Okta Inc (0KB7.L) Q2 2025 Earnings Report

Okta’s QQ2 2025 results show continued revenue growth and healthy gross margins, underpinned by ongoing investments in the Identity Cloud and the Auth0 platform integration. Revenue for the quarter reached $646.0 million, up 16.2% year-over-year, while gross profit rose to $491.0 million for a gross margin of 76.0%. Despite top-line strength, operating income remained negative at $-19.0 million, driving a negative operating margin of -2.94%. Net income totaled $29.0 million, or $0.17 per basic share and $0.15 per diluted share, aided by $31.0 million of net other income and a tax benefit of $17.0 million that contributed to positive earnings. EBITDA was $34.0 million (EBITDA margin 5.3%). The quarter benefited from 86.0 million in operating cash flow and generated 78.0 million in free cash flow, with a net cash increase of $193.0 million and ending cash end at $516.0 million. The balance sheet remains liquidity-rich, with $2.36 billion in cash and short-term investments and a net debt position of $0.71 billion, though the company carries substantial goodwill and intangible assets due to historic acquisitions (notably Auth0).

Key takeaway for investors: Okta is delivering on revenue growth and cash generation, but margin expansion remains contingent on improving operating leverage and the successful integration/monetization of Auth0 within the broader Okta Identity Cloud. Valuation remains elevated relative to revenue growth, underscoring the importance of execution in cross-selling, customer expansion, and efficiency improvements to sustain multiple support.