Okta Reports Strong Q4 Results, Stock Prices Surge 30%

Okta's share prices surged as the cybersecurity company reported Q4 results that surpassed analyst expectations, with revenue growing 13% year over year. Strong guidance provided optimism for future performance.

Date: 08-03-2025

AI Rating: 7

Strong Quarterly Performance and Positive Outlook

Okta has delivered impressive results for its fiscal Q4, achieving a 13% year-over-year revenue increase to $682 million, surpassing the guidance range of $667 million to $669 million. This significant revenue growth indicates a positive trend in consumer demand and operational efficiency.

The adjusted earnings per share (EPS) rose 24% from $0.63 to $0.78, which is above the company's forecast range of $0.73 to $0.74. This improvement in EPS reflects successful cost management and a robust pricing strategy that effectively counteracts the dip caused by a previous cybersecurity breach.

Moving forward, Okta's management is guiding for fiscal 2026 revenue between $2.85 billion and $2.86 billion, translating to growth between 9% and 10%. This growth projection is a positive indicator for investors as it reflects confidence in sustained demand and operational growth in the upcoming fiscal year.

Moreover, Okta's net dollar retention rate is at 107%, while customer acquisition has been strong, with the company adding about 200 new customers during the quarter. This growth in both customer count and revenues, particularly in higher-value contracts (ACVs above $1 million), is promising for Okta's market positioning.

Additionally, the company's remaining performance obligation (RPO) backlog increased by 25% to $4.22 billion, providing a solid foundation for future revenue. The current RPO backlog also rose by 15%, indicating strong future earnings potential.

In summary, key metrics such as revenue growth, adjusted EPS, and customer retention rate suggest a strong outlook for Okta. Investors may view these results positively, but caution remains due to an overall slow labor market which could temper growth projections.

Stocks: OKTA