According to Stratistics MRC, the Global Identity & Access Management market is estimated to grow 15% annually from $7.94 billion in 2016 to $20.87 billion by 2022. Earlier this year, Identity and Access Management services provider Okta (Nasdaq:OKTA) went public. The listing of the San Francisco-based company appears to be doing well so far.

Okta’s Financials

Okta’s identity management solution gets rid of duplicative credentials and disparate authentication policies to help organizations simplify and scale their IT infrastructures more efficiently. Its Identity Cloud offering allows customers to securely connect people to technology, anywhere, anytime and from any device. It recently reported its quarterly results – the first since it went public.

For the first quarter of the year, Okta’s revenues grew 67% over the year to $53 million, ahead of the market’s estimates of $48 million. Net loss of $0.50 per share was also better than the Street’s estimate of $0.61 loss per share.

By segment, subscription revenues grew 75% to $48.4 million and Professional services and other revenues grew 10% to $4.65 million. Geographically, 86% of its revenues for the quarter came from the US customers. Europe, Middle-East, and Africa contributed to the remaining 14% revenues.

Billings for the quarter grew 75% to $59.9 million, driven by large user expansions in enterprise sales. The Street had forecast billings of $48.8 million for the quarter. It ended the quarter with 3,350 customers.

During the quarter, research and development expenses grew nearly 50% from $8.1 million a year ago to $12.1 million.

For the current quarter, Okta forecast revenues of $55-$56 million and a net loss of $0.25-$0.26 per share. The Street had forecast revenues of $54 million and a loss of $0.26 per share. For the full year, Okta forecast revenues of $233-$236 million and a net loss of $1.11-$1.15, compared with the market estimate of revenues of $227 million and a net loss of $1.18 per share.

Okta’s Expansion Plans

During the quarter, Okta was awarded the FedRAMP certification. It is a gold standard in security certification and it will allow Okta to enter into contracts with government agencies for its Identity Cloud offerings. To achieve the certification, Okta had demonstrated compliance with more than 300 controls, including vulnerability management, incident response capability and business continuity. The certification has already helped Okta win a contract with the Department of Justice.

Besides expansion into the government sector, Okta is also looking at international expansion. As part of the move, it recently expanded its physical presence in Canada with a new office in downtown Toronto. The expansion will help Okta address the Canadian market more closely.

Okta is not alone in the identity management market. It is facing increasing threat from bigger rivals like Microsoft. Analysts believe that Microsoft is currently the biggest player in the Identity Access as a Service market and has been able to maintain its lead by bundling its access offering with the Azure Active Directory Premium solution. Microsoft has also been beating Okta on the pricing. Okta’s average price is about $14 a month per user, compared with Microsoft’s plans of $6-$9 a month per user.

Till recently, Okta was venture funded. It had raised $228 million from investors including Altimeter Capital, Janus Capital Group, Khosla Ventures, Greylock Partners, Andreessen Horowitz, Sequoia Capital, FLOODGATE, SV Angel, Maynard Webb, Dharmesh Shah, Stephen Marcus, Avid Larizadeh, Ed Roberts, Tom Berson, and Jacques & Sandra Kerrest. Its last round of funding was held in September 2015, when it raised $75 million at a valuation of $1.2 billion. In April this year, the company went public after offering its shares at $17 apiece, pegging its valuation at $1.54 billion. The stock had touched a high of $28.25 earlier last month and is currently trading at $23.66 with a market capitalization of $2.25 billion.

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