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5 Interesting Learnings from Okta at $2.75 Billion in ARR
- Okta has reached $2.75 billion in ARR, with a growth rate projected to slow from 12% to 10%.
- Non-GAAP operating margins stand at 27%, while free cash flow margins are at an impressive 35%.
- The company has an $18 billion market cap, approximately 6x its ARR.
- Key learnings from Okta's growth include metrics on revenue, growth, operational excellence, and market expansion.
- An essential metric is the number of customers with over $100,000 in annual contract value, currently at 4,870.
- Net retention rate has reduced from 122% to 106% over three years, signaling challenges at larger revenue scales.
- Current remaining performance obligations (cRPO) growth serves as a leading indicator for the next four quarters.
- Okta's revenue growth has sequentially decelerated, following the typical SaaS maturity curve.
- International revenue accounts for around 20% of Okta's total revenue, indicating growth potential.
- Operational excellence metrics demonstrate Okta's operating leverage efficiency, free cash flow margins, and headcount-to-revenue efficiency.
- Okta's evolution reflects the transition from a growth-focused company to one balancing growth with profitability and market leadership.
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