Okta Announces Fourth Quarter And Fiscal Year 2025 Financial Results

Rhea-AI Summary

Okta (NASDAQ: OKTA) reported strong Q4 and fiscal year 2025 results, with total revenue reaching $682 million in Q4, up 13% year-over-year. The company achieved record operating profitability and cash flow, with Q4 free cash flow of $284 million.

Key Q4 metrics include subscription revenue of $670 million (+13% YoY), RPO growth of 25% to $4.215 billion, and cRPO increase of 15% to $2.248 billion. The company reported GAAP net income of $23 million, compared to a loss in the previous year, with non-GAAP net income of $141 million.

For fiscal year 2025, Okta posted total revenue of $2.610 billion (+15% YoY) and subscription revenue of $2.556 billion (+16% YoY). The company's outlook for fiscal 2026 projects total revenue of $2.850-2.860 billion, representing 9-10% growth, with a non-GAAP operating margin of 25%.

Positive

• Record Q4 free cash flow of $284M (42% of revenue)
• RPO growth accelerated to 25% YoY
• Achieved GAAP profitability with $23M net income in Q4
• Non-GAAP operating margin improved to 25% in Q4
• Strong cash position with $2.523B in cash and investments

Negative

• Revenue growth decelerated to 13% YoY in Q4
• Projected growth slowdown to 9-10% for FY2026
• Organizational restructuring planned with $11M cash impact in Q1

Insights

Financial Analyst

Okta's Q4 results demonstrate a significant pivot to profitability while maintaining double-digit revenue growth. The company reported $682 million in quarterly revenue (13% YoY) and achieved record operating profitability with non-GAAP operating income of $168 million (25% margin). Most impressive was the exceptional cash generation with operating cash flow of $286 million (42% of revenue) and free cash flow of $284 million.

The accelerating RPO (remaining performance obligations) growth of 25% YoY to $4.215 billion signals strengthening future revenue visibility and contract momentum. This leading indicator outpacing current revenue growth suggests potentially improved growth trajectories ahead, despite the company's conservative FY26 guidance of just 9-10% revenue growth.

The company's transition from GAAP losses to profitability is particularly noteworthy – achieving $28 million in GAAP net income for fiscal 2025 compared to a $355 million loss the previous year. This dramatic margin expansion demonstrates successful operational discipline while building a $2.523 billion cash reserve.

However, investors should note the cautious forward guidance and references to organizational restructuring, suggesting potential near-term disruption from their go-to-market specialization strategy. The 9-10% projected growth for FY26 represents a deceleration from current 13-15% rates, though the company may be setting conservative targets it can exceed.

Cybersecurity Specialist

Okta's results validate the critical importance of identity security in today's enterprise technology stack. As organizations navigate increasingly complex security landscapes, identity management has become a foundational element rather than an optional component – evidenced by Okta's ability to maintain double-digit growth despite broader tech spending constraints.

The 25% growth in RPO to $4.215 billion demonstrates strong multi-year commitment from enterprise customers who view identity solutions as mission-critical infrastructure. This subscription-based revenue model (97% of total revenue) creates excellent business stability and predictability.

CEO Todd McKinnon's emphasis on delivering "the broadest array of modern identity security with flexibility" highlights how Okta has successfully positioned itself at the intersection of security and user experience. The company's dual-platform strategy with Okta and Auth0 allows it to address both workforce and customer identity needs through specialized solutions rather than one-size-fits-all approaches.

The reference to "go-to-market specialization" suggests Okta is further refining its sales approach to better target specific security use cases or customer segments. While this may cause short-term disruption (reflected in the cautious guidance), it likely strengthens their competitive positioning against point solutions and larger security platforms attempting to add identity capabilities. The $730 million in annual free cash flow gives Okta substantial resources to continue investing in R&D and potential strategic acquisitions to extend their security capabilities.

• Q4 revenue and subscription revenue grew 13% year-over-year
• Remaining performance obligations (RPO) grew 25% year-over-year; current remaining performance obligations (cRPO) grew 15% year-over-year
• Record operating profitability
• Record operating cash flow of $286 million and free cash flow of $284 million

SAN FRANCISCO--(BUSINESS WIRE)-- Okta, Inc. (Nasdaq: OKTA), the leading independent Identity partner, today announced financial results for its fourth quarter and fiscal year ended January 31, 2025.

“Okta’s strong financial results were highlighted by accelerating RPO and cRPO, coupled with record profitability and cash flow,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta. “In a rapidly evolving IT and security landscape, organizations are turning to Okta as their identity partner for our ability to deliver the broadest array of modern identity security with the flexibility to meet their demands. We’re entering the new fiscal year laser focused on serving our customers with even more innovation on the Okta and Auth0 platforms while further elevating the industry with the Okta Secure Identity Commitment.”

Fourth Quarter Fiscal 2025 Financial Highlights:

• Revenue: Total revenue was $682 million, an increase of 13% year-over-year. Subscription revenue was $670 million, an increase of 13% year-over-year.
• RPO: RPO, or subscription backlog, was $4.215 billion, an increase of 25% year-over-year. cRPO, which represents subscription backlog expected to be recognized over the next 12 months, was $2.248 billion, up 15% compared to the fourth quarter of fiscal 2024.
• GAAP Operating Income/Loss: GAAP operating income was $8 million, or 1% of total revenue, compared to a GAAP operating loss of $83 million, or (14)% of total revenue, in the fourth quarter of fiscal 2024.
• Non-GAAP Operating Income: Non-GAAP operating income was $168 million, or 25% of total revenue, compared to a non-GAAP operating income of $129 million, or 21% of total revenue, in the fourth quarter of fiscal 2024.
• GAAP Net Income/Loss: GAAP net income was $23 million, compared to a GAAP net loss of $44 million in the fourth quarter of fiscal 2024. GAAP basic and diluted net income per share were $0.13, compared to a GAAP basic and diluted net loss per share of $0.26 in the fourth quarter of fiscal 2024.
• Non-GAAP Net Income: Non-GAAP net income was $141 million, compared to non-GAAP net income of $113 million in the fourth quarter of fiscal 2024. Non-GAAP diluted net income per share was $0.78, compared to non-GAAP diluted net income per share of $0.63 in the fourth quarter of fiscal 2024.
• Cash Flow: Net cash provided by operations was $286 million, or 42% of total revenue, compared to net cash provided by operations of $174 million, or 29% of total revenue, in the fourth quarter of fiscal 2024. Free cash flow was $284 million, or 42% of total revenue, compared to $166 million, or 28% of total revenue, in the fourth quarter of fiscal 2024.
• Cash, cash equivalents, and short-term investments were $2.523 billion at January 31, 2025.

Full Year Fiscal 2025 Financial Highlights:

• Revenue: Total revenue was $2.610 billion, an increase of 15% year-over-year. Subscription revenue was $2.556 billion, an increase of 16% year-over-year.
• GAAP Operating Loss: GAAP operating loss was $74 million, or (3)% of total revenue, compared to a GAAP operating loss of $516 million, or (23)% of total revenue for fiscal 2024.
• Non-GAAP Operating Income: Non-GAAP operating income was $587 million, or 22% of total revenue, compared to non-GAAP operating income of $310 million, or 14% of total revenue for fiscal 2024.
• GAAP Net Income/Loss: GAAP net income was $28 million, compared to a GAAP net loss of $355 million, for fiscal 2024. GAAP basic and diluted net income per share were $0.16 and $0.06, respectively, compared to a GAAP basic and diluted net loss per share of $2.17, for fiscal 2024.
• Non-GAAP Net Income: Non-GAAP net income was $510 million, compared to non-GAAP net income of $286 million for fiscal 2024. Non-GAAP diluted net income per share was $2.81, compared to non-GAAP diluted net income per share of $1.60 for fiscal 2024.
• Cash Flow: Net cash provided by operations was $750 million, or 29% of total revenue, compared to $512 million, or 23% of total revenue, for fiscal 2024. Free cash flow was $730 million, or 28% of total revenue, compared to $489 million, or 22% of total revenue, for fiscal 2024.

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’re taking a prudent approach to forward guidance that factors in our previously announced go-to-market specialization.

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

• Total revenue of $678 million to $680 million, representing a growth rate of 10% year-over-year;
• Current RPO of $2.185 billion to $2.190 billion, representing a growth rate of 12% year-over-year;
• Non-GAAP operating income of $168 million to $170 million, which yields a non-GAAP operating margin of 25%;
• Non-GAAP diluted net income per share of $0.76 to $0.77, assuming diluted weighted-average shares outstanding of approximately 184 million and a non-GAAP tax rate of 26%; and
• Non-GAAP free cash flow margin of approximately 25%, inclusive of the expected cash impact of approximately $11 million related to the organizational restructuring expected to be paid out in the first quarter.

For the full year fiscal 2026, the Company now 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 $705 million to $715 million, which yields a non-GAAP operating margin of 25%;
• Non-GAAP diluted net income per share of $3.15 to $3.20, assuming diluted weighted-average shares outstanding of approximately 186 million and a non-GAAP tax rate of 26%; and
• Non-GAAP free cash flow margin of approximately 26%.

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 March 3, 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.

We periodically reassess the components of our non-GAAP adjustments for changes in how we evaluate our performance and changes in how we make financial and operational decisions, and consider the use of these measures by our competitors and peers to ensure the adjustments remain relevant and meaningful.

Okta believes that non-GAAP financial information, when taken collectively with GAAP financial measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by the Company's management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Okta encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.

Forward-Looking Statements: This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, business strategy and plans, market trends and market size, opportunities and positioning. These forward-looking statements are based on current expectations, estimates, forecasts and projections. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall" and variations of these terms and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. For example, macroeconomic conditions have in the past and could in the future reduce demand for our solutions; we and our third-party service providers have in the past and could in the future experience cybersecurity incidents; we may be unable to manage or sustain our revenue growth and profitability; our financial resources may be insufficient to effectively compete in our market; we may be unable to attract new customers, or retain or sell additional solutions to existing customers; we may fail to maintain strategic partnerships to promote or enhance our solutions; we may experience challenges successfully expanding our existing marketing and sales capabilities, including further specializing our go-to-market organization; customer growth has slowed in recent periods and could continue to decelerate in the future; we could experience interruptions or performance problems associated with our technology, including a service outage; and we and our third-party service providers have failed, or were perceived as having failed, to fully comply with various privacy and security provisions to which we are subject, and similar incidents could occur in the future. Further information on potential factors that could affect our financial results is included in our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission. The forward-looking statements included in this press release represent our views only as of the date of this press release and we assume no obligation and do not intend to update these forward-looking statements.

About Okta

Okta, Inc. is The World’s Identity Company™. We secure Identity, so everyone is free to safely use any technology. Our customer and workforce solutions empower businesses and developers to use the power of Identity to drive security, efficiencies, and success — all while protecting their users, employees, and partners. Learn why the world’s leading brands trust Okta for authentication, authorization, and more at okta.com.

OKTA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in millions, shares in thousands, except per share data) (unaudited)
	Three Months Ended January 31,								Twelve Months Ended January 31,
		2025				2024				2025				2024
Revenue:
Subscription	$	670			$	591			$	2,556			$	2,205
Professional services and other		12				14				54				58
Total revenue		682				605				2,610				2,263
Cost of revenue:
Subscription(1)		142				126				549				502
Professional services and other(1)		16				19				69				79
Total cost of revenue		158				145				618				581
Gross profit		524				460				1,992				1,682
Operating expenses:
Research and development(1)		157				156				642				656
Sales and marketing(1)		235				249				965				1,036
General and administrative(1)		113				110				448				450
Restructuring and other charges		11				28				11				56
Total operating expenses		516				543				2,066				2,198
Operating income (loss)		8				(83	)			(74	)			(516	)
Interest expense		(1	)			(1	)			(5	)			(8	)
Interest income and other, net		24				25				106				81
Gain on early extinguishment of debt		—				15				19				106
Interest and other, net		23				39				120				179
Income (loss) before provision for income taxes		31				(44	)			46				(337	)
Provision for income taxes		8				—				18				18
Net income (loss)	$	23			$	(44	)		$	28			$	(355	)
Net income (loss) per share, basic	$	0.13			$	(0.26	)		$	0.16			$	(2.17	)
Net income (loss) per share, diluted	$	0.13			$	(0.26	)		$	0.06			$	(2.17	)
Weighted-average shares used to compute net income (loss) per share, basic		171,936				166,002				169,569				163,634
Weighted-average shares used to compute net income (loss) per share, diluted		175,280				166,002				175,086				163,634

(1) Amounts include stock-based compensation expense as follows:
	Three Months Ended January 31,								Twelve Months Ended January 31,
		2025				2024				2025				2024
Cost of subscription revenue	$	21			$	18			$	82			$	75
Cost of professional services and other		3				4				12				15
Research and development		48				65				216				277
Sales and marketing		32				37				131				156
General and administrative		27				37				124				161
Total stock-based compensation expense	$	131			$	161			$	565			$	684

OKTA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in millions) (unaudited)
	January 31,				January 31,
		2025				2024
Assets
Current assets:
Cash and cash equivalents	$	409			$	334
Short-term investments		2,114				1,868
Accounts receivable, net of allowances		621				559
Deferred commissions		140				113
Prepaid expenses and other current assets		132				106
Total current assets		3,416				2,980
Property and equipment, net		43				48
Operating lease right-of-use assets		74				83
Deferred commissions, noncurrent		267				242
Intangible assets, net		138				182
Goodwill		5,448				5,406
Other assets		51				48
Total assets	$	9,437			$	8,989
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	13			$	12
Accrued expenses and other current liabilities		103				115
Accrued compensation		207				167
Convertible senior notes, net		509				—
Deferred revenue		1,691				1,488
Total current liabilities		2,523				1,782
Convertible senior notes, net, noncurrent		349				1,154
Operating lease liabilities, noncurrent		94				112
Deferred revenue, noncurrent		27				23
Other liabilities, noncurrent		39				30
Total liabilities		3,032				3,101
Stockholders’ equity:
Preferred stock		—				—
Class A common stock		—				—
Class B common stock		—				—
Additional paid-in capital		9,219				8,724
Accumulated other comprehensive loss		(12	)			(6	)
Accumulated deficit		(2,802	)			(2,830	)
Total stockholders’ equity		6,405				5,888
Total liabilities and stockholders' equity	$	9,437			$	8,989

OKTA, INC. SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions) (unaudited)
	Twelve Months Ended January 31,
		2025				2024
Cash flows from operating activities:
Net income (loss)	$	28			$	(355	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation		565				684
Depreciation, amortization and accretion		88				84
Amortization of deferred commissions		130				104
Deferred income taxes		2				6
Lease impairment charges		—				28
Gain on early extinguishment of debt		(19	)			(106	)
Other, net		9				13
Changes in operating assets and liabilities:
Accounts receivable		(63	)			(79	)
Deferred commissions		(186	)			(158	)
Prepaid expenses and other assets		(37	)			(32	)
Operating lease right-of-use assets		20				23
Accounts payable		1				—
Accrued compensation		41				68
Accrued expenses and other liabilities		(3	)			21
Operating lease liabilities		(33	)			(39	)
Deferred revenue		207				250
Net cash provided by operating activities		750				512
Cash flows from investing activities:
Capitalized software		(12	)			(15	)
Purchases of property and equipment		(8	)			(8	)
Purchases of securities available-for-sale and other		(1,812	)			(1,709	)
Proceeds from maturities and redemption of securities available-for-sale		1,571				2,134
Proceeds from sales of securities available-for-sale and other		3				62
Payments for business acquisitions, net of cash acquired		(56	)			(22	)
Purchases of intangible assets		—				(1	)
Net cash provided by (used in) investing activities		(314	)			441
Cash flows from financing activities:
Payments for repurchases of convertible senior notes		(280	)			(937	)
Taxes paid related to net share settlement of equity awards		(148	)			—
Payments for warrants related to convertible senior notes		—				(7	)
Proceeds from stock option exercises		27				15
Proceeds from shares issued in connection with employee stock purchase plan		42				46
Net cash used in financing activities		(359	)			(883	)
Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash		(4	)			1
Net increase in cash, cash equivalents and restricted cash		73				71
Cash, cash equivalents and restricted cash at beginning of period		342				271
Cash, cash equivalents and restricted cash at end of period	$	415			$	342

OKTA, INC.
Reconciliation of GAAP to Non-GAAP Data
(dollars in millions, shares in thousands, except per share data)
(unaudited)

Non-GAAP Gross Profit and Non-GAAP Gross Margin

We define non-GAAP gross profit and non-GAAP gross margin as GAAP gross profit and GAAP gross margin, adjusted for stock-based compensation expense included in cost of revenue, amortization of acquired intangibles and acquisition and integration-related expenses.

	Three Months Ended January 31,								Twelve Months Ended January 31,
		2025				2024				2025				2024
Gross profit	$	524			$	460			$	1,992			$	1,682
Add:
Stock-based compensation expense included in cost of revenue		24				22				94				90
Amortization of acquired intangibles		10				12				44				47
Non-GAAP gross profit	$	558			$	494			$	2,130			$	1,819
Gross margin		77	%			76	%			76	%			74	%
Non-GAAP gross margin		82	%			82	%			82	%			80	%

Non-GAAP Operating Income and Non-GAAP Operating Margin

We define non-GAAP operating income and non-GAAP operating margin as GAAP operating income (loss) and GAAP operating margin, adjusted for stock-based compensation expense, 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 and certain non-ordinary course legal settlements and related expenses.

In fiscal 2025, we updated our definition of non-GAAP operating income and non-GAAP operating margin to include certain non-ordinary course legal settlements and related expenses.

	Three Months Ended January 31,								Twelve Months Ended January 31,
		2025				2024				2025				2024
Operating income (loss)	$	8			$	(83	)		$	(74	)		$	(516	)
Add:
Stock-based compensation expense		131				161				565				684
Non-cash charitable contributions		—				2				5				6
Amortization of acquired intangibles		18				19				73				78
Acquisition and integration-related expenses		—				2				—				2
Restructuring costs		11				28				11				56
Legal settlements and related expenses		—				—				7				—
Non-GAAP operating income	$	168			$	129			$	587			$	310
Operating margin		1	%			(14	)%			(3	)%			(23	)%
Non-GAAP operating margin		25	%			21	%			22	%			14	%

Non-GAAP Net Income, Non-GAAP Net Margin and Non-GAAP Diluted Net Income Per Share

We define non-GAAP net income and non-GAAP net margin as GAAP net income (loss) and GAAP net margin, adjusted for stock-based compensation expense, non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses, amortization of debt issuance costs, gain on early extinguishment of debt, restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities and certain non-ordinary course legal settlements and related expenses. In addition, 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.

In fiscal 2025, we updated our definition of non-GAAP net income and non-GAAP net margin to include certain non-ordinary course legal settlements and related expenses.

We define non-GAAP diluted net income per share, as non-GAAP net income divided by GAAP weighted-average shares used to compute net income (loss) per share, basic, adjusted for the potentially dilutive effect of (i) employee equity incentive plans, excluding the impact of unrecognized stock-based compensation expense, and (ii) convertible senior notes outstanding and related warrants. In addition, non-GAAP net income per share, diluted, includes the impact of our capped call agreements on convertible senior notes outstanding. The capped call agreements are intended to offset potential dilution to our Class A common stock upon any conversion or settlement of the convertible senior notes under certain circumstances. Accordingly, we did not record any adjustments for the potential impact of the convertible senior notes outstanding under the if-converted method.

	Three Months Ended January 31,								Twelve Months Ended January 31,
		2025				2024				2025				2024
Net income (loss)	$	23			$	(44	)		$	28			$	(355	)
Add:
Stock-based compensation expense		131				161				565				684
Non-cash charitable contributions		—				2				5				6
Amortization of acquired intangibles		18				19				73				78
Acquisition and integration-related expenses		—				2				—				2
Amortization of debt issuance costs		—				—				2				3
Gain on early extinguishment of debt		—				(15	)			(19	)			(106	)
Restructuring costs		11				28				11				56
Legal settlements and related expenses		—				—				7				—
Tax adjustment		(42	)			(40	)			(162	)			(82	)
Non-GAAP net income	$	141			$	113			$	510			$	286
Net margin		3	%			(7	)%			1	%			(16	)%
Non-GAAP net margin		21	%			19	%			20	%			13	%
Weighted-average shares used to compute net income (loss) per share, basic		171,936				166,002				169,569				163,634
Non-GAAP weighted-average effect of potentially dilutive securities		9,636				13,247				12,020				14,763
Non-GAAP weighted-average shares used to compute non-GAAP net income per share, diluted		181,572				179,249				181,589				178,397
Net income (loss) per share, diluted	$	0.13			$	(0.26	)		$	0.06			$	(2.17	)
Non-GAAP net income per share, diluted	$	0.78			$	0.63			$	2.81			$	1.60

OKTA, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(dollars in millions)
(unaudited)

Free Cash Flow and Free Cash Flow Margin

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.

	Three Months Ended January 31,								Twelve Months Ended January 31,
		2025				2024				2025				2024
Net cash provided by operating activities	$	286			$	174			$	750			$	512
Less:
Purchases of property and equipment		(1	)			(3	)			(8	)			(8	)
Capitalized software		(1	)			(5	)			(12	)			(15	)
Free cash flow	$	284			$	166			$	730			$	489
Net cash provided by (used in) investing activities	$	(177	)		$	(133	)		$	(314	)		$	441
Net cash used in financing activities	$	(7	)		$	(109	)		$	(359	)		$	(883	)
Operating cash flow margin		42	%			29	%			29	%			23	%
Free cash flow margin		42	%			28	%			28	%			22	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250302847108/en/

Investor Contact:

Dave Gennarelli

investor@okta.com

Media Contact:

Kyrk Storer

press@okta.com

Source: Okta, Inc.

FAQ

What were Okta's Q4 2025 revenue and growth figures?

Okta reported Q4 revenue of $682 million, up 13% YoY, with subscription revenue of $670 million also growing 13% YoY.

How much did Okta's RPO and cRPO grow in Q4 2025?

RPO grew 25% YoY to $4.215 billion, while cRPO increased 15% YoY to $2.248 billion.

What is Okta's revenue guidance for fiscal year 2026?

Okta expects FY2026 total revenue of $2.850-2.860 billion, representing 9-10% YoY growth.

How much free cash flow did Okta generate in Q4 2025?

Okta generated record free cash flow of $284 million in Q4, representing 42% of total revenue.

What was Okta's profitability in Q4 2025?

Okta reported GAAP net income of $23 million and non-GAAP net income of $141 million in Q4 2025.