data or our customers' data could damage our reputation; we could experience interruptions or performance problems associated with our technology, including a service outage; we may not be able to pay off our convertible senior notes when due; and global economic conditions could deteriorate. Further information on potential factors that could affect our financial results is included in our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission. The forward-looking statements included in this press release represent our views only as of the date of this press release and we assume no obligation and do not intend to update these forward-looking statements.

About Okta

Okta is the leading independent provider of identity for the enterprise. The Okta Identity Cloud enables organizations to securely connect the right people to the right technologies at the right time. With over 6,500 pre-built integrations to applications and infrastructure providers, Okta customers can easily and securely use the best technologies for their business. Over 8,950 organizations, including Engie, JetBlue, Nordstrom, Takeda Pharmaceutical, Teach for America, T-Mobile and Twilio, trust Okta to help protect the identities of their workforces and customers.

Okta uses its investor.okta.com website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website in addition to following our press releases, SEC filings and public conference calls and webcasts.

OKTA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

Three Months Ended Six Months Ended July 31, July 31,

2020 2019 2020 2019

Revenue:

Subscription $ 190,689 $ 132,494 $ 364,470 $ 249,657

Professionalservices and 9,757 7,986 18,835 16,046 other

Total revenue 200,446 140,480 383,305 265,703

Cost of revenue:

Subscription^(1) 39,501 27,917 76,658 52,457

Professionalservices and 11,646 10,863 22,975 21,418 other^(1)

Total cost of 51,147 38,780 99,633 73,875 revenue

Gross profit 149,299 101,700 283,672 191,828

Operating expenses:

Research and 53,866 40,045 102,360 74,077 development^(1)

Sales and 98,322 78,385 202,365 160,497 marketing^(1)

General andadministrative^ 42,499 26,887 76,534 52,653 (1)

Total operating 194,687 145,317 381,259 287,227 expenses

Operating loss (45,388 ) (43,617 ) (97,587 ) (95,399 )

Interest expense (16,931 ) (4,304 ) (27,695 ) (8,545 )

Interest income 3,960 3,464 8,859 6,364 and other, net

Loss on earlyextinguishment (2,174 ) - (2,174 ) - of debt

Interest and (15,145 ) (840 ) (21,010 ) (2,181 )other, net

Loss beforebenefit from (60,533 ) (44,457 ) (118,597 ) (97,580 )income taxes

Benefit from (433 ) (1,477 ) (835 ) (2,634 )income taxes

Net loss $ (60,100 ) $ (42,980 ) $ (117,762 ) $ (94,946 )



Net loss pershare, basic and $ (0.48 ) $ (0.37 ) $ (0.94 ) $ (0.83 )diluted



Weighted-averageshares used tocompute net loss 126,319 115,033 124,922 114,042 per share, basicand diluted

^(1) Amounts include stock-based compensation expense as follows (inthousands):

Three Months Ended Six Months Ended July 31, July 31,

2020 2019 2020 2019

Cost of $ 5,164 $ 3,111 $ 9,139 $ 5,533subscriptionrevenueCost ofprofessional 2,000 1,873 3,811 3,392services andotherResearch and 14,953 9,082 26,888 15,428developmentSales and 13,165 9,236 24,325 16,022marketingGeneral and 13,112 7,972 21,959 13,584administrativeTotalstock-based $ 48,394 $ 31,274 $ 86,122 $ 53,959compensationexpense

OKTA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

July 31, January 31,

2020 2020

Assets

Current assets:

Cash and cash equivalents $ 957,234 $ 520,048

Short-term investments 1,557,279 882,976

Accounts receivable, net of allowances 110,540 130,115

Deferred commissions 37,808 33,636

Prepaid expenses and other current assets 44,074 32,950

Total current assets 2,706,935 1,599,725

Property and equipment, net 63,406 53,535

Operating lease right-of-use assets 157,781 125,204

Deferred commissions, noncurrent 86,556 77,874

Intangible assets, net 30,031 32,529

Goodwill 48,023 48,023

Other assets 22,283 18,505

Total assets $ 3,115,015 $ 1,955,395

Liabilities and stockholders' equity

Current liabilities:

Accounts payable $ 4,726 $ 3,837

Accrued expenses and other current liabilities 54,803 36,887

Accrued compensation 39,227 40,300

Convertible senior notes, net 43,578 100,703

Deferred revenue 391,246 365,236

Total current liabilities 533,580 546,963

Convertible senior notes, net, noncurrent 1,689,438 837,002

Operating lease liabilities, noncurrent 189,208 154,511

Deferred revenue, noncurrent 5,574 6,214

Other liabilities, noncurrent 12,018 5,361

Total liabilities 2,429,818 1,550,051



Stockholders' equity:

Preferred stock - -

Class A common stock 12 11

Class B common stock 1 1

Additional paid-in capital 1,498,549 1,105,564

Accumulated other comprehensive income 5,521 892

Accumulated deficit (818,886 ) (701,124 )

Total stockholders' equity 685,197 405,344

Total liabilities and stockholders' equity $ 3,115,015 $ 1,955,395

OKTA, INC.

SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

Six Months Ended July 31,

2020 2019

Cash flows from operating activities:

Net loss $ (117,762 ) $ (94,946 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Stock-based compensation 86,106 53,959

Depreciation, amortization and accretion 12,691 7,916

Amortization of debt discount and issuance costs 26,330 8,113

Amortization of deferred commissions 18,077 13,192

Deferred income taxes (1,915 ) (3,057 )

Non-cash charitable contributions 2,417 652

Loss on early extinguishment of debt 2,174 -

Other, net 1,435 84

Changes in operating assets and liabilities:

Accounts receivable 18,626 4,459

Deferred commissions (30,332 ) (21,372 )

Prepaid expenses and other assets (7,622 ) 1,534

Operating lease right-of-use assets 8,972 6,189

Accounts payable 810 1,368

Accrued compensation 15,045 4,717

Accrued expenses and other liabilities (3,131 ) 1,304

Operating lease liabilities (7,663 ) (159 )

Deferred revenue 25,369 36,175

Net cash provided by operating activities 49,627 20,128

Cash flows from investing activities:

Capitalization of internal-use software costs (2,326 ) (1,330 )

Purchases of property and equipment (10,669 ) (9,917 )

Purchases of securities available for sale and (1,029,281 ) (237,693 )other

Proceeds from maturities and redemption of 280,395 136,344 securities available for sale

Proceeds from sales of securities available for 89,620 17,329 sale and other

Purchases of intangible assets - (8,500 )

Payments for business acquisition, net of cash - (44,223 )acquired

Net cash used in investing activities (672,261 ) (147,990 )

Cash flows from financing activities:

Proceeds from issuance of convertible senior notes, 1,135,418 - net of issuance costs

Payments for repurchases of convertible senior (181 ) - notes

Proceeds from hedges related to convertible senior 195,046 - notes

Payments for warrants related to convertible senior (175,399 ) - notes

Purchases of capped calls related to convertible (133,975 ) - senior notes

Proceeds from stock option exercises 27,517 27,453

Proceeds from shares issued in connection with 12,821 9,005 employee stock purchase plan

Other, net - (126 )

Net cash provided by financing activities 1,061,247 36,332

Effects of changes in foreign currency exchange 578 (1,187 )rates on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents 439,191 (92,717 )and restricted cash

Cash, cash equivalents and restricted cash at 531,953 311,215 beginning of period

Cash, cash equivalents and restricted cash at end $ 971,144 $ 218,498 of period

OKTA, INC.Reconciliation of GAAP to Non-GAAP Data(In thousands, except percentages and per share data) (unaudited)

Non-GAAP Gross Profit and Non-GAAP Gross Margin

We define non-GAAP gross profit and non-GAAP gross margin as GAAP gross profit and GAAP gross margin, adjusted for stock-based compensation expense and amortization of acquired intangibles.

Three Months Ended Six Months Ended July 31, July 31,

2020 2019 2020 2019

Gross profit $ 149,299 $ 101,700 $ 283,672 $ 191,828

Add:

Stock-based compensationexpense included in cost 7,164 4,984 12,950 8,925 of revenue^(1)

Amortization of acquired 1,594 1,785 3,187 2,548 intangibles

Non-GAAP gross profit $ 158,057 $ 108,469 $ 299,809 $ 203,301

Gross margin 74 % 72 % 74 % 72 %

Non-GAAP gross margin 79 % 77 % 78 % 77 %

^ See table in footnote (1) to the condensed consolidated statements of(1) operations above for breakdown of stock-based compensation expense by line item.

Non-GAAP Operating Income (Loss) and Non-GAAP Operating Margin

We define non-GAAP operating income (loss) and non-GAAP operating margin as GAAP operating loss and GAAP operating margin, adjusted for stock-based compensation expense, non-cash charitable contributions, amortization of acquired intangibles and acquisition-related expenses.

Three Months Ended Six Months Ended July 31, July 31,

2020 2019 2020 2019

Operating loss $ (45,388 ) $ (43,617 ) $ (97,587 ) $ (95,399 )

Add:

Stock-based compensation 48,394 31,274 86,122 53,959 expense^(1)

Non-cash charitable 1,881 652 2,417 652 contributions

Amortization of acquired 1,594 1,785 3,187 2,548 intangibles

Acquisition-related - - - 3,449 expenses^(2)

Non-GAAP operating income $ 6,481 $ (9,906 ) $ (5,861 ) $ (34,791 )(loss)

Operating margin (23 ) (31 ) (25 ) (36 ) % % % %

Non-GAAP operating margin 3 % (7 ) (2 ) (13 ) % % %

^ See table in footnote (1) to the condensed consolidated statements of(1) operations above for breakdown of stock-based compensation expense by line item.

^ We define acquisition-related expenses as costs associated with(2) acquisitions, including transaction costs and other non-recurring incremental costs incurred.

Non-GAAP Net Income (Loss) and Non-GAAP Net Margin

We define non-GAAP net income (loss) and non-GAAP net margin as GAAP net loss and GAAP net margin, adjusted for stock-based compensation expense, non-cash charitable contributions, amortization of acquired intangibles, acquisition-related expenses, amortization of debt discount and debt issuance costs and loss on early extinguishment of debt.

Three Months Ended Six Months Ended July 31, July 31,

2020 2019^(1) 2020 2019^(1)

Net loss $ (60,100 ) $ (42,980 ) $ (117,762 ) $ (94,946 )

Add:

Stock-basedcompensation expense^ 48,394 31,274 86,122 53,959 (2)

Non-cash charitable 1,881 652 2,417 652 contributions

Amortization of 1,594 1,785 3,187 2,548 acquired intangibles

Acquisition-related - - - 3,449 expenses^(3)

Amortization of debtdiscount and debt 15,973 4,088 26,330 8,113 issuance costs^(4)

Loss on earlyextinguishment of debt^ 2,174 - 2,174 - (5)

Non-GAAP net income $ 9,916 $ (5,181 ) $ 2,468 $ (26,225 )(loss)

Net margin (30 ) (31 ) (31 ) (36 ) % % % %

Non-GAAP net margin 5 % (4 ) 1 % (10 ) % %

^ Prior periods have been adjusted to conform to the current presentation.(1) See footnotes (4) and (5) for additional details.

^ See table in footnote (1) to the condensed consolidated statements of(2) operations above for breakdown of stock-based compensation expense by line item.

^ We define acquisition-related expenses as costs associated with(3) acquisitions, including transaction costs and other non-recurring incremental costs incurred.

Amortization of debt issuance costs is an adjustment to non-GAAP net income (loss), effective the three and six months ended July 31, 2020.^ Debt issuance costs included are $0.8 million and $1.4 million for the(4) three and six months ended July 31, 2020, respectively, and $0.3 million and $0.6 million for the three and six months ended July 31, 2019, respectively.

Loss on early extinguishment of debt is calculated inclusive of write-offs^ of debt issuance costs, effective the three and six months ended July 31,(5) 2020. The amounts of these write-offs are $1.0 million for the three and six months ended July 31, 2020, respectively, and nil for the three and six months ended July 31, 2019, respectively.

Non-GAAP Net Income (Loss) per share, basic and diluted

We define non-GAAP net income (loss) per share, basic, as non-GAAP net income (loss) divided by GAAP weighted-average shares used to compute net loss per share, basic and diluted.

We define non-GAAP net income (loss) per share, diluted, as non-GAAP net income (loss) divided by GAAP weighted-average shares used to compute net loss per share, basic and diluted adjusted for the potentially dilutive effect of (i) employee equity incentive plans, excluding the impact of unrecognized stock-based compensation expense, and (ii) convertible senior notes outstanding and related warrants. In addition, non-GAAP net income (loss) per share, diluted, includes the anti-dilutive impact of the Company's note hedge and capped call agreements on convertible senior notes outstanding, which fully reduced the potential dilutive effect of the convertible senior notes outstanding. Accordingly, the Company did not record any adjustments to non-GAAP net income (loss) for the potential impact of the convertible senior notes outstanding under the if-converted method.

Three Months Ended July Six Months Ended July 31, 31,

2020 2019^(1) 2020 2019^(1)

Net loss $ (60,100 ) $ (42,980 ) $ (117,762 ) $ (94,946 )

Add:

Stock-basedcompensation expense^ 48,394 31,274 86,122 53,959 (2)

Non-cash charitable 1,881 652 2,417 652 contributions

Amortization of 1,594 1,785 3,187 2,548 acquired intangibles

Acquisition-related - - - 3,449 expenses^(3)

Amortization of debtdiscount and debt 15,973 4,088 26,330 8,113 issuance costs^(4)

Loss on earlyextinguishment of debt^ 2,174 - 2,174 - (5)

Non-GAAP net income $ 9,916 $ (5,181 ) $ 2,468 $ (26,225 )(loss)



Weighted-average sharesused to compute net 126,319 115,033 124,922 114,042 loss per share, basicand diluted

Non-GAAPweighted-average effect 15,936 - 16,281 - of potentially dilutivesecurities

Non-GAAPweighted-average sharesused to compute 142,255 115,033 141,203 114,042 non-GAAP net income(loss) per share,diluted



Net loss per share, $ (0.48 ) $ (0.37 ) $ (0.94 ) $ (0.83 )basic and diluted

Non-GAAP net income(loss) per share, basic $ 0.08 $ (0.05 ) $ 0.02 $ (0.23 )^(6)

Non-GAAP net income(loss) per share, $ 0.07 $ (0.05 ) $ 0.02 $ (0.23 )diluted^(6)

^ Prior periods have been adjusted to conform to the current presentation.(1) See footnotes (4), (5) and (6) for additional details.

^ See table in footnote (1) to the condensed consolidated statements of(2) operations above for breakdown of stock-based compensation expense by line item.

^ We define acquisition-related expenses as costs associated with(3) acquisitions, including transaction costs and other non-recurring incremental costs incurred.

Amortization of debt issuance costs is an adjustment to non-GAAP net^ income (loss), effective the three and six months ended July 31, 2020.(4) Debt issuance costs included are $0.8 million and $1.4 million for the three and six months ended July 31, 2020, respectively, and $0.3 million and $0.6 million for the three and six months ended July 31, 2019, respectively.

^ Loss on early extinguishment of debt is calculated inclusive of write-offs(5) of debt issuance costs, effective the three and six months ended July 31, 2020. The amounts of these write-offs are $1.0 million for the three and six months ended July 31, 2020, respectively, and nil for the three and six months ended July 31, 2019, respectively.

^ The total impact of the adjustments noted in footnotes (4) and (5) and for(6) the periods noted in footnote (1) above on non-GAAP net income (loss) per share, basic and diluted is nil and $0.01 for the three and six months ended July 31, 2019, respectively.

OKTA, INC. Reconciliation of GAAP to Non-GAAP Financial Measures(In thousands, except percentages) (unaudited)

Free Cash Flow and Free Cash Flow Margin

We define Free Cash Flow as net cash provided by operating activities, less cash used for purchases of property and equipment and capitalized internal-use software costs. Free cash flow margin is calculated as free cash flow divided by total revenue.

Three Months Ended Six Months Ended July 31, July 31,

2020 2019 2020 2019

Net cash providedby (used in) $ 10,930 $ (1,134 ) $ 49,627 $ 20,128 operating activities

Less:

Purchases ofproperty and (2,739 ) (2,207 ) (10,669 ) (9,917 )equipment

Capitalization ofinternal-use (1,326 ) (961 ) (2,326 ) (1,330 )software costs

Free cash flow $ 6,865 $ (4,302 ) $ 36,632 $ 8,881

Net cash used ininvesting $ (722,865 ) $ (22,383 ) $ (672,261 ) $ (147,990 )activities

Net cash providedby financing $ 1,047,080 $ 23,070 $ 1,061,247 $ 36,332 activities

Free cash flow 3 % (3 ) 10 % 3 %margin %

Calculated Billings

We define Calculated Billings as total revenue plus the change in deferred revenue and less the change in unbilled receivables during the period.

Three Months Ended Six Months Ended July 31, July 31,

2020 2019 2020 2019

Total revenue $ 200,446 $ 140,480 $ 383,305 $ 265,703

Add:

Unbilled receivables,current (beginning of 1,121 799 1,026 1,457 period)

Deferred revenue, 391,246 283,724 391,246 283,724 current (end of period)

Less:

Unbilled receivables, (2,113 ) (1,004 ) (2,113 ) (1,004 )current (end of period)

Deferred revenue,current (beginning of (392,121 ) (268,033 ) (365,236 ) (245,622 )period)

Current calculated 198,579 155,966 408,228 304,258 billings

Add:

Deferred revenue,noncurrent (end of 5,574 7,469 5,574 7,469 period)

Less:

Deferred revenue,noncurrent (beginning (6,070 ) (7,671 ) (6,214 ) (8,768 )of period)

Calculated billings $ 198,083 $ 155,764 $ 407,588 $ 302,959

View source version on businesswire.com: https://www.businesswire.com/news/home/20200827005238/en/

CONTACT: Investor Contact: Dave Gennarelli investor@okta.com 415-851-4744

CONTACT: Media Contact: Jenna Kozel press@okta.com 415-418-9600