Okta Stock Surges 20% on Earnings Beat; CEO Bullish on AI

Okta Inc. (NASDAQ: OKTA) shares soared more than 20% intraday on Tuesday, March 5, 2025, following the company's strong fourth-quarter fiscal 2025 earnings report and optimistic guidance for the future. The company's CEO, Todd McKinnon, expressed optimism about the growth opportunities and the role of artificial intelligence (AI) in the identity management space.

Okta reported adjusted earnings per share (EPS) of $0.78, surpassing the consensus estimate of $0.74, and revenue of $682 million, beating the $669.46 million estimate. The company's total revenue and subscription revenue grew 13% year-over-year, while net cash provided by operations and free cash flow increased by 42% and 42%, respectively. Okta's customer metrics also improved, with total customers of 19,650, up 4% year-over-year, and high-value customers (spending $100,000 annually) increasing to 4,800, up 7%. The company's trailing-12-month dollar-based net retention rate clocked in at 107%, indicating that existing Okta customers are expanding their relationships with the company.



For the first quarter of fiscal 2026, Okta expects adjusted EPS of $0.76 to $0.77 and revenue of $678 million to $680 million, both of which exceed analyst estimates. The company also provided strong guidance for the full year 2026, with revenue expected to grow by 10% year-over-year to $2.85 billion to $2.86 billion and adjusted EPS expected to be $3.15 to $3.20 per share. Okta's optimistic outlook reflects the company's confidence in its ability to maintain its growth trajectory.

McKinnon emphasized the importance of AI in the identity management space and Okta's commitment to investing in AI initiatives. He stated, "AI is worthy of the hype, and regulation is coming too soon. Okta has always been about connecting people with technology, but with AI, the people are still in charge. AI may raise the stakes, but identity belongs to you."

Okta plans to devote about $40 million of its annual research and development budget to new AI projects, demonstrating its commitment to staying at the forefront of the AI revolution in the identity management space. The company's focus on AI, coupled with its strong financial performance and optimistic guidance, has driven investor confidence in Okta's stock.

In conclusion, Okta's strong earnings report and optimistic guidance, combined with the company's CEO's bullish outlook on AI, have contributed to the stock's significant intraday surge. As Okta continues to invest in AI initiatives and maintain its growth trajectory, investors can expect the company to remain a strong player in the identity management space. However, it is essential for investors to conduct their due diligence and not rely solely on the information provided in this article.