Okta, Inc.

What they do

Okta provides two cloud-based identity platforms, Okta Platform and Auth0 Platform, that enable organizations to securely connect users to applications, servers, APIs, and IT infrastructure. The company sells multi-year subscription services to businesses, governments, and other entities, generating most revenue from subscription fees that scale with the number of users and solutions used.

Revenue drivers

• Subscription revenue — Core revenue stream; generated $750 million in Q1 FY2027, up 11% year-over-year, and represented 98% of total revenue for the three months ended April 30, 2026.
• Okta Platform (workforce identity) — Largest product line; secures employee, contractor, and partner access to applications and IT infrastructure, driving recurring subscription revenue.
• Auth0 Platform (customer identity) — Offers developer-focused identity for customer-facing applications; contributes to subscription revenue through per-user and usage-based pricing.
• Professional services — Includes implementation and support services; management has decided to shift this business to partners, creating a headwind to professional services revenue growth.

Recent performance

In Q1 FY2027 (ended April 30, 2026), Okta reported total revenue of $765 million, up 11% year-over-year, and subscription revenue of $750 million, also up 11%. GAAP net income was $74 million ($0.42 diluted EPS), compared to $62 million in the prior-year quarter. Operating cash flow was $277 million and free cash flow was $271 million. RPO grew 16% year-over-year to $4.719 billion, while cRPO grew 12% to $2.499 billion. For fiscal year 2026 (ended January 31, 2026), revenue was $2.92 billion and net income was $235 million.

Strategy

Okta is focusing on its go-to-market specialization to drive large enterprise growth and sales productivity. The company is expanding its identity platform to support non-human identities (NHIs) and AI agents, with new product offerings in development and early access. Management also aims to accelerate the shift of professional services to partners, which is expected to lower revenue growth but improve focus on core subscription offerings. Okta continues to invest in its unified identity platform, with new products like Okta Identity Governance resonating with customers.

Risks

• Cybersecurity incidents — Past breaches, including the October 2023 customer support system attack, have harmed reputation and customer relations, and future incidents could adversely affect financial results.
• Economic conditions — Macroeconomic uncertainties, including tariffs and changing government spending, may reduce customer spending on identity solutions, impacting revenue and cash flow.
• Competitive pressure — Okta faces intense competition from larger, well-established companies, which could pressure pricing and market share.
• Customer retention and growth — Failure to retain existing customers or grow the customer base could harm revenue growth and profitability.

Outlook

For Q2 FY2027, Okta expects total revenue of $790 to $794 million (9% year-over-year growth), cRPO of $2.505 to $2.515 billion, non-GAAP operating income of $204 to $208 million, and non-GAAP free cash flow of $155 to $165 million. For full-year FY2027, revenue guidance is $3.185 to $3.205 billion, reflecting a 9-10% growth rate, with an approximately one percentage point headwind from the professional services shift. Non-GAAP operating income is expected to be $806 to $826 million, yielding a margin of 25-26%.