Summary
Okta closed fiscal 2024 with a stronger fourth quarter. Revenue for the quarter ended January 31, 2024, rose 18.6% to $605.0 million. Full year revenue increased 21.8% to $2.26 billion. The quarter's growth was slower than the full year pace. Gross profit for the quarter was $460.0 million, up 24.0%. Gross margin expanded to 76.0%, up 3.3 percentage points from the prior-year quarter. The operating loss narrowed to $83.0 million. Net loss narrowed to $44.0 million. Operating cash flow for the quarter was $174.0 million, up 128.9%. Capital expenditures were flat at $3.0 million. Deferred revenue, current portion, increased 19.8% to $1.49 billion. Remaining performance obligations rose 12.6% to $3.38 billion.
The customer base grew to 18,950 as of January 31, 2024, an 8% increase from 17,600 a year earlier. Okta had 4,485 customers with annual contract value above $100,000. The dollar-based net retention rate for the trailing 12 months was 111%, down from 120%. Management blamed the decline on the macroeconomic environment, which slowed ACV growth from existing customers. Longer sales cycles could create near-term headwinds for cash flow, RPO, and billings. The October 2023 incident involved a threat actor gaining unauthorized access to and stealing information from a third-party customer support system. While Okta expects the impact of security incidents to adversely affect future financial performance, it cannot predict the extent with certainty. The company also said worldwide economic uncertainties, including financial and credit market fluctuations, uncertainty in the banking sector, rising interest rates, and inflation, have affected and could continue to affect results. Okta ended the year with more than 7,000 integrations with cloud, mobile, and web applications and IT infrastructure and security vendors.
Full year figures show the same trend. Gross margin was 74.3%, up 3.7 percentage points. Operating margin was -22.8%, up 20.9 percentage points. Net loss narrowed to $355 million for fiscal 2024. Diluted EPS improved to -$2.17. Operating cash flow for the full year was $512 million, up 495.3%. Capital expenditures were $8 million, down 33.3%. Full year gross profit was $1.68 billion, up 28.2%. The full year operating loss narrowed to $516 million. Okta's revenue is relatively predictable because subscriptions were approximately 97% of total revenue for fiscal 2024. The company operates as one reportable segment. Gross margin improvement was driven by improved spend efficiency and lower relative cost of subscription revenue. Management said research and development expenses will increase in absolute dollars as the business grows. Sales and marketing expenses should decline as a percentage of total revenue, and general and administrative expenses should also decline as a percentage of revenue. Sales and marketing remained the largest operating expense category. Restructuring and other charges increased due to lease impairments and severance costs.
Okta completed the acquisition of Spera Cybersecurity on February 1, 2024, for approximately $80 million in cash and stock. The company's cash, cash equivalents, and short-term investments were held for working capital and general corporate purposes, including potential future acquisition activity. These balances consisted primarily of U.S. treasury securities, money market funds, corporate debt securities, and certificates of deposit. Okta also repurchased a portion of its 2025 and 2026 convertible notes during fiscal 2024, which resulted in a gain on early extinguishment of debt. Starting in the first quarter of fiscal 2025, Okta will use net share settlement to cover employee payroll tax withholding on vesting equity awards. This reduces dilution but will use cash reserves and affect liquidity. Management believes existing cash and investments will meet working capital and capital expenditure needs for the foreseeable future. The company also noted that Pillar Two global minimum tax legislation is not expected to have a material adverse effect in fiscal 2025.
Okta's fourth quarter showed better profitability and cash generation, but the decline in net retention and the macro environment remain concerns. The full year net loss narrowed significantly, and operating cash flow turned strongly positive. However, the customer expansion rate slowed, and the security incident continues to pose risks. The company's guidance points to continued investment in research and development while managing sales and marketing costs.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $605.0M | $584.0M | +3.6% | $510.2M | +18.6% |
| Gross profit | $460.0M | $439.0M | +4.8% | $370.7M | +24.1% |
| Gross margin | 76.0% | 75.2% | +0.9 pp | 72.7% | +3.4 pp |
| Research & development | $156.0M | $165.0M | -5.5% | $154.0M | +1.3% |
| Sales & marketing | $249.0M | $270.0M | -7.8% | $258.9M | -3.8% |
| General & administrative | $110.0M | $111.0M | -0.9% | $86.5M | +27.2% |
| Total operating expenses | $543.0M | $550.0M | -1.3% | $528.4M | +2.8% |
| Operating income (loss) | -$83.0M | -$111.0M | +25.2% | -$157.7M | +47.4% |
| Operating margin | -13.7% | -19.0% | +5.3 pp | -30.9% | +17.2 pp |
| Net income (loss) | -$44.0M | -$81.0M | +45.7% | -$152.9M | +71.2% |
| Net margin | -7.3% | -13.9% | +6.6 pp | -30.0% | +22.7 pp |
| Diluted EPS | -$0.27 | -$0.49 | +$0.22 | -$0.97 | +$0.70 |
| Net retention rate | 111.0% | 115.0% | -4.0 pp | 120.0% | -9.0 pp |
Risks
Okta has experienced cybersecurity incidents, including the January 2022 compromise of a third-party service provider and the October 2023 unauthorized access to and theft of information from 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 general economic conditions and reductions in workforce identity and customer identity spending have in the past and may in the future reduce demand. MD&A highlights worldwide economic uncertainties, rising interest rates, inflation, and banking sector uncertainty as ongoing pressures.
Sales cycles are lengthening in certain circumstances and becoming less predictable, especially as Okta focuses on larger organizations. MD&A states longer sales cycles could delay deals closing and create near-term headwinds for cash flow, RPO, and billings growth.
Okta faces intense competition, especially from larger, well-established companies, and names Microsoft as its principal competitor. Larger competitors may have broader product offerings and can use zero or negative margin pricing, product bundling, or closed technology platforms to discourage customers from purchasing Okta products.
Customer growth has slowed in recent periods and could fall below expectations. Okta's Dollar-Based Net Retention Rate for the trailing 12 months ended January 31, 2024 was 111%, down from 120% as of January 31, 2023, primarily due to the macroeconomic environment and slower ACV growth from existing customers.
Okta announced separate worldwide restructuring plans in the first quarter of fiscal 2024 and fiscal 2025 that reduced its workforce by approximately 300 and 400 full-time employees, respectively. Execution challenges, including adverse impacts on employee morale or attrition beyond intended reductions, could harm business initiatives and financial results.
Okta has 2025 Notes and 2026 Notes outstanding and may not have sufficient cash flow to service its debt or settle conversions. During fiscal 2024, it repurchased $508 million principal amount of the 2025 Notes and $542 million principal amount of the 2026 Notes, resulting in an aggregate gain on early extinguishment of debt of $106 million.
Evolving privacy and data security laws, including the CCPA and CPRA, new state privacy statutes, FedRAMP obligations, and potential designation as a provider of critical software under Executive Order 14028, could increase compliance costs and delay or prevent contracts with customers, particularly government entities.
Okta depends on its executive officers and other key employees, and competition for highly qualified personnel in the San Francisco Bay Area and other locations is intense. The former Chief Operating Officer did not return as an employee following his recent sabbatical, though he continues to serve as a director and Vice Chairman of the Board.
International revenue was 21% of total revenue in fiscal 2024, down from 22% in fiscal 2023. International operations expose Okta to foreign laws, data privacy regimes, tariffs, sanctions, political instability, and currency fluctuations that could harm results.
SaaS KPIs
All quarters →Customers with annual contract value (ACV) above $100,000
Number of Customers
Current Remaining Performance Obligations
Remaining Performance Obligations
Summary, forecast, risks and KPIs are extracted from Okta, Inc.'s SEC filings for Q4 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 1, 2026.