OKTA Shares Jump on Solid Q4 Earnings Beat, Revenues Increase Y/Y

Core Insights - Okta (OKTA) reported fiscal fourth-quarter 2026 earnings of 90 cents per share, exceeding the Zacks Consensus Estimate by 6.36% and reflecting a 15.4% year-over-year increase [1] Revenue Performance - Total revenues rose 11.6% year over year to $761 million, surpassing the consensus mark by 1.59% [2] - Subscription revenues increased 11.5% year over year to $747 million, making up 98.2% of total revenues [2] - Professional services and other revenues, accounting for 1.8% of total revenues, jumped 16.7% year over year to $14 million [2] Geographic Revenue Breakdown - U.S. revenues contributed 83% to total revenues, increasing 12.04% year over year to $605 million [3] - International revenues accounted for 21.4% of total revenues, rising 9.86% year over year to $156 million [3] Customer Metrics - Customers with more than $100K in Annual Contract Value grew 6% year over year to 5,100 [4] - The dollar-based retention rate for the trailing 12 months was 106%, down 1% year over year [4] - Remaining Performance Obligations (RPO) totaled $4.827 billion, up 15% year over year, with current RPO expected to be recognized over the next 12 months at $2.513 billion, up 12% year over year [4] Operating Performance - Non-GAAP gross margin for Q4 increased by 20 basis points year over year to 82% [5] - Research and development expenses as a percentage of revenues decreased 60 basis points year over year to 15.2% [5] - General and administrative expenses decreased 210 basis points year over year to 10.5% [5] - Sales and marketing expenses increased 100 basis points year over year to 29.7% [5] - Non-GAAP operating margin expanded 190 basis points year over year to 26.5% [5] Financial Position - As of January 31, 2026, Okta had $2.55 billion in cash, cash equivalents, and short-term investments [6] - Net cash provided by operations was $258 million in the reported quarter, while free cash flow was $252 million [6] Guidance - For fiscal first-quarter 2027, Okta expects revenues in the range of $749-$753 million, indicating year-over-year growth of 9% [7] - Current RPO is expected to be between $2.440 billion and $2.450 billion, suggesting year-over-year growth of 10% [7] - Non-GAAP operating income is anticipated to be in the range of $176-$180 million, with an operating margin expected between 23% and 24% [8] - Non-GAAP earnings are projected to be between 84-86 cents per share, assuming diluted weighted-average shares outstanding of approximately 185 million [8] Long-term Outlook - For fiscal 2027, revenues are expected to be in the range of $3.17 billion to $3.19 billion, indicating year-over-year growth of 9% [9][10] - Non-GAAP operating income is expected to be in the range of $795-$815 million, with an operating margin projected at 25%-26% [10] - Non-GAAP earnings are anticipated to be between $3.74 and $3.82 per share, assuming diluted weighted-average shares outstanding of approximately 185 million [10]