Okta(US:OKTA)2025-12-02 23:08Revenue and Income - Total revenue for the three months ended October 31, 2025, was $742 million, a 11.6% increase from $665 million in the same period of 2024[14] - Subscription revenue reached $724 million for the three months ended October 31, 2025, up from $651 million in the same period of 2024, representing a 11.2% growth[14] - Net income for the three months ended October 31, 2025, was $43 million, compared to $16 million in the same period of 2024, marking a 168.8% increase[16] - Total revenue for the nine months ended October 31, 2025, reached $2,158 million, up by $230 million or 12% compared to $1,928 million in the same period of 2024[132] - The company reported a comprehensive income of $46 million for the three months ended October 31, 2025, compared to $20 million in the same period of 2024[16] Profitability and Expenses - Gross profit for the three months ended October 31, 2025, was $572 million, up from $508 million in the same period of 2024, reflecting a 12.6% increase[14] - Operating income for the three months ended October 31, 2025, was $23 million, compared to an operating loss of $16 million in the same period of 2024[14] - The gross margin for subscription services improved to 80% for the three months ended October 31, 2025, compared to 78% in the same period of 2024[136] - The cost of subscription revenue for the three months ended October 31, 2025, was $147 million, an increase of $7 million or 6% from $140 million in the same period of 2024[136] - Research and development expenses for the three months ended October 31, 2025, were $160 million, slightly up from $158 million in the same period of 2024[128] - Sales and marketing expenses for the three months ended October 31, 2025, were $271 million, reflecting a 6% increase from $256 million in 2024[149] - General and administrative expenses for the three months ended October 31, 2025, increased to $118 million, an 8% increase from $110 million in 2024[153] Assets and Liabilities - Total current assets as of October 31, 2025, were $3,201 million, a decrease from $3,416 million as of January 31, 2025[11] - Total liabilities decreased to $2,336 million as of October 31, 2025, down from $3,032 million as of January 31, 2025[11] - Cash and cash equivalents increased to $645 million as of October 31, 2025, from $409 million as of January 31, 2025[11] - Total stockholders' equity as of October 31, 2025, was $6,893 million, an increase from $6,405 million as of January 31, 2025[11] - The company reported a total of $1,818 million in short-term investments as of October 31, 2025, down from $2,114 million as of January 31, 2025[45] Stock and Equity - The company issued 1,205 shares of common stock during the three months ended July 31, 2024, raising an additional $9 million in paid-in capital[22] - The company’s total stockholders' equity increased to $6,265 million as of October 31, 2024, from $5,888 million as of January 31, 2024[22] - Unrecognized stock-based compensation expense related to outstanding equity awards was $689 million as of October 31, 2025[77] Taxation - The Company recorded a provision for income taxes of $7 million on pretax income of $50 million for the three months ended October 31, 2025, resulting in an effective tax rate of approximately 14.0%[79] - For the three months ended October 31, 2024, the company recorded a provision for income taxes of $9 million on a pretax income of $25 million, resulting in an effective tax rate of approximately 40.4%[84] - For the nine months ended October 31, 2024, the company recorded a provision for income taxes of $10 million on a pretax income of $15 million, resulting in an effective tax rate of approximately 69.6%[84] Customer Metrics - The dollar-based net retention rate was 106% as of October 31, 2025, indicating strong customer retention and expansion[133] - The number of customers with annual contract value (ACV) above $100,000 increased to 5,030 as of October 31, 2025, up from 4,705 in 2024[171] - Dollar-based net retention rate for the trailing 12 months ended October 31, 2025, was 106%, down from 108% in the previous year[171] Strategic Investments and Acquisitions - On September 4, 2025, the company acquired Axiom Security Ltd for $54 million, which is expected to enhance its privileged access management capabilities[92] - The acquisition of Axiom included $16 million for developed technology intangible assets and $40 million of goodwill, primarily attributed to the assembled workforce[93] - As of October 31, 2025, the balance of strategic investments was $32 million, up from $30 million as of January 31, 2025[51] Market Conditions and Risks - The company experienced cybersecurity incidents that adversely impacted its reputation and financial results, with potential future performance implications[106] - Current economic conditions, including market fluctuations and inflation, have the potential to adversely affect the company's business operations and financial results[107] - A hypothetical 10% change in foreign currency exchange rates would not have had a material impact on the company's financial statements during the nine months ended October 31, 2025[205] Cash Flow and Financing Activities - During the nine months ended October 31, 2025, cash provided by operating activities was $626 million, an increase of $162 million compared to the same period in 2024[193] - Cash used in financing activities increased to $622 million during the nine months ended October 31, 2025, primarily due to increased payments upon maturity and repurchase of convertible senior notes[198] - The company repurchased $42 million principal amount of the 2025 Notes for $40 million in cash during fiscal 2025, resulting in an aggregate gain on early extinguishment of debt of $19 million[188]