Okta reports quarterly earnings for Q3 FY2024 which ended October 31, 2023 this morning. Revenue was $584M vs. $563M expected. Adjusted EPS was $0.44 vs. $0.3 expected. The company also disclosed the hack reported back in October ended up affecting ALL users. The hacker hacked into Okta’s customer support system. As a result, the hacker downloaded a report containing data including names and email addresses of all clients that use its customer support system. The company said in a statement:
While we do not have direct knowledge or evidence that this information is being actively exploited, we have notified all our customers that this file is an increased security risk of phishing and social engineering
Despite a solid earnings report that beat expectations, OKTA 0.00%↑ stock fell 2.5% today, probably due to the hack announcement. Hacking a risk investors need to consider when investing in cloud software companies. On the surface, this hack doesn’t seem like a huge deal as it’s not a hack on Okta’s core one-click-login product. But there is irony in the fact that Okta, a cybersecurity identity management platform, was hacked, leading to the theft of customers' private identity information. Chances are the hacker targeted Okta to make a point. But we have seen this movie before. Before long, the storm will pass, people will forget about this particular hack and things will return to business as usual.