Okta Inc. shares dropped in the extended session Wednesday after the identity-management services company’s bottom-line outlook fell well short of Wall Street expectations and as the company announced a big acquisition.
Okta
OKTA,
-6.89%
shares dropped 13% in Wednesday’s after-hours session, following a 6.9% decline in the regular session to close at $241.22, compared with a 2.7% decline in the tech-heavy Nasdaq Composite Index
COMP,
-2.70%.
Okta expects an adjusted first-quarter loss of 21 cents to 20 cents a share on revenue between $237 million and $239 million, while analysts surveyed by FactSet had forecast a loss of 6 cents a share on revenue of $237.3 million.
For the year, Okta sees an adjusted loss of 49 cents to 44 cents a share on revenue of $1.08 billion to $1.09 billion, while analysts had forecast a loss of 2 cents a share on revenue of $1.07 billion.
Okta also announced it will acquire identity-platform company Auth0 for $6.5 billion in stock. The company expects the deal to close in its second quarter ending July 31. Okta said its outlook does not reflect the proposed acquisition of Auth0.
“Combining Auth0’s developer-centric identity solution with the Okta Identity Cloud will drive tremendous value for both current and future customers,” said Todd McKinnon, chief executive and co-founder of Okta, in a statement. “In an increasingly digital world, identity is the unifying means by which we use technology — both at work and in our personal lives.”
The company, which makes software that helps workers to sign into network applications, reported a fourth-quarter loss of $75.8 million, or 58 cents a share, compared with a loss of $50.5 million, or 42 cents a share, in the year-ago period. Adjusted earnings, which excludes stock-based compensation expenses and other items, were 13 cents a share, versus a loss of 11 cents a share in the year ago period.
Revenue rose to $234.7 million from $167.3 million in the year-ago quarter. Analysts had forecast an adjusted loss a penny a share on revenue of $221.8 million.
