- Q3 revenue grew 14% year-over-year; subscription revenue grew 14% year-over-year
- Remaining performance obligations (RPO) grew 19% year-over-year; current remaining performance obligations (cRPO) grew 13% year-over-year
- Operating cash flow of $159 million and free cash flow of $154 million
Okta, Inc. (OKTA), the leading independent Identity partner, financial results for its third quarter ended October 31, 2024.
“Our solid Q3 results were underpinned by continued strong profitability and cash flow,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta. “The focused investments we’ve made in our partner ecosystem, the public sector vertical, and large customers are materializing in our business with each of these areas contributing meaningfully to top-line growth. Okta’s commitment to innovation and elevating identity security is resonating with customers of all sizes as they look to Okta to modernize their identity infrastructure.”
Third Quarter Fiscal 2025 Financial Highlights:
- Revenue: Total revenue was $665 million, an increase of 14% year-over-year. Subscription revenue was $651 million, an increase of 14% year-over-year.
- RPO: RPO, or subscription backlog, was $3.659 billion, an increase of 19% year-over-year. cRPO, which represents subscription backlog expected to be recognized over the next 12 months, was $2.062 billion, up 13% compared to the third quarter of fiscal 2024.
- GAAP Operating Loss: GAAP operating loss was $16 million, or (2)% of total revenue, compared to a GAAP operating loss of $111 million, or (19)% of total revenue, in the third quarter of fiscal 2024.
- Non-GAAP Operating Income: Non-GAAP operating income was $138 million, or 21% of total revenue, compared to a non-GAAP operating income of $85 million, or 15% of total revenue, in the third quarter of fiscal 2024.
- GAAP Net Income (Loss): GAAP net income was $16 million, compared to a GAAP net loss of $81 million in the third quarter of fiscal 2024. GAAP basic and diluted net income per share were $0.09 and $0.00, respectively, compared to a GAAP basic and diluted net loss per share of $0.49 in the third quarter of fiscal 2024.
- Non-GAAP Net Income: Non-GAAP net income was $121 million, compared to non-GAAP net income of $79 million in the third quarter of fiscal 2024. Non-GAAP diluted net income per share was $0.67, compared to non-GAAP diluted net income per share of $0.44 in the third quarter of fiscal 2024.
- Cash Flow: Net cash provided by operations was $159 million, or 24% of total revenue, compared to net cash provided by operations of $156 million, or 27% of total revenue, in the third quarter of fiscal 2024. Free cash flow was $154 million, or 23% of total revenue, compared to $150 million, or 26% of total revenue, in the third quarter of fiscal 2024.
- Cash, cash equivalents, and short-term investments were $2.248 billion at October 31, 2024. During the quarter, the company repurchased $42 million principal amount of the convertible senior notes due in 2025, and $215 million principal amount of the convertible senior notes due in 2026, resulting in a gain on early extinguishment of debt of $16 million.
The section titled “Non-GAAP Financial Measures” below contains a description of the non-GAAP financial measures, and reconciliations between GAAP and non-GAAP information are contained in the tables below.
Financial Outlook:
All periods factor in a challenging macro environment.
For the fourth quarter of fiscal 2025, the Company expects:
- Total revenue of $667 million to $669 million, representing a growth rate of 10% to 11% year-over-year;
- Current RPO of $2.130 billion to $2.135 billion, representing a growth rate of 9% year-over-year;
- Non-GAAP operating income of $154 million to $156 million, yielding a non-GAAP operating margin of 23%;
- Non-GAAP diluted net income per share of $0.73 to $0.74, assuming diluted weighted-average shares outstanding of approximately 182 million and a non-GAAP tax rate of 26%; and
- Non-GAAP free cash flow margin of approximately 32%.
For the full year fiscal 2025, the Company now expects:
- Total revenue of $2.595 billion to $2.597 billion, representing a growth rate of 15% year-over-year;
- Non-GAAP operating income of $573 million to $575 million, yielding a non-GAAP operating margin of 22%;
- Non-GAAP diluted net income per share of $2.75 to $2.76, assuming diluted weighted-average shares outstanding of approximately 182 million and a non-GAAP tax rate of 26%; and
- Non-GAAP free cash flow margin of approximately 25%.
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