Company Performance - Okta reported quarterly earnings of $0.86 per share, exceeding the Zacks Consensus Estimate of $0.77 per share, and up from $0.65 per share a year ago, representing an earnings surprise of 11.69% [1] - The company posted revenues of $688 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 1.22%, and an increase from $617 million year-over-year [2] - Okta has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Stock Movement and Outlook - Okta shares have increased approximately 57% since the beginning of the year, contrasting with a -1.3% decline in the S&P 500 [3] - The future performance of Okta's stock will largely depend on management's commentary during the earnings call and the earnings outlook [4][5] - Current consensus EPS estimate for the upcoming quarter is $0.79 on revenues of $706.57 million, and for the current fiscal year, it is $3.19 on revenues of $2.86 billion [7] Industry Context - The Security industry, to which Okta belongs, is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, Zscaler, is expected to report quarterly earnings of $0.75 per share, reflecting a year-over-year decline of 14.8%, with revenues projected at $666.11 million, up 20.4% from the previous year [9][10]

Revenue and Profitability - Subscription revenue for the three months ended April 30, 2025, was $673 million, a 12% increase from $603 million in the same period of 2024[117] - Total revenue for the same period was $688 million, up from $617 million, reflecting a 12% year-over-year growth[117] - The gross profit margin improved to 77% for the three months ended April 30, 2025, compared to 76% in the prior year[119] - Operating income for the three months ended April 30, 2025, was $39 million, a significant improvement from an operating loss of $47 million in the same period of 2024[117] - The company reported a net income of $62 million for the three months ended April 30, 2025, compared to a net loss of $40 million in the same period of 2024[117] - Subscription revenue constituted approximately 98% of total revenue for the three months ended April 30, 2025[119] - Gross profit for the same period was $533 million, representing a 14% increase from $469 million year-over-year[125] - Subscription gross margin improved to 80% from 78% year-over-year, driven by improved spend efficiency[126] Customer Metrics - The dollar-based net retention rate was 106% as of April 30, 2025, indicating strong customer retention and expansion[123] - The number of customers with an annual contract value above $100,000 increased by 7% year-over-year[123] - As of April 30, 2025, the number of customers with annual contract value above $100,000 increased to 4,870 from 4,550 in 2024[145] - The dollar-based net retention rate decreased to 106% from 111% year-over-year, impacted by the macroeconomic environment[145] Expenses and Costs - The cost of subscription revenue was $136 million, resulting in a gross margin of 80% for subscription services[117] - For the three months ended April 30, 2025, total cost of revenue increased to $155 million, up 6% from $148 million in the same period of 2024[125] - Research and development expenses decreased to $154 million, down 6% from $163 million, primarily due to a reduction in stock-based compensation[131] - Sales and marketing expenses remained flat at $237 million, with a decrease in percentage of revenue from 38% to 34%[133] - General and administrative expenses decreased to $103 million, down 11% from $117 million, attributed to reduced stock-based compensation and legal settlement costs[135] Cash Flow and Investments - As of April 30, 2025, the company had cash, cash equivalents, and short-term investments totaling $2,725 million for working capital and potential acquisitions[155] - For the three months ended April 30, 2025, net cash provided by operating activities was $241 million, an increase of $22 million compared to the same period in 2024[166] - Cash used in investing activities during the three months ended April 30, 2025, was $120 million, a decrease from $194 million in the same period in 2024[167] - Cash used in financing activities was $45 million for the three months ended April 30, 2025, an increase of $8 million compared to the same period in 2024[168] Debt and Financing - In fiscal 2025, the company repurchased $42 million principal amount of the 2025 Notes for $40 million in cash, and $258 million principal amount of the 2026 Notes for $240 million in cash, resulting in an aggregate gain on early extinguishment of debt of $19 million[159] - The company issued the 2025 Notes with a principal amount of $1,060 million, of which $510 million remains outstanding as of April 30, 2025[183] - The 2026 Notes have a principal amount of $1,150 million, with $350 million remaining outstanding as of April 30, 2025[184] - The company continues to assess its capital structure and may seek additional equity or debt financing in the future[160] Market and Competitive Landscape - The company experienced revenue growth rates of 43%, 22%, and 15% during fiscal years 2023, 2024, and 2025, respectively[196] - The company incurred net losses of $355 million and $815 million in fiscal years 2024 and 2023, respectively, despite achieving profitability in fiscal 2025[204] - The company faces intense competition, particularly from larger, well-established companies, with Microsoft identified as a principal competitor[201] - The company’s revenue growth is dependent on retaining existing customers and expanding commercial relationships, which may fluctuate due to various factors[206] - The company may experience quarterly fluctuations in results due to demand variability, customer retention, and competitive landscape changes[208] Operational Risks and Challenges - The company has faced cybersecurity incidents in the past, which have harmed its reputation and financial results[195] - Economic conditions, such as inflation and interest rates, may adversely impact demand for the company’s solutions, affecting revenue[195] - The company anticipates increased operating expenses in future periods, which may not be offset by revenue growth, potentially harming financial results[198] - The company faces challenges in expanding operations internationally, including compliance with varying legal and regulatory requirements[218] - The company may need to adjust pricing strategies in response to inflation, interest rates, and competitive pressures[230] Compliance and Regulatory Issues - Compliance with evolving privacy and data security regulations may impose additional burdens and costs, potentially limiting service adoption[247] - The company has attained multiple privacy certifications, including the Privacy Recognition for Processors and the European Union Cloud Code of Conduct, Level 2, which are essential for retaining and attracting customers[255] - Increasing global data protection laws may raise compliance costs and expose the company to greater enforcement risks, potentially impacting business operations[258] - Non-compliance with data protection obligations can trigger significant fines and penalties, leading to increased resource expenditure for compliance[260] Technology and Security - The company has implemented various security measures, but these may not be sufficient to prevent all cybersecurity threats[239] - The company relies on third-party service providers for technology infrastructure, which may lead to service interruptions if these providers fail to meet capacity requirements[236] - The company must ensure its solutions integrate with various operating systems and platforms; failure to do so may reduce competitiveness and harm results[265] - The company is investing in expanding its AI capabilities, including the deployment and improvement of existing machine learning and AI technologies, as well as developing new product features using generative AI[273] Intellectual Property - The company faces risks related to intellectual property ownership and licensing rights surrounding AI technologies, which may require additional investment in proprietary datasets and machine learning models[274] - The company relies on a combination of patents, copyrights, trademarks, and trade secret laws to protect its proprietary rights, but these protections may be inadequate[275] - The company may incur significant costs related to monitoring and enforcing its intellectual property rights, which could distract management and impair its competitive position[277]

Financial Data and Key Metrics Changes - The company reported solid Q1 results with exceptional cash flow and record operating profitability and profit margin [16] - For Q2 FY '26, total revenue growth is expected to be 10%, with current RPO growth of 10% to 11%, and a non-GAAP operating margin of 26% [20] - For the full year FY '26, total revenue growth is projected at 9% to 10%, with a non-GAAP operating margin of 25% and a free cash flow margin of approximately 27% [20] Business Line Data and Key Metrics Changes - The governance portfolio, including Okta Identity Governance, lifecycle management, and workflows, has seen substantial growth, with workflow executions increasing nearly 400% over the past three years [8] - The Auth0 platform performed well, contributing positively to the overall results, particularly following a record Q4 [16][17] Market Data and Key Metrics Changes - The US public sector vertical has shown strength, with significant deals contributing to Q1 results, including federal contracts [18] - International markets experienced a deceleration compared to the US, but specific details on the impact were not disclosed [34] Company Strategy and Development Direction - The company is focused on product innovation, with new offerings such as Okta Identity Governance and Auth for GenAI, aimed at addressing evolving cyber threats and enhancing security [7][12] - Okta is positioning itself as a leader in identity security, emphasizing the importance of consolidating disparate identity systems for customers [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong customer conversations and the importance of identity solutions in the context of AI projects [26][30] - There is a cautious approach to guidance due to potential macroeconomic uncertainties, although no immediate impacts were observed in Q1 [28][30] Other Important Information - The company is committed to maintaining its investment levels despite a cautious macro outlook, indicating confidence in long-term growth opportunities [110] - The introduction of suite-based pricing for the Okta platform has shown positive results, with customers interested in purchasing multiple products [62] Q&A Session Summary Question: What factors influenced the additional conservatism in guidance? - Management noted that while Q1 results were strong, there is a cautious tone in the environment, prompting a conservative approach in guidance [28][30] Question: Was there any softness in April? - Management confirmed that there was no softness in April, and performance remained solid throughout the quarter [35] Question: How is the go-to-market specialization progressing? - Management reported a solid start to the specialization process, with strong performance in the Auth0 side and pipeline building [41][42] Question: What is the outlook for new logo pipeline in the workforce business? - Management expressed optimism about the new logo pipeline, highlighting the potential of new products to attract new customers [91][92] Question: How should investors interpret the guidance for CRPO? - Management explained that the guidance reflects a cautious approach due to macroeconomic factors, but emphasized that the underlying business remains strong [55][107]

Financial Data and Key Metrics Changes - The company reported a solid start to FY 2026, with record profitability and strong cash flow [5][14] - Total revenue growth for Q1 was approximately 12%, with expectations for Q2 growth of 10% and full-year growth of 9% to 10% [19][19] - Non-GAAP operating margin for Q1 was reported at 26%, with a full-year expectation of 25% [19][19] - Free cash flow margin for Q1 was approximately 19%, with a full-year expectation of around 27% [19][19] Business Line Data and Key Metrics Changes - The governance portfolio, including Okta Identity Governance and lifecycle management, has seen substantial growth, with workflow executions increasing nearly 400% over the past three years [6][6] - Auth0 performed well in Q1, following a record Q4, indicating strong pipeline strength [14][15] - The public sector vertical showed strength, with significant deals contributing to Q1 performance [16][16] Market Data and Key Metrics Changes - The company noted that there was no softness in April, contrasting with reports from other security peers [32][32] - The number of customers with over $1 million in ARR grew by 20% in Q1, indicating strong demand in the large enterprise segment [97][97] Company Strategy and Development Direction - The company is focused on product innovation, with new offerings such as Okta Identity Governance and Auth for GenAI aimed at addressing evolving cyber threats [5][11] - The strategy includes a shift to go-to-market specialization, which is expected to yield long-term benefits for both the company and its customers [14][15] - The company aims to consolidate disparate identity systems for customers, positioning itself as a comprehensive identity security platform [12][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong customer conversations and the importance of identity solutions in the context of AI projects [24][24] - There is a cautious outlook regarding potential macroeconomic impacts, with guidance reflecting some conservatism due to the uncertain environment [18][18] - Management remains confident in the long-term public sector opportunity, despite near-term uncertainties [18][18] Other Important Information - The company highlighted the importance of addressing nonhuman identities (NHIs) as a growing security concern, with only 15% of organizations feeling confident in securing NHIs [9][9] - The introduction of suite-based pricing for the Okta platform has shown positive results, encouraging customers to purchase multiple products [61][61] Q&A Session Summary Question: What factors influenced the conservative guidance? - Management noted that while Q1 performance was strong, there is a cautious approach due to macroeconomic conditions and the impact of go-to-market specialization [26][28] Question: Was there any softness in April? - Management confirmed that there was no softness in April, and performance remained solid throughout the quarter [32][32] Question: How is the go-to-market specialization progressing? - The company reported a solid start to the specialization process, with strong performance in the Auth0 segment and pipeline build throughout Q1 [38][39] Question: What is the outlook for new logo pipeline and competitive positioning? - Management expressed optimism about the new logo pipeline, particularly in the workforce business, and highlighted the unmatched breadth of their product offerings [90][92] Question: How should investors interpret the CRPO guidance? - Management explained that the sequential decline in CRPO guidance is due to a combination of factors, including historical growth rates and the current economic environment [51][53]

Q1 FY26 Investor Presentation May 27, 2025 © Okta and/or its affiliates. All rights reserved. © Okta and/or its affiliates. All rights reserved. Confidential Information of Okta – For Recipient's Internal Use Only. Safe Harbor This presentation 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 ...

SAN FRANCISCO (AP) — SAN FRANCISCO (AP) — Okta Inc. (OKTA) on Tuesday reported fiscal first-quarter profit of $62 million. The San Francisco-based company said it had profit of 35 cents per share. Earnings, adjusted for one-time gains and costs, were 86 cents per share. The results surpassed Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of 77 cents per share. The cloud identity management company posted revenue of $688 million in the per ...

Financial Performance - Q1 revenue was $688 million, a 12% year-over-year increase, with subscription revenue also growing 12% to $673 million[6]. - GAAP operating income was $39 million, representing 6% of total revenue, compared to a loss of $47 million in Q1 FY25[6]. - Non-GAAP operating income increased to $184 million, or 27% of total revenue, up from $133 million, or 22% of total revenue, in Q1 FY25[6]. - GAAP net income was $62 million, compared to a net loss of $40 million in Q1 FY25, with diluted net income per share at $0.35[6]. - Non-GAAP net income rose to $158 million, with diluted net income per share at $0.86, compared to $117 million and $0.65 in Q1 FY25[6]. - Operating cash flow was $241 million, or 35% of total revenue, while free cash flow was $238 million, also 35% of total revenue[6]. - Total revenue for the three months ended April 30, 2025, was $688 million, a 11.5% increase from $617 million in the same period of 2024[27]. - Subscription revenue increased to $673 million, up 11.6% from $603 million year-over-year[27]. - Net income for the three months ended April 30, 2025, was $62 million, compared to a net loss of $40 million in the same period of 2024[27]. - Non-GAAP net income for the same period was $158 million, up from $117 million year-over-year, resulting in a non-GAAP net margin of 23%[40]. - Free cash flow for the three months ended April 30, 2025, was $238 million, compared to $214 million in the same period of 2024, maintaining a free cash flow margin of 35%[43]. - Operating income for the three months ended April 30, 2025, was $39 million, a significant improvement from an operating loss of $47 million in the same period of 2024[37]. - Total operating expenses decreased to $494 million from $516 million year-over-year, reflecting a reduction in research and development costs[27]. - The company reported a gross profit of $533 million for the three months ended April 30, 2025, resulting in a gross margin of 77%[35]. Future Projections - For Q2 FY26, the company expects total revenue between $710 million and $712 million, reflecting a growth rate of 10% year-over-year[10]. - For the full year FY26, total revenue is projected to be between $2.850 billion and $2.860 billion, indicating a growth rate of 9% to 10% year-over-year[10]. Strategic Focus - The company is focusing on profitable growth and innovation in identity security solutions for large organizations[3]. Performance Obligations - Remaining performance obligations (RPO) reached $4.084 billion, up 21% year-over-year, while current remaining performance obligations (cRPO) grew 14% to $2.227 billion[6]. Cash Position - Cash and cash equivalents increased to $494 million as of April 30, 2025, compared to $409 million at the end of January 2025[30]. - Total assets decreased slightly to $9,365 million from $9,437 million at the end of January 2025[30].

Todd McKinnon, CEO and co-founder of Okta, speaks during the BoxWorks 2019 Conference in San Francisco, California, on Oct. 3, 2019.Okta reported better-than-expected earnings and revenue on Tuesday but maintained its guidance as the identity management software vendor grapples with an uncertain economic backdrop. The stock plunged 11% in extended trading.Here's how the company did compared to LSEG estimates:EPS: 86 cents adjusted vs. 77 cents expectedRevenue: $688 million vs. $680 million expectedRevenue i ...

Okta shares fell 0.2% to close at $123.72 on Friday. Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables. Let's have a look at how Benzinga's most-accurate analysts have rated the company in the recent period. Okta, Inc. OKTA will release its first-quarter earnings results after the closing bell on Tuesday, May 27. Analysts expect the San Francisco, California-based company to ...

POLAND - 2023/12/01: In this photo illustration, an Okta logo is displayed on a smartphone with ... More stock market percentages in the background. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)SOPA Images/LightRocket via Getty Images Okta (NASDAQ:OKTA) is scheduled to report its earnings on Tuesday, May 27, 2025. Historically, Okta’s stock has shown significant volatility around earnings releases. Over the past five years, the stock has posted a positive one-day return in 55 ...