Notes from the Okta S-1 IPO Filing

Okta, a SaaS identity management platform (software to manage which corporate applications people can use), just released their S-1 IPO filing to go public. You might wonder how big the market is to manage authentication and authorization in the cloud, and as we’ll see, it’s quite large.

Here are a few notes for the Okta S-1 IPO filing:

  • Founded in 2009 (pg. 1 – Note: founding to IPO in eight years is fast!)
  • 2 million people use Okta daily (pg. 1)
  • 2,900 customers (pg. 2)
  • Revenues (pg. 2)
    • 2015 – $41 million
    • 2016 – $86 million
    • Last nine months – $112 million
  • Losses (pg. 2)
    • 2015 – $59 million
    • 2016 – $76 million
    • Last nine months – $65.3 million
  • Estimated $18 billion global opportunity (pg. 3)
  • Over 5,000 integrations available (pg. 4 – Note: strong network effect)
  • Product modules (pg. 4)
    • Universal directory
    • Single sign-on
    • Multi-factor authentication
    • Lifecycle management
    • Mobility management
    • API access management
  • Original company name: Saasure (pg. 6)
  • 12% internation revenue (pg. 34)
  • Accumulated deficit of $270 million (pg. 51)
  • 11% of revenue from professional services (pg. 57)
  • Weighted-average contract duration of 2.4 years (pg. 62)
  • Define contribution margin as the annual contract value of subscription commitments, or ACV, from the customer cohort at the end of a period less the associated cost of subscription revenue and sales and marketing expenses (pg. 63 – Note: this is the SaaS Magic Number)
  • 443 customers with an annual contract value over $100,000 (pg. 65)
  • Deferred revenue of $100 million (pg. 78 – Note: this means customers pay their annual subscription upfront making for a significant amount of “free” working capital)
  • “Okta” is the unit of measure for cloud cover in meteorology (pg. 88)
  • Ownership (pg. 132)
    • Co-founder/CEO – 10.3%
    • Co-founder/COO – 6.2%
    • VCs – 65.7%

Okta is like a utility providing a core service that everyone needs but doesn’t get much attention. Identity management in the cloud is critical infrastructure with a massive market and Okta, as the leader, will have a successful IPO.

Congratulations to Todd and the team!

What else? What are some more thoughts on Okta’s S-1 IPO filing?

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