PART I. FINANCIAL INFORMATION This part provides Okta, Inc.'s unaudited financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the reported periods Item 1. Financial Statements (unaudited) This section presents Okta, Inc.'s unaudited condensed consolidated financial statements and notes for the reported periods Condensed Consolidated Balance Sheets | Metric | July 31, 2025 (millions) | January 31, 2025 (millions) | | :-------------------------------- | :----------------------- | :-------------------------- | | Assets | | | | Cash and cash equivalents | $876 | $409 | | Short-term investments | $1,982 | $2,114 | | Accounts receivable, net | $417 | $621 | | Total current assets | $3,566 | $3,416 | | Total assets | $9,550 | $9,437 | | Liabilities & Equity | | | | Convertible senior notes, net (current) | $859 | $509 | | Deferred revenue (current) | $1,550 | $1,691 | | Total current liabilities | $2,647 | $2,523 | | Total liabilities | $2,796 | $3,032 | | Total stockholders' equity | $6,754 | $6,405 | - Total assets increased to $9,550 million as of July 31, 2025, from $9,437 million as of January 31, 2025, primarily driven by an increase in cash and cash equivalents10 - Current convertible senior notes increased significantly to $859 million from $509 million, reflecting upcoming maturities10 Condensed Consolidated Statements of Operations | Metric | Three Months Ended July 31, 2025 (millions) | Three Months Ended July 31, 2024 (millions) | Six Months Ended July 31, 2025 (millions) | Six Months Ended July 31, 2024 (millions) | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Total revenue | $728 | $646 | $1,416 | $1,263 | | Gross profit | $560 | $491 | $1,093 | $960 | | Operating income (loss) | $41 | $(19) | $80 | $(66) | | Net income (loss) | $67 | $29 | $129 | $(11) | | Net income (loss) per share, basic | $0.38 | $0.18 | $0.74 | $(0.06) | | Net income (loss) per share, diluted | $0.37 | $0.15 | $0.72 | $(0.06) | - Total revenue increased by 12.7% YoY for the three months ended July 31, 2025, and by 12.1% YoY for the six months ended July 31, 202513 - The company achieved net income of $67 million for the three months ended July 31, 2025, a significant improvement from $29 million in the prior year, and $129 million for the six months, reversing a net loss of $11 million13 Condensed Consolidated Statements of Comprehensive Income (Loss) | Metric | Three Months Ended July 31, 2025 (millions) | Three Months Ended July 31, 2024 (millions) | Six Months Ended July 31, 2025 (millions) | Six Months Ended July 31, 2024 (millions) | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net income (loss) | $67 | $29 | $129 | $(11) | | Other comprehensive income (loss) | $(4) | $10 | $13 | $(1) | | Comprehensive income (loss) | $63 | $39 | $142 | $(12) | - Comprehensive income for the three months ended July 31, 2025, was $63 million, up from $39 million in the prior year, and $142 million for the six months, a significant improvement from a $12 million loss16 Condensed Consolidated Statements of Stockholders' Equity | Metric | As of July 31, 2025 (millions) | As of January 31, 2025 (millions) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Total stockholders' equity | $6,754 | $6,405 | | Additional paid-in capital | $9,426 | $9,219 | | Accumulated deficit | $(2,673) | $(2,802) | - Total stockholders' equity increased to $6,754 million as of July 31, 2025, from $6,405 million as of January 31, 2025, driven by net income and stock-based compensation20 - Stock-based compensation contributed $128 million and $147 million to additional paid-in capital for the periods ended April 30, 2025, and July 31, 2025, respectively20 Condensed Consolidated Statements of Cash Flows | Metric | Six Months Ended July 31, 2025 (millions) | Six Months Ended July 31, 2024 (millions) | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $408 | $305 | | Net cash provided by (used in) investing activities | $118 | $(38) | | Net cash used in financing activities | $(67) | $(87) | | Net increase in cash, cash equivalents and restricted cash | $469 | $180 | | Cash, cash equivalents and restricted cash at end of period | $884 | $522 | - Net cash provided by operating activities increased by $103 million to $408 million for the six months ended July 31, 2025, compared to the prior year24 - Investing activities shifted from a net cash outflow of $38 million in 2024 to a net cash inflow of $118 million in 2025, primarily due to higher proceeds from maturities and sales of available-for-sale securities24 Notes to Condensed Consolidated Financial Statements 1. Overview and Basis of Presentation - Okta, Inc. operates as a leading independent identity partner, providing cloud-based identity solutions through its Okta Platform and Auth0 Platform28 - The company operates as one reportable segment, utilizing a SaaS business model with revenue primarily from multi-year subscriptions33 2. Accounting Standards and Significant Accounting Policies - The company will adopt new FASB guidance on disaggregated income tax disclosures in its Annual Report on Form 10-K for the year ended January 31, 202641 - New FASB guidance requiring disaggregated income statement expense information disclosure is effective for annual periods beginning after December 15, 2026, and is currently being evaluated for impact42 3. Restructuring and Other Charges - The 2025 Restructuring Plan, involving a reduction of approximately 180 full-time employees, was substantially complete by Q1 fiscal 2026, with $11 million in restructuring costs recognized in Q4 fiscal 202543 | Metric | (dollars in millions) | | :-------------------------------- | :-------------------- | | Balance as of January 31, 2025 | $11 | | Restructuring charges | $0 | | Cash payments | $(11) | | Balance as of July 31, 2025 | $0 | 4. Cash Equivalents and Investments | Category | As of July 31, 2025 (millions) | As of January 31, 2025 (millions) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Money market funds (Level 1) | $654 | $225 | | Certificates of deposit (Level 2) | $34 | $23 | | U.S. treasury securities (Level 2) | $6 | $0 | | Total cash equivalents | $694 | $248 | | Short-term investments (Available-for-sale) | $1,982 | $2,114 | | Total | $2,676 | $2,362 | - Strategic investments in privately-held companies, classified as Level 3, increased to $33 million as of July 31, 2025, from $30 million as of January 31, 202549 5. Deferred Commissions | Metric | Three Months Ended July 31, 2025 (millions) | Three Months Ended July 31, 2024 (millions) | Six Months Ended July 31, 2025 (millions) | Six Months Ended July 31, 2024 (millions) | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Sales commissions capitalized | $48 | $33 | $80 | $59 | | Amortization of contract costs | $40 | $32 | $76 | $62 | - Capitalized sales commissions increased by 45% for the three months and 35.6% for the six months ended July 31, 2025, compared to the prior year50 6. Deferred Revenue and Performance Obligations - Subscription revenue recognized from beginning deferred revenue balances was $651 million for the three months ended July 31, 2025, and $1,144 million for the six months, indicating consistent revenue recognition from prior periods54 | Metric | As of July 31, 2025 (millions) | | :------------------------------------ | :----------------------------- | | Total remaining performance obligations (RPO) | $4,152 | | RPO expected to be recognized in next 12 months | $2,265 (55%) | 7. Convertible Senior Notes, Net - The 2025 Notes ($510 million principal) and 2026 Notes ($350 million principal) are classified as current liabilities due to upcoming maturities on September 1, 2025, and June 15, 2026, respectively57 | Note Type | Principal Amount (millions) | Net Carrying Amount as of July 31, 2025 (millions) | Net Carrying Amount as of January 31, 2025 (millions) | | :---------- | :-------------------------- | :--------------------------------------- | :--------------------------------------- | | 2025 Notes | $510 | $510 | $509 | | 2026 Notes | $350 | $349 | $349 | 8. Commitments and Contingencies - A class action lawsuit, In re Okta, Inc. Securities Litigation, was settled for $60 million, covered by D&O insurance and the company's $10 million retention, with final approval granted on November 19, 202463 - Derivative lawsuits related to cybersecurity controls and Auth0 integration were globally resolved with a non-monetary settlement and a $2.25 million fee award to plaintiffs' counsel, subject to final approval on October 24, 202572 9. Employee Incentive Plans | Expense Category | Three Months Ended July 31, 2025 (millions) | Three Months Ended July 31, 2024 (millions) | Six Months Ended July 31, 2025 (millions) | Six Months Ended July 31, 2024 (millions) | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Cost of subscription revenue | $21 | $22 | $38 | $41 | | Research and development | $51 | $56 | $98 | $119 | | Sales and marketing | $35 | $36 | $67 | $66 | | General and administrative | $35 | $31 | $64 | $67 | | Total stock-based compensation expense | $144 | $148 | $272 | $299 | - Total unrecognized stock-based compensation expense was $800 million as of July 31, 2025, with a weighted-average remaining period of 1.9 years for unvested RSUs77 10. Income Taxes | Period | Pretax Income (Loss) (millions) | Provision for (Benefit from) Income Taxes (millions) | Effective Tax Rate | | :------------------------------------ | :------------------------------ | :--------------------------------------------------- | :----------------- | | Three Months Ended July 31, 2025 | $67 | $0 | 0.5% | | Six Months Ended July 31, 2025 | $135 | $6 | 4.6% | | Three Months Ended July 31, 2024 | $12 | $(17) | (158.8)% | | Six Months Ended July 31, 2024 | $(10) | $1 | (2.5)% | - The 'One Big Beautiful Bill Act,' enacted July 4, 2025, resulted in a $5 million decrease to income tax expense for the three months ended July 31, 2025, primarily due to immediate expensing of domestic R&D expenditures8084 - The company maintains a full valuation allowance on its U.S. deferred tax assets, but may release a significant portion in the foreseeable future if sufficient positive evidence of profitability emerges163 11. Net Income (Loss) Per Share | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) per share, basic | $0.38 | $0.18 | $0.74 | $(0.06) | | Net income (loss) per share, diluted | $0.37 | $0.15 | $0.72 | $(0.06) | | Weighted-average shares, basic (thousands) | 175,460 | 168,612 | 174,827 | 168,045 | | Weighted-average shares, diluted (thousands) | 180,966 | 174,443 | 181,356 | 168,045 | - Potentially dilutive securities, including employee share-based awards and convertible senior notes, were excluded from diluted EPS calculations in certain periods if anti-dilutive90 12. Subsequent Events - On August 25, 2025, Okta entered a definitive agreement to acquire Axiom Security Ltd, a privileged access management solutions company, expected to close in Q3 fiscal 2026 and financed with cash on hand, with no material impact on fiscal 2026 financial results91 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Okta, Inc.'s financial condition, operational results, business model, key metrics, liquidity, and accounting estimates Overview - Okta, Inc. is a leading independent identity partner, offering Okta Platform and Auth0 Platform to securely connect users to technologies, supporting cloud adoption, remote work, and Zero Trust security models9697 - The company's SaaS business model generates approximately 98% of total revenue from multi-year subscriptions, with future growth potentially impacted by longer sales cycles99100 - Cybersecurity incidents and global economic uncertainties (e.g., inflation, interest rates) have adversely affected, and could continue to affect, the company's reputation, customer relations, and financial results102103 Components of Results of Operations - Subscription revenue is primarily driven by customer count, users per customer, and solutions used, typically invoiced annually in advance105 - Professional services revenue comes from implementation and optimization assistance, recognized as services are performed106 - Cost of subscription revenue includes hosting fees, employee-related costs for infrastructure and support, and amortization of capitalized software, with ongoing investments expected to improve gross margin over time108109112 Results of Operations | Metric | Three Months Ended July 31, 2025 (%) | Three Months Ended July 31, 2024 (%) | Six Months Ended July 31, 2025 (%) | Six Months Ended July 31, 2024 (%) | | :------------------------------------ | :----------------------------------- | :----------------------------------- | :--------------------------------- | :--------------------------------- | | Subscription Revenue | 98% | 98% | 98% | 98% | | Professional Services and Other Revenue | 2% | 2% | 2% | 2% | | Total Revenue | 100% | 100% | 100% | 100% | | Gross Profit | 77% | 76% | 77% | 76% | | Operating Income (Loss) | 6% | (3)% | 6% | (5)% | | Net Income (Loss) | 9% | 5% | 9% | (1)% | - Net income as a percentage of total revenue improved significantly, reaching 9% for both the three and six months ended July 31, 2025, compared to 5% and (1)% in the prior year periods, respectively125 Comparison of the Three and Six Months Ended July 31, 2025 and 2024 Revenue | Revenue Type | Three Months Ended July 31, 2025 (millions) | Three Months Ended July 31, 2024 (millions) | $ Change | % Change | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :------- | :------- | | Subscription | $711 | $632 | $79 | 12% | | Professional services & other | $17 | $14 | $3 | 24% | | Total Revenue | $728 | $646 | $82 | 13% | | Revenue Type | Six Months Ended July 31, 2025 (millions) | Six Months Ended July 31, 2024 (millions) | $ Change | % Change | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :------- | :------- | | Subscription | $1,384 | $1,235 | $149 | 12% | | Professional services & other | $32 | $28 | $4 | 16% | | Total Revenue | $1,416 | $1,263 | $153 | 12% | - Subscription revenue growth was primarily driven by new business, including new customers and additional solutions sold to existing customers, reflected in a 106% dollar-based net retention rate and a 7% increase in customers with ACV above $100,000128 Cost of Revenue, Gross Profit and Gross Margin | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total cost of revenue (millions) | $168 | $155 | $323 | $303 | | Gross profit (millions) | $560 | $491 | $1,093 | $960 | | Subscription gross margin | 80% | 78% | 80% | 78% | | Professional services & other gross margin | (24)% | (31)% | (25)% | (28)% | | Total gross margin | 77% | 76% | 77% | 76% | - Subscription gross margin improved to 80% for both the three and six months ended July 31, 2025, from 78% in the prior year periods, primarily due to improved spend efficiency133138 - Professional services and other gross margin improved from negative 31% to negative 24% for the three months, and from negative 28% to negative 25% for the six months, driven by increased revenue in this segment134139 Operating Expenses | Expense Category | Three Months Ended July 31, 2025 (millions) | Three Months Ended July 31, 2024 (millions) | % of Revenue 2025 | % of Revenue 2024 | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------- | :---------------- | | Research and development | $160 | $164 | 22% | 25% | | Sales and marketing | $246 | $238 | 34% | 37% | | General and administrative | $113 | $108 | 15% | 17% | | Expense Category | Six Months Ended July 31, 2025 (millions) | Six Months Ended July 31, 2024 (millions) | % of Revenue 2025 | % of Revenue 2024 | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------- | :---------------- | | Research and development | $314 | $327 | 22% | 25% | | Sales and marketing | $483 | $474 | 34% | 38% | | General and administrative | $216 | $225 | 15% | 18% | - Research and development expenses decreased by $4 million (3 months) and $13 million (6 months) YoY, primarily due to reduced stock-based compensation expense, leading to improved spend efficiency as a percentage of revenue141142 - Sales and marketing expenses increased by $8 million (3 months) and $9 million (6 months) YoY, mainly due to higher labor and travel costs, but decreased as a percentage of total revenue due to improved spend efficiency146147 - General and administrative expenses increased by $5 million (3 months) due to stock-based compensation but decreased by $9 million (6 months) due to reductions in consulting costs and stock-based compensation, also showing improved efficiency as a percentage of revenue150151 Interest and Other, Net | Metric | Three Months Ended July 31, 2025 (millions) | Three Months Ended July 31, 2024 (millions) | Six Months Ended July 31, 2025 (millions) | Six Months Ended July 31, 2024 (millions) | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Interest expense | $(1) | $(1) | $(2) | $(3) | | Interest income and other, net | $27 | $29 | $57 | $56 | | Gain on early extinguishment of debt | $0 | $3 | $0 | $3 | | Total Interest and other, net | $26 | $31 | $55 | $56 | - Interest and other, net decreased by $5 million (3 months) and $1 million (6 months) YoY, primarily due to the absence of gains on early extinguishment of debt from convertible senior notes repurchases in fiscal 2025154 Provision for (Benefit from) Income Taxes | Period | Provision for (Benefit from) Income Taxes (millions) | | :------------------------------------ | :--------------------------------------------------- | | Three Months Ended July 31, 2025 | $0 | | Three Months Ended July 31, 2024 | $(17) | | Six Months Ended July 31, 2025 | $6 | | Six Months Ended July 31, 2024 | $1 | - The provision for income taxes increased by $17 million (3 months) and $5 million (6 months) YoY, reflecting a higher proportion of pre-tax income156 - The 'One Big Beautiful Bill Act,' enacted July 4, 2025, led to a $5 million cumulative decrease in income tax expense for the three months ended July 31, 2025, mainly due to immediate expensing of domestic R&D expenditures157158161 Key Business Metrics | Metric | As of July 31, 2025 | As of July 31, 2024 | | :--------------------------------------------------- | :------------------ | :------------------ | | Customers with ACV above $100,000 | 4,945 | 4,620 | | Dollar-based net retention rate (trailing 12 months) | 106% | 110% | | Current remaining performance obligations (millions) | $2,265 | $1,995 | | Remaining performance obligations (millions) | $4,152 | $3,505 | - The number of customers with annual contract value (ACV) above $100,000 increased by 7% to 4,945 as of July 31, 2025, indicating continued growth in larger enterprise adoption167 - The dollar-based net retention rate decreased to 106% as of July 31, 2025, from 110% in the prior year, primarily due to the macroeconomic environment slowing ACV growth from existing customers173 Liquidity and Capital Resources - As of July 31, 2025, principal liquidity sources included $2,858 million in cash, cash equivalents, and short-term investments, primarily U.S. treasury securities, money market funds, corporate debt securities, and certificates of deposit176 - The company expects existing cash, investments, and cash from sales to meet short-term and long-term capital needs, but may seek additional financing for acquisitions or growth184 - Deferred revenue totaled $1,574 million as of July 31, 2025, with $1,550 million expected to be recognized as revenue in the next 12 months, representing a substantial source of cash185 | Cash Flow Activity | Six Months Ended July 31, 2025 (millions) | Six Months Ended July 31, 2024 (millions) | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $408 | $305 | | Net cash provided by (used in) investing activities | $118 | $(38) | | Net cash used in financing activities | $(67) | $(87) | Material Cash Requirements - No significant changes to material cash requirements were reported for the six months ended July 31, 2025, other than the reclassification of 2026 Notes as a current liability193 Indemnification Agreements - The company enters into indemnification agreements with customers, vendors, and directors/officers, but has not incurred significant costs or accrued material liabilities from these obligations to date195 Critical Accounting Estimates - There were no significant changes to critical accounting estimates for the six months ended July 31, 2025, compared to those discussed in the Annual Report on Form 10-K for fiscal year ended January 31, 2025197 Item 3. Quantitative and Qualitative Disclosures about Market Risk This section details Okta, Inc.'s exposure to market risks, including foreign currency and interest rate fluctuations, with no material impact expected - Most sales are denominated in U.S. dollars, limiting significant foreign currency risk, and a hypothetical 10% change in foreign currency exchange rates would not have a material impact198 - The company's cash, cash equivalents, and short-term investments ($2,858 million as of July 31, 2025) are subject to interest rate risk, but a hypothetical 10% change would not have a material impact on their value199201 - The 2025 Notes ($510 million principal, 0.125% fixed rate) and 2026 Notes ($350 million principal, 0.375% fixed rate) are classified as current liabilities due to upcoming maturities, but their fixed rates limit economic interest rate exposure202203204 Item 4. Controls and Procedures Management confirms the effectiveness of disclosure controls and procedures, with no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of July 31, 2025205 - No material changes in internal control over financial reporting occurred during the period covered by the report206 - The company acknowledges the inherent limitations of control systems, which can only provide reasonable, not absolute, assurance against errors and fraud207 PART II. OTHER INFORMATION This part covers legal proceedings, risk factors, other information, and exhibits for the reported period Item 1. Legal Proceedings This section incorporates legal matters from Note 8, detailing a class action settlement and ongoing derivative lawsuits - Legal matters, including the settlement of a class action lawsuit for $60 million and the status of derivative lawsuits, are incorporated by reference from Note 8 of the financial statements209 Item 1A. Risk Factors This section outlines various risks that could materially affect Okta, Inc.'s business, financial condition, and growth prospects Risk Factor Summary - Key risks include adverse economic conditions, intense competition (especially from Microsoft), potential for future losses despite recent profitability, reliance on customer retention and growth, and vulnerability to cybersecurity incidents and data breaches212220223225257 - Operational risks involve managing rapid growth, maintaining service levels, integrating with diverse technologies, and addressing errors or vulnerabilities in solutions215218290 - Financial and governance risks include stock price volatility, the dual-class stock structure concentrating voting control, and potential impacts from convertible note transactions216324326344 Risks Related to Our Business and Industry - Adverse economic conditions, including inflation and rising interest rates, could reduce demand for solutions and impact revenue, results of operations, and cash flows214 - Failure to effectively manage rapid growth, including challenges in restructuring efforts and maintaining customer satisfaction, could harm business and future prospects215218219 - Intense competition from larger, well-established companies like Microsoft, with greater resources and broader product offerings, poses a significant threat to market position and financial performance220221222 - The company's ability to sustain profitability depends on retaining existing customers and expanding its customer base, with non-renewal or slower growth adversely impacting revenue223225226 - Quarterly results may fluctuate due to factors like demand, sales cycles, security breaches, seasonality, and macroeconomic conditions, making future results difficult to predict227228229 - Failure to adequately fund R&D or successfully integrate acquisitions could impair competitiveness, while international expansion efforts face risks like political uncertainties and compliance with foreign regulations230234237238 Risks Related to Intellectual Property, Infrastructure Technology, Data Privacy and Security - Interruptions or performance problems in technology, systems, or infrastructure, including those from third-party data centers like AWS, could delay platform deployment, harm reputation, and lead to financial penalties253254256287288 - Cybersecurity incidents, including those involving third-party service providers, have harmed reputation and financial results in the past and could lead to unauthorized access, data theft, litigation, and increased costs257260261262 - Non-compliance with evolving global data privacy and security laws (e.g., GDPR, U.S. state laws) or perceived failures could result in investigations, fines, litigation, and reputational damage265266267268269271 - Real or perceived errors, failures, vulnerabilities, or bugs in solutions, especially during updates or in complex environments, could cause outages, data loss, and harm business operations and reputation290291 - The use of AI technologies, including generative AI, presents risks such as uncertain regulatory environments, potential intellectual property infringement claims, ethical concerns, and the creation of inaccurate content, which could lead to reputational harm or liability292293 - Failure to adequately protect proprietary rights (patents, trade secrets) or being subject to infringement claims could impair competitive position, lead to costly litigation, and reduce revenue294296297298 Risks Related to Legal, Accounting and Tax Matters - Revenue recognition over service periods means sales decreases are not immediately reflected, limiting rapid revenue increases and potentially impacting future periods303304 - Exposure to foreign currency exchange rate fluctuations may increase as international contracts become denominated in local currencies, potentially affecting results of operations306 - Non-compliance with anti-corruption, anti-bribery, and export control laws, especially with international expansion and channel partners, could lead to criminal penalties, significant fines, and reputational harm307309310 - Changes in tax laws, regulations, or interpretations, both domestic and international, could increase costs, lead to additional tax liabilities, and adversely affect liquidity and profitability311312313314315 - Limitations on the use of U.S. net operating loss carry-forwards due to past or future ownership changes could increase future tax liability316 - Failure to maintain effective disclosure controls and internal control over financial reporting could impair the ability to produce timely and accurate financial statements, leading to regulatory discipline and investor distrust317318 Risks Related to Ownership of Our Class A Common Stock - The stock price of Class A common stock is subject to substantial volatility due to various factors, including market performance, financial fluctuations, analyst coverage, and actions by institutional stockholders324325 - The dual-class common stock structure concentrates voting control with pre-IPO stockholders (32.5% as of July 31, 2025), limiting other stockholders' ability to influence corporate matters326 - Sales of a substantial number of Class A common stock shares by insiders or the perception of such sales could cause the market price to decline328 - The company does not intend to pay dividends in the foreseeable future, requiring investors to rely on stock price appreciation for gains332 - Provisions in charter documents and Delaware law could make company acquisition more difficult and limit stockholders' ability to replace the board333334335 Risks Related to our Outstanding Convertible Notes - Servicing debt, including the 2025 and 2026 convertible notes, requires significant cash flow, and insufficient cash could lead to default or restrictive financing terms338341 - The company may lack funds for cash settlement upon conversion or repurchase of notes, potentially limited by future debt agreements339 - Conditional conversion features of the notes, if triggered, could adversely affect financial condition by requiring cash payments or reclassifying debt as current liabilities342343 - Transactions related to convertible notes, including conversions, repurchases, or hedging activities by counterparties, may dilute ownership interests and affect the market price of Class A common stock344348 General Risk Factors - The company's success depends on retaining executive officers and key employees; loss of such personnel or inability to attract skilled talent could harm business and growth prospects350 - Catastrophic events like natural disasters, power loss, or cyber-attacks could disrupt operations, cause reputational harm, and lead to data security breaches, with insurance potentially insufficient to cover losses351 Item 5. Other Information This section discloses Rule 10b5-1 trading arrangements adopted by executive officers during the three months ended July 31, 2025 - Larissa Schwartz, Chief Legal Officer, adopted a 10b5-1 Plan on July 3, 2025, for the sale of up to 14,163 shares of Class A common stock, plus future RSUs, from October 8, 2025, to September 30, 2026352 - Brett Tighe, Chief Financial Officer, adopted a 10b5-1 Plan on July 15, 2025, for the sale of up to 40,000 shares of Class A common stock, from December 8, 2025, to January 27, 2026352 Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, certifications, and XBRL data - The report includes certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1) and XBRL interactive data files (Exhibits 101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)355 - Corporate governance documents, such as the Amended and Restated Certificate of Incorporation and Bylaws, are incorporated by reference355 Signatures This section contains the required signatures for the Quarterly Report on Form 10-Q, confirming its submission by the Chief Financial Officer - The report was duly signed on behalf of Okta, Inc. by Brett Tighe, Chief Financial Officer, on August 26, 2025357359
Okta(OKTA) - 2026 Q2 - Quarterly Report