Summary
Okta closed fiscal 2025 with a stronger fourth quarter than a year earlier. Revenue for the three months ended January 31, 2025 was $682.0 million, up 12.7%. Gross profit rose 13.9% to $524.0 million, and gross margin improved to 76.8%. The company swung to an operating profit of $8.0 million, lifting operating margin to 1.2%. Net income was $23.0 million.
The full year moved in the same direction at a larger scale. Revenue reached $2.61 billion, up 15.3%. Gross profit was $1.99 billion, up 18.4%, and full-year gross margin climbed to 76.3%. The operating loss narrowed to $74.0 million, and operating margin improved to negative 2.8%. Net income was $28.0 million. Diluted earnings per share were $0.06 for the fiscal year.
Cash generation is the clearest evidence of the operating shift. Operating cash flow was $286.0 million in the fourth quarter, up 64.4%. For the full year, operating cash flow was $750.0 million, up 46.5%. Capital expenditures were $1.0 million in the quarter, down, and $8.0 million for the fiscal year, flat. Current deferred revenue was $1.69 billion as of January 31, 2025, up 13.6%. Remaining performance obligations were $4.22 billion, up 24.5%.
Customer metrics kept expanding even as spending within the base slowed. Okta reported more than 19,650 customers as of January 31, 2025, up from 18,950 a year earlier. Customers with annual contract value above $100,000 reached 4,800, compared with 4,485. The dollar-based net retention rate for the trailing twelve months slipped to 107% from 111% and 120%, a decline management attributed to the macroeconomic environment and slower growth in annual contract value from existing customers.
Okta runs as a single reportable segment and sells multi-year cloud subscriptions, invoicing most customers annually in advance. That model makes revenue relatively predictable. The cost side improved mainly through spend efficiency, with lower sales and marketing and professional services labor costs and lower stock-based compensation across the company. Sales and marketing remains the largest operating expense category, and management expects it to decline as a percentage of total revenue as the top line grows. It is also the line most exposed if enterprise buying slows.
The forward commentary is more guarded than the reported numbers. Okta will stop reporting total customer count as a business metric beginning in the first quarter of fiscal 2026. The company also flagged longer sales cycles, which can delay deal closings and create near-term headwinds for cash flow, remaining performance obligations and billings growth. Risk factors in the filing include the reputational and financial fallout from past cybersecurity incidents, such as the October 2023 breach of a third-party customer support system, and broader macroeconomic pressure from tariffs, trade protectionism, interest rates, inflation and banking-sector uncertainty. On taxes, Section 174 rules that require capitalizing research and development costs continue to raise U.S. federal and state cash taxes, and Okta maintains a full valuation allowance against its U.S. deferred tax assets as of January 31, 2025. The 2025 convertible notes mature on September 1, 2025, are classified as current liabilities, and the company intends to settle the principal in cash.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $682.0M | $665.0M | +2.6% | $605.0M | +12.7% |
| Gross profit | $524.0M | $508.0M | +3.1% | $460.0M | +13.9% |
| Gross margin | 76.8% | 76.4% | +0.4 pp | 76.0% | +0.8 pp |
| Research & development | $157.0M | $158.0M | -0.6% | $156.0M | +0.6% |
| Sales & marketing | $235.0M | $256.0M | -8.2% | $249.0M | -5.6% |
| General & administrative | $113.0M | $110.0M | +2.7% | $110.0M | +2.7% |
| Total operating expenses | $516.0M | $524.0M | -1.5% | $543.0M | -5.0% |
| Operating income (loss) | $8.0M | -$16.0M | +150.0% | -$83.0M | +109.6% |
| Operating margin | 1.2% | -2.4% | +3.6 pp | -13.7% | +14.9 pp |
| Net income (loss) | $23.0M | $16.0M | +43.8% | -$44.0M | +152.3% |
| Net margin | 3.4% | 2.4% | +1.0 pp | -7.3% | +10.6 pp |
| Diluted EPS | $0.13 | $0.00 | +$0.13 | -$0.27 | +$0.40 |
| Net retention rate | 107.0% | 108.0% | -1.0 pp | 111.0% | -4.0 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 its customer support system. MD&A states these incidents harmed reputation and customer relations, adversely impacted financial results, and may create additional liabilities, and that future incidents, even if not significant, could adversely affect future financial performance.
Adverse general economic conditions, tariffs, increasing trade protectionism, changes in government spending, banking sector uncertainty, rising interest rates, and inflation have and could continue to reduce demand for workforce identity and customer identity solutions. MD&A states these factors have and could continue to adversely affect business operations or financial results.
Dollar-based net retention rate for the trailing 12 months ended January 31, 2025 decreased to 107% from 111% as of January 31, 2024, primarily due to the macroeconomic environment and slower ACV growth from existing customers. If customers do not renew or expand subscriptions, revenue growth could be harmed.
Okta is increasingly focused on larger enterprise sales, which involve lengthy purchasing approval processes and less predictable sales cycles. MD&A states longer sales cycles could delay deal closings and create near-term headwinds for cash flow, RPO, and billings growth, with potential future impacts on revenue growth.
Okta faces intense competition, especially from larger, well-established companies, and identifies Microsoft as its principal competitor. Competitors may bundle products, sell at zero or negative margins, or incorporate identity functionality into existing offerings, which could reduce revenue and gross margins.
Okta's revenue growth rates declined to 15% in fiscal 2025 from 22% in fiscal 2024 and 43% in fiscal 2023. If revenue growth does not increase to offset anticipated increases in operating expenses, profitability may be harmed.
Although Okta achieved net income of $28 million in fiscal 2025, it incurred net losses of $355 million in fiscal 2024 and $815 million in fiscal 2023, and operating loss was $74 million in fiscal 2025. Okta may not be consistently profitable in the future.
Okta has undertaken restructuring plans involving workforce reductions to reduce operating expenses and improve profitability. Challenges in executing these efforts, such as adverse impacts on employee morale or attrition beyond intended reductions, could impair execution of business initiatives. Restructuring and other charges were $11 million in fiscal 2025 compared with $56 million in fiscal 2024.
The 2025 Notes due September 1, 2025 are classified as current liabilities, and Okta currently intends to settle the principal amount in cash. Failure to generate sufficient cash flow or refinance could result in default, while conversion or repurchases could dilute stockholders or strain liquidity.
Okta is subject to evolving global data protection laws, including the GDPR, a growing patchwork of U.S. state privacy laws, and India's new comprehensive data protection law. Non-compliance could trigger significant fines, orders to change data processing, and private litigation, increasing compliance costs and enforcement risk.
Okta's ability to use U.S. net operating loss carryforwards may be limited by ownership changes under Section 382, and tax authorities could impose additional sales, use, or digital services taxes retroactively. The OECD Pillar Two global minimum tax and IRC Section 174 capitalization of R&D expenses may also increase future tax liabilities or cash taxes.
Okta depends on executive officers and key employees, and competition for software engineers and experienced sales professionals in the San Francisco Bay Area and other locations is intense. Difficulty hiring or retaining personnel could harm business and future growth prospects.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Current Remaining Performance Obligations (cRPO)
Customers with annual contract value (ACV) above $100,000
Summary, forecast, risks and KPIs are extracted from Okta, Inc.'s SEC filings for Q4 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 1, 2026.