01—Abstract
Summary
Summary of the 10-Q filed May 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Okta, Inc. reported its quarterly results for the three months ended April 30, 2025 in this Form 10-Q.
Total revenue rose to $688 milliona from $617 million, with subscription revenue at $673 million (up from $603 million). The filing states that total revenue grew 12% year over year, and subscription revenue made up approximately 98% of total revenue. Gross profit was $533 million versus $469 million, and operating income was $39 million compared with an operating loss of $47 million a year earlier.
Net income was $62 millionb, or $0.35 per diluted share, compared with a net loss of $40 million in the prior-year period. Cash flow and liquidity were solid. Net cash provided by operating activities was $241 million, up from $219 million.
As of April 30, 2025, cash, cash equivalents and short-term investments totaled $2,725 millionc, and the company stated that these sources are sufficient for its short- and long-term working capital and capital expenditure needs. Remaining performance obligations (RPO) reached $4,084 million, of which approximately $2,227 million, or 55%, is expected to be recognized over the next 12 months. Dollar-based net retention fell to 106% from 111%, which the company attributed primarily to the macroeconomic environment.
The balance sheet includes $510 milliond of 2025 convertible notes, classified as current because they mature on September 1, 2025, and the company stated it currently intends to settle that principal in cash. The filing also discloses a $60 million securities class action settlement covered by D&O insurance and the Company's retention, along with pending derivative action settlement terms, and a 2025 restructuring plan that reduced the workforce by approximately 180 full-time employees.
02—Key points
Key Highlights
- Total revenue of $688 million, up from $617 million, with subscription revenue of $673 million (98% of total revenue).
- Net income of $62 million ($0.35 per diluted share) versus a net loss of $40 million in the prior-year quarter; operating income of $39 million versus an operating loss of $47 million.
- Gross margin of 77% versus 76%, with subscription gross margin improving to 80% from 78%.
- Net cash provided by operating activities of $241 million, compared with $219 million a year earlier.
- Cash, cash equivalents and short-term investments of $2,725 million as of April 30, 2025; the company states this is sufficient for its working capital and capital expenditure needs.
- Remaining performance obligations of $4,084 million, with $2,227 million (55%) expected to be recognized over the next 12 months.
- Dollar-based net retention rate declined to 106% from 111%; customers with ACV above $100,000 rose to 4,870 from 4,550.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Okta kept $0.09.
- Revenue$688.0M100.0%
- Cost of revenue−$155.0M22.5%
- Gross profit$533.0M77.5%
- Operating costs−$494.0M71.8%
- Operating income$39.0M5.7%
- Interest, other & tax$23.0M3.3%
- Net income$62.0M9.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 28, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $688.00M$617.00M | +11.5% |
| Cost of Revenue | $155.00M$148.00M | +4.7% |
| Gross Profit | $533.00M$469.00M | +13.6% |
| R&D Expenses | $154.00M$163.00M | −5.5% |
| Operating Expenses | $494.00M$516.00M | −4.3% |
| Operating Income | $39.00M-$47.00M | +183.0% |
| Net Income | $62.00M-$40.00M | +255.0% |
| EPS (Basic) | $0.36$-0.24 | +250.0% |
| EPS (Diluted) | $0.35$-0.24 | +245.8% |
| Shares Outstanding (Basic) | 174.17M167.47M | +4.0% |
| Shares Outstanding (Diluted) | 181.75M167.47M | +8.5% |
05—Questions
Frequently Asked Questions
How did Okta's revenue and profitability change in the first quarter of fiscal 2026?
Total revenue rose 12% to $688 million from $617 million, driven mainly by subscription revenue growth from new business. Operating income swung to $39 million from an operating loss of $47 million, and net income was $62 million compared with a net loss of $40 million. Operating expenses declined to $494 million from $516 million, partly due to lower stock-based compensation.
What is the status of the 2025 convertible notes?
The $510 million principal of the 2025 Notes matures on September 1, 2025, and is classified as a current liability as of April 30, 2025. The company stated it currently intends to settle the principal in cash.
Why did the dollar-based net retention rate decline?
The filing says the decrease from 111% to 106% was primarily a result of the macroeconomic environment, with overall ACV from existing customers increasing at a slower rate in the current period.
Is Okta's cash position sufficient to meet its obligations?
The company reported $2,725 million in cash, cash equivalents and short-term investments and believes these, together with cash from sales of its solutions, will be sufficient to meet short- and long-term working capital and capital expenditure needs for the foreseeable future. It also noted it may need additional financing in some circumstances.
What legal matters does the filing disclose?
The 2022 securities class action was fully resolved, with final court approval granted November 19, 2024, under a $60 million settlement covered by D&O insurance and the Company's retention. Several derivative lawsuits are subject to a proposed global non-monetary settlement, with a $2.25 million attorneys' fee award the Company agreed not to oppose, subject to final documentation and court approval.
06—Continue