Okta, Inc. (OKTA) - Fiscal Year 2026 10-K Summary
Business Context and Reporting Period
This summary covers Okta, Inc.'s Annual Report on Form 10-K for the fiscal year ended January 31, 2026. Okta operates as the leading independent identity partner, providing the Okta Platform for workforce identity and the Auth0 Platform for customer identity. The company is expanding its capabilities to secure non-human identities (NHIs) and AI agents. Okta operates as a single reportable segment with a SaaS business model, generating approximately 98% of revenue from subscriptions.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Total Revenue | $2,919 million | $2,610 million | +12% |
| Net Income | $235 million | $28 million | Significant Improvement |
| Operating Income | $149 million | ($74 million) loss | Turnaround to Profit |
| Gross Margin | 77% | 76% | +100 bps |
| Operating Cash Flow | $884 million | $750 million | +18% |
| Cash & Investments | $2,553 million | $2,523 million | Stable |
| Remaining Performance Obligations (RPO) | $4,827 million | $4,215 million | +15% |
| Customers with ACV > $100k | 5,100 | 4,800 | +6% |
| Dollar-Based Net Retention Rate | 106% | 107% | -1% |
Material Changes vs. Prior Period
- Profitability: Okta achieved a significant turnaround, moving from a net loss of $355 million in FY2024 to a net income of $235 million in FY2026. Operating income improved from a $74 million loss in FY2025 to $149 million in FY2026.
- Revenue Growth: Total revenue grew 12% year-over-year, driven by an increase in users and sales of additional solutions to existing customers, as well as new customer acquisition.
- Expense Management: Operating expenses as a percentage of revenue decreased from 79% in FY2025 to 72% in FY2026, driven by improved spend efficiency and reduced stock-based compensation.
- Debt Settlement: The company settled the full principal amount of its 2025 Convertible Senior Notes ($510 million) in cash upon maturity in September 2025. The remaining 2026 Convertible Senior Notes ($350 million principal) are classified as a current liability due to maturity in June 2026.
- Acquisition: In September 2025, Okta acquired Axiom Security Ltd for $54 million in cash to enhance privileged access management capabilities.
Guidance, Outlook, and Risks
- Share Repurchase Program: In January 2026, the Board authorized a $1 billion share repurchase program. As of January 31, 2026, $921 million remained available. The company repurchased 875,000 shares for $79 million during the quarter.
- AI Strategy: Management highlights the long-term opportunity to serve as a control plane for AI agents and non-human identities, with new offerings like "Okta for AI Agents" in early access.
- Tax Legislation: The "One Big Beautiful Bill Act" enacted in July 2025 maintains the 21% federal corporate tax rate and makes permanent the immediate expensing of domestic R&D expenditures, expected to reduce future cash tax payments.
- Key Risks:
- Cybersecurity: History of incidents (Jan 2022, Oct 2023) impacting reputation and financial results; ongoing threat of sophisticated attacks.
- Competition: Intense competition, particularly from Microsoft, which has greater resources and integrated offerings.
- Debt Maturity: $350 million in convertible notes mature in June 2026; the company intends to settle in cash.
- Macroeconomics: Potential for reduced IT spending due to economic downturns or geopolitical instability.
Investor Verification Checklist
- Verify the company's ability to generate sufficient cash flow to repay the $350 million 2026 Convertible Senior Notes maturing in June 2026.
- Monitor the execution of the $1 billion share repurchase program and its impact on liquidity.
- Assess the impact of the "One Big Beautiful Bill Act" on future effective tax rates and cash tax payments.
- Review the trajectory of the Dollar-Based Net Retention Rate, which declined slightly to 106% in FY2026.
- Evaluate the progress and market adoption of new AI agent identity management products.
- Confirm the status of ongoing legal settlements related to prior cybersecurity incidents (e.g., the $60 million securities class action settlement).