Okta (OKTA) Q1 2026 earnings summary

Executive summary

• Q1 FY26 revenue grew 12% year-over-year to $688M, with subscription revenue also up 12% to $673M and representing 98% of total revenue.

• Achieved record GAAP and non-GAAP operating profitability, with GAAP operating income of $39M (6% margin) and non-GAAP operating income of $184M (27% margin).

• GAAP net income was $62M, reversing a net loss of $40M in Q1 FY25; non-GAAP net income was $158M, up from $117M.

• Remaining performance obligations (RPO) increased 21% year-over-year to $4.08B, and current RPO rose 14% to $2.23B.

• Profitability exceeded expectations due to revenue overperformance and spend efficiency, while continuing investments in growth and security.

Financial highlights

• Total revenue: $688M (+12% YoY); subscription revenue: $673M (+12% YoY); professional services revenue was flat at $15M.

• Non-GAAP gross margin: 82%; GAAP gross margin: 77%; subscription gross margin: 83.9%.

• Non-GAAP operating margin: 27% in Q1 FY26, up from 22% in Q1 FY25; free cash flow margin: 35%.

• Non-GAAP diluted net income per share was $0.86, up from $0.65 year-over-year; GAAP diluted EPS was $0.35, compared to a loss of $0.24.

• Cash, cash equivalents, and short-term investments totaled $2.725B at quarter end.

Outlook and guidance

• Q2 FY26 revenue expected between $710M and $712M, representing 10% year-over-year growth; CRPO guidance is $2.20B–$2.21B (+10–11% YoY).

• Q2 non-GAAP operating income projected at $183–$185M (26% margin); non-GAAP diluted EPS of $0.83–$0.84; free cash flow margin: ~19%.

• FY26 revenue guidance: $2.85B–$2.86B (+9–10% YoY); non-GAAP operating margin: 25%; non-GAAP diluted EPS: $3.23–$3.28; free cash flow margin: ~27%.

• Guidance reflects prudent assumptions for macroeconomic uncertainty and ongoing go-to-market specialization.

• Management expects sales and marketing expenses as a percentage of revenue to decrease as revenue grows.