Introduction: Can Okta Become the Global Benchmark for Identity Security?

In an era where cyberattacks have become routine and secure identity management tops the priority list for every organization, Okta continues to demonstrate consistent growth, expanding market share, and improving core financial metrics. The company’s Q1 FY26 report, published on May 27, 2025, delivers results that reinforce Okta’s position as an industry leader and spark significant interest among investors and enterprise clients.

Key Figures: Double-Digit Growth and Strengthened Financial Fundamentals

In the first quarter of FY26, Okta reported total revenue of $688 million, marking a 12% increase compared to the same period last year. Subscription revenue reached $673 million, also up 12%. Remaining performance obligations (RPO) soared to $4.084 billion, up 21% year-over-year, while current RPO (due in the next 12 months) stood at $2.227 billion, up 14%FINAL-Okta-Q1FY26-Earni….
The dollar-based net retention rate, a key SaaS metric, reached 106%—a five-point decrease, but still robust for the sector. Non-GAAP gross margin stood at 81.9%, up 0.4 percentage points, and non-GAAP subscription gross margin was 83.9%FINAL-Okta-Q1FY26-Earni….

Market Trends: Quality Growth, Improving Profitability, and Enterprise Expansion

Okta continues to improve its non-GAAP operating margin, reaching 26.7% in Q1—an increase of 5.1 points year-over-year. Free cash flow margin was particularly strong at 34.7%. The “Rule of 40”—a combined growth and free cash flow metric widely used in SaaS analysis—came in at 42%, underlining Okta’s operational strength.

From a client perspective, Okta saw a 7% increase in the number of customers spending more than $100,000 annually, reaching 4,870 large enterprise customers this quarter. This highlights Okta’s deepening penetration into the enterprise sector—a key driver of its long-term growth strategy.

Market Positioning: Competitive Edge and Growth Opportunities

Operating in a global market estimated at $80 billion, Okta is focused on secure identity platforms, customer and device identity management, and advanced solutions for global enterprises. The company emphasizes the development and implementation of advanced standards, high-level identity security for Global 2000 firms, and continuous product innovation—including integrations and automation capabilities.

Compared to its chief rival Microsoft, Okta reports higher service availability, broader integration, and sustained leadership in Gartner’s Access Management Magic Quadrant for eight consecutive years. For example, from 2021 to 2024, Microsoft experienced around 2,100 minutes of outages, while Okta reported just 69 minutes. In 2025, Okta had only one minor regional incident and achieved 100% SLA for the quarterFINAL-Okta-Q1FY26-Earni….

Outlook: Growth Targets and Continued Financial Resilience

For Q2 FY26, Okta forecasts revenue of $710–712 million, reflecting expected year-over-year growth of 10%. Current RPO is projected to grow by 10%–11%. Non-GAAP operating income is expected to be between $183 million and $185 million, with an operating margin of 26%. Non-GAAP diluted earnings per share are projected at $0.83–$0.84, and free cash flow margin is expected to remain highFINAL-Okta-Q1FY26-Earni….

For the full fiscal year, the company projects total revenue of $2.85–$2.86 billion (up 9%–10%), with non-GAAP operating income of $710–$720 million (representing 25% of sales).

Conclusion and Forward View

Okta’s Q1 FY26 results demonstrate robust financial stability, accelerated organic growth, and continuous improvements in profitability. Key trends include a shift toward enterprise expansion, broadening product offerings, and a clear competitive edge in integration and secure identity solutions. The company maintains high levels of customer retention and satisfaction, profitability, and cash flow. Despite ongoing competition from industry giants like Microsoft, Okta continues to set a high bar for innovation and operational excellence, positioning itself as a leading player in secure identity management for 2025–2026.