Investing.com -- Shares of Okta Inc (NASDAQ:OKTA) surged over 17% in premarket trading Wednesday after the digital-identity verification provider reported a quarterly profit and higher revenue
Revenue for the third quarter ended Oct. 31 rose 14% to $651 million, while net income was $17 million, compared to a loss of $81 million a year earlier.
Current remaining performance obligations (cRPO) grew 13% in the quarter, ahead of the company's guidance of 9% growth.
“Our solid Q3 results were underpinned by continued strong profitability and cash flow,” said Todd McKinnon, Okta's Chief Executive Officer.
“The focused investments we’ve made in our partner ecosystem, the public sector vertical, and large customers are materializing in our business with each of these areas contributing meaningfully to top-line growth."
For the fourth quarter, Okta forecast total revenue between $667 million and $669 million, representing year-over-year growth of 10% to 11%.
The company also projected current remaining performance obligations (cRPO), a measure of backlog, to range between $2.13 billion and $2.135 billion, up 9% from a year ago, in line with consensus estimates.
Moreover, Okta offered a preliminary fiscal 2026 year growth outlook of 7% year-over-year, below the consensus of 10%.
"While guidance remains conservative, the magnitude of beats should narrow as mgmt. is no longer embedding extra conservatism for the Oct'23 breach," D.A. Davidson analysts commented. "Further growth deceleration into the high single digits remains likely in our view & we thus remain Neutral rated," while lifting the price target form $75 to $90.
Meanwhile, RBC Capital Markets analysts maintained an Outperform rating on Okta and their price target of $101. "We continue to think valuation remains attractive and like the path to upside in Q4 and into FY/26," analysts wrote.
Pratyush Thakur contributed to this report.