Okta (OKTA) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue reached $665M, up 14% year-over-year, with subscription revenue also up 14% to $651M and net income of $16M, reversing a prior year loss.

• Customer base grew to over 19,450, with 4,705 customers above $100K ACV and a dollar-based net retention rate of 108%.

• Large customers and public sector, especially U.S. federal, drove growth, with all top 10 Q3 deals involving partners.

• Product innovation, including over 30 new features and AI-related launches, fueled customer engagement and expansion.

• Okta recognized as a leader in access management by Gartner for the eighth consecutive year.

Financial highlights

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

• Remaining performance obligations (RPO) grew 19% year-over-year to $3.66B; current RPO up 13% to $2.06B.

• Gross profit was $508M, with a total gross margin of 76% and non-GAAP gross margin of 81%.

• Net cash provided by operating activities was $159M for Q3 and $464M for the nine months ended October 31, 2024.

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

Outlook and guidance

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

• FY25 revenue guidance raised to $2.595–$2.597B (15% growth), 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%.

• Q4 current RPO guidance of $2.13–$2.135B, up 9% year-over-year.

• FY25 non-GAAP diluted EPS forecasted at $2.75–$2.76.