Okta Reports 12% Revenue Growth to $688 Million and Net Income Turnaround

Okta, Inc. reported a significant increase in financial performance for the three months ended April 30, 2025, with total revenue reaching $688 million, up 12% from $617 million in the same period last year. Subscription revenue, which constitutes approximately 98% of total revenue, rose to $673 million, a 12% increase from $603 million. The company achieved a net income of $62 million, compared to a net loss of $40 million in the prior year, marking a notable turnaround in profitability. This improvement was attributed to a combination of increased customer acquisition and expansion within existing accounts, reflected in a dollar-based net retention rate of 106%.

In terms of operational metrics, Okta reported a customer base of 4,870 clients with annual contract values exceeding $100,000, an increase from 4,550 in the previous year. The company also noted a 7% rise in customers with annual contract values above this threshold, indicating a growing demand for its identity management solutions. The total remaining performance obligations (RPO) stood at approximately $4.08 billion, with $2.23 billion expected to be recognized as revenue over the next 12 months, underscoring the company's strong future revenue visibility.

Strategically, Okta has been focusing on enhancing its product offerings and expanding its market presence. The company continues to invest in its Okta and Auth0 platforms, which facilitate secure identity management for organizations. Additionally, Okta has implemented a restructuring plan that involved a workforce reduction of approximately 180 employees, aimed at reallocating resources to drive growth. This restructuring is expected to be completed in the first quarter of fiscal 2026 and is anticipated to yield long-term operational efficiencies.

Financially, Okta's balance sheet remains robust, with cash and cash equivalents totaling $494 million and short-term investments of $2.23 billion as of April 30, 2025. The company reported net cash provided by operating activities of $241 million, an increase from $219 million in the prior year, driven by improved cash collections from customers. However, the company also faces challenges from macroeconomic conditions, including rising interest rates and inflation, which could impact future growth and operational performance.

Looking ahead, Okta remains optimistic about its growth trajectory, emphasizing its commitment to expanding its customer base and enhancing product adoption. The company plans to continue investing in its technology infrastructure and marketing efforts to capture a larger share of the identity management market. However, management cautioned that longer sales cycles and economic uncertainties could pose risks to achieving its growth objectives in the near term.