Summary
Okta's fiscal 2023 fourth quarter total revenue was $510.21 million, up 33.3% from the prior-year quarter. Full-year revenue reached $1.86 billion, up 42.9% from the prior fiscal year. Gross profit in the quarter was $370.72 million, up 40.6%, and gross margin was 72.7%, up 3.8 percentage points. The company still reported a GAAP operating loss of $157.65 million, but that loss narrowed from the prior-year quarter, and operating margin was negative 30.9%, up 25.3 percentage points. GAAP net loss was $152.92 million, also a narrower loss than the prior-year quarter. On a non-GAAP basis, Okta reported operating income of $46 million, compared with a non-GAAP operating loss of $24 million in the prior-year quarter, and non-GAAP net income of $52 million, compared with a non-GAAP net loss of $29 million. The gap between GAAP and non-GAAP results remains wide, largely because of stock-based compensation and other adjustments.
Operational metrics showed solid but slowing momentum. RPO, or subscription backlog, was $3.01 billion, up 11.6% from the prior-year quarter. Current RPO was $1.68 billion, up 25%. Calculated billings were $710 million in the quarter, up 18%, and $2.12 billion for the full year, up 24%. Okta ended the fiscal year with more than 17,600 customers, up from over 15,000 a year earlier. The number of customers with annual contract value above $100,000 rose to 3,930 from 3,100. Dollar-based net retention rate for the trailing 12 months was 120%, down from 124% a year earlier. Management noted that longer sales cycles have appeared, and that these can delay deal closings and create near-term headwinds for cash flow, RPO, and billings growth.
Cash generation improved sharply in the quarter. Operating cash flow was $76.24 million, up 468.4% from the prior-year quarter. For the full year, operating cash flow was $86 million, down 17.3% from the prior fiscal year. Capital expenditures were $2.62 million in the quarter, down 63.6%, and $12 million for the full year, down 7.7%. Free cash flow, a non-GAAP measure defined as operating cash flow less purchases of property and equipment and capitalized internal-use software costs, was $72 million in the quarter and $65 million for the full year. Deferred revenue, current portion, was $1.24 billion, up 27.6% from the prior-year quarter. The cash flow swing in the quarter is notable, but the full-year operating cash flow decline shows that the improvement was not consistent across the year.
Guidance sets out the company's expectations for the next quarter and the full fiscal year. For the first quarter of fiscal 2024, Okta guided to 23% year-over-year revenue growth, current RPO of $1.675 billion to $1.685 billion, which represents 19% year-over-year growth, non-GAAP operating income of $18 million to $20 million, and non-GAAP diluted net income per share of $0.11 to $0.12. That per-share outlook assumes approximately 178 million diluted weighted-average shares and a non-GAAP tax rate of 26%. For the full year fiscal 2024, the company guided to 16% to 17% year-over-year revenue growth, non-GAAP operating income of $136 million to $145 million, and non-GAAP diluted net income per share of $0.74 to $0.79. The full-year per-share outlook assumes approximately 180 million diluted weighted-average shares and a non-GAAP tax rate of 26%.
The main risks are familiar for a high-growth software company. Okta operates in an evolving macroeconomic environment that could worsen and affect demand. Longer sales cycles could continue to delay deals and pressure near-term metrics. The company also faces integration risk from the Auth0 acquisition, potential network or data security incidents, service outages, and the need to manage convertible notes when due. Okta has a history of operating losses, and it expects to continue incurring operating losses and cash flows that may fluctuate between positive and negative amounts for the foreseeable future. The fourth quarter showed better profitability and cash flow, but the full-year picture still includes a GAAP operating loss and a full-year operating cash flow decline.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $510.2M | $481.0M | +6.1% | $383.0M | +33.2% |
| Gross profit | $370.7M | $343.4M | +8.0% | $263.5M | +40.7% |
| Gross margin | 72.7% | 71.4% | +1.3 pp | 68.8% | +3.9 pp |
| Research & development | $154.0M | $148.5M | +3.7% | $147.5M | +4.5% |
| Sales & marketing | $258.9M | $290.0M | -10.7% | $221.6M | +16.8% |
| General & administrative | $86.5M | $111.5M | -22.5% | $108.9M | -20.6% |
| Total operating expenses | $528.4M | $550.0M | -3.9% | $477.9M | +10.6% |
| Operating income (loss) | -$157.7M | -$206.6M | +23.7% | -$214.4M | +26.5% |
| Operating margin | -30.9% | -43.0% | +12.1 pp | -56.0% | +25.1 pp |
| Net income (loss) | -$152.9M | -$208.9M | +26.8% | -$241.2M | +36.6% |
| Net margin | -30.0% | -43.4% | +13.5 pp | -63.0% | +33.0 pp |
| Diluted EPS | -$0.97 | -$1.32 | +$0.35 | -$1.63 | +$0.66 |
| Net retention rate | 120.0% | — | — | — | — |
Risks
Adverse general economic conditions, inflation and interest rate environment, and potential recession could reduce workforce identity and customer identity spending. MD&A states future growth may be impacted by longer sales cycles, creating near-term headwinds for cash flow, RPO and billings growth.
Sales cycles are lengthening and becoming less predictable, especially as Okta focuses on larger organizations. MD&A states this could delay deal closings and create near-term headwinds for cash flow, RPO and billings growth.
Dollar-Based Net Retention Rate was 120% for the trailing 12 months ended January 31, 2023, compared with 124% in the prior year. Any material decline would harm future results of operations.
Okta faces intense competition, especially from Microsoft and larger well-established companies that can bundle products, sell at zero or negative margins, or leverage existing customer relationships. This could lead to price reductions, fewer orders, reduced revenue and gross margins.
Okta has experienced cybersecurity incidents, including the January 2022 compromise of a third-party service provider, which was widely publicized and has become the subject of lawsuits. Future incidents could harm reputation, create liability, and increase costs.
Okta depends on executive officers and key employees; the President, Worldwide Field Operations retired at the end of fiscal 2023 and the Executive Vice Chairman and co-founder is on sabbatical through October 2023. Competition for personnel is intense.
In the first quarter of fiscal 2024, Okta announced a worldwide restructuring plan to reduce operating expenses and improve profitability. Execution challenges could impact business initiatives and financial results. Fiscal 2023 included $29 million in restructuring and other charges.
Okta has convertible notes due in 2023, 2025, and 2026. Servicing debt may require significant cash, and conversion features could adversely affect liquidity and dilute stockholders. The 2023 Notes were due February 15, 2023, and nearly all were repurchased or converted as of January 31, 2023.
International revenue was 22% of total revenue in fiscal 2023, up from 20% in fiscal 2022. Expansion subjects Okta to regulatory, geopolitical, and currency risks.
Failure to comply with privacy or security laws, including GDPR and CCPA, could result in proceedings, penalties, and reduced demand. Evolving regulations may increase compliance costs.
Okta has limited experience acquiring businesses and continues to face challenges integrating Auth0, acquired in May 2021. Future acquisitions could divert management, dilute stockholders, or harm results.
A portion of revenues are generated by sales to government entities, subject to budget cycles, compliance requirements, audits, and termination rights. Additional costs could harm margins.
SaaS KPIs
All quarters →Free Cash Flow Margin
Free Cash Flow
Non-GAAP Operating Margin
Calculated Billings
Number of Customers
Current Remaining Performance Obligations
Customers with Annual Contract Value Above $100,000
Remaining Performance Obligations
Summary, forecast, risks and KPIs are extracted from Okta, Inc.'s SEC filings for Q4 FY2023 (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.