Okta (OKTA) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue grew 11% year-over-year to $765 million, with subscription revenue also up 11% to $750 million and comprising 98% of total revenue.

• Remaining performance obligations (RPO) reached $4.719 billion, up 16% year-over-year, with current RPO at $2.499 billion, up 12% year-over-year.

• Net income rose to $74 million, with GAAP diluted EPS of $0.42; non-GAAP net income was $168 million, with non-GAAP diluted EPS of $0.91.

• Large enterprise focus continued, with customers over $100,000 ACV up 6% to 5,180 and $1 million+ ACV customers up 19% to 570.

• Strong operating and free cash flow, with $277 million and $271 million respectively, and robust margins.

Financial highlights

• Q1 FY27 total revenue: $765 million (+11% YoY); subscription revenue: $750 million (+11% YoY); subscription revenue represents 98% of total revenue.

• Non-GAAP operating income: $191 million (25% margin); non-GAAP net income: $168 million (22% margin); non-GAAP diluted EPS: $0.91.

• Free cash flow: $271 million (35% margin); operating cash flow: $277 million (36% margin).

• Cash, cash equivalents, and short-term investments totaled $2.589 billion at quarter end.

• Deferred revenue was $1.75 billion, with $1.73 billion expected to be recognized in the next 12 months.

Outlook and guidance

• Q2 FY27 revenue guidance: $790–$794 million (+9% YoY); non-GAAP operating margin: 26%; non-GAAP diluted EPS: $0.95–$0.97.

• FY27 revenue guidance: $3.185–$3.205 billion (+9–10% YoY); non-GAAP operating margin: 25–26%; non-GAAP diluted EPS: $3.79–$3.87.

• FY27 free cash flow guidance: $855–$885 million (27–28% margin); Q2 FY27 free cash flow: $155–$165 million (20–21% margin).

• Guidance reflects a 1-point headwind from shifting professional services to partners and lower interest income due to stock repurchases and debt settlement.

• Non-GAAP tax rate reduced to 21% from 26% due to new legislation.