Okta FY 2026 Results: Profitability Builds On Higher Revenue Base

Okta (OKTA) closed FY 2026 with Q4 revenue of US$761 million and basic EPS of US$0.36, while trailing twelve month figures show US$2.9 billion of revenue and basic EPS of US$1.34 as earnings and margins moved higher over the past year. The company has seen quarterly revenue step up from US$682 million in Q4 FY 2025 to US$761 million in Q4 FY 2026, with basic EPS rising from US$0.13 to US$0.36 over the same period. Trailing twelve month EPS shifted from US$0.17 to US$1.34 as net income expanded from US$28 million to US$235 million. For investors, the combination of higher earnings, a stronger profit base and an 8.1% net margin sets the stage for a results season focused squarely on how durable these margin gains really are.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the main stories around Okta, where strong growth expectations and improving profitability meet more cautious views about how far margins can stretch from here.

Earnings Turn From Loss To US$235 Million On A Larger Base

• On a trailing twelve month basis, net income moved from US$28 million to US$235 million, with basic EPS moving from US$0.17 to US$1.34 while revenue went from US$2.6b to US$2.9b.
• Consensus narrative fans the bullish case that identity demand and AI related products can support higher earnings over time. However, the very large step up in EPS over the past year already exceeds the recent 42.2% per year five year earnings growth pace, which means future years would need to keep clearing a higher bar for that bullish story to stay intact.
  • Analysts look for earnings to grow about 18% per year, which is much slower than the very large increase just reported, so the current data points to a potential gap between the recent surge and more moderate forward expectations.
  • With net margin at 8.1% versus 1.1% a year earlier, the jump in profitability aligns with the view that the business can support higher margins, but also raises the question of how much further margin expansion is built into bullish scenarios.

High double digit EPS growth is already on the board, so the real question for bullish investors is how long Okta can keep expanding profits from here without relying on another very sharp jump. 🐂 Okta Bull Case

Premium 60x P/E Meets DCF Fair Value Gap

• Okta trades on a trailing P/E of 60.1x, which is higher than both the US IT industry average of 21.5x and a peer average of 29.6x. The current share price of US$79.65 sits below a DCF fair value of about US$111.50.
• Bears focus on this premium multiple and argue that if revenue growth runs around 8.1% per year, below the 10.3% forecast for the broader US market, then paying roughly double the peer P/E could prove demanding even if earnings keep growing.
  • The DCF fair value being above the current price suggests one valuation framework sees upside, which sits uncomfortably next to the idea that the market might already be pricing in too much at 60.1x trailing earnings.
  • With analysts using a 100.85 price target in the data, the gap between US$79.65, that target, and the US$111.50 DCF fair value gives you three very different anchors to compare against the same earnings and growth profile.

The mix of a high P/E, slower forecast revenue growth and a DCF fair value above today’s price is exactly what cautious investors point to when they question how much optimism is already in the valuation. 🐻 Okta Bear Case

8.1% Net Margin Puts More Weight On Future Growth Assumptions

• Net profit margin on the latest trailing twelve month numbers is 8.1%, up from 1.1% a year earlier, and analysts frame this against five year earnings growth of 42.2% per year and a forecast 18% annual earnings growth ahead.
• Consensus narrative suggests that expanding identity, AI related security use cases and cross sell into a US$2.9b revenue base can support durable profitability. However, the combination of an 8.1% margin and a 60.1x P/E means a lot now rides on whether that 18% earnings growth forecast materialises.
  • If margins were to drift closer to the lower end of analyst scenarios rather than climb further, the current earnings base would support less growth than the bullish side of the narrative implies.
  • On the other hand, with high quality past earnings flagged in the data, investors who accept the consensus view may see the current 8.1% margin as a starting point rather than an endpoint when they think about the next few years.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Okta on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this combination of stronger earnings and valuation trade offs feels finely balanced, it may be a good time to review the full dataset yourself and decide how it compares with your expectations, including the 3 key rewards identified in our work.

See What Else Is Out There

Okta’s premium 60.1x P/E, slower forecast revenue growth, and heavy reliance on continued margin strength make its valuation feel demanding for cautious investors.

If that rich pricing gives you pause, it could be worth checking a curated list of 47 high quality undervalued stocks that line up better with what you want to pay for earnings today.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.