Okta (OKTA) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue reached $665M, up 14% year-over-year, driven by subscription growth and large customer wins, with subscription revenue also up 14% to $651M and total customers rising to 19,450.

• Net income was $16M, reversing a net loss of $81M in the prior year, and non-GAAP net income was $121M, with non-GAAP diluted EPS of $0.67.

• Remaining performance obligations (RPO) grew 19% year-over-year to $3.659B, with current RPO up 13% to $2.062B.

• The $1M+ ACV customer cohort is the fastest growing, now representing ~$1B in ACV, and customers over $100K ACV grew 8% to 4,705.

• Product innovation, partner ecosystem momentum, and recognition as a leader in Gartner's Magic Quadrant continue to drive growth.

Financial highlights

• Non-GAAP operating margin improved to 21% in Q3 FY25, up from 15% year-over-year, and free cash flow margin was 23%.

• Non-GAAP gross margin was 81%, with subscription gross margin at 83.2%.

• Net retention rate for the trailing 12 months was 108%, reflecting slower expansion within existing customers.

• Cash, cash equivalents, and short-term investments totaled $2.25B at quarter end.

• Rule of 40 (TTM revenue growth + free cash flow margin) was 41%.

Outlook and guidance

• Q4 FY25 revenue expected between $667M and $669M, representing 10–11% year-over-year growth, with non-GAAP operating margin projected at 23%.

• FY25 revenue guidance raised to $2.595–$2.597B, up 15% year-over-year, with non-GAAP operating margin at 22% and free cash flow margin around 25%.

• Preliminary FY26 outlook: revenue of $2.77–$2.78B (7% growth), non-GAAP operating margin at least 22%, and free cash flow margin at least 24%.

• Management notes ongoing macroeconomic and operational risks, including longer sales cycles.