OKTA Shares Jump on Solid Q4 Earnings Beat, Revenues Increase Y/Y

Okta OKTA reported fiscal fourth-quarter 2026 earnings of 90 cents per share, which beat the Zacks Consensus Estimate by 6.36% and increased 15.4% year over year. 

Total revenues increased 11.6% year over year to $761 million, surpassing the consensus mark by 1.59%. The year-over-year upside can be attributed to higher subscription revenues, which rose 11.5% year over year to $747 million and accounted for 98.2% of total revenues. Professional services and other revenues (1.8% of total revenues) jumped 16.7% year over year to $14 million.

Location-wise, revenues from the United States contributed 83% to total revenues in the fiscal fourth quarter. The figure increased 12.04% year over year to $605 million. International revenues contributed 21.4% to total revenues. The figure increased 9.86% year over year to $156 million.

Okta stock gained 2.17% in the pre-market trading.

Okta, Inc. Price, Consensus and EPS Surprise

Okta, Inc. price-consensus-eps-surprise-chart | Okta, Inc. Quote

Okta’s Q4 Top-Line Details

Customers with more than $100K in Annual Contract Value increased 6% year over year to 5,100. The dollar-based retention rate for the trailing 12 months was 106%, down 1% year over year.

Remaining Performance Obligations (RPO) totaled $4.827 billion, up 15% year over year. The current RPO, expected to be recognized over the next 12 months, was $2.513 billion, up 12% year over year.

Okta’s Q4 Operating Details

Fourth-quarter fiscal 2026 non-GAAP gross margin increased 20 basis points (bps) on a year-over-year basis to 82%.

As a percentage of revenues, research and development expenses decreased 60 bps year over year to 15.2%. General and administrative expenses decreased 210 bps year over year to 10.5%. Sales and marketing expenses increased 100 bps year over year to 29.7%.

Non-GAAP operating margin expanded 190 bps year over year to 26.5% in the reported quarter.

Okta’s Balance Sheet

Okta had $2.55 billion in cash, cash equivalents, and short-term investments as of Jan. 31, 2026.

Net cash provided by operations was $258 million in the reported quarter, while free cash flow was $252 million.

Okta Offers Positive Guidance

For fiscal first-quarter 2027, Okta expects revenues in the $749-$753 million range, indicating year-over-year growth of 9%. Current RPO is expected to be between $2.440 billion and $2.450 billion, suggesting year-over-year growth of 10%. 

Non-GAAP operating income is expected to be in the range of $176-$180 million. Operating margin is expected to be in the range of 23% to 24%. Non-GAAP earnings are anticipated to be in the range of 84-86 cents per share, assuming diluted weighted-average shares outstanding of approximately 185 million. 

Non-GAAP free cash flow margin is expected to be approximately between 33% and 35%.

For fiscal 2027, revenues are expected to be in the range of $3.17-$3.19 billion, indicating year-over-year growth of 9%. Non-GAAP operating income is expected to be in the range of $795-$815 million, while the operating margin is expected to be 25%-26%. Non-GAAP earnings are anticipated to be between $3.74 and $3.82 per share, assuming diluted weighted-average shares outstanding of approximately 185 million.  

Non-GAAP free cash flow margin is expected to be approximately 27%-28%.

Zacks Rank & Other Stocks to Consider

Currently, Okta sports a Zacks Rank #1 (Strong Buy).

HUYA HUYA, Micron Technology MU, and Getty Images GETY are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. While HUYA and Micron Technology currently sport a Zacks Rank #1, Getty Images carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

HUYA is set to report fourth-quarter 2025 results on March 17. HUYA shares have lost 15.3% in the trailing 12-month period.

Micron Technology is set to report second-quarter fiscal 2026 results on March 18. MU shares have appreciated 348.9% in the trailing 12-month period.

Getty Images is set to report fourth-quarter 2025 results on March 16. GETY shares have lost 55.7% in the trailing 12-month period.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research