Okta Q3 Earnings Beat, Lifts FY26 Guidance

On Dec. 2, 2025, Okta, Inc. (NASDAQ: OKTA) reported third-quarter fiscal 2026 results that exceeded estimates. Management cited strength among large customers, growing adoption of Identity Governance, and stronger cash flow, prompting an upward revision to full-year guidance.

Quarter Results and Profitability

For the quarter ended Oct. 31, 2025, Okta reported revenue of $742 million and non-GAAP diluted earnings per share (EPS) of $0.82, surpassing analyst estimates of $730 million and $0.75. Subscription revenue reached $724 million, with total revenue rising 12% year over year and subscription revenue increasing 11%.

On a GAAP basis, Okta posted net income of $43 million, or $0.24 per share, compared with $16 million, or $0.09 per share, a year earlier. Non-GAAP operating income was $178 million, representing a 24% margin, up from $138 million and a 21% margin in the prior-year quarter. GAAP operating income turned positive at $23 million, or a 3% margin, reversing a $16 million operating loss in the previous period.

Cash Flow, Backlog, and Guidance

Operating cash flow totaled $218 million, or 29% of revenue, while free cash flow was $211 million, or 28% of revenue, up from $159 million (24% of revenue) and $154 million (23%) respectively in the prior year. Remaining performance obligations (RPO), a measure of contracted backlog, stood at $4.292 billion, up 17% year over year. The 12-month forward contracted RPO (cRPO) rose 13% to $2.328 billion.

Liquidity included $2.463 billion in cash, cash equivalents, and short-term investments as of Oct. 31, 2025. During the quarter, the company paid $510 million in cash to retire the remaining principal on its 2025 convertible notes.

Okta raised full-year fiscal 2026 revenue guidance to a range of $2.906 billion to $2.908 billion. It set fourth-quarter revenue guidance between $748 million and $750 million, with non-GAAP EPS guidance of $0.84 to $0.85. Management described this outlook as a prudent approach to current market conditions.

CEO and co-founder Todd McKinnon said in the company’s Dec. 2 press release, "We delivered another quarter of solid results." He highlighted customer traction for Identity Governance and the launch of Auth0 for AI Agents as strategic priorities.

Despite the earnings beat and raised guidance, several major Wall Street firms cut price targets in late November 2025, including JPMorgan from $140 to $115, Cantor Fitzgerald from $130 to $115, Barclays from $112 to $95, Jefferies from $105 to $90, and Mizuho from $120 to $110. The stock has declined roughly 67% over five years, reflecting ongoing investor caution.