Okta Announces First Quarter Fiscal Year 2026 Financial Results

SAN FRANCISCO--(BUSINESS WIRE)-- Okta, Inc. (Nasdaq: OKTA), the leading independent identity partner, today announced financial results for its first quarter ended April 30, 2025.

“Okta had a solid start to FY26 highlighted by record operating profit and another quarter of robust free cash flow,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta. “The world's biggest organizations continue to turn to Okta to solve identity security across their workforces, customers, and AI use cases. We remain focused on driving profitable growth, accelerating innovation, and delivering the only modern, unified identity security platform for our customers."

First Quarter Fiscal 2026 Financial Highlights:

• Revenue: Total revenue was $688 million, an increase of 12% year-over-year. Subscription revenue was $673 million, an increase of 12% year-over-year.
• RPO: RPO, or subscription backlog, was $4.084 billion, an increase of 21% year-over-year. cRPO, which represents subscription backlog expected to be recognized over the next 12 months, was $2.227 billion, up 14% compared to the first quarter of fiscal 2025.
• GAAP Operating Income/Loss: GAAP operating income was $39 million, or 6% of total revenue, compared to a GAAP operating loss of $47 million, or (8)% of total revenue, in the first quarter of fiscal 2025.
• Non-GAAP Operating Income: Non-GAAP operating income was $184 million, or 27% of total revenue, compared to a non-GAAP operating income of $133 million, or 22% of total revenue, in the first quarter of fiscal 2025.

The section titled "Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures, and reconciliations between GAAP and non-GAAP information are contained in the tables below.

Financial Outlook:

We continue to take a prudent approach to forward guidance that factors in our go-to-market specialization that was rolled out in Q1 of FY26. Additionally, we’re now factoring in potential risks related to the uncertain economic environment for the remainder of FY26.

For the second quarter of fiscal 2026, the Company expects:

• Total revenue of $710 million to $712 million, representing a growth rate of 10% year-over-year;
• Current RPO of $2.200 billion to $2.205 billion, representing a growth rate of 10% to 11% year-over-year;
• Non-GAAP operating income of $183 million to $185 million, which yields a non-GAAP operating margin of 26%;
• Non-GAAP diluted net income per share of $0.83 to $0.84, assuming diluted weighted-average shares outstanding of approximately 186 million and a non-GAAP tax rate of 26%;
• Non-GAAP free cash flow margin of approximately 19%.

For the full year fiscal 2026, the Company expects:

• Total revenue of $2.850 billion to $2.860 billion, representing a growth rate of 9% to 10% year-over-year;
• Non-GAAP operating income of $710 million to $720 million, which yields a non-GAAP operating margin of 25%;
• Non-GAAP diluted net income per share of $3.23 to $3.28, assuming diluted weighted-average shares outstanding of approximately 186 million and a non-GAAP tax rate of 26%;
• Non-GAAP free cash flow margin of approximately 27%.

These statements are forward-looking and actual results may differ materially. Refer to the "Forward-Looking Statements" safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Okta has not reconciled its forward-looking non-GAAP financial measures to their most directly comparable GAAP measures because certain items are out of Okta’s control or cannot be reasonably predicted. Accordingly, reconciliations for forward-looking non-GAAP financial measures are not available without unreasonable effort.

Webcast Information:

Okta will host a live video webcast at 2:00 p.m. Pacific Time on May 27, 2025 to discuss the results and outlook. The prepared remarks and the news release with the financial results will be accessible from the Company’s website at investor.okta.com prior to the webcast. The live video webcast will be accessible from the Okta investor relations website at investor.okta.com. A replay will be available on the Okta investor relations website following the completion of the event.

Supplemental Financial and Other Information:

Supplemental financial and other information can be accessed through the Company’s investor relations website at investor.okta.com. Okta uses its investor.okta.com website and okta.com/blog websites (including the Security Blog, Okta Developer Blog and Auth0 Developer Blog) as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations and okta.com/blog websites in addition to following our press releases, SEC filings and public conference calls and webcasts.

Non-GAAP Financial Measures:

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP net margin, non-GAAP diluted net income per share, non-GAAP tax rate, free cash flow and free cash flow margin. Certain of these non-GAAP financial measures exclude stock-based compensation, non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses, restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities, certain non-ordinary course legal settlements and related expenses, amortization of debt issuance costs and gain on early extinguishment of debt. Acquisition and integration-related expenses include transaction costs and other non-recurring incremental costs incurred through the one-year anniversary of the transaction close.

Stock-based compensation is non-cash in nature and is generally fixed at the time the stock-based instrument is granted and amortized over a period of several years. Although stock-based compensation is an important aspect of the compensation of our employees and executives, the expense for the fair value of the stock-based instruments we use may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards. We believe excluding stock-based compensation provides meaningful supplemental information regarding the long-term performance of our core business and facilitates comparison of our results to those of peer companies.

We also exclude non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses, restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities, certain non-ordinary course legal settlements and related expenses, amortization of debt issuance costs and gain on early extinguishment of debt from the applicable non-GAAP financial measures because these adjustments are considered by management to be outside of our core operating results.

In addition to these exclusions, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We use a fixed long-term projected tax rate of 26% in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. The non-GAAP tax rate could be subject to change for a variety of reasons, including changes in tax laws and regulations, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. We will periodically reevaluate the projected long-term tax rate, as necessary, for significant events based on our ongoing analysis of relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions.

We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities, less cash used for purchases of property and equipment, net of sales proceeds, and capitalized software. Free cash flow margin is calculated as free cash flow divided by total revenue. We use free cash flow as a measure of financial progress in our business, as it balances operating results, cash management, and capital efficiency. We believe information regarding free cash flow provides investors and others with an important perspective on the cash available to make strategic acquisitions and investments, to fund ongoing operations, and to fund other capital expenditures. Free cash flow can be volatile and is sensitive to many factors, including changes in working capital and timing of capital expenditures. Working capital at any specific point in time is subject to many variables, including seasonality, the discretionary timing of expense payments, discounts offered by vendors, vendor payment terms, and fluctuations in foreign exchange rates.