To The Moon

$Okta Inc.(OKTA)$ is scheduled to release its fiscal Q1 2026 earnings, for the quarter ending 30 April 2025, after the U.S. market close on Tuesday, 27 May 2025. A live video webcast will be held on the same day at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the results.

The consensus revenue estimate is around $680.1 million, aligning with the high end of Okta's guidance.

Analysts expect adjusted EPS to be around $0.77, which is within the company's guided range.

Okta Inc (OKTA) Last Positive Earnings Saw Significant 46.05% Increase In Share Price

Okta had a positive earnings call on 03 March 2025 which saw its share price make a significant gain of 46.05%.

The earnings call reflects a strong performance by Okta in Q4 FY 2025, with record profitability, significant growth in Auth0 bookings, and successful partnerships, particularly with AWS. While there were some challenges related to headcount reduction and seat-based headwinds, the positive highlights significantly outweigh the lowlights.

Fiscal Q4 2025 Performance (as a Precursor)

In Q4 2025 (reported in March 2025), Okta reported adjusted EPS of $0.78, exceeding the analyst estimate of $0.74. Revenue for Q4 2025 was $682 million, a 13% year-over-year increase, also topping the consensus estimate of $668.91 million.

Okta's Remaining Performance Obligations (RPO) surged 25% year-over-year to $4.215 billion. Current RPO (cRPO), expected to be recognized in the next 12 months, reached $2.248 billion, up 15% year-over-year.

The company achieved a GAAP operating income of $8 million, a significant improvement from the $83 million loss in the same quarter of the previous year. Non-GAAP operating margin expanded to 25% of revenue.

Okta Inc (OKTA) Guidance

In Okta's fiscal year 2025 call, the company highlighted significant achievements including a record-breaking Q4 performance, with RPO and CRPO acceleration, alongside record profitability and free cash flow. Okta’s new product innovations contributed to over 20% of Q4 bookings, and the company exceeded $1 billion in total contract value for the first time in a quarter. The company also saw a 25% increase in RPO, surpassing the $4 billion mark, and achieved record bookings, with the top 25 deals totaling over $320 million.

Additionally, 70% of deals were partner-influenced, indicating strong partner ecosystem collaboration. For fiscal year 2026, Okta is projecting total revenue growth of 9-10%, with a non-GAAP operating margin of 25% and a free cash flow margin of approximately 26%. The company is focusing on expanding its identity security platform and further specializing its sales approach to capture more market opportunities.

Key Areas to Watch in Okta's Q1 2026 Earnings

Revenue Growth: Investors will be looking to see if Okta can meet or exceed its revenue guidance, demonstrating the sustainability of its growth trajectory, even at a slightly moderated pace compared to previous years.

Okta reported record profitability and free cash flow for Q4 FY 2025, with sales productivity reaching a multiyear high. The company also achieved record bookings in Q4, surpassing $1 billion in total contract value for the first time.

RPO and cRPO Growth: Continued strong growth in RPO and cRPO will be a positive indicator of future revenue and the strength of Okta's customer relationships.

Since its launch two years ago, Okta Identity Governance (OIG) has amassed over 1,300 customers, contributing over $100 million in annual contract value. The total governance-related business, including Okta Lifecycle Management and Workflows, exceeds $400 million.

Profitability and Margin Expansion: Maintaining the targeted non-GAAP operating margin of 25% will be crucial, showing the company's focus on balancing growth with profitability.

Okta reported approximately nine points of operating margin growth and six points of free cash flow margin growth for FY 2025.

Progress on Profitability Initiatives: Any updates on cost management and strategies to drive more efficient growth will be closely monitored.

Okta undertook a headcount reduction as part of ongoing efforts to optimize cost structure and reallocate resources to drive growth.

Okta continues to face challenges with seat-based headwinds, as customers are now purchasing fewer seats upfront compared to previous years.

Customer Growth and Retention: Insights into new customer additions and the dollar-based net retention rate will provide a view into Okta's ability to attract and retain customers and expand within its existing base.

Okta surpassed $1 billion in aggregate total contract value through its partnership with AWS Marketplace, with revenue from AWS Marketplace growing over 80% in FY 2025.

Integration of Auth0: While the acquisition was completed earlier, any updates on the continued integration and synergies with Auth0 will be of interest.

Auth0 achieved its best bookings quarter in history, contributing significantly to Okta's overall strong performance.

Competitive Landscape: Commentary on the competitive environment in the identity and access management space and Okta's strategies to maintain its market leadership will be valuable.

Full-Year Guidance: Any revisions or reaffirmation of the full-year fiscal 2026 guidance will significantly influence investor sentiment. Okta's initial full-year guidance included revenue growth of 9-10% and non-GAAP EPS of $3.15 to $3.20.

Okta Inc (OKTA) Price Target

Based on 37 analysts offering 12 month price targets for Okta in the last 3 months. The average price target is $119.22 with a high forecast of $155.00 and a low forecast of $75.00. The average price target represents a -5.71% change from the last price of $127.30.

Potential Factors Influencing Q1 2026 Performance

Macroeconomic Conditions: The overall economic climate can impact enterprise spending on software and cybersecurity solutions.

Competition: The identity management market is competitive, with players like Microsoft, Ping Identity, and others vying for market share.

Sales Execution: Okta's ability to effectively sell its platform and solutions will be a key driver of revenue growth.

Product Innovation: Continued innovation and the introduction of new features and products are essential for maintaining a competitive edge.

Technical Analysis - Exponential Moving Average (EMA)

Okta have been enjoying the recent rally brought by some of the tech stocks, and we can see that it had a good positive momentum before its earnings, the bulls are in control and we can see that daily uptrend is in progress, the bulls attempt to make a daily uptrend continuation have been successful.

We could be seeing an earnings surprise which could help Okta to make a gap up post earnings.

We are not seeing any signs of investors planning to take profit, or selling off, there would be anticipation of better or reaffirmation of the full-year fiscal 2026 guidance, this could keep investors sentiment strong on the Okta stock.

Summary

The fiscal Q1 2026 earnings report will be an important indicator of Okta's ability to execute its strategy of balancing growth with increased profitability. I will be paying close attention to revenue growth, RPO trends, margin performance, and any updates to the full-year outlook. Meeting or exceeding its own guidance will be crucial for maintaining positive investor sentiment.

Appreciate if you could share your thoughts in the comment section whether you think Okta could surprise with a better RPO and revenue growth with a strong guidance.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.