Okta (OKTA) Q3 2026 earnings summary

Executive summary

• Q3 revenue grew 12% year-over-year to $742 million, with subscription revenue up 11% and representing 98% of total revenue.

• Strong performance in large customer segments, workforce upsells, and new product adoption, notably Okta Identity Governance and Auth0 for AI Agents.

• Net income for the quarter was $43 million, a significant increase from $16 million in the prior year quarter.

• The company acquired Axiom Security Ltd for $54 million to enhance privileged access management capabilities.

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

Financial highlights

• Total revenue for Q3 was $742 million, up 12% year-over-year; subscription revenue was $724 million, up 11%.

• Remaining performance obligations (RPO) grew 17% year-over-year to $4.292 billion; current RPO up 13% to $2.328 billion.

• Non-GAAP operating income was $178 million (24% margin), up from $138 million (21%) year-over-year.

• Free cash flow for Q3 was $211 million, yielding a 28% free cash flow margin, up from $154 million and 23% margin last year.

• Cash, cash equivalents, and short-term investments totaled $2.463 billion at quarter end.

Outlook and guidance

• Q4 FY26 revenue expected between $748 million and $750 million, representing 10% growth; current RPO guidance is $2.445–$2.450 billion, up 9%.

• Q4 non-GAAP operating income projected at $189–$191 million (25% margin); non-GAAP diluted EPS of $0.84–$0.85; free cash flow margin of ~31%.

• FY26 revenue outlook raised to $2.906–$2.908 billion (11% growth); non-GAAP operating income of $753–$755 million (26% margin); non-GAAP diluted EPS of $3.43–$3.44; free cash flow margin outlook raised to ~29%.

• FY27 guidance to be provided after Q4, with management emphasizing a prudent approach due to Q4's seasonal significance.

• Immediate expensing of domestic R&D expenditures under new tax law is expected to reduce future tax payments.