Executive Summary
Okta Inc delivered QQ2 2026 results with solid gross margin but meaningful cash flow headwinds. Revenue reached $728.0 million, producing a gross profit of $560.0 million and a gross margin of approximately 76.9%. Operating income stood at $41.0 million, yielding an operating margin of about 5.6%, while net income was $67.0 million and trailing twelve-month EPS (diluted) approximately $0.37–$0.38. Despite profitability on the income statement, operating cash flow was negative at about $(240.6) million and free cash flow was $(239.6) million, driven by substantial working capital activity and investing outflows. The balance sheet shows a strong equity position and a modest net debt profile, but the company carries a heavy cash burn from operating activities and significant investing activity, including sizable securities purchases and maturities. Management commentary (where available) is not included in the supplied dataset; as such, the forward-looking stance relies on the qualitative implications of the results and the secular growth trajectory of the identity protection market. In summary, Okta remains a leadership player in identity security with attractive gross margins and a path to expansion through cross-sell of Auth0 and expanded Identity Cloud adoption, but near-term cash flow optimization is essential to translate profitability into durable free cash flow.
Key Performance Indicators
QoQ: -99.89% | YoY:-99.89%
QoQ: -99.89% | YoY:-99.89%
QoQ: -99.89% | YoY:100.22%
QoQ: -99.89% | YoY:-99.77%
Key Insights
Revenue: $728.0m, YoY -99.89%, QoQ -99.89% (per dataset; note: quarterly figures imply a potential data inconsistency; actual quarter-over-quarter trend should be cross-verified with SEC filing)
Gross Profit: $560.0m, Margin 76.93%, YoY -99.89%, QoQ -99.89%
Operating Income: $41.0m, Margin 5.63%, YoY +100.22%, QoQ -99.89%
Net Income: $67.0m, Margin 9.20%, YoY -99.77%, QoQ -99.89%
EPS (GAAP): $0.38, EPS (Diluted): $0.37; YoY +123.53%, QoQ +5.56%
EBITDA: $41.0m, EBITDA Margin 5.63%
Debt and li...
Financial Highlights
Revenue: $728.0m, YoY -99.89%, QoQ -99.89% (per dataset; note: quarterly figures imply a potential data inconsistency; actual quarter-over-quarter trend should be cross-verified with SEC filing)
Gross Profit: $560.0m, Margin 76.93%, YoY -99.89%, QoQ -99.89%
Operating Income: $41.0m, Margin 5.63%, YoY +100.22%, QoQ -99.89%
Net Income: $67.0m, Margin 9.20%, YoY -99.77%, QoQ -99.89%
EPS (GAAP): $0.38, EPS (Diluted): $0.37; YoY +123.53%, QoQ +5.56%
EBITDA: $41.0m, EBITDA Margin 5.63%
Debt and liquidity: Net debt $64.0k; cash and cash equivalents $0.88m; total cash and short-term investments $2.86m; current ratio ~1.34
Cash flow: Net cash provided by operating activities $(240.6)m; free cash flow $(239.6)m; net cash used in investing activities $(120.1)m; net cash used in financing activities $(22.0)m; fx impact $(8.99)m; net change in cash $(499.1)m
Balance sheet: Total assets $9.55m; total liabilities $2.80m; total stockholders’ equity $6.75m; cash at end of period $0.884m; working capital considerations driven by accounts receivable outflow and other working capital movements
Efficiency/Capitalization: Weighted average shares 175.46m (outstanding) / 180.97m (diluted). Current liabilities largely funded by working capital and modest long-term debt (~$0.94m). Revenue efficiency metrics indicate high gross margin and moderate operating margin, with substantial non-cash comp and other working capital effects impacting cash flow.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
728.00K |
-99.89% |
-99.89% |
| Gross Profit |
560.00K |
-99.89% |
-99.89% |
| Operating Income |
41.00K |
100.22% |
-99.89% |
| Net Income |
67.00K |
-99.77% |
-99.89% |
| EPS |
0.38 |
123.53% |
5.56% |
Management Commentary
Transcript analysis unavailable in the supplied dataset; no management quotes or themes are provided. Please supply earnings call transcripts to enable theme-based extraction (strategy, operations, market conditions) and quote-level insights.
Forward Guidance
Explicit forward guidance is not provided in the supplied data. Based on the QQ2 2026 results and the business model, key near-term considerations for Okta include: (1) sustaining and accelerating ARR growth and DBNRR through continued Identity Cloud expansion and Auth0 integration; (2) improving cash flow generation by optimizing working capital (notably accounts receivable) and revising stock-based compensation pacing where appropriate; (3) continuing prudent capital allocation in R&D and go-to-market initiatives to support multi-product cross-sell while moderating overhead to drive FCF; (4) monitoring competitive dynamics—particularly the Microsoft Azure AD moat and competitive IAM players (Ping Identity, SailPoint). Management commentary on targets is not present in the dataset; investors should monitor ARR trajectory, customer retention and average contract value, gross and operating margins, and free cash flow conversion in upcoming quarters to assess achievability of sustainability and margin expansion.