Okta Quietly Buys Startup atSpoke to Fuel Identity Governance
Okta CEO Todd McKinnon says atSpoke’s access request workflow capability will help augment the broader strategy and vision around the company’s identity governance offering, which is set to debut early next year.
Okta surreptitiously acquired early-stage workplace operations platform atSpoke last month to serve as a building block for its upcoming identity governance and administration (IGA) offering.
The San Francisco-based identity security provider said San Francisco-based atSpoke’s access request workflow capability will help augment the broader strategy and vision around Okta’s IGA platform, which is slated to debut early next year, said Co-Founder and CEO Todd McKinnon. atSpoke’s 20-person team joined Okta in early August, and the two companies have known one another for quite some time.
“We also acquired a very good smaller organization called atSpoke recently that‘s a great technology and team tuck-in into what we’re doing with IGA,” Co-Founder and COO Frederic Kerrest told investors Wednesday. “Very opportunistic…They’re just about to hit that go-to-market inflection point, so it’s a great time for us to bring them into the fold.”
Okta didn’t put out a press release or SEC (Securities and Exchange Commission) filing announcing the atSpoke acquisition, and the deal hadn’t received any press coverage up until now. Okta’s only public acknowledgement of the atSpoke transaction before Wednesday’s earnings call took place in an Aug. 2 blog post written by Vice President of Product Management George Kwon.
“Through its user experiences rooted in natural language interfaces and a robust platform for tasks and workflow, we are confident that atSpoke will modernize the Identity Governance experience for end users, line of business users and IT administrators alike,” Kwon wrote in the blog post. “We believe this will unlock an opportunity to make IGA products not only tolerated, but loved.”
atSpoke CEO Jay Srinivasan and CTO Pratyus Patnaik joined Okta as senior directors of product management and engineering, respectively. Terms of the acquisition weren’t disclosed, and Kwon said it wasn’t expected to have any impact on Okta’s financial guidance issued in May. atSpoke was founded in 2016 and has raised $28 million in two rounds of funding from Greylock and Accel, Crunchbase said.
“This combination will maximize the customer experience with our forces working to address critical pain points in access management, a crucial field in today’s modern workforce, through Okta’s outstanding platform,” Srinivasan said in the August blog post.
The basis for Okta’s IGA offering will be the company’s existing lifecycle management and advanced lifecycle management products, which Kerrest said were some of Okta’s top-selling products in 2020. Demand for lifecycle management was so high that Okta extended the capability earlier this year from its flagship workforce identity platform to both the Okta and Auth0 customer identity platform.
“If you‘ve got all your identity information already running in the public cloud, you’re going to want a product that’s right next to that in an adjacent suite,” Kerrest said Wednesday. “We’ve got a lot of pipeline already built up. In fact, there’s more customers asking to get early access to the product that we want to open it up for, just because we want to make sure that we get it right.”
Okta’s revenue for the quarter ended July 31 skyrocketed to $315.5 million, up 57.4 percent from $200.4 million the year prior. That crushed Seeking Alpha’s estimate of $293.2 million.
The company’s net loss worsened to $276.7 million, or $1.83 per diluted share, 360.4 percent larger than a net loss of $60.1 million, or $0.48 per diluted share, last year. On a non-GAAP basis, net loss worsened to $16.3 million, or $0.11 per diluted share, as compared with net income of $9.9 million, or $0.07 per diluted share, last year. That beat Seeking Alpha’s non-GAAP net loss estimate of $0.33 per share.
Okta’s stock is down $6.01 (2.27 percent) to $258.75 per share in after-hours trading. Earnings were announced after the market closed Wednesday.
The company’s subscription revenue in the quarter surged to $303.1 million, up 59 percent from $190.7 million the year prior. And Okta professional services revenue jumped to $12.4 million, up 26.9 percent from $9.8 million last year.
For the quarter ending Oct. 31, Okta expects non-GAAP net loss of $0.24 to $0.25 per share on revenue of $325 million to $327 million. Analysts had been expecting non-GAAP net loss of $0.33 per share on earnings of $319.2 million, according to Seeking Alpha.