Why Okta Stock Rocketed Higher Tuesday Morning

Core Insights - Okta's shares surged by as much as 19.9% following the release of its quarterly earnings results, reflecting positive sentiment among shareholders [1] Financial Performance - For fiscal Q4 2025, Okta reported revenue of $682 million, a 13% increase year over year, driven by subscription revenue growth of 13% to $670 million [2] - The company transitioned from a net loss of $44 million to a profit of $23 million, resulting in adjusted earnings per share (EPS) of $0.78, surpassing analysts' expectations of $668 million in revenue and $0.74 EPS [2] Cash Flow and Customer Metrics - Okta achieved record operating cash flow of $286 million and free cash flow of $284 million, representing increases of 64% and 71%, respectively [3] - The total customer base grew to 19,650, a 4% year-over-year increase, with high-value customers (spending $100,000 annually) rising by 7% to 4,800 [4] Future Outlook - The current remaining performance obligation (RPO) stands at $2.25 billion, up 15% year over year, while total RPO increased by 25% to $4.2 billion, indicating a reacceleration in sales [5] - For Q1, Okta forecasts revenue of approximately $679 million, a 10% increase at the midpoint, and full-year revenue guidance of $2.85 billion, also a 10% increase, exceeding expectations of $2.79 billion [6] - The stock is currently valued at around 30 times next year's expected earnings, suggesting an attractive valuation as growth stabilizes [7]