Okta (OKTA) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue grew 16% year-over-year to $646 million, with subscription revenue up 17% to $632 million and representing 98% of total revenue.

• Achieved record profitability, including first-ever GAAP net income of $29 million versus a $111 million loss a year ago.

• Customer base expanded to 19,300, with 4,620 customers above $100,000 ACV and strong growth in large customer cohorts.

• Major product launches included Identity Threat Protection with Okta AI, Identity Security Posture Management, and Highly Regulated Identity for customer identity.

• Security remains a top priority, with significant progress on the Okta Secure Identity Commitment and enhanced bot detection reducing malicious traffic by over 90% for key customers.

Financial highlights

• Non-GAAP operating margin reached a record 23%, up from 11% a year ago; non-GAAP operating income was $148 million.

• Free cash flow for Q2 FY25 was $78 million, with a margin of 12%.

• Non-GAAP net income for Q2 was $131 million, with a non-GAAP net margin of 20%.

• Cash, cash equivalents, and short-term investments totaled $2.36 billion at quarter end.

• Remaining performance obligations (RPO) reached $3.51 billion, up 16% year-over-year; current RPO at $1.995 billion, up 13%.

Outlook and guidance

• Q3 FY25 revenue expected between $648–$650 million, up 11% year-over-year; cRPO guidance of $1.985–$1.990 billion, up 9%.

• Q3 non-GAAP operating income projected at $118–$120 million (18% margin); non-GAAP EPS of $0.57–$0.58.

• FY25 revenue guidance raised to $2.555–$2.565 billion, up 13% year-over-year; non-GAAP operating margin 21%; free cash flow margin outlook raised to 23%.

• Guidance remains cautious due to macroeconomic uncertainty and ongoing monitoring of impacts from the October 2023 security incident.