Okta delivered a strong beat-and-raise quarter for Q4 FY2025, posting non-GAAP EPS of $0.78 (vs. $0.74 estimate) and total revenue of $682 million (vs. $668.91M estimate). The stock surged 14.85% in after-hours trading to $100.10, reflecting investor confidence in accelerating growth and record profitability.
About Okta
Okta, Inc. (NASDAQ: OKTA) is The World’s Identity Company, providing cloud-based identity and access management solutions for workforce and customer-facing applications. Founded in 2009 by Todd McKinnon and Frederic Kerrest, both former Salesforce executives, the company is headquartered at 100 First Street, San Francisco, California. Okta serves over 18,000 customers globally across industries, enabling secure authentication, single sign-on, and multi-factor access through its Okta Workforce Identity Cloud and Auth0 Customer Identity platforms.
At the time of the Q4 FY2025 earnings release (March 3, 2025), Okta had a market capitalization of approximately $14.96 billion. The company employs roughly 5,000 to 6,000 people across offices in 15 countries. Okta’s trailing twelve-month P/E ratio at the time of the report stood at approximately 66x on a GAAP basis, while the forward P/E ratio was around 30x based on FY2026 earnings projections. The company does not pay a dividend. During Q4, Okta achieved the “Rule of 40” milestone, combining revenue growth and profitability margins, a key benchmark for SaaS companies.
Top Financial Highlights
- Total revenue reached $682 million, reflecting a 13% year over year increase, supported by strong recurring demand.
- Subscription revenue totaled $670 million, rising 13% year over year and representing 98% of total revenue, indicating a highly predictable revenue base.
- Professional services revenue was $12 million, compared to $14 million in Q4 FY2024, reflecting a modest decline in non recurring services activity.
- GAAP operating income improved to $8 million, resulting in a 1% operating margin, compared to a GAAP operating loss of $83 million and a negative 14% margin in Q4 FY2024.
- Non GAAP operating income increased to $168 million, up from $129 million in the prior year period, delivering a 25% non GAAP operating margin.
- GAAP net income was $13 million, equivalent to $0.13 per basic share, compared to a GAAP net loss of $44 million or -$0.26 per share in Q4 FY2024.
- Non GAAP diluted EPS reached $0.78, up from $0.63 in Q4 FY2024, reflecting improved earnings performance.
- Operating cash flow totaled $286 million, representing a 42% margin and marking a record high for the company.
- Free cash flow reached $284 million, also reflecting a 42% margin and increasing significantly from $166 million in Q4 FY2024.
- Remaining performance obligations increased to $4.215 billion, up 25% year over year and surpassing the $4 billion milestone for the first time.
- Current remaining performance obligations stood at $2.248 billion, reflecting a 15% year over year increase and providing near term revenue visibility.
- Record bookings were achieved during the quarter, with total contract value exceeding $1 billion for the first time, and the top 25 deals contributing more than $320 million in total contract value.
- Cash and short term investments totaled $2.523 billion, including $409 million in cash and $2,114 million in short term investments, reinforcing a strong liquidity position.
Beat or Miss?
Okta beat both earnings and revenue estimates for Q4 FY2025, and then raised guidance across every metric for FY2026.
| Metric | Reported | Analyst Estimate | Difference |
| Non-GAAP EPS | $0.78 | $0.74 | Beat by $0.04 (+5.4%) |
| Total Revenue | $682M | $668.91M | Beat by $13.09M (+2.0%) |
| Q1 FY2026 Revenue Guidance | $678-$680M | $669.40M | Above consensus |
| Q1 FY2026 EPS Guidance | $0.76-$0.77 | $0.70 | Above consensus |
| FY2026 Revenue Guidance | $2.85-$2.86B | $2.80B | Above consensus |
| FY2026 EPS Guidance | $3.15-$3.20 | $2.94 | Above consensus |
Notably, 36 analysts revised their earnings expectations upward in the 90 days prior to the report, with zero negative revisions, signaling growing confidence before the results even landed.
What Leadership Is Saying?
“Okta’s strong financial results were highlighted by accelerating RPO and cRPO, coupled with record profitability and cash flow. In a rapidly evolving IT and security landscape, organizations are turning to Okta as their identity partner for our ability to deliver the broadest array of modern identity security with the flexibility to meet their demands. We’re entering the new fiscal year laser focused on serving our customers with even more innovation on the Okta and Auth0 platforms while further elevating the industry with the Okta Secure Identity Commitment.” Says Todd McKinnon, CEO and Co-Founder
“I’m especially proud of the incredible progress we’ve made building on the efficiency initiatives we started over two years ago. This is best illustrated by the approximately nine points of operating margin growth and six points of free-cash flow margin growth we achieved for FY ’25, all while making the right investments for future growth.” Says Brett Tighe, Chief Financial Officer
CFO Tighe also highlighted that Q4 was a “really strong quarter across the board,” noting strength in EMEA, the public sector, and across new business, upsell, and renewal motions. He credited the sales team with “excellent execution” and pointed out that new products contributed over 20% of Q4 bookings, with Okta Identity Governance (OIG) reaching over 1,300 customers and surpassing $100 million in annual contract value.
Historical Performance
Q4 FY2025 vs. Q4 FY2024
| Category | Q4 FY2025 | Q4 FY2024 | Change (%) |
| Total Revenue | $682M | $605M | +12.7% |
| Subscription Revenue | $670M | $591M | +13.4% |
| Gross Profit (GAAP) | $524M | $460M | +13.9% |
| GAAP Operating Income (Loss) | $8M | ($83M) | Turned profitable |
| Non-GAAP Operating Income | $168M | $129M | +30.2% |
| GAAP Net Income (Loss) | $13M | ($44M) | Turned profitable |
| Non-GAAP EPS (diluted) | $0.78 | $0.63 | +23.8% |
| Operating Cash Flow | $286M | $174M | +64.4% |
| Free Cash Flow | $284M | $166M | +71.1% |
| RPO | $4,215M | $3,365M (est.) | +25.3% |
| Non-GAAP Operating Margin | 25% | 21% | +4 pts |
Full-year FY2025 also showed significant improvement: total revenue reached $2.610 billion (+15% YoY), non-GAAP operating income was $587 million (22% margin vs. 14% in FY2024), and free cash flow hit $730 million (28% margin vs. 22% in FY2024).
Competitor Comparison
Identity Security Landscape
The identity and access management sector saw broad-based strength in the most recent reporting periods. Below is a comparison of Okta against two key competitors, CyberArk (privileged access and identity security) and SailPoint (identity governance), using their most recent comparable quarterly results.
| Category | Okta (Q4 FY2025, Jan 2025) | CyberArk (Q4 CY2024, Dec 2024) | SailPoint (Q4 FY2025, Jan 2025) |
| Total Revenue | $682M | $314.4M | $240.1M |
| Revenue YoY Growth | +13% | +41% | +18% |
| Subscription Revenue | $670M | $243.0M | $224M |
| Subscription Rev. Growth | +13% | +62% | +22% |
| Non-GAAP Op. Income | $168M | ~$42M (est.) | $46M |
| Non-GAAP Op. Margin | 25% | ~15% (FY basis) | 19% |
| ARR | N/A (uses RPO: $4.2B) | $1.169B | $877M |
| ARR Growth | RPO +25% | +51% | +29% |
| Free Cash Flow | $284M | $221M (FY) | N/A |
CyberArk posted the fastest top-line growth at 41%, partly fueled by its October 2024 acquisition of Venafi, which contributed $47 million in Q4 revenue. SailPoint showed strong SaaS ARR momentum at 39% growth, with an ~80% year-over-year increase in customers with over $1 million ARR. Okta leads the group in absolute revenue scale and profitability margins, having achieved the Rule of 40 benchmark in FY2025. CyberArk also hit Rule of 40 for its FY2024.
How the Market Reacted?
Okta’s stock surged 14.85% in after-hours trading following the Q4 FY2025 earnings announcement on March 3, 2025, climbing to $100.10 from a closing price of $87.16. The move brought shares closer to the 52-week high of $114.50, reflecting strong investor sentiment around the beat-and-raise quarter.
The positive reaction was driven by multiple factors: the earnings and revenue beat, raised full-year FY2026 guidance across all metrics, record bookings crossing $1 billion in TCV, and accelerating RPO growth of 25%.
In the 90 days prior to earnings, 36 analysts issued positive EPS revisions with no downward revisions, indicating that the bullish sentiment was building well before the actual results dropped. The overall tone of the report and forward guidance leaned decisively bullish, positioning Okta as a profitable identity security platform with durable growth ahead.
