Summary
Okta closed FY2025 Q1 with total revenue of $617 million, up 19.1% from $518 million in the prior-year quarter. Gross profit rose 24.7% to $469 million from $376 million. Gross margin expanded to 76.0% from 72.6%, and operating margin improved to negative 7.6% from negative 30.9%. The company still recorded a GAAP operating loss of $47 million, but that loss narrowed from $160 million a year earlier. GAAP net loss was $40 million, or $0.24 per diluted share, compared with $119 million, or $0.74 per diluted share, in the prior-year quarter. The loss narrowed.
Cash generation stood out. Operating cash flow, a GAAP measure, was $219 million, up from $129 million. Free cash flow, a non-GAAP measure, was $214 million, compared with $124 million. Free cash flow margin was 35%, compared with 24%. Non-GAAP operating income was $133 million, or 22% of revenue, versus $37 million, or 7%, a year ago. Non-GAAP net income was $117 million, and non-GAAP diluted net income per share was $0.65, compared with $0.22. Management called the quarter a record for non-GAAP profitability and cash flow.
Operational KPIs showed steady customer additions but softer expansion. Okta had more than 19,100 customers as of April 30, 2024, up from 18,050 a year earlier. Customers with annual contract value above $100,000 rose to 4,550 from 4,080. Dollar-based net retention rate for the trailing 12 months was 111%, down from 117%. The company said the decline was primarily due to the macroeconomic environment, with ACV from existing customers increasing at a slower rate. RPO was $3.364 billion, up 14.3% from $2.942 billion. Current RPO was $1.949 billion, up 15% from $1.701 billion. Deferred revenue, current portion only, was $1.391 billion, up 18.6% from $1.173 billion.
Guidance for the next quarter, FY2025 Q2, points to non-GAAP operating income of $123 million to $125 million, which works out to a non-GAAP operating margin of 19% to 20%. Non-GAAP diluted net income per share is projected at $0.60 to $0.61, assuming diluted weighted-average shares outstanding of approximately 182 million and a non-GAAP tax rate of 26%. Current RPO is expected to be $1.955 billion to $1.960 billion. Non-GAAP free cash flow margin is guided to approximately 5%. For the full fiscal year 2025, Okta now expects non-GAAP operating income of $490 million to $500 million, a non-GAAP operating margin of 19% to 20%, non-GAAP diluted net income per share of $2.35 to $2.40, and a non-GAAP free cash flow margin of approximately 22%. The outlook assumes a stable but still challenging macro environment and potential impacts from the October 2023 security incident.
Risks remain. The company flagged the October 2023 security incident, which involved unauthorized access to a third-party customer support system, and the January 2022 incident involving a third-party service provider. Okta said these incidents harmed reputation and customer relations, adversely impacted financial results, and may create additional liabilities. The macroeconomic environment, rising interest rates, inflation, and banking sector uncertainty could continue to pressure demand. Okta also noted longer sales cycles, which could delay deals and create near-term headwinds for cash flow, RPO, and billings growth. Customer growth has slowed in recent periods and could continue to decelerate. The company carries convertible senior notes and completed the acquisition of Spera on February 1, 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $617.0M | $605.0M | +2.0% | $518.0M | +19.1% |
| Gross profit | $469.0M | $460.0M | +2.0% | $376.0M | +24.7% |
| Gross margin | 76.0% | 76.0% | -0.0 pp | 72.6% | +3.4 pp |
| Research & development | $163.0M | $156.0M | +4.5% | $163.0M | ±0.0% |
| Sales & marketing | $236.0M | $249.0M | -5.2% | $256.0M | -7.8% |
| General & administrative | $117.0M | $110.0M | +6.4% | $110.0M | +6.4% |
| Total operating expenses | $516.0M | $543.0M | -5.0% | $536.0M | -3.7% |
| Operating income (loss) | -$47.0M | -$83.0M | +43.4% | -$160.0M | +70.6% |
| Operating margin | -7.6% | -13.7% | +6.1 pp | -30.9% | +23.3 pp |
| Net income (loss) | -$40.0M | -$44.0M | +9.1% | -$119.0M | +66.4% |
| Net margin | -6.5% | -7.3% | +0.8 pp | -23.0% | +16.5 pp |
| Diluted EPS | -$0.24 | -$0.27 | +$0.03 | -$0.74 | +$0.50 |
| Customers | 19,100 | — | — | 18,050 | +5.8% |
| Net retention rate | 111.0% | 111.0% | ±0.0 pp | 117.0% | -6.0 pp |
Risks
Okta has experienced cybersecurity incidents, including the January 2022 third-party service provider compromise and the October 2023 unauthorized access to its third-party customer support system. MD&A states these incidents harmed reputation and customer relations, adversely impacted financial results, and may create additional liabilities.
Adverse economic conditions and reduced workforce identity and customer identity spending may lower demand, and MD&A attributes the Dollar-Based Net Retention Rate decrease to macro pressure, with the rate at 111% as of April 30, 2024 compared to 117% as of April 30, 2023.
Okta's increasing focus on larger organizations is lengthening and making sales cycles less predictable. MD&A notes longer sales cycles could delay deal closings and create near-term headwinds for cash flow, RPO and billings growth.
Okta faces intense competition, particularly from larger, well-established companies, and identifies Microsoft as its principal competitor. Competitors may bundle products or sell at zero or negative margins, which could pressure pricing, market share, revenue and gross margins.
The business depends on customer renewals and additional purchases, and any material decline in Dollar-Based Net Retention Rate would harm future results. Customer growth has slowed in recent periods and could fall below analyst or investor expectations.
Okta depends on executive officers and other key employees, and competition for qualified personnel in the San Francisco Bay Area and elsewhere is intense. The risk factor notes the former Chief Operating Officer did not return as an employee following his sabbatical.
Okta has convertible notes due in 2025 and 2026, and servicing this debt may require significant cash. The notes may become convertible or require cash settlement, and related hedging or capped call activity could affect liquidity and dilute stockholders.
Okta is subject to evolving global privacy and data protection laws, including EU rules with fines up to 20 million euros or 4% of total worldwide annual revenue, whichever is higher. New and conflicting U.S. state and international regimes increase compliance costs and potential liability.
Okta announced a worldwide restructuring in Q1 FY2025 involving approximately 400 full-time employees, following approximately 300 in Q1 FY2024. Execution challenges may include adverse impacts on employee morale or attrition beyond intended reductions and could impair business initiatives.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Current Remaining Performance Obligations (cRPO)
Free Cash Flow Margin
Free Cash Flow
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Customers with annual contract value (ACV) above $100,000
Total Customers
Non-GAAP Operating Income
Dollar-Based Net Retention Rate
Summary, forecast, risks and KPIs are extracted from Okta, Inc.'s SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.