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This statistic highlights Okta’s Revenue by Segment from 2016 onwards, split between Subscription, and Professional services & others segments.
Okta’s Revenue by Segment
|Segment||Q3 2021||Q3 2020||YoY Growth||Revenue share in Q3 2021|
|Professional services and other||$10.64||$8.52||25%||5%|
(All figures in millions, except percentages)
The Okta Identity Cloud enables the customers to reliably connect with the right people, to the right technologies and services at the right time. Okta has designed the Okta Identity Cloud to help organizations with an integrated approach to managing and securing every identity in their organization. Contractors, as well as employees, use the Okta Identity Cloud to seamlessly and securely access the applications they need to do their important work. Okta serves more than 10,000 customers in almost every industry. Its customer base includes leading global organizations like largest enterprises, small and medium-sized businesses, non-profits companies, universities, and government agencies. The revenue generated by Okta is in the form of Subscription, Professional services & others.
Revenue from Subscription Segment
Okta’s revenue from subscription consists of fees for access to and usage of its cloud-based platform and other related support. Subscription revenue depends on the number of customers, the number of users per customer, and the products used. Okta invoices its customers in advance for the annual installments of subscriptions to the platform.
Okta offers Software-as-a-Service (SaaS) business model and generates revenue primarily by selling multi-year subscriptions of cloud-based offerings. It focuses more on acquiring and retaining the customers and by providing access to the Okta Identity Cloud and up-selling additional products. Okta sells its products both directly and indirectly through field teams, inside sales teams, the network of channel partners like resellers, system integrators, and other distribution partners.
Okta’s business is mainly dependent on subscriptions fee paid by the customers. Hence, the existing customers must renew their subscriptions when existing contract terms expire and also purchase additional licenses or subscriptions as well as attract new customers. However, the customer retention and expansion may decline or fluctuate as a result of several factors like pricing plans especially particularly in light of COVID-19 related economic conditions, customers’ satisfaction with the products, reductions in the customers’ spending levels, the prices of competing software products, user adoption of the platform, new product releases, product support, deployment success, utilization rates by the customers, and changes to the packaging of the product offerings.
In Q3 2021, Okta generated almost 95% of its total revenue from subscriptions amounting to $206.74 million. The revenue from this segment has increased by 43% year-over-year from $144.52 million in Q3 2020. This increase in revenue was primarily due to the addition of new customers, increase in users as well as sales of additional products to existing customers.
Revenue from Professional services & others Segment
Okta generates revenue from Professional services which includes assisting customers in implementing and optimizing the use of Okta products. Professional services include training services, application configuration, and system integration. The professional services team provides aid to customers in the deployment of the Okta Identity Cloud as well as assist in identity experts, security experts, SmartStart, and customized deployment plans. Professional services look after customer-specific requests related to application integrations, user interface enhancements, and other customer-specific requests. Revenue from professional services is recognized as revenue as services are performed in proportion with their pattern of transfer.
In Q3 2021, Okta generated only 5% of its total revenue from professional services and others amounting to $10.64 million. The revenue from this segment has increased by 25% year-over-year from $8.52 million in Q3 2020. This increase in revenue from professional services was primarily due to an increase in implementation and other services associated with an increase in the number of new customers purchasing Okta’s subscription services.
Okta, Inc. is an American-based company established in 2009 by Todd McKinnon and Frederic Kerrest. Its headquarters is in San Francisco, California. Okta, Inc. completed its initial public offering in 2017 and its common stocks are traded on the NASDAQ Stock Market LLC under the trading symbol “OKTA”.
Okta is an identity and access management company that provides cloud software to companies to manage and secure user authentication into applications. It also helps developers to build identity controls into applications, website web services, and other devices. Its products enable customers to provide their customers, contractors, employees, and partners to connect to any device, application, or cloud with an intuitive, simple, and consumer-like user experience. It has partnered with the application, infrastructure, and security vendors like Cisco, Google Cloud, Netskope, Salesforce, VMware, Amazon Web Services, CrowdStrike, Microsoft, Proofpoint, ServiceNow, and Workday. Some of its competitors are CyberArk Software, Microsoft, SailPoint Technologies, Ping Identity, ForgeRock, OneLogin, and Centrify.
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