Okta (OKTA) — Company Research
Last Updated: 24 May 2026
Okta (NASDAQ: OKTA) is the largest independent identity provider in technology, selling cloud software that lets organisations securely manage how employees, customers and, increasingly, AI agents log in and access applications. Fiscal 2026 (the year ended 31 January 2026) was a milestone: Okta delivered its first full year of GAAP operating profit, grew revenue 12% to $2.92 billion, generated $863 million of free cash flow and slashed its convertible debt, all while repositioning the platform around securing the coming wave of "agentic" AI. The trade-off is that growth has cooled to single digits and Microsoft's bundled Entra ID looms over every deal. This report lays out exactly what Okta reported and the facts that matter, with every figure taken from primary filings. Follow the price on our live charts page.
1. Company Snapshot
Okta is a profitable, founder-led identity-security company headquartered in San Francisco, led by co-founder and CEO Todd McKinnon since 2009. The figures below are drawn from the company's fourth-quarter and full-year fiscal 2026 results (year ended 31 January 2026) and live market data.
| Field | Value |
|---|---|
| Ticker / Exchange | OKTA / NASDAQ |
| Sector | Technology — Cybersecurity (Identity & Access Management) |
| Share price (22 May 2026) | $90.87 |
| Market capitalisation | ~$15.9 billion |
| 52-week range | $62.66 – $127.52 |
| Revenue (FY2026) | $2,919 million (+12% YoY) |
| Net income (FY2026, GAAP) | $235 million |
| Non-GAAP operating income (FY2026) | $766 million (26% margin) |
| Free cash flow (FY2026) | $863 million (30% margin) |
| Balance sheet | $350m convertible notes; ~$2.55bn cash & short-term investments |
| CEO / Co-founder | Todd McKinnon |
| Employees (31 Jan 2026) | 6,366 full-time |
| Remaining performance obligations | $4.83 billion (+15% YoY) |
| Next earnings | Q1 FY2027 — 28 May 2026 |
2. Bull & Bear Case
Bull Case
- Profitability inflection: Fiscal 2026 was Okta's first full year of GAAP operating income ($149 million versus a $74 million loss the prior year) and GAAP net income reached $235 million, evidence the business has crossed from "growth-at-all-costs" into durable profitability.
- Cash generation and deleveraging: Okta produced $863 million of free cash flow at a 30% margin and cut convertible debt from $2.2 billion in fiscal 2023 to $350 million, leaving a net cash position of roughly $2.2 billion.
- AI-agent identity opportunity: Okta for AI Agents reached general availability in April 2026, and as the neutral, independent identity layer the company is positioning to secure non-human "agentic" identities across any ecosystem.
- Visible backlog: Remaining performance obligations grew 15% to $4.83 billion, a faster pace than revenue and a sign of committed future business.
- Independence and scale: As the largest independent identity vendor, Okta is the natural choice for customers wary of locking their identity layer into a single application stack.
Bear Case
- Microsoft Entra bundling: Microsoft's Entra ID is bundled with Microsoft 365 and Azure, letting Microsoft undercut standalone vendors on price; its bundle economics are the single biggest structural threat to Okta.
- Growth keeps slowing: Revenue growth has stepped down from 22% (FY2024) to 15% (FY2025) to 12% (FY2026), with management guiding fiscal 2027 to roughly 9%.
- Trust is the product: For an identity vendor, security incidents are uniquely damaging, and Okta's 2022 and 2023 breaches showed how quickly reputation, and sales cycles, can be hit.
- Platform consolidation: Palo Alto Networks' roughly $25 billion acquisition of CyberArk, completed in February 2026, signals that large security platforms are absorbing identity capabilities and bundling them against independents.
- Heavy stock-based compensation: Stock-based compensation was $544 million in fiscal 2026, about 19% of revenue, which flatters non-GAAP metrics and dilutes shareholders.
3. Business Segments
Okta operates as a single reportable segment, but its revenue splits cleanly between recurring subscriptions and a small services line. Within subscriptions, the business spans Workforce Identity (securing employee access) and Customer Identity, the latter built around the Auth0 platform Okta acquired in 2021. The recurring nature of the revenue is the financial backbone of the company.
| Segment | % of revenue | What it is |
|---|---|---|
| Subscription | ~98% | Recurring SaaS subscriptions to the Okta identity platform, covering both Workforce Identity and Customer Identity (Auth0) |
| Professional services & other | ~2% | Implementation, configuration, training and support services |
4. Business Model & Competitive Moat
How it makes money. Okta sells subscriptions to its cloud identity platform, priced per user and per product module. Subscription revenue made up roughly 98% of the $2.92 billion total in fiscal 2026, giving the company highly predictable, recurring income with a backlog of $4.83 billion in remaining performance obligations.
Unit economics. The model is now both growing and profitable. Non-GAAP gross margin runs around 82%, non-GAAP operating margin reached 26%, and free cash flow margin hit 30%, while the company has been steadily converting its scale into GAAP profit for the first time.
The competitive moat. Okta's moat is rooted in neutrality and network effects. As an independent vendor it integrates with thousands of applications through the Okta Integration Network, and because identity sits at the centre of an organisation's security stack, switching costs are high once deployed. Its independence is also its sharpest differentiator: customers who do not want to hand their identity layer to Microsoft, Google or Amazon turn to Okta, and the company is extending that neutral position into securing AI agents across any cloud, including a recent integration with Amazon Bedrock.
5. Financial Health
Okta's financial story is a clear arc from heavy losses to profitability and deleveraging. The company has never paid a dividend, and its only debt is convertible senior notes, which it has been steadily retiring. The table below is drawn from the company's annual earnings press releases; fiscal years end on 31 January. Revenue is in millions of US dollars, "Adjusted EPS" is non-GAAP diluted earnings per share, and the debt column shows convertible senior notes outstanding at year-end. Figures in brackets are losses.
| Year | Revenue ($m) | YoY % | GAAP EPS | Adjusted EPS | Dividend/share | Long-term debt (YE) |
|---|---|---|---|---|---|---|
| FY2022 | 1,300 | +56% | ($5.73) | ($0.46) | None | $1,832m |
| FY2023 | 1,858 | +43% | ($5.16) | ($0.04) | None | $2,193m |
| FY2024 | 2,263 | +22% | ($2.17) | $1.60 | None | $1,154m |
| FY2025 | 2,610 | +15% | $0.06 | $2.81 | None | $858m |
| FY2026 | 2,919 | +12% | $1.31 | $3.50 | None | $350m |
The fiscal 2026 quarterly cadence shows steady sequential revenue growth and consistent non-GAAP profitability across the year. Adjusted EPS is non-GAAP diluted; the full-year total is shown in bold.
| Quarter | Revenue ($m) | Adjusted EPS | GAAP EPS |
|---|---|---|---|
| Q4 FY2026 | 761 | $0.90 | $0.35 |
| Q3 FY2026 | 742 | $0.82 | $0.24 |
| Q2 FY2026 | 728 | $0.91 | $0.37 |
| Q1 FY2026 | 688 | $0.86 | $0.34 |
| FY2026 total | 2,919 | $3.50 | $1.31 |
On the cash flow statement, operating cash flow rose to $884 million (30% of revenue) and free cash flow reached $863 million in fiscal 2026. Crucially, GAAP results turned positive: a $149 million operating profit and $235 million of net income, reversing prior-year losses, helped by tighter cost discipline and the wind-down of the large stock-based and acquisition charges that had weighed on earlier years. The balance sheet ended the year with roughly $2.55 billion of cash and short-term investments against just $350 million of convertible notes.
6. Valuation
Raw metrics, May 2026. Not opinions on whether the stock is cheap or expensive.
| Metric | Value |
|---|---|
| Market cap | ~$15.9 billion |
| Enterprise value | ~$13.7 billion (market cap ~$15.9bn + convertible notes ~$0.35bn − cash & short-term investments ~$2.55bn per FY2026 balance sheet) |
| Trailing P/E (GAAP) | ~69x (price $90.87 / FY2026 GAAP diluted EPS $1.31) |
| P/E (forward) | ~24x (price $90.87 / FY2027 non-GAAP guided EPS midpoint ~$3.78) |
| P/S (TTM) | ~5.5x (market cap ~$15.9bn / FY2026 revenue $2.92bn) |
| P/FCF | ~18x (market cap ~$15.9bn / FY2026 free cash flow $863m) |
| EV/EBITDA (TTM) | ~56x (EV ~$13.7bn / EBITDA ~$245m, where EBITDA = GAAP operating income $149m + D&A $96m; excluding $544m of stock-based compensation, adjusted EBITDA is ~$789m and the multiple is ~17x) |
| 52-week high | $127.52 |
| 52-week low | $62.66 |
| Short interest (% of float) | ~4.8% (~8.5m shares, recent) |
| Days to cover | ~2 |
The valuation reflects the company's transition: a very high trailing GAAP earnings multiple, because GAAP profit only just turned positive, alongside a far more moderate forward multiple as guided non-GAAP earnings scale. The technical picture is summarised below.
7. Growth Drivers
Okta's growth case rests on three pillars. The first is new products beyond core single sign-on, including Identity Governance, Privileged Access and Identity Threat Protection, which expand the amount each customer can spend and push Okta deeper into the security budget. The second is securing artificial intelligence: Okta for AI Agents, generally available since April 2026 and now extended to Amazon Bedrock and to rival identity providers, aims to make Okta the control plane for the explosion of non-human identities that AI agents create. The third is large enterprise and public-sector adoption, where Okta's neutrality and FedRAMP-authorised offerings help it win complex, multi-vendor environments.
The counterweight is guidance. Management expects fiscal 2027 revenue of $3.170 billion to $3.190 billion, growth of roughly 9%, and a non-GAAP diluted EPS of $3.74 to $3.82, helped by a lower 21% non-GAAP tax rate adopted after recent US tax legislation. In other words, the profitability and free-cash-flow story is expected to keep improving even as top-line growth settles into single digits.
8. Peer Comparison
Okta competes against the bundled identity offerings of cloud giants on one side and specialist identity-security vendors on the other. Market caps are as of May 2026; the metric column shows each peer's most relevant recent figure.
| Peer | Market cap (May 2026) | Key 2025 metric |
|---|---|---|
| Microsoft (Entra ID) | ~$3.11 trillion | FY2025 revenue $281.7bn (+15%); Entra bundled with M365 and Azure |
| CyberArk (now Palo Alto Networks) | ~$25bn deal value | Acquired by Palo Alto Networks, closed Feb 2026; privileged access and identity security |
| SailPoint (SAIL) | ~$8.5 billion | Identity governance specialist; returned to public markets in 2025 |
| Ping Identity / ForgeRock | Private (Thoma Bravo) | Federation and customer identity (CIAM); strong in hybrid and on-premise |
9. Insider Activity
Insider activity at Okta has been dominated by routine selling under pre-arranged trading plans rather than open-market buying, a common pattern at founder-led technology companies where executives hold large equity stakes. The most material recent transactions reported on Form 4 are below.
| Name | Date | Type | Shares | Price | Value | Plan Type |
|---|---|---|---|---|---|---|
| Todd McKinnon (CEO) | 23 Mar 2026 | Sell | 11,263 | — | — | Rule 10b5-1 |
| J. Frederic Kerrest (Co-founder) | 2026 (recent) | Sell (net) | 1,313,811 | — | — | Planned / 10b5-1 |
There were no insider open-market purchases in the period. The selling appears to be systematic diversification under pre-set plans rather than a signal on valuation, but the absence of insider buying is worth noting.
10. Key Risks
- Microsoft bundling: Entra ID's inclusion in widely owned Microsoft 365 and Azure subscriptions lets Microsoft compete on bundle economics that a standalone vendor cannot match, pressuring both pricing and win rates.
- Growth deceleration: If single-digit growth becomes the steady state, Okta's premium software multiple will depend almost entirely on continued margin and free-cash-flow expansion.
- Security and trust: As an identity company, any breach is disproportionately damaging; the 2022 and 2023 incidents showed how quickly customer confidence and sales momentum can be affected.
- Industry consolidation: Large platforms such as Palo Alto Networks, now owner of CyberArk, are bundling identity into broader security suites, raising the competitive bar for independents.
- Dilution: Stock-based compensation near 19% of revenue meaningfully dilutes shareholders and widens the gap between GAAP and non-GAAP profitability.
- IT spending and macro: Identity budgets are tied to overall software and security spend, which can tighten in a slower economy.
11. Recent Developments
- 14 May 2026 — Okta opens AI-agent security to rivals. The company extended Okta for AI Agents to Amazon Bedrock and to non-Okta identity providers including Microsoft Entra ID and Ping, letting customers layer Okta's agent-identity controls on top of existing infrastructure.
- 30 Apr 2026 — Okta for AI Agents reaches general availability. The product gives organisations a framework to discover, govern and secure the identities of AI agents across the enterprise.
- 04 Mar 2026 — Full-year fiscal 2026 results. Revenue rose 12% to $2.919 billion, GAAP operating income was $149 million (the first full-year GAAP operating profit), GAAP net income reached $235 million, non-GAAP diluted EPS was $3.50, and free cash flow was $863 million; remaining performance obligations grew 15% to $4.83 billion.
- 11 Feb 2026 — Identity-sector consolidation. Palo Alto Networks completed its roughly $25 billion acquisition of CyberArk, underscoring how large security platforms are absorbing identity capabilities and sharpening the competitive landscape Okta operates in.
12. Key Dates to Watch
- 28 May 2026 — Q1 fiscal 2027 earnings, the first test of management's roughly 9% full-year growth guidance.
- 26 Aug 2026 — expected Q2 fiscal 2027 earnings, a read on enterprise demand and AI-agent traction through the summer.
- 03 Dec 2026 — expected Q3 fiscal 2027 earnings, including the seasonally important large-customer renewal cycle.
Between those dates, watch for AI-agent product adoption, competitive commentary on Microsoft Entra, and any further convertible-note reduction. Track scheduled market-moving events on our economic calendar, and discuss the stock in the ChartsView forum.
Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.
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13. Thesis Verdict
The central thesis. Okta is the largest independent identity provider, selling cloud subscriptions that secure how employees, customers and AI agents log in, with subscriptions making up about 98% of revenue. Fiscal 2026 revenue grew 12% to $2.92 billion and the company delivered its first full year of GAAP operating profit ($149 million) and $863 million of free cash flow, while cutting convertible debt to $350 million; management guides fiscal 2027 to roughly 9% growth with rising margins. The central growth driver is securing the surge of AI-agent identities, where Okta for AI Agents went generally available in April 2026.
What would confirm or break it. Sustained GAAP profitability, stable or improving customer retention and traction in AI-agent and governance products would confirm the durable-profit thesis. It breaks if Microsoft's bundled Entra ID accelerates share loss, if growth slips below guidance, or if another security incident damages the trust on which an identity vendor depends.
Watchpoints
- ConfirmsQ1 FY2027 earnings (4 days) landing in line with or above management guidance.
- ConfirmsEvidence supporting the "Profitability inflection:" thesis continuing to build across subsequent filings.
- InvalidatesMaterialisation of the "Microsoft bundling:" risk, or any disclosure that fundamentally alters the capital-return or growth profile stated by management.
Diagnostic grid
Generated by ChartsView research tooling. Thesis strength measures how well the evidence in this report supports the company's stated thesis — it is NOT a buy/sell rating or price target. ChartsView is not authorised by the FCA to provide regulated investment advice. Generated 24 May 2026.