Summary
Okta closed FY2024 Q2 with total revenue of $556 million, up 23.0% year over year. Gross profit was $407 million, up 29.6%, and gross margin reached 73.2%, an improvement of 3.7 percentage points. The company still posted a GAAP operating loss of $162 million, an improvement of $46 million from the prior-year quarter, and a GAAP net loss of $111 million, an improvement of $99 million. GAAP diluted net loss per share was -$0.68, an improvement of $0.66 from the prior-year quarter. Operating margin was -29.1%, up 16.9 percentage points year over year. On a non-GAAP basis, Okta reported operating income of $59 million and net income of $56 million, with diluted net income per share of $0.31. The gap between GAAP and non-GAAP results remains wide because of stock-based compensation and other adjustments.
Subscription backlog tells a mixed story. RPO was $3.03 billion, up 8.5% year over year. Current RPO, the portion expected to be recognized over the next 12 months, was $1.77 billion, up 18%. Current deferred revenue was $1.22 billion, up 23.2%. Okta ended the quarter with more than 18,400 customers, up from over 16,400 a year earlier, and 4,205 customers had annual contract value above $100,000, up from 3,525. Dollar-based net retention rate was 115%, down from 122% as existing customers increased spending at a slower pace. Management tied that slowdown to the macroeconomic environment and warned that longer sales cycles could create near-term headwinds for cash flow and RPO growth.
Cash generation improved sharply. Operating cash flow was $53 million in the quarter, up $72 million year over year. For the first half, operating cash flow was $182 million, up $182 million from the prior-year first half. Free cash flow, a non-GAAP measure, was $49 million, or 9% of total revenue, compared with negative $24 million in the prior-year quarter. Capital expenditures were $2 million in the quarter, flat year over year. The company also repurchased convertible notes during the quarter, which generated a gain on early extinguishment of debt and reduced outstanding debt.
Guidance for the third quarter of fiscal 2024 calls for 16% year-over-year revenue growth. Management guided current RPO to $1.780 billion to $1.785 billion, or 13% growth. Non-GAAP operating income is expected at $53 million to $55 million, and non-GAAP diluted net income per share at $0.29 to $0.30, assuming roughly 180 million diluted shares and a 26% non-GAAP tax rate. For the full fiscal year 2024, Okta expects 19% year-over-year revenue growth. Full-year non-GAAP operating income is guided to $215 million to $220 million, non-GAAP diluted net income per share to $1.17 to $1.20, and a non-GAAP free cash flow margin of 15%.
Risks remain. The macroeconomic backdrop includes rising interest rates, inflation, banking sector uncertainty, and weaker spending from existing customers. Okta faces execution risk around integrating Auth0, potential network or data security incidents, service outages, and the need to pay off convertible notes when due. Restructuring and other charges in the quarter were primarily related to lease impairment charges, and the company may incur more charges from its real estate optimization plan. Even with better margins and cash flow, Okta still reported a GAAP operating loss and a GAAP net loss, so profitability under GAAP remains a work in progress.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $556.0M | $518.0M | +7.3% | $451.8M | +23.1% |
| Gross profit | $407.0M | $376.0M | +8.2% | $314.1M | +29.6% |
| Gross margin | 73.2% | 72.6% | +0.6 pp | 69.5% | +3.7 pp |
| Research & development | $172.0M | $163.0M | +5.5% | $155.8M | +10.4% |
| Sales & marketing | $261.0M | $256.0M | +2.0% | $264.7M | -1.4% |
| General & administrative | $119.0M | $110.0M | +8.2% | $101.7M | +17.0% |
| Total operating expenses | $569.0M | $536.0M | +6.2% | $522.2M | +9.0% |
| Operating income (loss) | -$162.0M | -$160.0M | -1.3% | -$208.1M | +22.1% |
| Operating margin | -29.1% | -30.9% | +1.8 pp | -46.0% | +16.9 pp |
| Net income (loss) | -$111.0M | -$119.0M | +6.7% | -$210.5M | +47.3% |
| Net margin | -20.0% | -23.0% | +3.0 pp | -46.6% | +26.6 pp |
| Diluted EPS | -$0.68 | -$0.74 | +$0.06 | -$1.34 | +$0.66 |
| Customers | 18,400 | 18,050 | +1.9% | 16,400 | +12.2% |
| Net retention rate | 115.0% | 117.0% | -2.0 pp | — | — |
Risks
Risk factors and MD&A highlight worldwide economic uncertainty, banking sector instability, rising interest rates and inflation that may reduce workforce identity and customer identity spending. MD&A states these conditions have and could continue to adversely affect business operations or financial results.
MD&A says future growth may be impacted by longer sales cycles, which Okta has experienced, causing delays in deal closings and near-term headwinds for cash flow and RPO growth. Risk factors state sales cycles are lengthening in certain circumstances and becoming less predictable as Okta focuses on larger organizations.
Dollar-based net retention rate for the trailing 12 months ended decreased to 115% as of July 31, 2023 from 122% as of July 31, 2022, which MD&A attributes primarily to the macroeconomic environment and slower ACV growth from existing customers. Risk factors state any material decline in this rate would harm future results of operations.
Risk factors re-emphasize that Okta has experienced cybersecurity attacks and the January 2022 compromise of a third-party service provider was widely publicized and became the subject of lawsuits, even though it was not material and not a breach of Okta's product or systems. As an identity provider, Okta remains an attractive target and future incidents could create liability, remediation costs, and reputational harm.
During the first quarter of fiscal 2024 Okta announced a restructuring plan reducing the workforce by approximately 300 full-time employees, and restructuring and other charges were $17 million for FY2024 Q2 and $24 million for FY2024 year to date, primarily lease impairment charges. Risk factors note execution challenges such as adverse employee morale or attrition beyond intended reductions.
Risk factors state Okta faces intense competition, with Microsoft named as principal competitor, and larger competitors may use broader product offerings, bundling, or zero or negative margin pricing to gain business. This could lead to pricing pressure, fewer orders, reduced revenue and gross margins, and loss of market share.
Risk factors describe evolving U.S. and international privacy and data protection laws, including CPRA, new state statutes, India's comprehensive law, and uncertainty around the EU-U.S. Data Privacy Framework and Standard Contractual Clauses, with fines up to 20 million euros or 4% of worldwide annual revenue in Europe. Noncompliance could increase costs and restrict operations.
MD&A reports Okta repurchased $508 million principal amount of 2025 Notes and $242 million principal amount of 2026 Notes during FY2024 year to date for cash, resulting in a $73 million gain on early extinguishment. Risk factors state servicing or settling convertible notes may require significant cash and conversion features could adversely affect liquidity and dilute stockholders.
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
Non-GAAP Operating Income
Number of Customers
Summary, forecast, risks and KPIs are extracted from Okta, Inc.'s SEC filings for Q2 FY2024 (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.