Okta Q4: Enterprise Business Is Booming, Even Management Is Surprised

(15min)

Summary

  • Okta's Q4 FY25 earnings saw its revenue and earnings grow 13% and 30% earnings YoY respectively, surpassing analyst estimates and driving the stock up 16%.
  • During the quarter, Okta saw its cRPO grow at an even higher pace compared to Q3, driven by the accelerating momentum in its $100K+ and $1M+ ACV customers.
  • For FY26, the management remains committed to investing in ongoing product innovation, where its portfolio of new products has seen growing adoption along with the help from a targeted GTM strategy.
  • Although NRR declined for the 3rd consecutive quarter, while FY26 revenue estimates came lower than my expectations, I believe directionally, OKTA is on the right track, reiterating my “buy” rating.

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Introduction & Investment Thesis

Okta (NASDAQ:OKTA) reported its Q4 FY25 earnings yesterday on March 3, with revenue and earnings growing 13% and 30% YoY, respectively, surpassing analyst estimates and sending the stock 16% higher.

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Amrita runs a boutique family office fund in beautiful Vancouver, where she leads the investment strategy for the family fund. The fund's objective is to invest capital in sustainable, growth-driven companies that maximize shareholder equity by meeting their growth-oriented goals. In addition, she also started her own award-winning newsletter, The Pragmatic Optimist which focuses on portfolio strategy, valuation, and macroeconomics in concert with her husband Uttam Dey who is also a contributor on Seeking Alpha. Prior to cofounding her fund, Amrita worked for 5 years in high-growth supply-chain start-ups in downtown San Francisco, where she led strategy. During her time in the Bay Area, she also worked with venture capital firms and start-ups, where her efforts led her to grow the user acquisition business. During this time, she was introduced to investment portfolios and was able to maximize returns for clients during the pandemic. The cornerstone of Amritas work rests on democratizing financial literacy for everyone and breaking down financial jargon and complex macroeconomic concepts into formats that are easily digestible but more empowering than the typical investment thesis. Her newsletter has been featured as the Top Newsletter in Finance on popular newsletter platforms and she aims to bring her ideas to Seeking Alpha as well.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of OKTA, AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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