Okta delivered a solid Q2 FY2025 despite a cautious macro backdrop, with revenue of $646 million, up 16.2% year-over-year and 4.7% quarter-over-quarter, and gross margin of 76.0%. The company achieved GAAP profitability for the first time, reporting net income of $29 million and non-GAAP operating margin of 18% guidance for Q3 FY2025, underscoring a successful margin expansion path driven by operating efficiencies and a favorable mix towards larger, enterprise+ type deals. Management highlighted strength in large customers (fastest-growing cohort: $1 million+ ACV) and the rapid adoption of new products, including Identity Threat Protection with Okta AI, Identity Security Posture Management, and Highly Regulated Identity, signaling a broader platform strategy and cross-sell potential.
Looking ahead, Okta raised full-year expectations to 13% revenue growth for FY2025 with a non-GAAP operating margin target of 21% and free cash flow margin around 23%. The company also emphasized channel acceleration, with more than 40% of revenue driven through indirect partners and partner contributions in eight of the top ten global deals, along with rising deal sizes and a growing Global 2000 footprint (over 40% of Global 2000 now Okta customers). Management acknowledged macro headwinds and the residual impact of last year’s security incident, adopting prudence in guidance while continuing to invest in security and platform capabilities. Taken together, Okta’s framework — land-and-expand discipline, product diversification, and channel-driven growth — supports a constructive long-term growth trajectory and earnings quality ahead of many software peers.