Okta's (OKTA, Financial) stock took a solid 5.5% leap this morning after the identity security powerhouse delivered Q3 results that blew past Wall Street estimates. Revenue climbed 14% year-over-year to $665 million, while subscription revenue matched pace at $651 million. CEO Todd McKinnon pointed to “focused investments” in partnerships, public sector clients, and big-ticket customers as the secret sauce driving growth. And it's not just about the top line—Okta's profitability is on fire, with non-GAAP operating income soaring 62% year-over-year to $138 million, or 21% of revenue. Cash flow? A cool $159 million, proving Okta's got the balance sheet to back its ambitions.
Investors were equally jazzed about Okta's forward guidance. The company is forecasting Q4 revenue of $667 million to $669 million, paired with a non-GAAP EPS of $0.73 to $0.74—both ahead of analyst predictions. For the full fiscal year, Okta's now projecting $2.595 billion in revenue, a 15% annual growth rate, and a 25% free cash flow margin. These numbers show Okta is navigating the choppy macroeconomic waters like a pro, positioning itself as a leader in the identity security space.
What's the takeaway? Okta's third-quarter beat and bullish outlook are a clear sign that its strategy is clicking, even in a challenging environment. Shares are still down nearly 4% for the year, but today's pop could signal a momentum shift. With its strong cash position, profitability gains, and a market hungry for security solutions, Okta's making a compelling case for long-term investors to take notice.
