Tech Stocks News: Zoom and Okta Report Earnings

Coronavirus continued to be the top headline across the globe this week. Fears about how the virus will affect businesses led to greater market volatility as stocks rose and fell viciously.

Beyond this broader market news, however, some interesting financial updates from two fast-growing tech companies: the video conferencing specialist Focus on video communications (NASDAQ: ZM) and identity management company Okta (NASDAQ:OKTA) both released their most recent quarterly results.

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Focus on video communications

Shares of Zoom Video Communications soared on Thursday, following the company’s fourth-quarter fiscal update. Zoom reported higher and lower results that crushed analysts’ estimates.

Revenue during the period soared 78% year-over-year to $188.3 million, bringing total fiscal 2020 revenue to $622.7 million, an increase 88% year over year. Non-GAAP earnings per share (adjusted) were $0.15, compared to $0.04 a year ago.

Cash was also a strong point for Zoom. Cash flow from operating activities increased from $16 million a year ago to $36.6 million. During the same period, free cash flow soared from $5.7 million to $26.6 million.

Zoom’s better-than-expected revenue and profit growth was driven by a 62% year-over-year increase in the number of customers with more than 10 employees and an 86% increase in the number of customers contributing to $100,000 or more in Zoom’s best-performing 12-month sales. line.

Okta

Identity management technology company Okta also reported better than expected fiscal fourth quarter results. Revenue jumped 45% year-over-year, in line with Okta’s strong 45% year-over-year growth rate in the third quarter of the fiscal year. This brings total revenue for the period to $167.3 million. Okta’s revenue growth was primarily fueled by a 46% year-over-year increase in subscription revenue. Subscription revenue during the fourth quarter of the fiscal year was $158.5 million.

Okta’s operating cash was $24.8 million, or 14.8% of revenue. This compared to $10.1. million, or 8.8% of sales, in the prior year period. Free cash flow increased from $4.8 million in the prior year quarter to $18.1 million.

“We continue to deliver industry-leading growth in subscription revenue, remaining performance obligations and billing, while achieving positive operating cash flow and free cash flow for the year. “Okta CEO Todd McKinnon said in the company’s fourth quarter earnings release. “Our unparalleled cloud-based platform and continued execution enable us to achieve this exceptional growth at scale.”

The company is optimistic about the growth opportunities ahead, forecasting a 32% to 33% year-over-year revenue increase in fiscal 2021.

“We are still in the early days of a massive addressable market to modernize workforce and customer identity and we are in a leadership position to capitalize on this opportunity for many years to come,” said McKinnon said.

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Daniel Sparks has no position in the stocks mentioned. The Motley Fool owns shares and recommends Okta and Zoom Video Communications and recommends the following: $120 short calls in May 2020 on Zoom Video Communications. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.