Okta (OKTA) Third Quarter 2026 Financial Results Summary

2025-12-03 · Stocks · QuoteReporter

Okta, Inc. (OKTA) Q3 2026 Financial Results Summary

On December 2, 2025, Okta, Inc. (Nasdaq: OKTA) released its financial results for the third quarter of fiscal year 2026, which ended on October 31, 2025.

Key Financial Highlights

Revenue
Total revenue reached $742 million, a 12% increase year-over-year.
Subscription revenue was $724 million, marking an 11% increase compared to the previous year.
Remaining Performance Obligations (RPO)
Total RPO expanded to $4.292 billion, demonstrating a 17% growth year-over-year.
Current RPO (cRPO), which indicates revenue expected to be recognized within the next 12 months, rose to $2.328 billion, up 13% from the same quarter last year.
Operating Performance
GAAP Operating Income was $23 million, or 3% of total revenue, compared to a GAAP operating loss of $16 million (or -2%) in Q3 FY2025.
Non-GAAP Operating Income improved to $178 million (24% of total revenue), up from $138 million (21% of total revenue) in the prior year.
Net Income
GAAP net income was $43 million, significantly higher than the $16 million recorded in the prior year.
Both GAAP basic and diluted net income per share amounted to $0.24, compared to $0.09 and $0.00, respectively, from the same quarter last year.
Non-GAAP net income rose to $152 million, compared to $121 million year-over-year, with non-GAAP diluted net income per share increasing to $0.82 from $0.67.
Cash Flow
The operating cash flow for the quarter was $218 million, which corresponds to 29% of total revenue, compared to $159 million (24% of total revenue) for the same quarter in 2025.
Free cash flow was reported at $211 million, representing 28% of total revenue, an increase from $154 million (23%) year-over-year.
Balance Sheet
Cash, cash equivalents, and short-term investments totaled $2.463 billion as of October 31, 2025.
The company settled the remaining principal amount of the 2025 Notes for $510 million in cash during the quarter.

Quarterly Dividend and Share Repurchase

Quarterly Dividend: No quarterly dividend was declared during this quarter.
Share Repurchase: No share repurchase activities were reported in the financial results.

Financial Outlook

For the upcoming fourth quarter of fiscal 2026, Okta’s guidance indicates:
– Expectation of total revenue between $748 million to $750 million, which would reflect a year-over-year growth rate of 10%.
– Predictions for current RPO to be around $2.445 billion to $2.450 billion, representing a 9% growth year-over-year.
– An estimated non-GAAP operating income in the range of $189 million to $191 million, implying a non-GAAP operating margin of approximately 25%.
– Projected non-GAAP diluted net income per share estimated at $0.84 to $0.85.

For the full fiscal year 2026:
– Total revenue is expected to be approximately $2.906 billion to $2.908 billion, showing an 11% growth year-over-year.
– The guidance includes expected non-GAAP operating income of $753 million to $755 million and non-GAAP diluted net income per share of $3.43 to $3.44.

Summary

Okta’s financial results for Q3 FY2026 demonstrate solid operational execution, reflected in growth metrics across key areas including revenue and cash flow. The company continues to enhance its position as a leading identity and access management provider while strategically expanding its offerings, including AI-driven security solutions. With encouraging forward guidance, Okta is positioned to continue its growth trajectory into the next quarter and fiscal year.

	Three Months Ended	Nine Months Ended
	October 31, 2025	October 31, 2024
Revenue:
Subscription	$724	$651
Professional services and other	18	14
Total revenue	742	665
Cost of revenue:
Subscription(1)	147	140
Professional services and other(1)	23	17
Total cost of revenue	170	157
Gross profit	572	508
Operating expenses:
Research and development(1)	160	158
Sales and marketing(1)	271	256
General and administrative(1)	118	110
Total operating expenses	549	524
Operating income (loss)	23	-16
Interest expense	-1	-1
Interest income and other, net	28	26
Gain on early extinguishment of debt	—	16
Interest and other, net	27	41
Income before provision for income taxes	50	25
Provision for income taxes	7	9
Net income	$43	$16
Net income per share, basic	$0.24	$0.09
Net income (loss) per share, diluted	$0.24	$0.00
Weighted-average shares used to compute net income per share, basic	176,524	170,217
Weighted-average shares used to compute net income (loss) per share, diluted	178,402	170,673
(1) Amounts include stock-based compensation expense as follows:
Cost of subscription revenue	$19	$20
Cost of professional services and other	3	3
Research and development	49	49
Sales and marketing	33	33
General and administrative	34	30
Total stock-based compensation expense	$138	$135

Assets	October 31, 2025	January 31, 2025
Current assets:
Cash and cash equivalents	$645	$409
Short-term investments	1,818	2,114
Accounts receivable, net of allowances	463	621
Deferred commissions	155	140
Prepaid expenses and other current assets	120	132
Total current assets	3,201	3,416
Property and equipment, net	40	43
Operating lease right-of-use assets	64	74
Deferred commissions, noncurrent	280	267
Intangible assets, net	106	138
Goodwill	5,487	5,448
Other assets	51	51
Total assets	$9,229	$9,437
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$13	$13
Accrued expenses and other current liabilities	91	103
Accrued compensation	173	207
Convertible senior notes, net	350	509
Deferred revenue	1,557	1,691
Total current liabilities	2,184	2,523
Convertible senior notes, net, noncurrent	—	349
Operating lease liabilities, noncurrent	73	94
Deferred revenue, noncurrent	29	27
Other liabilities, noncurrent	50	39
Total liabilities	2,336	3,032
Stockholders’ equity:
Preferred stock	—	—
Class A common stock	—	—
Class B common stock	—	—
Additional paid-in capital	9,519	9,219
Accumulated other comprehensive loss	4	-12
Accumulated deficit	-2,630	-2,802
Total stockholders’ equity	6,893	6,405
Total liabilities and stockholders’ equity	$9,229	$9,437