Okta Inc (NASDAQ:OKTA) stock rose 8.55% (As on March 2, 11:23:11 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 23. Subscription revenue was $495 million, an increase of 34% year-over-year. RPO, or subscription backlog, was $3.01 billion, an increase of 12% year-over-year. cRPO, which is contracted subscription revenue expected to be recognized over the next 12 months, was $1.68 billion, up 25% compared to the fourth quarter of fiscal 2022. Total calculated billings was $710 million, an increase of 18% year-over-year. Non-GAAP operating income was $46 million, or 9% of total revenue, compared to non-GAAP operating loss of $24 million, or (6)% of total revenue, in the fourth quarter of fiscal 2022. Net cash provided by operations was $76 million, or 15% of total revenue, compared to net cash provided by operations of $14 million, or 4% of total revenue, in the fourth quarter of fiscal 2022. Free cash flow was $72 million, or 14% of total revenue, compared to $5 million, or 1% of total revenue, in the fourth quarter of fiscal 2022. Cash, cash equivalents, and short-term investments were $2.58 billion at January 31, 2023.

OKTA in the fourth quarter of FY 23 has reported the adjusted earnings per share of 30 cents, beating the analysts’ estimates for the adjusted earnings per share of 21 cents. The company had reported the adjusted revenue growth of 33 percent to $510 million in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $489.8 million. This is driven by the 34% surge in subscription revenue to $495M. Okta also reported calculated billings of $710M, beating the consensus of $661.3M.

For this quarter, Okta sees EPS between $0.11 and $0.12 on revenue of $510M (up or down $1M), ahead of the consensus for flat EPS on revenue of $497.9M. For FY24, Okta projects EPS in the range of $0.74-0.79 on revenue of $2.16-2.17B, which compares to the market estimate for FY earnings of $0.32 per share on sales of $2.16B.

Meanwhile, in the aftermath of the earnings report, TD Cowen analysts upgraded Okta shares to Outperform from Market Perform with a price target of $100 per share (the prior $70). The upgrade is based on: 1) Strong FQ4 results and improved FY24 guidance; 2) Focus shifting to profitable growth as FY24 operating & FCF margin should dramatically expand on the heels of prior & expected disciplined cost mgmt; 3) Ongoing healthy trends realized across the Identity arena given its mission criticality, as per the analysts’ note.