Okta Inc. will release its latest quarterly earnings report on December 2, 2025 (after U.S. market close). The market is focused on the pace of its revenue and profit improvement as well as the resilience of its subscription business.

Market Forecast

The market consensus for this quarter (company's fiscal period) is approximately $730 million in total revenue, a year-on-year increase of about 12%; adjusted EPS of around $0.756, a year-on-year increase of about 31%; and EBIT of approximately $163 million, a year-on-year increase of around 36%. The company maintained its full-year guidance in the last earnings report, with media reports suggesting that the company adheres to its annual outlook despite an uncertain macro environment. The main highlight of the company's business is subscription revenue, which accounts for more than 97% of the total revenue and is the core driver of its revenue and profit. The largest existing business with growth prospects is the identity and access management subscription service, with subscription revenue of approximately $711 million in the last quarter, representing a year-on-year growth of approximately 12.7%.

Quarter Review

Last quarter, the company reported revenue of approximately $728 million, a year-on-year increase of about 12.7%; gross margin of about 76.92%; net profit attributable to the parent company of approximately $67 million, a net profit margin of about 9.20%, and a quarter-on-quarter increase in net profit of about 8.06%; adjusted EPS of about $0.91, a year-on-year increase of about 26.4%. The company maintained its full-year outlook despite the uncertain macro environment, which had a temporary disruptive effect on the stock price. The main business aspect is subscription revenue of about $711 million, accounting for about 97%, with a year-on-year increase of about 12.7%; and professional services and other revenue of about $17 million, accounting for about 2.3%.

Quarter Outlook

Renewal and Expansion of Identity Cloud Subscription

The subscription model of identity and access management provides high visibility into recurring revenue. The market expects continued double-digit growth in revenue and EPS this quarter, reflecting the sustained healthy renewal rate and upsell momentum. The gross margin structure is supported by the high gross margin attribute of the subscription business. Last quarter, the gross margin was about 76.92%, and if the subscription ratio remains high, the gross margin is expected to remain solid. - Large customers are continually investing in unified identity platforms driven by Zero Trust and compliance, expanding access scenarios across applications and cloud environments, which boosts revenue per customer. With more security and access control modules being bundled for sale, the leverage effect of EBIT becomes more apparent with revenue expansion, supporting the market's expectation of approximately $163 million in EBIT this quarter. - Recent media reports have highlighted the company's emphasis on maintaining stable annual guidance amid macroeconomic uncertainties, indicating that cost discipline and sales efficiency optimization remain the core strategies of the management team. If the sales cycle remains stable, subscription renewals and additional module expansions will be the main drivers of revenue and profit for this quarter.

Cross-Selling and Platformization of Security Product Portfolio

Identity security is increasingly integrated with a broader security stack, and the platform strategy enhances the value of the customer lifecycle through cross-selling. For customers, a unified identity platform reduces integration complexity and maintenance costs, driving deeper product adoption, which provides substantial support for this quarter's revenue momentum. - The subscription revenue structure last quarter showed that the platform business is the main source of revenue. If the management continues to push for account penetration, enhance threat detection, and adaptive access strategies, the improvement in EBIT and EPS this quarter has fundamental support. The market expects approximately 31% year-on-year growth in EPS, consistent with the stability of gross margin brought by platformization and optimization of expense ratio. - With the expansion of generative and automation tools, identity governance, and access management scenarios are increasing, helping the company maintain stickiness among large enterprise customers. Enhanced platform depth often accompanies better renewal rates and additional module purchases, which aligns with short-term profitability and mid-term cash flow improvement.

Impact of Demand Environment and Guidance on Stock Prices

Stock price is sensitive to slight changes in orders and guidance. Recent media reported that the company insists on its annual outlook amid macroeconomic uncertainties, and the market will focus on the guidance range and operational indicators such as renewals and RPO for this quarter. If the company maintains healthy growth rates in revenue and profit, the market will have stronger confidence in the valuation stability. - During the reporting period, investors will focus on the direction of gross margin and changes in net profit margin. Last quarter, the net profit margin was about 9.20%. If expense control continues this quarter, the net profit margin is expected to remain stable or improve quarter-on-quarter. The expectation of approximately 36% year-on-year growth in EBIT reflects operational leverage, and achieving or exceeding this expectation will act as a positive catalyst for the stock price. - Combining the long-term demand for identity and access management across the industry, the market will focus on whether the order pace of large customers and the public sector is stable. If this quarter provides a clearer outlook for the second half of the year and full-year renewals, the uncertainty premium will be reduced.

Analyst Opinions

Media information over the past six months shows that institutional comments generally focus on the impact of macroeconomic uncertainties on orders and short-term stock prices. The company's communication of its full-year outlook has concentrated market expectations on steady growth and profit margin improvement. Overall, more positive views are reflected in public research reports and market commentary. - Reports indicate that "cybersecurity company Okta has noted risks related to economic uncertainty but has maintained its full-year performance outlook," which institutions interpret as management's confidence in the core business, focusing on subscription renewals and cross-selling of the platform to support revenue and profit. - Most optimistic analysts emphasize the high gross margin and cash flow quality brought by the high subscription ratio, enhanced customer stickiness from the platform strategy, and optimized expense ratios that improve EBIT and EPS. Considering the market's expectation of approximately $730 million in revenue and EPS of around $0.756 this quarter, if the company provides solid quarterly and full-year guidance, the upside potential will come from achieving or exceeding expectations and operational leverage release.