Piper says Carahsoft raid opens potential volatility to federal year-end results

Piper Sandler analyst Rob Owens says that earlier this morning, the FBI conducted a raid on Carahsoft headquarters in Reston, VA. In a statement, the FBI confirmed the raid but declined to provide any further comment. Given Carahsoft is one of the largest IT solution providers to the U.S. government and the timing of the raid is very close to the end of the federal fiscal year, the firm believes this has the potential to disrupt deals in the pipeline. Based on Piper’s analysis of publicly disclosed federal contracts, it notes that ServiceNow (NOW) and Okta (OKTA) have the highest portion of federal contract dollars sourced through Carahsoft in its coverage, with both companies seeing over 40% of disclosed federal contract dollars coming through Carahsoft.