Shares of Okta, which sells cloud software for identity and access management, shot up around 7% on Friday after it trounced Wall Street's expectations for revenue and posted a narrower-than-expected loss. That continues a steady uptick for the stock this year, with shares up 68% so far in 2019.
For the quarter, Okta reported quarterly revenue of $125 million for the quarter, up 50% from one year ago and ahead of analysts' estimates. Subscription revenue came in at $117.2 million, up 52% year-over year.
"At our scale, that's really strong growth," Okta CEO Todd McKinnon told TheStreet. "We're going after big markets: Every company is trying to do more with the cloud; they're also worried about security. Those are two fundamental drivers of our growth."
For its 6,500 customers, Okta's products fill a few different needs: Its core "Identity Cloud" helps organizations manage access to technology internally as well as externally, also providing a means of integrating various systems and external users securely.
Much of the focus this year has been on selling to large enterprises, McKinnon said.
One example is a recent deal with Major League Baseball, which deployed Okta across its own workforce and that of 30 individual teams. It's also used as a sign-on for millions of fans who access MLB.com and other digital properties to buy tickets or watch video.
McKinnon also noted that Okta has been cash flow positive for three consecutive quarters, which he said demonstrates its capacity to balance expansion with progress towards profitability.
Okta recently spun up Sydney-based infrastructure to boost an expansion in Asia-Pacific, and also opened an office in Germany. In April, the company also nabbed a longtime Google (GOOGL) - Get Report executive, Diya Jolly, to serve as product chief.
"We're able to grow really fast and to generate cash," McKinnon added.
Having taken Okta public about two years ago, McKinnon also weighed in on some of the recent IPOs of companies that, like Okta, sell cloud-based enterprise software. Zoom (ZM) - Get Report and PagerDuty (PD) - Get Report are up 29% and 35%, respectively, since their IPOs.
"Companies in this space have been under-appreciated in terms of their growth potential, with a lot of the attention focused on segments like ridesharing," he said. "When you look at the cloud, digital transformation, security -- when you look at the valuations, the market is starting to appreciate the potential."