Identity management company Okta (NASDAQ: OKTA) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 11.6% year on year to $761 million. On the other hand, next quarter’s revenue guidance of $751 million was less impressive, coming in 0.5% below analysts’ estimates. Its non-GAAP profit of $0.90 per share was 6.3% above analysts’ consensus estimates.
Is now the time to buy Okta? Find out by accessing our full research report, it’s free.
Okta (OKTA) Q4 CY2025 Highlights:
- Revenue: $761 million vs analyst estimates of $749.1 million (11.6% year-on-year growth, 1.6% beat)
- Adjusted EPS: $0.90 vs analyst estimates of $0.85 (6.3% beat)
- Adjusted Operating Income: $202 million vs analyst estimates of $189.9 million (26.5% margin, 6.4% beat)
- Revenue Guidance for Q1 CY2026 is $751 million at the midpoint, below analyst estimates of $754.9 million
- Adjusted EPS guidance for the upcoming financial year 2027 is $3.78 at the midpoint, beating analyst estimates by 2.9%
- Operating Margin: 6%, up from 1.2% in the same quarter last year
- Free Cash Flow Margin: 33.1%, up from 28.4% in the previous quarter
- Billings: $1.08 billion at quarter end, up 12.5% year on year
- Market Capitalization: $12.85 billion
Company Overview
Named after the meteorological measurement for cloud cover, Okta (NASDAQ: OKTA) provides cloud-based identity management solutions that help organizations securely connect their employees, partners, and customers to the right applications and services.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Okta’s 28.4% annualized revenue growth over the last five years was impressive. Its growth beat the average software company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Okta’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 13.6% over the last two years was well below its five-year trend. 
This quarter, Okta reported year-on-year revenue growth of 11.6%, and its $761 million of revenue exceeded Wall Street’s estimates by 1.6%. Company management is currently guiding for a 9.2% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 8.6% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges.
ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.
Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.
Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Okta’s billings came in at $1.08 billion in Q4, and over the last four quarters, its growth was underwhelming as it averaged 9.8% year-on-year increases. This alternate topline metric grew slower than total sales, meaning the company recognizes revenue faster than it collects cash - a headwind for its liquidity that could also signal a slowdown in future revenue growth. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
It’s relatively expensive for Okta to acquire new customers as its CAC payback period checked in at 74.5 months this quarter. The company’s slow recovery of its sales and marketing expenses indicates it operates in a highly competitive market and must invest to stand out, even if the return on that investment is low. 
Key Takeaways from Okta’s Q4 Results
It was great to see Okta’s full-year EPS guidance top analysts’ expectations. We were also glad its billings outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed and its revenue guidance for next quarter fell slightly short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock remained flat at $71.09 immediately following the results.
So do we think Okta is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
