10-K – 2026-03-05 – okta-20260131.htm

• recruitment or departure of key personnel;
• rumors and market speculation involving us or other companies in our industry;
• announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures or capital commitments; and
• sales of additional shares of our Class A common stock by us, our directors, our officers or our stockholders.
In addition, stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies, including technology companies and high-growth, unprofitable companies in particular, have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. Our involvement in securities litigation has, in the past and could, in the future, subject us to substantial costs, divert resources and the attention of management from our business and harm our business.
The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to the completion of our IPO, including our directors, executive officers, and their affiliates, who held in the aggregate 32% of the voting power of our capital stock as of January 31, 2026. This will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transaction requiring stockholder approval.
Our Class B common stock has ten votes per share and our Class A common stock has one vote per share. As of January 31, 2026, our directors, executive officers and their affiliates held in the aggregate 32% of the voting
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power of our capital stock, taking into account shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of January 31, 2026 and restricted stock units (“RSUs”) that are releasable within 60 days of January 31, 2026. Because of the ten-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively could continue to control nearly a majority of the combined voting power of our common stock and be able to effectively control all matters submitted to our stockholders for approval until April 12, 2027, the date that is the ten-year anniversary of the closing of our IPO. This concentrated control may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transaction requiring stockholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders.
Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as certain transfers effected for estate planning purposes. The conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who have retained their shares.
Sales of a substantial number of shares of our Class A common stock in the public markets, or the perception that sales might occur, could cause the market price of our Class A common stock to decline.
Sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our directors, executive officers and principal stockholders, or the perception that these sales might occur, could cause the market price of our Class A common stock to decline.
In addition, we have options outstanding that, if fully exercised, would result in the issuance of shares of our Class A and Class B common stock. We also have RSUs outstanding that, if vested and settled, would result in the issuance of shares of Class A common stock. All of the shares of Class A and Class B common stock issuable upon the exercise of stock options and vesting of RSUs and the shares reserved for future issuance under our equity incentive plans, are registered for public resale under the Securities Act of 1933, as amended (“Securities Act”). Accordingly, these shares will be able to be freely sold in the public market upon issuance, subject to applicable vesting requirements.
Furthermore, a substantial number of shares of our Class A common stock is reserved for issuance upon the exercise of the 2026 Notes (as defined below). If we elect to satisfy our conversion obligation on the 2026 Notes solely in shares of our Class A common stock upon conversion of the 2026 Notes, we will be required to deliver the shares of our Class A common stock, together with cash for any fractional share, on the second business day following the relevant conversion date.
We cannot guarantee that our Share Repurchase Program will be fully consummated or will enhance long-term stockholder value, and stock repurchases could increase the volatility of the trading price of our Class A common stock and diminish our cash reserves.
On January 5, 2026, we announced that our board of directors (our “board”) approved a stock repurchase program with authorization to purchase up to $1 billion of our Class A common stock from time to time (the “Share Repurchase Program”). As of January 31, 2026, a total of $921 million remained available for repurchase under the Share Repurchase Program. Repurchases under the Share Repurchase Program are made in the open market, through privately negotiated transactions or other means, including pursuant to Rule 10b5-1 trading arrangements, and in compliance with applicable securities laws and other requirements. The timing, manner, price, and amount of the Share Repurchase Program is subject to the discretion of our management. The Share Repurchase Program does not obligate us to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. We may not be able to repurchase shares at favorable prices. Further, our share repurchases could affect the trading price of our Class A common stock, increase its volatility, reduce our cash reserves, and may be suspended or terminated at any time, which may result in a lower market valuation of our Class A common stock.
If securities or industry analysts do not publish or cease publishing research, or publish inaccurate or unfavorable research, about our business, the price of our Class A common stock and trading volume could decline.
The trading market for our Class A common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If industry analysts do not publish or cease
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publishing research on our company, the trading price for our Class A common stock would be negatively affected. If one or more of the analysts who cover us downgrade our Class A common stock or publish inaccurate or unfavorable research about our business, our Class A common stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us on a regular basis, demand for our Class A common stock could decrease, which might cause our Class A common stock price and trading volume to decline.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the operation of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current board and limit the market price of our Class A common stock.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that:
• provide that our board is classified into three classes of directors with staggered three-year terms;
• permit our board to establish the number of directors and fill any vacancies and newly-created directorships;
• require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws;
• authorize the issuance of “blank check” preferred stock that our board could use to implement a stockholder rights plan;
• provide that only the Chairperson of our board, our Chief Executive Officer or a majority of our board are authorized to call a special meeting of stockholders;
• provide for a dual class common stock structure in which holders of our Class B common stock have the ability to effectively control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets;
• prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
• provide that our board is expressly authorized to make, alter or repeal our bylaws; and
• advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Moreover, Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations and other transactions between us and holders of 15% or more of our common stock.
Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for:
• any derivative action or proceeding brought on our behalf;
• any action asserting a breach of fiduciary duty;
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• any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws; or
• any action asserting a claim against us that is governed by the internal affairs doctrine.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers or other employees, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.
Risks Related to our Outstanding Convertible Notes

Servicing our debt may require a significant amount of cash. We may not have sufficient cash flow from our business to pay our indebtedness.
We have issued convertible notes due in 2026 (the “2026 Notes”). Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the 2026 Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive. Our ability to refinance or raise any future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. In addition, any of our future debt agreements may contain restrictive covenants that may prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of our debt.
We may not have the ability to raise the funds necessary for cash settlement upon conversion of the 2026 Notes or to repurchase them for cash upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion of the 2026 Notes or to repurchase the 2026 Notes.
Holders of the 2026 Notes have the right to require us to repurchase their 2026 Notes upon the occurrence of a fundamental change (as defined in the indentures governing their respective Notes) at a repurchase price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid interest, if any. Upon conversion of the 2026 Notes, unless we elect to deliver solely shares of our Class A common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2026 Notes being converted. We may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2026 Notes surrendered or those being converted. In addition, our ability to repurchase the 2026 Notes or to pay cash upon conversions of the 2026 Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase 2026 Notes at a time when the repurchase is required by the indenture governing such notes or to pay any cash payable on future conversions of the 2026 Notes as required by such indenture would constitute a default under such indenture. A default under the indenture governing the 2026 Notes or the fundamental change itself could also lead to a default under agreements governing our future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2026 Notes or make cash payments upon conversions.
In addition, our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences. For example, it could:
• make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and adverse changes in government regulation;
• limit our flexibility in planning for, or reacting to, changes in our business and our industry;
• place us at a disadvantage compared to our competitors who have less debt;
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• limit our ability to borrow additional amounts to fund acquisitions, for working capital and for other general corporate purposes; and
• make an acquisition of our company less attractive or more difficult.
Any of these factors could harm our business, results of operations and financial condition. In addition, if we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase.
The conversion features of the 2026 Notes, if triggered, may adversely affect our financial condition and results of operations.
In the event the conditional conversion features of the 2026 Notes are triggered, holders of the 2026 Notes will be entitled to convert them at any time during specified periods at their option. If one or more holders elect to convert their 2026 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. From the date of issuance through January 31, 2026, the conditions allowing holders of the 2026 Notes to convert were not met. As of January 31, 2026, the 2026 Notes are classified as a current liability due to their upcoming maturity on June 15, 2026.
Transactions relating to the 2026 Notes may affect the value of our Class A common stock.
The conversion of some or all of the 2026 Notes would dilute the ownership interests of existing stockholders to the extent we satisfy our conversion obligation by delivering shares of our Class A common stock upon any conversion of such notes. Our 2026 Notes may become in the future convertible at the option of their holders under certain circumstances. If holders of the 2026 Notes elect to convert their notes, we may settle our conversion obligation by delivering to them a significant number of shares of our Class A common stock, which would cause dilution to our existing stockholders. We have in the past and may in the future, engage in exchanges, repurchase or induce conversions of the 2026 Notes. Holders of the 2026 Notes that participate in any of these exchanges, repurchases or induced conversions may enter into or unwind various derivatives with respect to our Class A common stock or sell shares of our Class A common stock in the open market to hedge their exposure in connection with these transactions. These activities could decrease (or reduce the size of any increase in) the market price of our Class A common stock or the 2026 Notes, or dilute the ownership interests of our stockholders. In addition, the market price of our Class A common stock is likely to be affected by short sales of our Class A common stock or the entry into or unwind of economically equivalent derivative transactions with respect to our Class A common stock by investors that do not participate in the exchange transactions and by the hedging activity of the counterparties to our capped call transactions (“Capped Calls”) or their respective affiliates.
In addition, in connection with the issuance of the 2026 Notes, we entered into Capped Calls with certain financial institutions (the “Option Counterparties”). The Capped Calls are generally expected to reduce potential dilution to our Class A common stock upon any conversion or settlement of the 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2026 Notes, as the case may be, with such reduction and/or offset subject to a cap. If we unwind the Capped Calls in connection with 2026 Notes repurchases or otherwise, we would lose the anti-dilutive impact of any unwound Capped Calls.
From time to time, the Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our Class A common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions prior to the maturity of the 2026 Notes. This activity could cause a decrease in the market price of our Class A common stock.
General Risk Factors
We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business.
Our success depends largely upon the continued services of our executive officers and other key employees. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives. We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period and they could terminate their employment with us
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at any time. The loss of one or more of our executive officers or key employees, and any failure to have in place and execute an effective succession plan for key executives, could harm our business. In addition, to execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel in the San Francisco Bay Area, where our headquarters is located, and in other locations where we maintain offices, is intense, especially for engineers experienced in designing and developing software and SaaS applications and experienced sales professionals. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications, and may not be able to fill positions in the desired regions or at all. Our efforts to attract new personnel may be compounded by intensified restriction on travel, changes to immigration policy or the availability of work visas. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be harmed.
Catastrophic events may disrupt our business.
Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy, and thus could harm our business. We have a large employee presence in San Francisco, California, and the west coast of the United States contains active earthquake and wildfire zones which have the potential to disrupt our business. Communications systems and infrastructure could be damaged or interrupted at any time due to a major catastrophic event such as an earthquake, hurricane, fire or flood; power loss or a telecommunications failure; an unauthorized or malicious act such as a cyber-attack, war or terrorist attack; a health epidemic; or similar events or disruptions. Such events could result in reputational harm, delays in our application development, breaches of data security and loss of critical data. While we have backup systems for certain aspects of our operations, disaster recovery planning by its nature cannot be sufficient for all eventualities. In addition, the insurance we maintain may be insufficient to compensate for losses from a major interruption.

Item 1B. Unresolved Staff Comments
None.

Item 1C. Cybersecurity
Cybersecurity risk management is an important part of our overall risk management efforts. We have an established cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our systems, internal networks and information. This program implements policies, processes and controls to prevent, detect and respond to cybersecurity threats and mitigate business impacts. Our board has delegated to the cybersecurity risk committee of the board (the “cybersecurity risk committee”) oversight responsibility of the cybersecurity risk management program, which includes a cybersecurity incident response plan.
We devote significant resources, including human and financial capital, to create and maintain security measures, configuration policies and response plans to address cybersecurity risks. However, as a well-known provider of identity and security solutions, we are a particularly attractive target to threat actors. For additional information related to these risks, see “ Risk Factors ” included under Part I, Item 1A of this Annual Report on Form 10-K. In the past we have experienced cybersecurity incidents, and cannot anticipate when or the extent to which cybersecurity incidents will materially affect us or our customers’ use of our platforms in the future. To date we have not identified any prior cybersecurity incidents that have materially adversely affected or are reasonably likely to materially adversely affect us, including our operations, business strategy, results of operations, or financial condition. Despite our efforts, we cannot eliminate all risks related to cybersecurity threats or incidents. There can be no assurance that our cybersecurity risk management program and processes will be fully implemented. Even if implemented, they may not be complied with and may not effectively protect our systems and information or those of our customers.
Cybersecurity Risk Management and Strategy
Cybersecurity is a top priority for us. Our cybersecurity strategy is to develop a consistent framework of security controls that can apply to all business functions. To execute on this strategy, we integrate cybersecurity risk management into our broader enterprise risk management program. We also take a cross-functional approach to cybersecurity risk management by engaging teams across the business, including security, technical operations, engineering, IT, customer support, legal and communications, to implement shared processes for identifying, assessing and managing key cybersecurity risks.
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We design and assess our cybersecurity risk management program against the National Institute of Standards and Technology Cybersecurity Framework (the “NIST Framework”). This does not imply that our cybersecurity risk management program satisfies any particular specifications or requirements, only that we use the NIST Framework to guide our efforts to improve our security posture. Certain of our Okta Platform product offerings have attained multiple security certifications, the details of which are described in “Our Technology” under Part I, Item I of this Annual Report on Form 10-K.
Our cybersecurity risk management program consists of technical and organizational safeguards aimed at protecting the confidentiality, integrity and availability of our systems and platforms. From time to time, management will engage external consultants and advisors to perform independent assessments and testing of the cybersecurity risk management program, or otherwise assist with aspects of the program and security controls.
Key features of our cybersecurity risk management program include:
• Designated security governance, risk and compliance team . Our security governance, risk and compliance team is responsible for maintaining our cybersecurity risk management framework and risk assessments, and for tracking risk mitigation efforts. This team, together with our enterprise risk management team, monitors and regularly reports on our cybersecurity risk profile. Our internal audit team partners with these teams to provide input on the overall effectiveness of our security risk governance and management processes.
• Risk assessments . We periodically perform security risk assessments to stay informed about relevant security risks. Functional teams across the business assess risks associated with their specific activities, following an established framework with supervision by the security governance, risk and compliance team. We have a management-level risk oversight committee, led by internal audit and security risk management personnel, that meets quarterly with other internal business leaders to review the results of these security risk assessments and evaluate the adequacy of any proposed mitigation plans.
• Incident response planning . Our cybersecurity incident response plan outlines the processes and procedures for responding to, remediating and resolving a cybersecurity incident, and defines the roles and responsibilities of company personnel and third-party service providers who may assist in responding to such incidents. In fiscal 2026, we conducted tabletop exercises involving multiple operational teams to educate personnel on their roles in response scenarios.
• Security awareness training . We require our employees and contractors to complete general cybersecurity awareness training at least annually. These training sessions advise on employee responsibilities and relevant policies designed to protect us, our information systems and data, as well as our customers’ systems and data. From time to time we may also require supplemental cybersecurity training for certain members of our workforce depending on their job responsibilities.
• Third-party risk management . Using a risk-based approach, we require third-party vendors, suppliers and service providers to undergo a cybersecurity risk assessment prior to contracting with us. Certain third parties are monitored and reassessed on an ongoing basis, depending on their level of risk or in the event of changes to their products or services.
Cybersecurity Governance
Our board oversees our enterprise risk management program, of which cybersecurity is an important component. To facilitate the board’s supervision of cybersecurity matters, the board formed the cybersecurity risk committee. Among other responsibilities, the cybersecurity risk committee provides oversight over the effectiveness of our cybersecurity program.
The cybersecurity risk committee receives regular updates on our cybersecurity program from our chief security officer (the “CSO”). In addition, management updates the cybersecurity risk committee, as appropriate, regarding cybersecurity incidents. Our cybersecurity risk committee reports to the board on its activities. In addition to receiving reports from the cybersecurity risk committee, our board periodically receives cyber risk management program briefings directly from the CSO . Additionally, the audit committee of the board (the “audit committee”) receives regular cybersecurity updates as part of the audit committee’s oversight over our enterprise risk management program.

Our management team, including the CSO , is responsible for assessing and managing our risks from cybersecurity threats. The CSO partners with the security, technical operations, legal, internal audit, engineering and product development teams to supervise both our cybersecurity program and our retained third-party cybersecurity consultants, and to stay informed on security at Okta and the overall security landscape. Our current CSO brings over 20 years of cybersecurity and risk management experience to his work at Okta, having held numerous security leadership positions in highly-regulated industries such as finance. His experience delivering cybersecurity at scale extends internationally and includes security and risk management roles at companies in Australia, the United Kingdom and the United States. Our security team includes individuals with experience across a broad range of cybersecurity areas, including product security; cloud security; infrastructure security; threat intelligence; insider threat management; security monitoring and incident response; identity and access management; vulnerability management; and governance, risk and compliance.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security and technical personnel; threat intelligence and other information obtained from governmental, public or private sources, including third-party consultants engaged by us; and alerts and reports produced by security tools deployed in our technical environment.

Item 2. Properties
Our corporate headquarters is located in San Francisco, California, where we currently lease approximately 285,996 square feet under a lease, as amended, that expires in October 2028. We are entitled to two five-year options to extend this lease, subject to certain requirements. We sublease approximately 99,807 square feet of space under this lease to third parties.
We also lease space in various locations in the Americas, Europe and Asia-Pacific.
We believe that our facilities are suitable to meet our current needs. We intend to add new facilities, as necessary, as we add employees and enter new geographic markets, and we believe that suitable additional or alternative space will be available as needed to accommodate any such growth.

Item 3. Legal Proceedings
The information set forth under “Legal Matters” in Note 10 to our consolidated financial statements “Commitments and Contingencies” is incorporated by reference herein.

Item 4. Mine Safety Disclosures
Not Applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information and Holders
Our Class A common stock has been listed on the Nasdaq Global Select Market under the symbol “OKTA” since April 7, 2017. Prior to that date, there was no public trading market for our Class A common stock. Our Class B common stock is not listed or traded on any stock exchange.
As of February 27, 2026, we had 46 holders of record of our Class A common stock and 15 holders of record of our Class B common stock. The actual number of Class A beneficial stockholders is substantially greater than the number of holders of record because a large portion of our Class A common stock is held in street name by brokers and other nominees.
Dividend Policy
We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any further determination to pay dividends on our capital stock will be at the discretion of our board of directors (our “board”), subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board considers relevant.
Issuer Purchases of Equity Securities
Share repurchases of our Class A common stock for the three months ended January 31, 2026 were as follows:

Period
Total Number of Shares Purchased
(in thousands)
Average Price Paid Per Share (1)
Total Number of Shares Purchased as Part of Publicly Announced Program
(in thousands)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (2)
(in millions)

November 1 - 30
— $ 0.00  — $ — 
December 1 - 31
— 0.00 — — 
January 1 - 31
875 90.64 875 921 
Fourth Quarter 2026
875 $ 90.64  875 $ 921 

(1) Includes related commissions.
(2) On January 5, 2026, our board authorized a program to repurchase up to $1 billion of our common stock. See Note 1 1 to our consolidated financial statements “Stockholders’ Equity” for additional information.
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Stock Performance Graph
This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission (“SEC”) for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Okta, Inc. under the Securities Act of 1933, as amended (“Securities Act”) or the Exchange Act.
The following graph shows a five-year comparison of cumulative total return (equal to dividends plus stock appreciation) for our Class A common stock, the Standard & Poor’s 500 Index (“S&P 500 Index”) and Standard & Poor’s Information Technology Index (“S&P 500 Information Technology Index”). All values assume a $100 initial investment, and data for the S&P 500 Index and S&P 500 Information Technology Index assume reinvestment of dividends. The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our Class A common stock.

Company/Index 1/31/2021 1/31/2022 1/31/2023 1/31/2024 1/31/2025 1/31/2026
Okta $ 100  $ 76  $ 28  $ 32  $ 36  $ 33 
S&P 500 Index 100  123  113  137  173  201 
S&P 500 Information Technology Index 100  126  107  160  204  256 

Securities Authorized for Issuance under Equity Compensation Plans
The information required by this item with respect to our equity compensation plans is incorporated by reference to our 2026 Annual Report to Stockholders, which includes our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended January 31, 2026.
Unregistered Sales of Equity Securities
None.

Item 6. [Reserved]
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OKTA, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Amounts reported in millions are rounded based on the amounts in thousands. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. In addition, percentages presented may not add to their respective totals or recalculate due to rounding. In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” under Part I, Item 1A of this Annual Report on Form 10-K. Our fiscal year ends January 31. References to fiscal 2026, for example, refer to the fiscal year ended January 31, 2026.
Overview
We are the leading independent identity partner. Our Okta Platform and Auth0 Platform enable our customers to securely connect the right people to the right technologies and services at the right time. Every day, thousands of organizations and millions of people use our platforms to securely access a wide range of cloud, mobile, web and Software-as-a-Service (“SaaS”) applications, on-premises servers, application programming interfaces (“APIs”), IT infrastructure providers, and services from a multitude of devices. For IT and security leaders, the Okta Platform governs the seamless and secure access by human users and non-human identities (“NHIs”) to the applications they need to do their most important work. We are expanding these capabilities to include AI agents with the introduction of new product offerings currently in development and early access. Developers leverage our Okta Platform and Auth0 Platform to securely and efficiently embed identity for both human users and, increasingly, AI agents into the software they build, allowing them to innovate and focus on their core mission.
Our customers consist of leading global organizations ranging from the largest enterprises to small- and medium-sized businesses, universities, nonprofits and government agencies. We partner with a broad range of application, IT infrastructure and security vendors through our Okta Integration Network. As of January 31, 2026, we had over 7,000 integrations with these cloud, mobile and web applications, and IT infrastructure and security vendors.
We employ a SaaS business model and generate revenue primarily by selling multi-year subscriptions to our cloud-based offerings. We focus on attracting and retaining our customers by building on and increasing the value we provide to them over time. This commitment to our customers’ success helps drive increased customer investment in the number of users of our Okta Platform and Auth0 Platform and adoption of our additional product offerings. We sell our product offerings directly through our field and inside sales teams, as well as indirectly through our network of channel partners, including cloud marketplaces, resellers, system integrators and other distribution partners. Our subscription fees include the use of our service and our technical support and management of our platforms. We base subscription fees primarily on the solutions used and the number of users on our platforms. We typically invoice customers in advance in annual installments for subscriptions to our platforms.
Our revenue is relatively predictable as a result of our subscription-based business model, which constituted approximately 98% of total revenue for fiscal 2026. Future growth may be impacted by longer sales cycles, which we have experienced, which in turn, could result in delays in deals closing, creating near-term headwinds for cash flow, remaining performance obligations (“RPO”) and billings growth as well as potential future impacts on revenue growth and other key metrics on a trailing basis.
Impact of Cybersecurity Incidents
In the past we have experienced cybersecurity incidents, such as the January 2022 incident involving one of our third-party service providers and the October 2023 incident where a threat actor gained unauthorized access to and stole information from our third-party customer support system, that harmed our reputation and customer relations and adversely impacted our financial results. While we expect the impact of these security incidents to adversely affect our future financial performance, we cannot predict the extent of such impact with certainty. Due to
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the nature of our business, the announcement of any security incidents, even if not significant, could have these impacts.
Impact of Current Economic Conditions
Worldwide economic and political uncertainties and negative trends, including financial and credit market fluctuations, tariffs and increasing trade protectionism, changes in government spending levels, uncertainty in the banking sector, changing interest rates, inflation and other impacts from the macroeconomic environment have, and could continue to, adversely affect our business operations or financial results. As we continue to monitor the direct and indirect impacts of these circumstances, the broader implications of these macroeconomic and political events on our business, results of operations and overall financial position remain uncertain. See the section titled “ Risk Factors ” included under Part I, Item 1A above for further discussion of the possible impact of these factors and other risks on our business.
Financial Information and Segments
We operate our business as one reportable segment. For fiscal 2026, 2025 and 2024, our revenue was $2,919 million, $2,610 million and $2,263 million, respectively, representing a growth rate of 12% and 15% in fiscal 2026 and 2025, respectively. For fiscal 2026 and 2025, we generated net income of $235 million and $28 million, respectively, and for fiscal 2024, we generated a net loss of $355 million. Our accumulated deficit as of January 31, 2026 was $2,567 million.
Key Business Metrics 
We review a number of operating and financial metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

  As of January 31,
2026 2025 2024
  (dollars in millions)

Customers with annual contract value (“ACV”) above $100,000
5,100  4,800  4,485 
Dollar-based net retention rate for the trailing 12 months ended 106  % 107  % 111  %
Current remaining performance obligations $ 2,513  $ 2,248  $ 1,952 
Remaining performance obligations $ 4,827  $ 4,215  $ 3,385 

Number of Customers with Annual Contract Value Above $100,000
The number of customers who have greater than $100,000 in ACV with us was 5,100, 4,800 and 4,485 as of January 31, 2026, 2025 and 2024, respectively. We expect this trend to continue as larger enterprises recognize the value of our platforms and replace their legacy identity access management infrastructure. We define a customer as a separate and distinct buying entity, such as a company, an educational or government institution, or a distinct business unit of a large company that has an active contract with us or one of our partners to access our platforms. For purposes of determining our customer count, we do not include customers that use our platforms under self-service arrangements only.
Dollar-Based Net Retention Rate
Part of our ability to generate revenue is dependent upon our ability to maintain our relationships with our customers and to increase their utilization of our platforms. We believe we can achieve these goals by focusing on delivering value and functionality that enables us to both retain our existing customers and expand the number of users and solutions used within an existing customer. One way that we assess our performance in this area by measuring our Dollar-Based Net Retention Rate. Our Dollar-Based Net Retention Rate measures our ability to increase revenue across our existing customer base through expansion of users and solutions associated with a customer as offset by churn and contraction in the number of users and/or solutions associated with a customer.
Our Dollar-Based Net Retention Rate is based upon our ACV which is calculated based on the terms of that customer’s contract and represents the total contracted annual subscription amount as of that period end. We
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calculate our Dollar-Based Net Retention Rate as of a period end by starting with the ACV from all customers as of twelve months prior to such period end (“Prior Period ACV”). We then calculate the ACV from these same customers as of the current period end (“Current Period ACV”). Current Period ACV includes any upsells and is net of contraction or churn over the trailing twelve months but excludes ACV from new customers in the current period. We then divide the Current Period ACV by the Prior Period ACV to arrive at our Dollar-Based Net Retention Rate. Our Dollar-Based Net Retention Rate is inclusive of ACV from self-service customers.
Our Dollar-Based Net Retention Rate is primarily attributable to our healthy gross retention, an expansion of users and upselling additional solutions within our existing customers. Larger enterprises often implement a limited initial deployment of our platforms before increasing their deployment on a broader scale. The decrease in our Dollar-Based Net Retention Rate as of January 31, 2026, compared to January 31, 2025, was primarily a result of the macroeconomic environment, with overall ACV from existing customers increasing at a slower rate in the current period.
Remaining Performance Obligations (“RPO”)
RPO represent all future, non-cancelable, contracted revenue under our subscription contracts with customers that has not yet been recognized, inclusive of deferred revenue that has been invoiced and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. Current RPO represents the portion of RPO expected to be recognized during the next 12 months. RPO fluctuates due to a number of factors, including the timing, duration and dollar amount of customer contracts and fluctuations in foreign currency exchange rates.

Components of Results of Operations
Revenue
Subscription Revenue.  Subscription revenue primarily consists of fees for access to and usage of our cloud-based platforms and related support. Subscription revenue is driven primarily by the number of customers, the number of users per customer and the solutions used. We typically invoice customers in advance in annual installments for subscriptions to our platforms.
Professional Services and Other . Professional services revenue includes fees from assisting customers in implementing and optimizing the use of our solutions. These services include application configuration, system integration and training services.
We generally invoice customers as the work is performed for time-and-materials arrangements, and up front for fixed fee arrangements. Professional services revenue is recognized as the services are performed.
Overhead Allocation and Employee Compensation Costs
We allocate shared costs, such as facilities costs (including rent, utilities and depreciation on assets shared by all departments), certain information technology costs, security costs and recruiting costs to all departments based on headcount. As such, allocated shared costs are reflected in each of the cost of revenue and operating expense categories. Employee compensation costs reflected in each of the cost of revenue and operating expense categories include salaries, bonuses, compensation related taxes, benefits and stock-based compensation. Additionally included in the sales and marketing expense category are sales commissions and related taxes.
Cost of Revenue and Gross Margin
Cost of Subscription . Cost of subscription primarily consists of expenses related to hosting our services and providing support. These expenses include employee-related costs associated with our cloud-based infrastructure, our product security organization and our customer support organization, third-party hosting fees, software and maintenance costs, outside services associated with the delivery of our subscription services, amortization expense associated with capitalized internal-use software and acquired developed technology and allocated overhead.
We intend to continue to invest additional resources in our platform infrastructure, our platforms’ support organizations and security posture. We will continue to invest in technology innovation and we anticipate that costs qualifying for capitalization of internal-use software costs and related amortization may fluctuate over time. We
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
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expect our investment in technology to expand the capability of our platforms, enabling us to improve our gross margin over time. The level and timing of investment in these areas could affect our cost of subscription revenue in the future.
Cost of Professional Services and Other . Cost of professional services consists primarily of employee-related costs for our professional services delivery team, travel-related costs, allocated overhead and costs of outside services associated with supplementing our professional services delivery team. The cost of providing professional services has historically been higher than the associated revenue we generate.
Gross Margin . Gross margin is gross profit expressed as a percentage of total revenue. Our gross margin may fluctuate from period to period as a result of the timing and amount of investments to expand our hosting capacity and our continued efforts to build platform support and professional services teams.
Operating Expenses
Research and Development. Research and development expenses consist primarily of employee compensation costs and allocated overhead. We believe that continued investment in our platforms is important for our growth.
Sales and Marketing.  Sales and marketing expenses consist primarily of employee compensation costs, costs of general marketing and promotional activities, travel-related expenses, amortization expense associated with acquired customer relationships and trade names and allocated overhead. Commissions earned by our sales force that are considered incremental and recoverable costs of obtaining a contract with a customer are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be generally five years.
General and Administrative. General and administrative expenses consist primarily of employee compensation costs for finance, accounting, legal, information technology and human resources personnel. In addition, general and administrative expenses include acquisition and integration-related costs, non-personnel costs, such as legal, accounting and other professional fees, charitable contributions, allocated overhead and all other supporting corporate expenses.
Restructuring and Other Charges. Restructuring and other charges consist primarily of personnel costs, such as notice period, employee severance payments and termination benefits. In addition, restructuring and other charges include certain lease impairment charges.
Interest and Other, Net
Interest and other, net consists of interest expense, which primarily includes amortization of debt issuance costs and contractual interest expense for our convertible senior notes, interest income from our investment holdings, gains on early extinguishment of debt and gains and losses from our strategic investments.
Provision for Income Taxes
Our provision for income taxes consists of federal and state income taxes in the United States and income taxes in certain foreign jurisdictions where we operate.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
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Results of Operations
The following table sets forth our results of operations for the periods presented:

  Year Ended January 31,
  2026 2025 2024
  (dollars in millions)
Revenue
Subscription $ 2,855  $ 2,556  $ 2,205 
Professional services and other 64  54  58 
Total revenue 2,919  2,610  2,263 
Cost of revenue
Subscription (1)
578  549  502 
Professional services and other (1)
83  69  79 
Total cost of revenue 661  618  581 
Gross profit 2,258  1,992  1,682 
Operating expenses
Research and development (1)
639  642  656 
Sales and marketing (1)
1,018  965  1,036 
General and administrative (1)
448  448  450 
Restructuring and other charges 4  11  56 
Total operating expenses 2,109  2,066  2,198 
Operating income (loss)
149  (74) (516)
Interest expense (4) (5) (8)
Interest income and other, net 110  106  81 
Gain on early extinguishment of debt
—  19  106 
Interest and other, net 106  120  179 
Income (loss) before provision for income taxes
255  46  (337)
Provision for income taxes
20  18  18 
Net income (loss)
$ 235  $ 28  $ (355)

(1) Includes stock-based compensation expense as follows:

  Year Ended January 31,
  2026 2025 2024
(dollars in millions)
Cost of subscription revenue $ 74  $ 82  $ 75 
Cost of professional services and other revenue 10  12  15 
Research and development 196  216  277 
Sales and marketing 132  131  156 
General and administrative 132  124  161 
Total stock-based compensation expense $ 544  $ 565  $ 684 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
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The following table sets forth our results of operations for the periods presented as a percentage of our total revenue:
  Year Ended January 31,
  2026 2025 2024
Revenue  
Subscription 98  % 98  % 97  %
Professional services and other 2  2  3 
Total revenue 100  100  100 
Cost of revenue
Subscription 20  21  22 
Professional services and other 3  3  4 
Total cost of revenue 23  24  26 
Gross profit 77  76  74 
Operating expenses
Research and development 22  25  29 
Sales and marketing 35  37  46 
General and administrative 15  17  20 
Restructuring and other charges —  —  2 
Total operating expenses 72  79  97 
Operating income (loss)
5  (3) (23)
Interest expense —  —  — 
Interest income and other, net 4  4  4 
Gain on early extinguishment of debt
—  1  4 
Interest and other, net 4  5  8 
Income (loss) before provision for income taxes 9  2  (15)
Provision for income taxes 1  1  1 
Net income (loss) 8  % 1  % (16) %

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

A discussion regarding our financial condition and results of operations for fiscal 2026 compared to fiscal 2025 is presented below. A discussion regarding our financial condition and results of operations for fiscal 2025 compared to fiscal 2024 can be found under Item 7 in our Annual Report on Form 10-K for fiscal 2025, filed with the SEC on March 5, 2025, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.okta.com.
Comparison of the Years Ended January 31, 2026 and 2025
Revenue
  Year Ended January 31,
  2026 2025 $ Change % Change

  (dollars in millions)
Revenue:      
Subscription $ 2,855  $ 2,556  $ 299  12  %
Professional services and other 64  54  10  18 
Total revenue $ 2,919  $ 2,610  $ 309  12  %
Percentage of revenue:      
Subscription 98  % 98  %    
Professional services and other 2  2     
Total 100  % 100  %    

For fiscal 2026, the increase in subscription revenue was primarily due to an increase in users and sales of additional solutions to existing customers and the addition of new customers. The increase in revenue was attributable to increased revenue from existing customers as reflected in our Dollar-Based Net Retention Rate of 106% as of January 31, 2026 and an increase in the number of customers as detailed in our Key Business Metrics.
For fiscal 2026, the increase in professional services and other revenue was due to higher bookings associated with professional services. Beginning in fiscal 2027, we expect professional services and other revenue to decline as we shift more engagements to our partner ecosystem.
Cost of Revenue, Gross Profit and Gross Margin
  Year Ended January 31,
  2026 2025 $ Change % Change

  (dollars in millions)
Cost of revenue:      
Subscription $ 578  $ 549  $ 29  5  %
Professional services and other 83  69  14  19 
Total cost of revenue $ 661  $ 618  $ 43  7  %
Gross profit $ 2,258  $ 1,992  $ 266  13  %
Gross margin:      
Subscription 80  % 79  %    
Professional services and other (29) (29)    
Total gross margin 77  % 76  %    

For fiscal 2026, cost of subscription revenue increased primarily due to an increase of $20 million in labor costs, third-party hosting costs of $15 million, and software costs of $9 million. This was offset by decreases in consulting costs of $10 million and stock-based compensation of $8 million.
Our gross margin for subscription revenue improved from 79% to 80% during fiscal 2026. The increase was primarily driven by improved spend efficiency resulting in lower relative cost of subscription revenue.
For fiscal 2026, cost of professional services and other revenue increased due to an increase in labor costs of $15 million offset by a decrease in stock-based compensation of $2 million.
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Our gross margin for professional services and other revenue remained relatively flat.
Operating Expenses
Research and Development Expenses
  Year Ended January 31,
  2026 2025 $ Change % Change

  (dollars in millions)
Research and development $ 639  $ 642  $ (3) (1) %
Percentage of revenue 22  % 25  %    

For fiscal 2026, research and development expenses decreased due to a reduction in stock-based compensation expense of $20 million, offset by increases in labor costs of $15 million and hosting fees of $2 million. The decrease in research and development as a percentage of total revenue was primarily driven by improved spend efficiency.
Sales and Marketing Expenses
  Year Ended January 31,
  2026 2025 $ Change % Change

  (dollars in millions)
Sales and marketing $ 1,018  $ 965  $ 53  5  %
Percentage of revenue 35  % 37  %    

For fiscal 2026, sales and marketing expenses increased primarily due to an increase in labor costs of $23 million, marketing costs of $12 million, travel and entertainment of $8 million, software costs of $2 million and stock-based compensation expense of $1 million. The decrease in sales and marketing as a percentage of total revenue was primarily driven by improved spend efficiency.
We expect our sales and marketing expenses will continue to be our largest operating expense category for the foreseeable future. We expect sales and marketing expenses as a percentage of total revenue to decrease as our total revenue grows.
General and Administrative Expenses
  Year Ended January 31,
  2026 2025 $ Change % Change

  (dollars in millions)
General and administrative $ 448  $ 448  $ —  —  %
Percentage of revenue 15  % 17  %    

For fiscal 2026, general and administrative expenses remained flat. Increases in labor costs of $13 million and stock-based compensation expense of $8 million were partially offset by decreases in legal and professional fees of $10 million and consulting costs of $8 million. The decrease in general and administrative as a percentage of total revenue was primarily driven by improved spend efficiency. We expect general and administrative expenses as a percentage of total revenue to decrease as our total revenue grows.
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Restructuring and Other Charges

  Year Ended January 31,
  2026 2025 $ Change % Change

  (dollars in millions)
Restructuring and other charges $ 4  $ 11  $ (7) (65) %
Percentage of revenue —  % —  %    

Restructuring and other charges decreased in fiscal 2026 due to a reduction in the scale of restructuring initiatives compared to fiscal 2025.
Interest and Other, Net
  Year Ended January 31,
  2026 2025 $ Change % Change

  (dollars in millions)
Interest expense $ (4) $ (5) $ 1  (34) %
Interest income and other, net 110  106  4  4 
Gain on early extinguishment of debt
—  19  (19) (100)
Interest and other, net $ 106  $ 120  $ (14) (11) %

For fiscal 2026, interest and other, net decreased primarily due to a decrease in gains on early extinguishment of debt related to repurchases of the convertible senior notes offset by an increase in interest income from our short-term investments. We expect interest income to decrease in fiscal 2027 as we deploy investable cash to fund our Share Repurchase Program, settle our 2026 Convertible Senior Notes obligation, and due to changes in the interest rate environment.
Provision for Income Taxes

  Year Ended January 31,
  2026 2025 $ Change % Change

  (dollars in millions)
Provision for income taxes
$ 20  $ 18  $ 2  14  %

For fiscal 2026, income tax expense resulted primarily from income in profitable foreign jurisdictions and state and local taxes, offset by the favorable impacts of the “One Big Beautiful Bill Act” (the “Act”) enacted on July 4, 2025.
For fiscal 2025, income tax expense resulted primarily from income in profitable foreign jurisdictions, federal and state taxes resulting from limitations on tax attribute utilization, offset by the impact of tax windfalls from stock-based compensation in the United States.
The Act, among other provisions, maintains the U.S. federal 21% corporate tax rate, makes permanent the immediate expensing of domestic research and development expenditures, allows for 100% bonus depreciation for qualified assets, and modifies the U.S. taxation of profits derived from foreign operations. The provisions of the Act have staggered effective dates beginning in 2025 and continuing through 2027. Our provision for income taxes reported for fiscal 2026 was computed to reflect the effects of the change in the tax law. We expect the immediate expensing of domestic R&D expenditures to be the most significant impact of the Act, resulting in a reduction in federal and state cash tax payments and in our provision for income taxes for future periods.
In addition, certain provisions of the Act, particularly those related to international taxation, are effective beginning in the fiscal period ending January 31, 2027. We are currently evaluating the impact of these provisions on our financial statements and tax positions.
We periodically evaluate the realizability of our deferred tax assets based on all available evidence, both positive and negative. The realization of the net deferred tax assets is dependent on our ability to generate sufficient
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future taxable income during the periods prior to the expiration of tax attributes to fully utilize these assets. Given our current and anticipated future earnings, we may release a significant portion of our valuation allowance in the foreseeable future if there is sufficient positive evidence that outweighs the negative evidence. The release of the valuation allowance would result in the recognition of certain deferred tax assets and a corresponding decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of any potential valuation allowance release remains uncertain and is subject to change on the basis of the level of profitability that we are able to actually achieve. As of January 31, 2026 we continue to maintain a full valuation allowance on our deferred tax assets in the United States.

Liquidity and Capital Resources
As of January 31, 2026, our principal sources of liquidity were cash, cash equivalents and short-term investments totaling $2,553 million, which were held for working capital and general corporate purposes, including potential future acquisition activity. Our cash equivalents and investments consisted primarily of U.S. treasury securities, money market funds, corporate debt securities and certificates of deposit.
Recent macroeconomic events, including changes in interest rates, global inflation and bank failures, have led to further economic uncertainty in the global economy. To mitigate risk, our cash and cash equivalents are distributed across large financial institutions. In addition, we have policy restrictions in place on the types of securities that can be purchased as part of our available-for-sale securities portfolio. These restrictions take credit quality, liquidity and diversification into consideration among other criteria. We continue to monitor the impacts of this situation; however, there can be no assurances that conditions in the banking sector and in global financial markets will not worsen and/or adversely affect us.
In January 2026, our board authorized a stock repurchase program of up to $1 billion of our outstanding shares of Class A common stock (the “Share Repurchase Program”). We have and may repurchase shares of our Class A common stock from time to time through open market purchases, in privately negotiated transactions, or by other means. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18. We may also, from time to time, enter into Rule 10b5-1 trading plans to facilitate repurchases of shares. The timing and the amount of stock repurchases under the Share Repurchase will be based on our evaluation of factors including business and market conditions, corporate and regulatory requirements, and other considerations. The Share Repurchase Program does not obligate us to repurchase any specific number of shares and may be modified, suspended, or terminated at any time. During the year ended January 31, 2026, we repurchased and immediately retired 875,150 shares of our Class A common stock for an aggregate amount, including commissions, of $79 million under the Share Repurchase Program. As of January 31, 2026, approximately $921 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.
We satisfy employee tax withholding obligations due upon the vesting of share-based awards through net share settlement using available cash. This practice reduces our equity dilution rate and impacts liquidity as our cash requirements for these obligations are primarily driven by the market price of our Class A common stock at the time of vesting. In fiscal 2026 and 2025 , cash paid to satisfy these employee tax withholding obligations was $192 million and $148 million , respectively.
In September 2019, we completed our private offering of the 2025 convertible senior notes (“2025 Notes”) due on September 1, 2025 and we used a portion of the proceeds to enter into capped call transactions (“2025 Capped Calls”) with respect to our Class A common stock. The 2025 Notes matured on September 1, 2025, and we settled in full the principal amount then outstanding of $510 million in cash and the associated then outstanding 2025 Capped Calls expired unexercised.
In June 2020, we completed our private offering of the 2026 convertible senior notes (“2026 Notes”) due on June 15, 2026 and received aggregate gross proceeds of $1,150 million. The interest rate on the 2026 Notes is fixed at 0.375% per year and is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. In connection with the 2026 Notes, we used a portion of the proceeds to enter into capped call transactions (“2026 Capped Calls”) with respect to our Class A common stock. As of January 31, 2026, the outstanding principal balance of the 2026 Notes of $350 million is classified as a current liability due to their upcoming maturity on June 15, 2026 and we currently intend to settle the principal amount of the 2026 Notes in cash.
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In the ordinary course of our business, we have and may, at any time and from time to time, seek to extinguish our outstanding 2026 Notes through cash purchases and/or exchanges for equity, in open-market purchases, privately negotiated transactions or otherwise. Such extinguishments, if any, will be conducted on such terms and at such prices as we may determine, and will depend on our evaluation of the prevailing market conditions, trading price of the 2026 Notes, our liquidity requirements, legal and contractual restrictions and other factors. See Note 8 to our consolidated financial statements “Convertible Senior Notes, Net” and the section titled “Transactions relating to the 2026 Notes may affect the value of our Class A common stock” in “ Risk Factors ” included under Part I, Item 1A of this Annual Report on Form 10-K for additional information.
On September 4, 2025, we acquired all of the outstanding equity of Axiom Security Ltd (“Axiom”), a privately held company specializing in privileged access management solutions. The acquisition date cash consideration was $54 million. See Note 16 to our consolidated financial statements “Business Combinations” for additional information.
We believe our existing cash and cash equivalents, our investments and cash provided by sales of our solutions will be sufficient to meet our short-term and long-term projected working capital and capital expenditure needs for the foreseeable future. Our future capital requirements will depend on many factors, including our subscription growth rate, subscription renewal activity, billing frequency, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the expansion of our international operations, the introduction of new and enhanced product offerings, and the continuing market adoption of our platforms. We continue to assess our capital structure and evaluate the merits of deploying available cash. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights; additionally, we have, and may in the future, repurchase shares of our Class A common stock from time to time under our Share Repurchase Program. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies this could reduce our ability to compete successfully and harm our results of operations.
A significant majority of our customers pay in advance for annual subscriptions. Therefore, a substantial source of our cash is from our deferred revenue, which is included on our consolidated balance sheet as a liability. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is recognized as revenue in accordance with our revenue recognition policy. As of January 31, 2026, we had deferred revenue of $1,905 million, of which $1,875 million was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.
Cash Flows
The following table summarizes our cash flows for the periods indicated:

  Year Ended January 31,
  2026 2025 2024
  (dollars in millions)
Net cash provided by operating activities $ 884  $ 750  $ 512 
Net cash provided by (used in) investing activities 271  (314) 441 
Net cash used in financing activities
(720) (359) (883)
Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash 14  (4) 1 
Net increase in cash, cash equivalents and restricted cash
$ 449  $ 73  $ 71 

Operating Activities
Our largest source of operating cash is cash collections from our customers for subscription and professional services. Our primary uses of cash from operating activities are for employee-related expenditures, marketing expenses and third-party hosting costs.
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During fiscal 2026, cash provided by operating activities was $884 million, an increase of $134 million compared to fiscal 2025. The increase was primarily attributable to an increase in cash received from customers and improved spend efficiency.
Investing Activities
During fiscal 2026, cash provided by investing activities was $271 million, compared to cash used in investing activities of $314 million during fiscal 2025. The change was primarily driven by higher proceeds from maturities and redemption of available-for-sale securities and a decrease in purchases of available-for-sale and other securities.
Financing Activities
During fiscal 2026, cash used in financing activities was $720 million, an increase of $361 million compared to fiscal 2025. The increase was primarily attributable to an increase in payments upon maturity and repurchases of convertible senior notes, an increase in taxes paid related to net share settlement of equity awards, and further impacted by common stock repurchases related to the initiation of our share repurchase program in fiscal 2026. The cash outlay for common stock repurchases and taxes paid on net share settlement of equity awards are generally predicated on the closing price of our stock on the respective transaction dates.

Material Cash Requirements
Contractual Obligations
The following table represents our known short-term (i.e., the next twelve months) and long-term (i.e., beyond the next twelve months) obligations as of January 31, 2026:

Short-term Long-term Total
(dollars in millions)
Convertible Senior Notes: (1)

    Principal payments $ 350  $ —  $ 350 
    Interest payments 1  —  1 
Operating leases (2)
36  77  113 
Purchase obligations (3)
306  163  469 
Total contractual obligations $ 693  $ 240  $ 933 

(1) See Note 8 to our consolidated financial statements “Convertible Senior Notes, Net” for additional information.
(2) See Note 9 to our consolidated financial statements “Leases” for additional information.
(3) Purchase obligations primarily relate to data center hosting facilities, and other sales and marketing obligations.

Indemnification Agreements
In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No material demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated balance sheets, consolidated statements of operations and comprehensive income (loss), or consolidated statements of cash flows.

Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. In the preparation of these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs
56

OKTA, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

and expenses, and related disclosures. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting estimates, which we discuss below.
Income Taxes
Income taxes are accounted for using the liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled.
Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character, within the carry-back or carry-forward periods available under the applicable tax law. In assessing the need for a valuation allowance, we consider available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. Our judgment regarding future estimates may change due to many factors, including future market conditions and the ability to successfully execute our business plans and tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our provision for income taxes would increase or decrease in the period in which the assessment is changed.
Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. We recognize the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, based on the technical merits. Significant judgment is required in determining the technical merits of an uncertain tax position, such as taking into account current tax laws, our interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent the final tax outcome of these matters is different than the amounts recorded, such differences may impact the provision for income taxes in the period in which such determination is made.
Business Combinations
When we acquire a business, the purchase price is allocated to the acquired assets, including separately identifiable intangible assets, and assumed liabilities at their respective estimated fair values. Any residual purchase price is recorded as goodwill. The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates can include, but are not limited to:
• future expected cash flows from subscription contracts, professional services contracts, other customer contracts and acquired developed technologies;
• person hours required in recreating certain acquired technologies;
• historical and expected customer attrition rates and anticipated growth in revenue from acquired customers;
• royalty rates applied to acquired developed technology platforms and other intangible assets;
• obsolescence curves and other useful life assumptions, such as the period of time and intended use of acquired intangible assets in our product offerings;
• discount rates;
• uncertain tax positions and tax-related valuation allowances; and
57

OKTA, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

• fair value of assumed equity awards.
These estimates are inherently uncertain and unpredictable, and unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.
If the initial accounting for a business combination is not complete following the acquisition date, we report provisional amounts for the known assets, liabilities, equity interests, or items of consideration for which the accounting is incomplete at the end of the financial reporting period. Provisional accounting is inherently subjective and judgmental. The objective of the measurement period is to provide a reasonable period of time to obtain the information necessary to complete all aspects of business combination accounting with a high level of confidence. During the measurement period, which may be up to one year from the acquisition date, adjustments to the reported provisional amounts may be recorded for which the accounting was incomplete, with the corresponding offset to goodwill. Should the accounting for a business combination be incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our financial statements, disclosing them as provisional, and any material measurement period adjustments are identified as such. Additional assets acquired or liabilities assumed in an acquisition that were not recognized at the acquisition date might be identified during the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, no further adjustments are made.
Loss Contingencies
We evaluate contingent liabilities, including threatened or pending litigation, and make provisions for such liabilities when it is both probable that a loss has been incurred and its amount can be reasonably estimated. Because of uncertainties inherent in litigation, we base our estimate and accrue the liabilities, if any, on the information available at the time of our assessment. Significant judgment is required to determine both the probability and the estimated amount of loss given such legal proceedings are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. Developments in these matters could affect the amount of any liability we may accrue. As additional information becomes available, we may revise our estimates. Any revisions in the estimates of potential liabilities could have a material impact on our operating results and financial position. Further, until the final resolution of any such matter, there may be a loss exposure in excess of the liability recognized and such amount could be significant.
Revenue Recognition
We primarily derive our revenues from subscription fees. A description of our revenue recognition policies is included in Note 2 to our consolidated financial statements “Summary of Significant Accounting Policies.”
Our contracts with customers often contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price of the contract is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. Evaluating customer contracts with multiple performance obligations and complex terms may require significant judgment in identifying the distinct performance obligations.
Recent Accounting Pronouncements
See Note 2 to our consolidated financial statements “Summary of Significant Accounting Policies — Accounting Pronouncements Recently Adopted and Recent Accounting Pronouncements Not Yet Adopted” for more information.
58

Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Foreign Currency Exchange Risk
The functional currencies of our foreign subsidiaries are the respective local currencies. Most of our sales are denominated in U.S. dollars, and therefore our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily in the United States, United Kingdom, Canada, and Australia. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments. During fiscal 2026, 2025 and 2024, a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our consolidated financial statements.
Interest Rate Risk
We had cash, cash equivalents and short-term investments totaling $2,553 million as of January 31, 2026, of which $2,365 million was invested in U.S. treasury securities, money market funds, corporate debt securities and certificates of deposit. Our cash and cash equivalents are held for working capital and general corporate purposes, including potential future acquisition activity. Our short-term investments are made for capital preservation purposes. We do not enter into investments for trading or speculative purposes.
Our cash equivalents and our investment portfolio are subject to market risk due to changes in interest rates. Fixed rate securities may have their market value adversely affected due to a rise in interest rates. Due in part to these factors, our future investment income may fall short of our expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates. However, because we classify our short-term investments as “available-for-sale,” no gains are recognized due to changes in interest rates. As losses due to changes in interest rates are generally not considered to be credit related changes, no losses in such securities are recognized due to changes in interest rates unless we intend to sell, it is more likely than not that we will be required to sell, we sell prior to maturity, or we otherwise determine that all or a portion of the decline in fair value are due to credit related factors.
As of January 31, 2026, a hypothetical 10% relative change in interest rates would not have had a material impact on the value of our cash equivalents or investment portfolio. Fluctuations in the value of our cash equivalents and investment portfolio caused by a change in interest rates (gains or losses on the carrying value) are recorded in other comprehensive income (loss), and are realized only if we sell the underlying securities prior to maturity.
Convertible Senior Notes
In June 2020, we issued the 2026 Notes due June 15, 2026 with a principal amount of $1,150 million. Concurrently with the issuance of the 2026 Notes, we entered into separate capped call transactions. The 2026 Capped Calls were completed to reduce the potential dilution from the conversion of the 2026 Notes. As of January 31, 2026, the outstanding principal balance of the 2026 Notes of $350 million is classified as a current liability due to their upcoming maturity on June 15, 2026.
The 2026 Notes have a fixed annual interest rate of 0.375%; accordingly, we do not have economic interest rate exposure on the 2026 Notes. However, the fair value of the 2026 Notes is exposed to interest rate risk. Generally, the fair market value of the 2026 Notes will increase as interest rates fall and decrease as interest rates rise. In addition, the fair value of the 2026 Notes fluctuates when the market price of our common stock fluctuates. The fair value was determined based on the quoted bid price of the 2026 Notes in an over-the-counter market on the last available trading day of the reporting period. See Note 8 to our consolidated financial statements “Convertible Senior Notes, Net” for additional information. Changes in the interest rate environment upon maturity of this fixed rate debt could have an effect on our future cash flows and earnings, depending on whether the debt is replaced with other fixed rate debt, variable rate debt or equity.
59

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
61

Consolidated Balance Sheets
64

Consolidated Statements of Operations
65

Consolidated Statements of Comprehensive Income (Loss)
66

Consolidated Statements of Stockholders’ Equity
67

Consolidated Statements of Cash Flows
68

Notes to Consolidated Financial Statements
70

60

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Okta, Inc.

Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Okta, Inc. (the Company) as of January 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2026, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 5, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
61

Revenue recognition – Identifying and evaluating terms and conditions in contracts with customers

Description of the Matter
The Company derives the majority of its revenue from subscription fees. As explained in Note 2 to the consolidated financial statements, the Company’s arrangements are generally non-cancelable and non-refundable. In addition, the arrangements do not provide customers with the right to take possession of the software and, as a result, are accounted for as service arrangements. Subscription revenue, which includes support, is recognized on a straight-line basis over the non-cancelable contractual term of the arrangement, generally beginning on the date that the Company’s service is made available to the customer.

Auditing the Company’s accounting for subscription revenue recognition required significant effort in the identification and evaluation of non-standard terms and conditions, including the identification of performance obligations, for significant arrangements that involve negotiation of otherwise standard terms with the customer.

How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s internal controls over the identification and evaluation of non-standard terms and conditions in contracts that impact subscription revenue recognition, including the identification of performance obligations. This included testing relevant controls over the information systems that are used in the initiation, billing and recording of subscription revenue transactions.

Among other procedures, on a sample basis, we tested the completeness and accuracy of management’s identification and evaluation of the non-standard terms and conditions in subscription revenue contracts. Further, we selected a sample of significant contractual arrangements that may have involved negotiation of standard terms to test that management had properly assessed the impact of any non-standard terms on the identified performance obligations and revenue recognition.

/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2013.
San Jose, California
March 5, 2026
62

Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Okta, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Okta, Inc.’s internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Okta, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2026, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2026, and the related notes and our report dated March 5, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
San Jose, California
March 5, 2026
63

OKTA, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in millions, shares in thousands, except per share data)

  As of January 31,
  2026 2025
Assets  
Current assets:  
Cash and cash equivalents $ 858   $ 409  
Short-term investments 1,695   2,114  
Accounts receivable, net
687   621  
Deferred commissions 171   140  
Prepaid expenses and other current assets 233   132  
Total current assets 3,644   3,416  
Property and equipment, net 38   43  
Operating lease right-of-use assets 65   74  
Deferred commissions, noncurrent 332   267  
Intangible assets, net 91   138  
Goodwill 5,487   5,448  
Other assets 53   51  
Total assets $ 9,710   $ 9,437  
Liabilities and stockholders’ equity  
Current liabilities:  
Accounts payable $ 12   $ 13  
Accrued expenses and other current liabilities 104   103  
Accrued compensation 213   207  
Convertible senior notes, net 350   509  
Deferred revenue 1,875   1,691  
Total current liabilities 2,554   2,523  
Convertible senior notes, net, noncurrent —   349  
Operating lease liabilities, noncurrent 72   94  
Deferred revenue, noncurrent 30   27  
Other liabilities, noncurrent 55   39  
Total liabilities 2,711   3,032  
Commitments and contingencies (Note 10)

Stockholders’ equity:  
Preferred stock, par value $ 0.0001 per share; 100,000 shares authorized, no shares issued and outstanding as of January 31, 2026 and 2025.
—   —  
Class A common stock, par value $ 0.0001 per share; 1,000,000 shares authorized; 169,670 and 165,650 shares issued and outstanding as of January 31, 2026 and 2025, respectively.
—   —  
Class B common stock, par value $ 0.0001 per share; 120,000 shares authorized; 7,687 and 7,809 shares issued and outstanding as of January 31, 2026 and 2025, respectively.
—   —  
Additional paid-in capital 9,553   9,219  
Accumulated other comprehensive income (loss)
13   ( 12 )
Accumulated deficit ( 2,567 ) ( 2,802 )
Total stockholders’ equity 6,999   6,405  
Total liabilities and stockholders’ equity $ 9,710   $ 9,437  

See Notes to Consolidated Financial Statements.
64

OKTA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, shares in thousands, except per share data)

  Year Ended January 31,
  2026 2025 2024
Revenue  
Subscription $ 2,855   $ 2,556   $ 2,205  
Professional services and other 64   54   58  
Total revenue 2,919   2,610   2,263  
Cost of revenue
Subscription 578   549   502  
Professional services and other 83   69   79  
Total cost of revenue 661   618   581  
Gross profit 2,258   1,992   1,682  
Operating expenses  
Research and development 639   642   656  
Sales and marketing 1,018   965   1,036  
General and administrative 448   448   450  
Restructuring and other charges 4   11   56  
Total operating expenses 2,109   2,066   2,198  
Operating income (loss)
149   ( 74 ) ( 516 )
Interest expense ( 4 ) ( 5 ) ( 8 )
Interest income and other, net 110   106   81  
Gain on early extinguishment of debt
—   19   106  
Interest and other, net 106   120   179  
Income (loss) before provision for income taxes
255   46   ( 337 )
Provision for income taxes
20   18   18  
Net income (loss)
$ 235   $ 28   $ ( 355 )
 
Net income (loss) per share, basic $ 1.33   $ 0.16   $ ( 2.17 )
Net income (loss) per share, diluted $ 1.31   $ 0.06   $ ( 2.17 )
 
Weighted-average shares used to compute net income (loss) per share, basic 175,882   169,569   163,634  
Weighted-average shares used to compute net income (loss) per share, diluted 179,290   175,086   163,634  

See Notes to Consolidated Financial Statements.

65

OKTA, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)
 
  Year Ended January 31,
  2026 2025 2024
Net income (loss)
$ 235   $ 28   $ ( 355 )
Other comprehensive income (loss):
Net change in unrealized gains or losses on available-for-sale securities —   —   26  
Foreign currency translation adjustments 25   ( 6 ) 1  
Other comprehensive income (loss) 25   ( 6 ) 27  
Comprehensive income (loss)
$ 260   $ 22   $ ( 328 )

See Notes to Consolidated Financial Statements.

66

OKTA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(dollars in millions, shares in thousands)

  Class A Common Stock  
Class B Common Stock  
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Total Stockholders’ Equity

  Shares  
Amount  
Shares  
Amount  

Balances as of January 31, 2023 154,009   $ —   7,300   $ —   $ 7,974   $ ( 33 ) $ ( 2,475 ) $ 5,466  

Issuance of common stock, net
5,850   —  —  —  67   —  —  67  

Conversion of Class B common stock to Class A common stock 9   —  ( 9 ) —  —  —  —  — 

Proceeds from hedges related to convertible senior notes ( 33 ) —  —  —  —  —  —  — 
Stock-based compensation —  —  —  —  690   —  —  690  
Settlement of warrants
—  —  —  —  ( 7 ) —  —  ( 7 )
Other comprehensive income
—  —  —  —  —  27   —  27  
Net loss —  —  —  —  —  —  ( 355 ) ( 355 )
Balances as of January 31, 2024
159,835   $ —   7,291   $ —   $ 8,724   $ ( 6 ) $ ( 2,830 ) $ 5,888  
Issuance of common stock, net
5,710   —  623   —  74   —  —  74  
Taxes withheld related to net share settlement of equity awards
—  —  —  —  ( 149 ) —  —  ( 149 )
Conversion of Class B common stock to Class A common stock 105   —  ( 105 ) —  —  —  —  — 
Stock-based compensation —  —  —  —  570   —  —  570  
Other comprehensive loss
—  —  —  —  —  ( 6 ) —  ( 6 )
Net income
—  —  —  —  —  —  28   28  
Balances as of January 31, 2025
165,650   $ —   7,809   $ —   $ 9,219   $ ( 12 ) $ ( 2,802 ) $ 6,405  
Issuance of common stock, net
4,543   —  230   —  53   —  —  53  
Taxes withheld related to net share settlement of equity awards —  —  —  —  ( 191 ) —  —  ( 191 )
Common stock repurchased
( 875 ) —  —  —  ( 79 ) —  —  ( 79 )
Conversion of Class B common stock to Class A common stock 352   —  ( 352 ) —  —  —  —  — 
Settlement of capped calls related to convertible senior notes —  —  —  —  2   —  —  2  
Stock-based compensation —  —  —  —  549   —  —  549  
Other comprehensive income
—  —  —  —  —  25   —  25  
Net income —  —  —  —  —  —  235   235  
Balances as of January 31, 2026 169,670   $ —   7,687   $ —   $ 9,553   $ 13   $ ( 2,567 ) $ 6,999  

See Notes to Consolidated Financial Statements.
67

OKTA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

  Year Ended January 31,
  2026 2025 2024

Cash flows from operating activities:  
Net income (loss) $ 235   $ 28   $ ( 355 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation 544   565   684  
Depreciation and amortization
96   98   99  

Amortization of deferred commissions 161   130   104  
Deferred income taxes 13   2   6  

Lease impairment charges —   —   28  
Gain on early extinguishment of debt —   ( 19 ) ( 106 )

Other, net 8   ( 1 ) ( 2 )
Changes in operating assets and liabilities:
Accounts receivable ( 70 ) ( 63 ) ( 79 )
Deferred commissions ( 245 ) ( 186 ) ( 158 )
Prepaid expenses and other assets ( 33 ) ( 37 ) ( 32 )
Operating lease right-of-use assets 18   20   23  
Accounts payable ( 2 ) 1   —  
Accrued compensation 1   41   68  
Accrued expenses and other liabilities 1   ( 3 ) 21  
Operating lease liabilities ( 30 ) ( 33 ) ( 39 )
Deferred revenue 187   207   250  
Net cash provided by operating activities 884   750   512  
Cash flows from investing activities:  
Capitalized software ( 12 ) ( 12 ) ( 15 )
Purchases of property and equipment ( 9 ) ( 8 ) ( 8 )

Purchases of securities available-for-sale and other ( 1,505 ) ( 1,812 ) ( 1,709 )
Proceeds from maturities and redemption of securities available-for-sale 1,848   1,571   2,134  
Proceeds from sales of securities available-for-sale and other 5   3   62  
Payments for business acquisitions, net of cash acquired ( 56 ) ( 56 ) ( 22 )
Purchases of intangible assets —   —   ( 1 )
Net cash provided by (used in) investing activities 271   ( 314 ) 441  
Cash flows from financing activities:  

Payments upon maturity and repurchases of convertible senior notes
( 510 ) ( 280 ) ( 937 )
Taxes paid related to net share settlement of equity awards ( 192 ) ( 148 ) —  

Payments for warrants related to convertible senior notes —   —   ( 7 )
Proceeds from settlement of capped calls related to convertible senior notes
2   —   —  
Repurchases of common stock ( 73 ) —   —  
Proceeds from stock option exercises 12   27   15  

Proceeds from shares issued in connection with employee stock purchase plan 41   42   46  

Net cash used in financing activities
( 720 ) ( 359 ) ( 883 )
Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash 14   ( 4 ) 1  
Net increase in cash, cash equivalents and restricted cash
449   73   71  
Cash, cash equivalents and restricted cash at beginning of year 415   342   271  
Cash, cash equivalents and restricted cash at end of year $ 864   $ 415   $ 342  

68

  Year Ended January 31,
  2026 2025 2024

Supplementary cash flow disclosure:    

Non-cash investing and financing activities:

Unsettled common stock repurchases
6   —   —  
Unsettled maturities of securities available-for-sale
69   —   —  
Operating lease right-of-use assets exchanged for lease liabilities 9   9   11  

Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown in the statements of cash flows above:
Cash and cash equivalents $ 858   $ 409   $ 334  
Restricted cash, current included in prepaid expenses and other current assets 1   1   2  
Restricted cash, noncurrent included in other assets 5   5   6  
Total cash, cash equivalents and restricted cash $ 864   $ 415   $ 342  

See Notes to Consolidated Financial Statements.

69

OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Overview and Basis of Presentation
Description of Business
Okta, Inc. (the “Company”) is the leading independent identity partner. The Company’s Okta Platform and Auth0 Platform enable customers to securely connect the right people to the right technologies and services at the right time. For IT and security leaders, the Okta Platform governs the seamless and secure access by human users and non-human identities (“NHIs”) to the applications they need to do their most important work. Developers leverage the Okta Platform and Auth0 Platform to securely and efficiently embed identity for both human users and, increasingly, AI agents into the software they build, allowing them to innovate and focus on their core mission. The Company is headquartered in San Francisco, California.
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation.
The Company’s fiscal year ends on January 31. References to fiscal 2026, for example, refer to the fiscal year ending January 31, 2026.
Certain prior period amounts have been reclassified to conform to the current period presentation.
Segments
The Company conducts business globally and is managed, operated and organized by major functional departments that operate on a consolidated basis. As a result, the Company operates as one reportable segment. The Company employs a SaaS business model and generates revenue primarily by selling multi-year subscriptions to its cloud-based offerings.
The Company’s chief operating decision maker (“CODM”) is the chief executive officer. The CODM utilizes consolidated GAAP and non-GAAP measures of profit and loss to evaluate the Company’s overall performance and inform resource allocation to support strategic priorities and capital allocation needs. The profit and loss measure most consistent with GAAP used by the CODM is consolidated net income.
The CODM is regularly provided with budgeted expense information and consolidated expense data. Accordingly, significant segment expenses are inherently reflected in the consolidated financial statements and related notes.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates are based on historical experience and on other assumptions that management believes are reasonable under the circumstances. Actual results could vary from those estimates. The Company’s most significant estimates include the valuation of deferred income tax assets, uncertain tax positions, assets and liabilities acquired in business combinations, and loss contingencies related to litigation.
Foreign Currency
The functional currencies of the Company’s foreign subsidiaries are the respective local currencies. Translation adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive income (loss) within the consolidated statements of stockholders’ equity. Foreign currency transaction gains and losses are included in interest and other, net in the consolidated statements of operations and were not material in fiscal 2026, 2025 or 2024. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the average exchange rate during the period.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Summary of Significant Accounting Policies
Revenue Recognition
Revenue is derived from subscription fees (which include support fees) and professional services fees. The Company sells subscriptions to its platforms through arrangements that are generally one to five years in length. The arrangements are generally non-cancellable and non-refundable. Furthermore, if a customer reduces the contracted usage or service level, the customer has no right of refund. The subscription arrangements do not provide customers with the right to take possession of the software supporting the platforms and, as a result, are accounted for as service arrangements. This revenue recognition policy is consistent for sales generated directly with customers and sales generated indirectly through channel partners.
Revenue recognition is determined through the following steps:
• Identification of the contract, or contracts, with a customer;
• Identification of the performance obligations in the contract;
• Determination of the transaction price;
• Allocation of the transaction price to the performance obligations in the contract; and
• Recognition of revenue when, or as, the performance obligations are satisfied.
The Company recognizes revenue net of any applicable value added or sales tax.
Subscription Revenue
Subscription revenue, which includes support, is recognized on a straight-line basis over the non-cancellable contractual term of the arrangement, generally beginning on the date that the Company’s service is made available to the customer.
Professional Services Revenue
Professional services principally consist of customer-specific requests for application integrations, user interface enhancements and other customer-specific requests. Revenue for professional services is recognized as services are performed in proportion to their pattern of transfer.
Contracts with Multiple Performance Obligations
Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis.
The Company determines SSP based on observable, if available, prices for those related services when sold separately. When such observable prices are not available, the Company determines SSP based on overarching pricing objectives and strategies, taking into consideration market conditions and other factors, including customer size, volume purchased, market and industry conditions, product-specific factors and historical sales of the deliverables. Pricing objectives, market conditions or other factors may change in the future resulting in changes to standalone selling prices that could impact the timing or amount of revenue recognition.
Deferred Revenue
Deferred revenue consists primarily of payments received and accounts receivable recorded in advance of revenue recognition under the Company’s subscription and support services and professional services arrangements. The Company primarily invoices its customers for its subscription services arrangements annually in advance. The Company’s payment terms generally provide that customers pay the invoiced portion of the total arrangement fee within 30 days of the invoice date. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current; the remaining portion is recorded as deferred revenue, noncurrent in the consolidated balance sheets.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Deferred Commissions
Sales commissions earned by the Company’s sales force are generally considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for new revenue contracts, including incremental sales to existing customers, are deferred and then amortized on a straight-line basis over a period of benefit, which is determined to be generally five years . The Company determined the period of benefit by taking into consideration the terms of its customer contracts, its technology life and other factors.
Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the average contractual term of two years .
Sales commissions capitalized as contract costs totaled $ 245 million and $ 186 million in fiscal 2026 and 2025, respectively. Amortization of contract costs totaled $ 161 million, $ 130 million and $ 104 million in fiscal 2026, 2025 and 2024, respectively. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of operations.
Cost of Revenue
Costs of revenue primarily consist of costs related to providing the Company’s cloud-based platforms to its customers, including third-party hosting fees, amortization of capitalized internal-use software and finite-lived purchased developed technology, customer support, other employee-related expenses for security, technical operations and professional services staff, and allocated overhead costs.
Research and Development
Research and development expense incurred in the normal course of business is expensed as incurred.
Software Development Costs
Qualifying internally-developed software development costs, including the associated stock-based compensation expenses, are capitalized during the application development stage, as long as management has authorized and committed to funding the project, it is probable the project will be completed and the software will be used to perform the function intended. Capitalization of such costs ceases once the project is substantially complete and ready for its intended use. Capitalized software development costs are included in Intangible assets, net on the consolidated balance sheets and are amortized on a straight-line basis over an expected useful life of 3 years.
Advertising Expenses
Advertising costs are expensed as incurred. Advertising expense was $ 83 million, $ 68 million, and $ 65 million in fiscal 2026, 2025 and 2024, respectively.
Restructuring and Other Charges
Restructuring generally includes actions involving employee-related severance charges, facilities consolidation and contract termination costs. Employee-related severance charges are largely based upon substantive severance plans, while some are mandated requirements in certain foreign jurisdictions. Severance costs generally include severance payments, outplacement services, health insurance coverage and legal costs. These charges are reflected in the period when both the actions are probable, at the balance sheet date, and the amounts are reasonably estimable. Right-of-use asset impairments are recognized on the date the premises have been vacated or the Company have ceased-use of the leased facilities.
Actual results may differ from the Company’s estimates and assumptions. Restructuring liabilities are classified in accrued expenses and other current liabilities in the consolidated balance sheets.
Stock-Based Compensation
The Company’s equity incentive plans provide for granting stock options, restricted stock units (“RSUs”), restricted stock awards to employees, consultants, officers and directors and RSUs with market-based vesting conditions to certain executives. In addition, the Company offers an employee stock purchase program (“ESPP”) to eligible employees.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock-based compensation expense related to stock awards (including stock options, RSUs, market-based RSUs, and ESPP) is measured based on the fair value of the awards granted and recognized as an expense over the requisite service period.
The fair value of each RSU award is based on the fair value of the underlying common stock as of the grant date. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period, generally three to four years .
The fair value of each market-based RSU award is measured using a Monte Carlo simulation valuation model which requires the use of various assumptions, including the stock price volatility and risk-free interest rate as of the valuation date corresponding to the length of time remaining in the performance period. Stock-based compensation expense for awards with market conditions is recognized over the requisite service period using the accelerated attribution method and is not reversed if the market condition is not met.
The fair value of ESPP awards are estimated on the grant date using the Black-Scholes option pricing model which requires the use of various assumptions, including the expected term of the award, the expected volatility of the price of the underlying common stock, risk-free interest rates, and expected dividend yield of the underlying common stock. Stock-based compensation expense is recognized following the straight-line attribution method over the offering period for ESPP awards.
The assumptions used to determine the fair value of the stock awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. Forfeitures are accounted for as they occur.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets are also recognized for operating losses and tax credit carry forwards. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Management considers all positive and negative evidence in evaluating the Company’s ability to realize its deferred tax assets, for example its historical results and forecasts of future ability to realize its deferred tax assets, including forecasts of future taxable income by jurisdiction. Deferred tax assets and liabilities are measured using enacted tax rates applicable in the years in which they are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax law is recognized in the provision for income taxes in the period that includes the enactment date.
The Company does not provide for income taxes on undistributed earnings of subsidiaries that are intended to be indefinitely reinvested. Where the Company does not intend to indefinitely reinvest subsidiary earnings, income and withholding taxes, as applicable, are provided on such undistributed earnings.
The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company determines if the weight of available evidence indicates that it is more likely than not that a tax position will be sustained on tax audit, assuming that all issues are audited and resolution of any related appeals or litigation processes are considered. The tax benefit is then measured as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The reserves for uncertain tax positions are adjusted as facts and circumstances change, for example on closing of a tax audit, expiration of statutes of limitation on potential assessments or refinement of an estimate. To the extent that the final outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such a determination is made. The provisions for income taxes include the impact of reserves for uncertain tax positions, along with the related interest and penalties.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents generally consist of investments in money market funds. The fair market value of cash equivalents approximated their carrying value as of January 31, 2026 and 2025.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of January 31, 2026 and 2025, the Company’s restricted cash balance was $ 6 million, primarily related to letters of credit for its facility lease agreements. 
Short-Term Investments
The Company’s short-term investments comprise of U.S. treasury securities, corporate debt securities and certificates of deposit. The Company determines the appropriate classification of its short-term investments at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified and accounted for its short-term investments as available-for-sale securities as the Company may sell these securities at any time for use in its current operations or for other purposes, even prior to maturity. As a result, short-term investments, including securities with stated maturities beyond twelve months, are classified within current assets in the consolidated balance sheets.
Available-for-sale securities are recorded at fair value each reporting period and are periodically evaluated for impairment. For unrealized losses in securities that the Company intends to hold and will not more likely than not be required to sell before recovery, the Company further evaluates whether declines in fair value below amortized cost are due to credit or non-credit related factors.
The Company considers credit related impairments to be changes in value that are driven by a change in the creditor’s ability to meet its payment obligations, and records an allowance and recognizes a corresponding loss in interest and other, net when the impairment is incurred. Unrealized non-credit related losses and unrealized gains are reported as a separate component of accumulated other comprehensive income (loss) in the consolidated balance sheets until realized. Realized gains and losses are determined based on the specific identification method and are reported in interest and other, net in the consolidated statements of operations.
Strategic Investments
The Company’s strategic investments consist primarily of equity investments in privately held companies and are included in Other assets on the consolidated balance sheets. Investments in privately held companies without readily determinable fair values in which the Company does not own a controlling interest or have significant influence over are measured using the measurement alternative. In applying the measurement alternative, the Company adjusts the carrying values of strategic investments based on observable price changes from orderly transactions for identical or similar investments of the same issuer. Additionally, the Company evaluates its strategic investments at least quarterly for impairment. Adjustments and impairments are recorded in Interest and other, net on the consolidated statements of operations.
In determining the estimated fair value of its strategic investments in privately held companies, the Company uses the most recent and available data. Valuations of privately held securities are inherently complex due to the lack of readily available market data and require the use of judgment. The determination of whether an orderly transaction is for an identical or similar investment requires use of significant judgment. In its evaluation, the Company considers factors such as differences in the rights and preferences of the investments and the extent to which those differences would affect the fair values of those investments. The Company’s impairment analysis encompasses an assessment of both qualitative and quantitative factors including the investee’s financial metrics, market acceptance of the investee's product or technology, general market conditions and liquidity considerations.
Accounts Receivable and Allowances
Accounts receivable are recorded at the invoiced amount, net of allowances. These allowances are based on the Company’s assessment of the collectibility of accounts by considering the age of each outstanding invoice, the collection history of each customer, and an evaluation of current expected risk of credit loss based on current economic conditions and reasonable and supportable forecasts of future economic conditions over the life of the receivable. The Company assesses collectibility by reviewing accounts receivable on an aggregated basis where similar characteristics exist and on an individual basis when specific customers with collectibility issues are identified. Amounts deemed uncollectible are recorded as an allowance in the consolidated balance sheets with an offsetting decrease in deferred revenue or a charge to general and administrative expense in the consolidated statements of operations.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Property and Equipment
Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets. Repairs and maintenance costs are expensed as incurred.
The useful lives of property and equipment are as follows:

Useful lives

Furniture and fixtures Shorter of 7 years or remaining lease term

Leasehold improvements Shorter of estimated useful life or remaining lease term

Business Combinations
Business combinations are accounted for under the acquisition method of accounting, which requires the acquired assets, including separately identifiable intangible assets, and assumed liabilities to be recorded as of the acquisition date at their respective estimated fair values. Any excess of the purchase price over the fair value of the assets acquired, including separately identifiable intangible assets and liabilities assumed, is recorded as goodwill.
The determination of the fair value of assets acquired and liabilities assumed involves assessments of factors such as the expected future cash flows associated with individual assets and liabilities and appropriate discount rates at the date of the acquisition. Significant management inputs used in the estimation of fair value of assets acquired and liabilities assumed include, but are not limited to, expected future cash flows, future changes in technology, estimated replacement costs, person hours required in recreating certain acquired technologies, discount rates and assumptions about the period of time the brand will continue to be used in the Company’s portfolio. Where appropriate, external advisers are consulted to assist in the determination of fair value. For non-observable market values, fair value has been determined using acceptable valuation methods. The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. The results of operations for businesses acquired are included in the financial statements from the acquisition date. Acquisition-related expenses and post-acquisition restructuring costs are recognized separately from the business combination and are expensed as incurred.
Goodwill and Other Long-Lived Assets
Goodwill represents the excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination. Goodwill amounts are not amortized. Goodwill is tested for impairment annually on the first day of the fourth quarter of each fiscal year, or whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company operates as a single operating segment.
Management has the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the Company’s reporting unit is less than the carrying amount, including goodwill. The Company also has the option, which the Company has elected, to bypass the qualitative assessment, and perform the quantitative assessment. The quantitative assessment involves comparing the fair value of the reporting unit to its carrying value, including goodwill. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. No goodwill impairments were recorded during the years presented based on the assessments performed.
Long-lived assets, such as property and equipment and finite-lived intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated undiscounted future cash flows expected to be generated. If the carrying amount exceeds the undiscounted cash flows, the assets are determined to be impaired and an impairment charge is recognized as the amount by which the carrying amount exceeds its fair value. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Operating Leases and Incremental Borrowing Rate
The Company leases office space under operating leases with expiration dates through 2031. The Company determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at lease commencement. Lease liabilities are measured based on the present value of the total lease payments not yet paid, discounted based on the more readily determinable of either the rate implicit in the lease or the incremental borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The estimation of the incremental borrowing rate is based on an estimate of the Company’s unsecured borrowing rate, adjusted for tenor and collateralized security features. Lease liabilities due within twelve months are included within accrued expenses and other current liabilities on the consolidated balance sheet. Right-of-use assets are measured based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives received, incurred or payable under the lease. Recognition of rent expense begins when the lessor makes the underlying asset available to the Company. The Company does not assume renewals or early terminations of its leases unless it is reasonably certain to exercise these options at commencement and does not allocate consideration between lease and non-lease components.
For leases with a lease term of 12 months or less (“short-term leases”), rent expense is recorded in the consolidated statements of operations on a straight-line basis over the lease term and records variable lease payments as incurred.
Loss Contingencies
The Company is periodically involved in various legal claims and proceedings. The Company routinely reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any matter is considered probable and the amount can be reasonably estimated, the Company records a liability for the estimated loss. If either or both of the criteria for recording the liability are not met, the Company assesses whether there is at least a reasonable possibility that a loss, or additional losses, may have been incurred. If there is a reasonable possibility that a loss may have been incurred, the Company discloses the estimate of the amount of loss or range of loss, discloses that the amount is immaterial, or discloses that an estimate of loss cannot be made, as applicable. Because of inherent uncertainties related to these legal matters, the Company bases its loss accruals on the best information available at the time. As additional information becomes available, the Company reassesses its potential liability and may review its estimates. Actual outcomes of these legal and regulatory proceedings may differ materially from the Company’s estimates.
Share Repurchase Program
Share repurchases are recorded on the trade date and the repurchase price is inclusive of any related fees and commissions. Shares of Class A common stock repurchased by the Company are immediately retired. The par value of the Class A common stock repurchased is deducted from common stock with the excess of repurchase price recorded to additional paid-in capital on the Company’s consolidated balance sheets.
Concentrations of Risk
Financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. The Company’s short-term investments are primarily intended to facilitate liquidity and capital preservation and consist predominately of highly liquid investment-grade fixed-income securities, diversified among industries and individual issuers. The Company’s policy is designed to limit exposure from any particular issuer or institution.
Credit risk arising from accounts receivable is mitigated due to the large number of customers and their dispersion across various industries and geographies. For the periods presented, there were no customers that represented more than 10% of the Company’s accounts receivable balance or total revenue.
The Company serves customers and users from data center facilities located across various different physical locations, such as the U.S., Europe and Asia-Pacific, most of which are operated by a single third party. The Company has disaster recovery protocols at the third-party service providers. Even with these procedures for disaster recovery in place, access to the Company’s service could be significantly interrupted, resulting in an adverse effect on its operating results and financial condition.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Net Income (Loss) per Share
The Company computes basic and diluted net income (loss) per share attributable to common stockholders for Class A and Class B common stock using the two-class method required for participating securities. Under the two-class method, basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.
Diluted earnings per share attributable to common stockholders is computed by giving effect to all potential shares of common stock, including shares underlying convertible senior notes, unvested RSUs, outstanding stock options, unvested common stock and restricted stock issued in connection with certain business combinations, and ESPP obligations, to the extent they are dilutive. The dilutive effect of potentially dilutive common shares included in diluted earnings per share is determined in accordance with the treasury stock, if-converted, or contingently issuable accounting methods, depending on the nature of the security.
The rights of the holders of the Company’s Class A and Class B common stock are identical, except with respect to voting and conversion rights.
Accounting Pronouncements Recently Adopted
In December 2023, the FASB issued guidance to provide disaggregated income tax disclosures on the rate reconciliation and income taxes paid. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted this guidance prospectively in fiscal 2026. Refer to Note 13 to the consolidated financial statements “Income Taxes” for the expanded disclosures resulting from the adoption of this guidance.
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued guidance requiring the disclosure, in the notes to financial statements, of specified disaggregated income statement expense information. This guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this guidance.
In September 2025, the FASB issued guidance to modernize the accounting for internal-use software costs to current development practices, clarifying when to begin capitalizing costs, and enhancing disclosure requirements. This guidance is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual periods, with early adoption permitted. Entities can adopt the new standard using a prospective, modified, or retrospective transition approach. The Company is currently evaluating the impact of adopting this guidance, including the timing of adoption (early or standard) and the selection of an appropriate transition method.

3. Restructuring and Other Charges
The following table summarizes the Company’s restructuring and other charges during fiscal 2026, 2025 and 2024 :

Year Ended January 31,
2026 2025 2024
(dollars in millions)
Severance and termination benefit costs $ 4   $ 11   $ 28  
Lease impairment charges —   —   28
Total $ 4   $ 11   $ 56  

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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the Company’s restructuring liability related to severance and termination benefit costs that is included in Accrued expenses and other current liabilities on the consolidated balance sheets:

Severance and termination benefit costs
(dollars in millions)

Balance as of January 31, 2024
$ 24  
Restructuring charges 11  
Cash payments ( 24 )
Balance as of January 31, 2025
11  
Restructuring charges 4  
Cash payments ( 11 )
Balance as of January 31, 2026
$ 4  

Severance and termination benefits are provided primarily under ongoing arrangements and are accrued when the obligation is probable and the amount can be reasonably estimated.
During fiscal 2026, the Company recognized $ 4  million in restructuring costs related to an insignificant workforce reduction that is expected to be substantially complete by the first quarter of fiscal 2027.
During fiscal 2025, the Company recognized $ 11  million in restructuring costs that was substantially complete by the first quarter of fiscal 2026.
During fiscal 2024, the Company recognized $ 24  million in restructuring costs that was substantially complete by the first quarter of fiscal 2025. Other charges during fiscal 2024 included $ 28  million in lease impairments and $ 4  million in severance for separate insignificant workforce reductions.

4. Cash Equivalents and Investments
Cash Equivalents and Short-term Investments
Financial assets are measured at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
  Three levels of inputs may be used to measure as follows:
• Level 1 — Valuations based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
• Level 2 — Valuations based on other inputs that are directly or indirectly observable in the marketplace.
• Level 3 — Valuations based on unobservable inputs that are supported by little or no market activity.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table presents the estimated fair value of cash equivalents and short-term investments:

As of January 31,

  2026 2025
(dollars in millions)

Cash equivalents:

Money market funds (Level 1)
$ 654   $ 225  
Certificates of deposit (Level 2)
—   23  
U.S. treasury securities (Level 2)
16   —  

Total cash equivalents 670   248  
Level 2:

Short-term investments (Available-for-sale):
 

U.S. treasury securities 1,459   1,788  
Corporate debt securities 180   281  
Certificates of deposit
56   45  
Total short-term investments 1,695   2,114  
Total $ 2,365   $ 2,362  

The following table presents the contractual maturities of the Company’s short-term investments:

  As of January 31, 2026
  Estimated Fair Value

(dollars in millions)
Due within one year $ 1,387  
Due between one to five years 308  
Total $ 1,695  

Interest receivable of $ 24 million is included in Prepaid expenses and other current assets on the consolidated balance sheets as of January 31, 2026 and 2025.
There were no material differences between the estimated fair value and amortized cost of cash equivalents and short-term investments as of January 31, 2026 and 2025.
For available-for-sale debt securities that have unrealized losses, there were no material credit or non-credit related impairments for short-term investments as of January 31, 2026 and 2025.
Strategic Investments
Strategic investments primarily include equity investments in privately-held companies, which do not have a readily determinable fair value. Strategic investments are classified as Level 3 in the fair value hierarchy as nonrecurring fair value measurements may include observable and unobservable inputs. As of January 31, 2026 and 2025, the balance of strategic investments was $ 33 million and $ 30 million, respectively.

5. Goodwill and Intangible Assets, net
Goodwill
As of January 31, 2026 and 2025, goodwill was $ 5,487 million and $ 5,448 million, respectively. No goodwill impairments were recorded during fiscal 2026, 2025 and 2024.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Intangible Assets, net
Intangible assets consisted of the following:

  As of January 31, 2026
Gross Accumulated Amortization Net
(dollars in millions)
Purchased developed technology $ 214   $ ( 179 ) $ 35  
Customer relationships 116   ( 106 ) 10  
Capitalized internal-use software costs 72   ( 32 ) 40  
Trade name 21   ( 20 ) 1  
Other 7   ( 2 ) 5  
  $ 430   $ ( 339 ) $ 91  

  As of January 31, 2025
Gross Accumulated Amortization Net
(dollars in millions)
Purchased developed technology $ 239   $ ( 179 ) $ 60  
Customer relationships 116   ( 85 ) 31  
Capitalized internal-use software costs 54   ( 19 ) 35  
Trade name 21   ( 16 ) 5  
Other 10   ( 3 ) 7  
  $ 440   $ ( 302 ) $ 138  

The weighted-average remaining useful lives of the Company’s acquired intangible assets are as follows:
  Weighted-Average Remaining Useful Life
As of January 31,
2026 2025
Purchased developed technology 2.1 years 1.9 years
Customer relationships 0.9 years 1.6 years
Trade name 0.3 years 1.3 years

As of January 31, 2026, estimated remaining amortization expense for the intangible assets by fiscal year was as follows:

Remaining Amortization
(dollars in millions)
2027 $ 45  
2028 24  
2029 17  
2030 4  
2031 1  

Total $ 91  

Amortization expense of intangible assets was $ 83 million, $ 85 million and $ 87 million in fiscal 2026, 2025 and 2024, respectively.
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OKTA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. Property and Equipment, net
Property and equipment consisted of the following:

  As of January 31,
  2026 2025
(dollars in millions)

Furniture and fixtures $ 18   $ 15  
Leasehold improvements 90   84  
Property and equipment, gross 108   99  
Less accumulated depreciation ( 70 ) ( 56 )
Property and equipment, net $ 38   $ 43  

Depreciation expense was $ 13 million in fiscal 2026 and 2025 and $ 12 million in fiscal 2024 .

7. Deferred Revenue and Performance Obligations
Deferred Revenue
Deferred revenue, which is a contract liability, consists primarily of payments received and accounts receivable recorded in advance of revenue recognition under the Company’s contracts with customers and is recognized as the revenue recognition criteria are met.
Subscription revenue recognized during fiscal 2026 and 2025 that was included in the deferred revenue balances at the beginning of the respective periods was $ 1,674 million and $ 1,456 million, respectively.
Transaction Price Allocated to the Remaining Performance Obligations
Transaction price allocated to the remaining performance obligations represents all future, non-cancelable contracted revenue that has not yet been recognized, inclusive of deferred revenue that has been invoiced and non-cancelable amounts that will be invoiced and recognized as revenue in future periods.
Total remaining non-cancelable performance obligations under subscription contracts with customers was approximately $ 4,827 million as of January 31, 2026. Of this amount, the  Company expects to recognize revenue of approximately $ 2,513 million, or 52 %, over the next  12 months, with the balance to be recognized as revenue thereafter.

8. Convertible Senior Notes, Net
Convertible Senior Notes
The 2025 Notes and 2026 Notes are recorded at face value less unamortized debt issuance costs.
During fiscal 2025, the Company repurchased $ 42 million principal amount of the 2025 Notes for $ 40 million in cash, and $ 258 million principal amount of the 2026 Notes for $ 240 million in cash, resulting in a gain on early extinguishment of debt of $ 19 million.
During fiscal 2024, the Company repurchased $ 508 million principal amount of the 2025 Notes for $ 462 million in cash, and $ 542 million principal amount of the 2026 Notes for $ 475 million in cash, resulting in a gain on early extinguishment of debt of $ 106 million.
2025 Convertible Senior Notes
The 2025 Notes matured on September 1, 2025, and the Company settled the full then remaining $ 510  million principal amount outstanding in cash.
2025 Capped Calls
In connection with the pricing of the 2025 Notes, the Company entered into capped call transactions with respect to its Class A common stock. During fiscal 2026, the Company unwound and settled in cash a portion of the
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2025 Capped Calls corresponding to the previously repurchased notes and all remaining 2025 Capped Calls expired upon the maturity of the 2025 Notes.
2026 Convertible Senior Notes
The 2026 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 0.375 % per year. Interest is payable in cash semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The 2026 Notes mature on June 15, 2026, unless earlier redeemed, repurchased or converted. As of January 31, 2026, the outstanding principal balance of the 2026 Notes of $ 350 million is classified as a current liability due to their upcoming maturity on June 15, 2026.
The terms of the 2026 Notes are governed by an Indenture by and between the Company and Wilmington Trust, National Association, as Trustee (the “2026 Indenture”). Upon conversion, the 2026 Notes may be settled in cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at the Company’s election.
The 2026 Notes are convertible at an initial conversion rate of 4.1912 shares of Class A common stock per $1,000 principal amount of the 2026 Notes, which is equal to an initial conversion price of approximately $ 238.60 per share of Class A common stock, subject to adjustment under certain circumstances in accordance with the terms of the 2026 Indenture. Prior to the close of business on the business day immediately preceding March 15, 2026, holders of the 2026 Notes may convert all or a portion of their 2026 Notes only in multiples of $1,000 principal amount, under the following circumstances:
• during any fiscal quarter commencing after the fiscal quarter ending on October 31, 2020 (and only during such fiscal quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price of the 2026 Notes on each applicable trading day;
• during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2026 Notes for each trading day of that five consecutive trading day period was less than 98 % of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on such trading day;
• if the Company calls the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
• upon the occurrence of specified corporate events, as described in the 2026 Indenture.
On or after March 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2026 Notes regardless of the foregoing circumstances. During the three months ended January 31, 2026, the conditions allowing holders of the 2026 Notes to convert prior to March 15, 2026 were not met. As of January 31, 2026, the 2026 Notes are classified as current liabilities due to their upcoming maturity on June 15, 2026.
The Company may redeem for cash all or any portion of the 2026 Notes, at its option, on or after June 20, 2023, if the last reported sale price of the Company’s Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on and including the trading day preceding the date on which the Company provides notice of redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.
Holders of the 2026 Notes who convert their 2026 Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the 2026 Indenture) or in connection with the Company’s issuance of a redemption notice are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a corporate event that constitutes a fundamental change (as defined in the 2026 Indenture), holders of the 2026 Notes may require the Company to repurchase all or a portion of their 2026 Notes at a price equal to 100 % of the principal amount of the 2026 Notes being repurchased, plus any accrued and unpaid interest.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2026 Capped Calls
In connection with the pricing of the 2026 Notes, the Company entered into capped call transactions with respect to its Class A common stock. The 2026 Capped Calls are purchased call options that give the Company the option to purchase approximately 5  million shares, subject to anti-dilution adjustments substantially identical to those in the 2026 Notes, of its Class A common stock for approximately $ 238.60 per share (subject to adjustment), corresponding to the approximate initial conversion price of the 2026 Notes, exercisable upon conversion of the 2026 Notes. The 2026 Capped Calls have initial cap prices of $ 360.14 per share (subject to adjustment) and will expire in 2026, if not exercised earlier. The 2026 Capped Calls are intended to offset potential dilution to the Company’s Class A common stock and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount upon any conversion of the 2026 Notes under certain circumstances. The 2026 Capped Calls are separate transactions and are not part of the terms of the 2026 Notes. The 2026 Capped Calls meet the criteria for classification as equity and, as such, are not remeasured each reporting period. During fiscal 2026, the Company unwound and settled in cash a portion of the 2026 Capped Calls corresponding to the previously repurchased notes.
Fair Value Measurements
As of January 31, 2026, the estimated fair value of the 2026 Notes, which are not recorded at fair value on the consolidated balance sheets, was $ 345 million.
The estimated fair value of the 2026 Notes, which are Level 2 financial instruments, was determined based on the quoted bid prices of the 2026 Notes in an over-the-counter market on the last available trading day of the reporting period.

9. Leases
The Company has entered into various non-cancelable office space operating leases with original lease periods expiring between 2026 and 2031. These leases do not contain material variable rent payments, residual value guarantees, financial covenants or other restrictions. The Company’s corporate headquarters lease in San Francisco has a 10-year term, which expires in October 2028. The Company is entitled to two five-year options to extend this lease, subject to certain requirements.
Operating lease costs were as follows:
Year Ended January 31,
2026 2025 2024
(dollars in millions)
Operating lease costs (1)
$ 28   $ 31   $ 34  

(1)     Amounts are presented exclusive of sublease income and include short-term leases, which are immaterial.
The weighted-average remaining term of operating leases was 3.0 years and 3.8 years as of January 31, 2026 and January 31, 2025, respectively, and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 5.6 % as of January 31, 2026 and January 31, 2025.
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Maturities of operating lease liabilities, which do not include short-term leases, were as follows:
As of January 31, 2026
Fiscal Year Ending January 31: (dollars in millions)
2027 $ 36  
2028 39  
2029 31  
2030 4  
2031
2  
Thereafter
1  
Total lease payments 113  
Less imputed interest and other
( 12 )
Total operating lease liabilities $ 101  

Cash payments made related to operating lease liabilities were $ 37 million and $ 41 million in fiscal 2026 and 2025, respectively.

10. Commitments and Contingencies
Letters of Credit
In conjunction with the execution of certain office space operating leases, letters of credit in the aggregate amount of $ 5 million and $ 6 million were issued and outstanding as of January 31, 2026 and January 31, 2025, respectively. No draws have been made under such letters of credit.
Legal Matters
From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings.
On May 20, 2022, a purported shareholder filed a putative class action lawsuit in the United States District Court for the Northern District of California against the Company and certain of its executive officers, captioned In re Okta, Inc. Securities Litigation , No. 3:22-cv-02990. The lawsuit asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, alleging that the defendants made false or misleading statements or omissions concerning the Company’s cybersecurity controls, vulnerability to data breaches, and the Company’s integration of Auth0, Inc. (“Auth0”). The lawsuit sought an order certifying the lawsuit as a class action and unspecified damages. The defendants moved to dismiss the amended complaint. On March 31, 2023, the court dismissed in full the claims based on the plaintiff’s allegations related to the Company’s cybersecurity controls and vulnerability to data breaches, and dismissed in part and denied in part the claims based on allegations related to the Auth0 integration. On May 28, 2024, the parties entered into a stipulation of settlement (the “Stipulation”) where, in exchange for the release and dismissal with prejudice of all claims, the Company agreed to pay and/or to cause its insurance carriers to pay a total of $ 60  million, which is covered through a combination of the Company’s Director & Officer (“D&O”) insurance and the balance of the Company’s $ 10  million retention on the primary D&O policy. The Stipulation does not constitute an admission of fault or wrongdoing by the Company or its executives. On November 19, 2024, the court granted final approval of the Stipulation and dismissed the lawsuit in its entirety, with prejudice.
Additionally, two purported shareholders filed derivative lawsuits on behalf of the Company in the United States District Court for the Northern District of California against certain of its current and former executive officers and directors, captioned O’Dell v. McKinnon et al. , No. 3:22-cv-07480 (filed Nov. 28, 2022), and LR Trust v. McKinnon et al ., No. 3:22-cv-08627 (filed Dec. 13, 2022) (together, the “California Federal Derivative Actions”). The California Federal Derivative Actions allege, among other things, that the defendants breached their fiduciary duties by making false or misleading statements or omissions concerning the Company’s cybersecurity controls, vulnerability to data breaches and the Company’s integration of Auth0. The California Federal Derivative Actions seek orders permitting the plaintiffs to maintain the actions derivatively on behalf of the Company, awarding unspecified damages allegedly sustained by the Company, awarding restitution from the individual defendants, and requiring the Company to make certain reforms to its corporate governance and controls. On February 22, 2023, the court entered a stipulated order consolidating the California Federal Derivative Actions, appointing co-lead counsel
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for plaintiffs, and staying the consolidated California Federal Derivative Actions during the pendency of the motion to dismiss in the securities class action lawsuit. The consolidated California Federal Derivative Actions are captioned In re Okta, Inc. Stockholder Derivative Litigation , No. 3:22-cv-07480. On May 9, 2023, the court entered a stipulated order continuing the stay through the close of discovery in the securities class action lawsuit and, on January 27, 2025, the court entered an order continuing the stay.
On April 14, 2023, another shareholder filed a substantially similar derivative lawsuit in the United States District Court for the District of Delaware against certain of the Company’s current and former executive officers and directors, captioned Buono v. McKinnon et al. , No. 1:23-cv-00413 (the “Buono Action”). On May 31, 2023, the court entered a stipulated order whereby the defendants agreed to accept service and stay the Buono Action through the close of discovery in the securities class action lawsuit.
On January 25, 2024, another shareholder filed a substantially similar derivative lawsuit in the United States District Court for the District of Delaware against certain of the Company’s current and former executive officers and directors, captioned Nasr v. McKinnon, et al. , No. 1:24-cv-00106 (together with the Buono Action, the “Delaware Federal Derivative Actions”). On March 18, 2024, the court entered a stipulated order whereby the defendants agreed to accept service and stay the derivative action through the close of discovery in the securities class action lawsuit.
On July 1, 2024, another shareholder filed a substantially similar derivative lawsuit in the Court of Chancery for the State of Delaware (the “Delaware Chancery Court”) against certain of the Company’s current and former executive officers and directors, captioned Grimaldi v. McKinnon, et al. , C.A. No. 2024-0685-PAF (the “Grimaldi Action”). On July 19, 2024, the Delaware Chancery Court entered a stipulated order whereby the defendants agreed to accept service and to stay the derivative action through final approval of the settlement in the securities class action lawsuit.
On October 18, 2024, another shareholder filed a substantially similar derivative lawsuit in the Delaware Chancery Court against certain of the Company’s current and former executive officers and directors, captioned Duprat v. McKinnon, et al ., C.A. No. 2024-1072-PAF (the “Duprat Action”). On November 8, 2024, the Delaware Chancery Court entered a stipulated order where the defendants agreed to accept service in the Duprat Action; the Grimaldi Action and the Duprat Action were consolidated (the “Delaware Chancery Actions”); and the Delaware Chancery Actions were stayed pursuant to the terms previously entered in the Grimaldi Action.
On January 10, 2025, the Company and defendants agreed in principle to the non-monetary terms of a global resolution of the California Federal Derivative Actions, the Delaware Federal Derivative Actions, and the Delaware Chancery Actions (collectively, the “Derivative Actions”), and executed a Memorandum of Understanding in connection therewith containing the agreed-upon material, non-monetary terms of the proposed settlement. The parties in the Derivative Actions subsequently agreed that the Company would not oppose a fee award to plaintiffs’ counsel of $ 2.25  million, which the Company, as part of the final settlement documentation, agreed to cause its D&O insurers to pay. The parties in the Derivative Actions executed a Stipulation of Settlement on June 26, 2025, and the plaintiffs in the consolidated California Federal Derivative Actions filed a motion for preliminary approval of the proposed settlement on July 1, 2025. On August 18, 2025, the court in the consolidated California Federal Derivative Actions granted preliminary approval of the proposed settlement. On October 22, 2025, the court in the consolidated California Federal Derivative Actions granted final approval of the settlement and entered a judgment dismissing the consolidated California Federal Derivative Actions with prejudice. On November 24, 2025, the court in the Delaware Federal Derivative Actions entered orders dismissing those actions with prejudice pursuant to the terms of the settlement. On December 1, 2025, the court in the Delaware Chancery Actions entered an order dismissing that consolidated action pursuant to the terms of the settlement.
Warranties and Indemnification
The Company’s subscription services are generally warranted to perform materially in accordance with the Company’s online help documentation under normal use and circumstances. Additionally, the Company’s arrangements generally include provisions for indemnifying customers against liabilities if its subscription services infringe a third party’s intellectual property rights. Furthermore, the Company may also incur liabilities if it breaches the security or confidentiality obligations in its arrangements. To date, the Company has not incurred significant costs and has not accrued any material liabilities in the accompanying consolidated financial statements as a result of these obligations.
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  The Company has entered into service-level agreements with a majority of its customers defining levels of uptime reliability and performance and permitting certain customers to receive credits for paid amounts related to subscription services when the Company fails to meet the defined levels of uptime. In very limited instances, the Company allows customers to early terminate their agreements in the event that the Company fails to meet those levels as they may constitute a breach of contract. If the customer did terminate, they would receive a refund of prepaid unused subscription fees. To date, the Company has not experienced any significant failures to meet defined levels of uptime reliability and performance as a result of those agreements and, as a result, the Company has not incurred significant costs and has not accrued any material liabilities in the accompanying consolidated financial statements as a result of these warranties.
Agreements with customers and other third parties may include indemnification or other provisions under which the Company agrees to indemnify or otherwise be liable to them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by us to property or persons, or other liabilities relating to or arising from the use of the Company’s platforms or other acts or omissions. The Company cannot reasonably estimate potential payment obligations as a result of indemnification claims because it cannot predict when and under what circumstances they may be incurred. As a result, no material liabilities have been recognized in the accompanying consolidated financial statements related to these indemnification obligations.

11. Common Stock and Stockholders’ Equity
Common Stock
Holders of Class A and Class B common stock are entitled to  one  vote per share and  ten  votes per share, respectively, and the shares of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder on a one -for-one basis, and are automatically converted into Class A common stock upon sale or transfer, subject to certain limited exceptions. Shares of Class A common stock are not convertible.
As of January 31, 2026, shares of common stock reserved for future issuance were as follows:

As of January 31, 2026

(shares in thousands)
Options and unvested RSUs outstanding 7,828  
Available for future stock option and RSU grants 43,612  
Available for ESPP 9,892  
Total
61,332  

Share Repurchase Program
In January 2026, the Company’s board authorized a stock repurchase program of up to $ 1 billion of the Company’s outstanding shares of Class A common stock. The Company may repurchase shares of its Class A common stock from time to time through open market purchases, in privately negotiated transactions, or by other means. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18. The Company may also, from time to time, enter into Rule 10b5-1 trading plans to facilitate repurchases of shares. The timing and the amount of stock repurchases under the Share Repurchase Program will be determined by the Company’s management, based on its evaluation of factors including business and market conditions, corporate and regulatory requirements, and other considerations. The Share Repurchase Program does not obligate the Company to repurchase any specific number of shares and may be modified, suspended, or terminated at any time.
During the year ended January 31, 2026, the Company repurchased and immediately retired 875,150 shares of its Class A common stock for an aggregate amount, including commissions, of $ 79  million under the Share Repurchase Program. As of January 31, 2026, approximately $ 921  million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.
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12. Employee Incentive Plans
Equity Incentive Plans
The Company has  two equity incentive plans: the 2009 Stock Plan (“2009 Plan”) and the 2017 Equity Incentive Plan (“2017 Plan”). All shares that remain available for future grants are under the 2017 Plan. As of January 31, 2026, options to purchase 739,356 shares of Class A common stock and 330,688 shares of Class B common stock remained outstanding.
The Company’s equity incentive plans provide for granting stock options, RSUs, restricted stock awards to employees, consultants, officers and directors and RSUs with market-based vesting conditions to certain executives. In addition, the Company offers an ESPP to eligible employees.
Stock-based compensation expense by award type was as follows:

  Year Ended January 31,
  2026 2025 2024
(dollars in millions)
Stock options $ 1   $ 14   $ 45  
RSUs 476   475   490  
Market-based RSUs
44   25   12  
ESPP 16   17   26  
Restricted stock awards 7   34   111  

Total $ 544   $ 565   $ 684  

Stock-based compensation expense was recorded in the following cost and expense categories in the consolidated statements of operations:

  Year Ended January 31,
  2026 2025 2024
(dollars in millions)
Cost of revenue:  
Subscription $ 74   $ 82   $ 75  
Professional services and other 10   12   15  
Research and development 196   216   277  
Sales and marketing 132   131   156  
General and administrative 132   124   161  
Total $ 544   $ 565   $ 684  

Stock Options
Options issued under the Plan generally are exercisable for periods not to exceed ten years and generally vest over four years with 25 % vesting after one year and with the remainder vesting monthly thereafter in equal installments. Shares offered under the Plan may be: (i) authorized but unissued shares or (ii) treasury shares. 
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A summary of stock option activity and related information was as follows:

  Number of Options  
(in thousands)
Weighted-Average
Exercise Price  
Weighted-Average Remaining
Contractual Term
(Years)
Aggregate
Intrinsic Value
(in millions)

Outstanding as of January 31, 2025 2,199   $ 57.98   2.8 $ 137  

Exercised ( 1,128 ) 10.11  
Expired ( 1 ) 30.56  

Outstanding as of January 31, 2026 1,070   $ 108.43   3.1 $ 36  
As of January 31, 2026
Vested and expected to vest 1,070   $ 108.43   3.1 $ 36  
Vested and exercisable 1,070   $ 108.43   3.1 $ 36  

No options were granted during fiscal 2026, 2025 and 2024. The total grant-date fair value of stock options vested was $ 1 million, $ 16 million and $ 48 million during fiscal 2026, 2025 and 2024, respectively. The intrinsic value of the options exercised, which represents the difference between the fair market value of the Company’s common stock on the date of exercise and the exercise price of each option, was $ 109 million, $ 213 million and $ 57 million during fiscal 2026, 2025 and 2024, respectively. Windfall tax benefits realized upon exercise of stock options were $ 24 million and $ 47 million during fiscal 2026 and 2025, respectively, while no windfall tax benefits were realized in fiscal year 2024.
Restricted Stock Units
A summary of RSU activity and related information was as follows:

  Number of RSUs
(in thousands)
Weighted-Average
Grant Date Fair Value Per Share

Outstanding as of January 31, 2025 7,479   $ 97.15  
Granted 4,855   101.12  
Vested ( 4,761 ) 103.57  
Forfeited ( 1,324 ) 95.67  
Outstanding as of January 31, 2026 6,249   $ 95.66  

The Company granted 4,855,252  RSUs with an aggregate fair value of $ 491 million during fiscal 2026. As of January 31, 2026, there was a total of $ 528 million of unrecognized stock-based compensation expense related to unvested RSUs, which is being recognized over a weighted-average period of  1.8 years, based on vesting under the award service conditions. The total fair value of RSUs vested during fiscal 2026, 2025 and 2024 was $ 460 million, $ 375 million and $ 335 million, respectively.
Market-based Restricted Stock Units
A summary of market-based RSU activity and related information was as follows:
  Number of market-based RSUs
(in thousands)
Weighted-Average
Grant Date Fair Value Per Share

Outstanding as of January 31, 2025 320   $ 190.08  
Granted 327   199.63  

Vested ( 138 ) 120.98  

Outstanding as of January 31, 2026 509   $ 214.94  

Market-based RSUs granted in fiscal 2026 vest over each of a one-, two- and three-year performance period, each starting on February 1, 2025. The average grant date fair value per target market-based RSU was estimated
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