Summary
Okta closed fiscal 2026 with steady top-line growth and a sharp improvement in GAAP profitability. Fourth-quarter revenue was $761 million, up 11.6% from the prior-year quarter, and full-year revenue was $2.919 billion, up 11.8%. Gross profit for the quarter was $593 million, up 13.2%, while full-year gross profit was $2.258 billion, up 13.4%. Gross margin for the quarter was 77.9%, up 1.1 percentage points, and full-year gross margin was 77.4%, up 1.0 percentage point. The balance sheet and backlog showed similar momentum. Current deferred revenue was $1.875 billion, up 10.9%, and remaining performance obligations were $4.827 billion, up 14.5%. Current remaining performance obligations, a metric Okta reports outside GAAP, were $2.513 billion, up 12% from the fourth quarter of fiscal 2025.
Profitability swung hard in Okta's favor. GAAP operating income was $46 million for the quarter, up 475.0%, and the quarterly operating margin was 6.0%, up 4.9 percentage points. For the full year, GAAP operating income was $149 million, up 301.4% and swung to a profit, with an operating margin of 5.1%, up 7.9 percentage points. GAAP net income was $63 million for the quarter, up 173.9%, and $235 million for the full year, up 739.3%. Full-year diluted EPS was $1.31, up 2083.3%. On a non-GAAP basis, fourth-quarter operating income was $202 million, or 26% of revenue, compared with $168 million, or 25% of revenue, a year earlier. Non-GAAP net income was $167 million for the quarter, and non-GAAP diluted EPS was $0.90. Full-year non-GAAP operating income was $766 million, or 26% of revenue, compared with $587 million, or 22%. Full-year non-GAAP net income was $646 million, and non-GAAP diluted EPS was $3.50, compared with $2.81.
Cash generation was mixed by period but strong for the full year. Fourth-quarter operating cash flow was $258 million, down 9.8%, while full-year operating cash flow was $884 million, up 17.9%. Free cash flow, a non-GAAP measure, was $252 million for the quarter and $863 million for the full year. Capital expenditures were $2 million for the quarter, up 100.0%, and $9 million for the full year, up 12.5%. The company ended the year with 5,100 customers with annual contract value above $100,000, up from 4,800 a year earlier. Dollar-based net retention rate for the trailing 12 months was 106%, down from 107%.
Management's guidance frames a slower growth profile for fiscal 2027. For the first quarter of fiscal 2027, Okta expects revenue of $749 million to $753 million, or 9% growth year over year. It expects current RPO of $2.440 billion to $2.450 billion, or 10% growth, non-GAAP operating income of $176 million to $180 million, a non-GAAP operating margin of 23% to 24%, non-GAAP diluted EPS of $0.84 to $0.86, and non-GAAP free cash flow of $250 million to $260 million, a free cash flow margin of 33% to 35%. For the full fiscal year 2027, the company expects revenue of $3.170 billion to $3.190 billion, or 9% growth. It guides to non-GAAP operating income of $795 million to $815 million, a non-GAAP operating margin of 25% to 26%, non-GAAP diluted EPS of $3.74 to $3.82, and non-GAAP free cash flow of $850 million to $880 million, a free cash flow margin of 27% to 28%. The revenue outlook includes an approximately one percentage point impact from shifting more professional services work to partners, and the free cash flow outlook includes an approximately one percentage point impact from lower interest income tied to the stock repurchase program, the planned cash settlement of the remaining 2026 Notes, and the interest rate environment.
Risks remain straightforward. Okta faces macroeconomic uncertainty, longer sales cycles, and past cybersecurity incidents that harmed its reputation and customer relations. The company said longer sales cycles could create near-term headwinds for cash flow, RPO, and billings growth. It also expects professional services and other revenue to decline in fiscal 2027 as it shifts engagements to partners. Dollar-based net retention slipped to 106%, which management attributed to the macroeconomic environment and slower growth in ACV from existing customers. Effective February 1, 2026, Okta adopted a long-term non-GAAP tax rate of 21%, reduced from 26%, mainly because of the One Big Beautiful Bill Act. In January 2026, the board authorized a $1 billion stock repurchase program; during fiscal 2026, Okta repurchased and retired 875,150 shares for $79 million, leaving approximately $921 million available.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2026 | Q3 FY2026 | QoQ | Q4 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $761.0M | $742.0M | +2.6% | $682.0M | +11.6% |
| Gross profit | $593.0M | $572.0M | +3.7% | $524.0M | +13.2% |
| Gross margin | 77.9% | 77.1% | +0.8 pp | 76.8% | +1.1 pp |
| Research & development | $165.0M | $160.0M | +3.1% | $157.0M | +5.1% |
| Sales & marketing | $264.0M | $271.0M | -2.6% | $235.0M | +12.3% |
| General & administrative | $114.0M | $118.0M | -3.4% | $113.0M | +0.9% |
| Total operating expenses | $547.0M | $549.0M | -0.4% | $516.0M | +6.0% |
| Operating income (loss) | $46.0M | $23.0M | +100.0% | $8.0M | +475.0% |
| Operating margin | 6.0% | 3.1% | +2.9 pp | 1.2% | +4.9 pp |
| Net income (loss) | $63.0M | $43.0M | +46.5% | $23.0M | +173.9% |
| Net margin | 8.3% | 5.8% | +2.5 pp | 3.4% | +4.9 pp |
| Diluted EPS | $0.35 | $0.24 | +$0.11 | $0.13 | +$0.22 |
| Net retention rate | 106.0% | 106.0% | ±0.0 pp | 107.0% | -1.0 pp |
Risks
Adverse general economic conditions and reductions in workforce identity and customer identity spending may reduce demand. Okta's Dollar-Based Net Retention Rate for the trailing 12 months ended January 31, 2026 decreased to 106% from 107% for the prior year, which MD&A attributes primarily to the macroeconomic environment and slower ACV expansion from existing customers.
Longer and less predictable sales cycles, especially for larger organizations, may delay deal closings and create near-term headwinds for cash flow, RPO and billings growth. MD&A states future growth may be impacted by longer sales cycles, with potential trailing impacts on revenue growth and other key metrics.
Okta faces intense competition, especially from larger, well-established companies such as Microsoft, which can bundle identity offerings, sell at zero or negative margins, and invest more heavily in R&D. The risk factor also notes competitors may introduce lower cost or AI-integrated solutions that put Okta at a competitive disadvantage.
Okta has previously experienced cybersecurity incidents, including the January 2022 third-party service provider compromise and the October 2023 customer support system breach, harming reputation and financial results. The filing states use of AI, AI agents and NHIs to enhance cyberattacks is expected to increase the frequency, severity and volume of attacks.
Okta depends on retaining existing customers and expanding their subscriptions, but customers have no renewal obligation and may renew on less favorable terms. Retention and expansion can decline due to satisfaction with solutions, pricing relative to competitors, macroeconomic conditions, or negative sentiment from cybersecurity incidents.
Use, development and deployment of AI Technologies, including generative AI, carry uncertain regulatory, intellectual property, security and reputational risks. The EU Artificial Intelligence Act and evolving U.S. rules may limit AI use or require costly changes, and generative AI can produce inaccurate or misleading content that creates liability.
The $350 million outstanding principal of the 2026 Notes is classified as a current liability due June 15, 2026, and Okta currently intends to settle the principal in cash. Failure to repurchase notes or pay cash upon conversion when required could cause a default, and note-related conversions or hedging could dilute stockholders and pressure the stock price.
Sales to public sector entities rely on partners and are tied to government budget cycles, with requirements such as FedRAMP and risk of audits or debarment. Changes in government spending or workforce could reduce purchases and harm revenue and future growth.
International revenue was 20% of total revenue in fiscal 2026 compared with 21% in fiscal 2025, exposing Okta to geopolitical, regulatory, trade and localization risks. Failure to successfully expand international operations could harm business and results of operations.
Okta announced a new $1 billion Share Repurchase Program on January 5, 2026, with $921 million remaining available as of January 31, 2026. Repurchases are discretionary and could increase stock price volatility, reduce cash reserves, and may be suspended or terminated at any time.
MD&A expects interest income to decrease in fiscal 2027 as Okta deploys investable cash to fund the Share Repurchase Program, settles its 2026 Convertible Senior Notes obligation, and due to changes in the interest rate environment. Interest income and other, net was $110 million in fiscal 2026, up 4%.
MD&A expects professional services and other revenue to decline beginning in fiscal 2027 as Okta shifts more engagements to its partner ecosystem. Professional services and other revenue was $64 million in fiscal 2026, up 18% from fiscal 2025, and a decline could affect total revenue mix.
SaaS KPIs
All quarters →Current Remaining Performance Obligations
Customers with ACV Above $100,000
Dollar-Based Net Retention Rate
Remaining Performance Obligations
Summary, forecast, risks and KPIs are extracted from Okta, Inc.'s SEC filings for Q4 FY2026 (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.