What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-05 compared with 2025-03-05 · 190 added, 200 removed, 897 unchanged (30% of the section changed)

31 unchanged sentences

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.

Revenue recognition – Identifying and evaluating terms and conditions in contracts

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

Description of the Matter

As explained in Note 2 to the consolidated financial statements, the Company derives revenue from subscription fees and professional services fees.

The Company’s arrangements are generally non-cancelable and non-refundable.

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.

Revenue for the Company’s professional services is recognized as services are performed in proportion to their pattern of transfer.

Auditing the Company’s accounting for revenue recognition was challenging, specifically related to the appropriate identification and evaluation of non-standard terms and conditions for significant arrangements that involve negotiation of otherwise standard terms with the customer.

For example, certain non-standard terms and conditions required judgment to identify the distinct performance obligations.

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 terms and conditions in contracts that impact revenue recognition, including the identification of performance obligations.

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 contracts.

Further, we selected a sample of significant contractual arrangements that may involve negotiation of standard terms to test that management had properly assessed the impact of any non-standard terms on the identified performance obligations.

Additionally, to verify completeness of non-standard terms and conditions, we obtained confirmations of terms and conditions for a sample of arrangements with customers.

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

34 unchanged sentences

Short-term investments 1,695 2,114

Accounts receivable, net of allowances of $ 4 and $ 6 , respectively

Accounts receivable, net

Deferred commissions 171 140

32 unchanged sentences

Additional paid-in capital 9,553 9,219

Accumulated other comprehensive loss ( 12 ) ( 6 )

Accumulated other comprehensive income (loss)

Accumulated deficit ( 2,567 ) ( 2,802 )

20 unchanged sentences

Total operating expenses 2,109 2,066 2,198

Operating loss ( 74 ) ( 516 ) ( 812 )

Operating income (loss)

149 ( 74 ) ( 516 )

Interest expense ( 4 ) ( 5 ) ( 8 )

30 unchanged sentences

Additional Paid-in Capital

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

1 unchanged sentence

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

Adjustments from adoption of ASU No.

— — — — ( 528 ) — 156 ( 372 )

Issuance of common stock, net

1 unchanged sentence

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

Settlement of convertible senior notes 356 — — — 17 — — 17

Proceeds from hedges related to convertible senior notes ( 33 ) — — — — — — —

Stock-based compensation — — — — 690 — — 690

Other comprehensive loss — — — — — ( 21 ) — ( 21 )

Net loss — — — — — — ( 815 ) ( 815 )

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

16 unchanged sentences

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.

5 unchanged sentences

Net income (loss) $ 235 $ 28 $ ( 355 )

$ 28 $ ( 355 ) $ ( 815 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Stock-based compensation 544 565 684

Depreciation, amortization and accretion 88 84 114

Depreciation and amortization

Amortization of deferred commissions 161 130 104

2 unchanged sentences

Gain on early extinguishment of debt — ( 19 ) ( 106 )

( 19 ) ( 106 ) —

Other, net 8 ( 1 ) ( 2 )

12 unchanged sentences

Capitalized software ( 12 ) ( 12 ) ( 15 )

( 12 ) ( 15 ) ( 9 )

Purchases of property and equipment ( 9 ) ( 8 ) ( 8 )

Purchases of securities available-for-sale and other ( 1,505 ) ( 1,812 ) ( 1,709 )

( 1,812 ) ( 1,709 ) ( 1,411 )

Proceeds from maturities and redemption of securities available-for-sale 1,848 1,571 2,134

1,571 2,134 1,308

Proceeds from sales of securities available-for-sale and other 5 3 62

1 unchanged sentence

Purchases of intangible assets — — ( 1 )

— ( 1 ) ( 2 )

Net cash provided by (used in) investing activities 271 ( 314 ) 441

( 314 ) 441 ( 130 )

Cash flows from financing activities:

Payments for repurchases of convertible senior notes

Payments upon maturity and repurchases of convertible senior notes

( 510 ) ( 280 ) ( 937 )

1 unchanged sentence

Payments for warrants related to convertible senior notes — — ( 7 )

Proceeds from settlement of capped calls related to convertible senior notes

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 provided by (used in) financing activities

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 (decrease) in cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of year 415 342 271

3 unchanged sentences

Supplementary cash flow disclosure:

Cash paid during the period for:

Interest $ 3 $ 5 $ 6

Income taxes 19 14 8

Non-cash investing and financing activities:

Issuance of common stock for repurchases and conversions of convertible senior notes — — 47

Benefit from exercise of hedges related to convertible senior notes — 2 18

Unsettled common stock repurchases

Unsettled maturities of securities available-for-sale

Operating lease right-of-use assets exchanged for lease liabilities 9 9 11

10 unchanged sentences

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.

Employees and contractors sign into the Okta Platform to seamlessly and securely access the applications they need to do their most important work with more modern and secure experiences in the cloud and via mobile devices.

Developers leverage the Okta Platform and Auth0 Platform to securely and efficiently embed identity into the software they build, allowing them to innovate and focus on their core mission.

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.

3 unchanged sentences

The Company’s fiscal year ends on January 31.

References to fiscal 2025, for example, refer to the fiscal year ended January 31, 2025.

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.

4 unchanged sentences

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 (loss).

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.

7 unchanged sentences

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 loss within the consolidated statements of stockholders’ equity.

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.

40 unchanged sentences

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 and other factors.

Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the contractual term.

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.

13 unchanged sentences

Restructuring and Other Charges

Restructuring generally includes significant actions involving employee-related severance charges, facilities consolidation and contract termination costs.

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.

7 unchanged sentences

In addition, the Company offers an employee stock purchase program (“ESPP”) to eligible employees.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The fair value of each option and 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 requisite service period for options, and over the offering period for ESPP awards.

The expected term of the Company’s stock options, which were last granted to employees in fiscal 2022, was determined utilizing the simplified method due to lack of historical exercise data.

The expected volatility was determined using a weighted-average of the historical volatility measures of a group of guideline companies and the Company's own historical volatility.

The risk-free interest rate was based on the U.S.

Treasury yield in effect at the time of grant for a period consistent with the expected term of the award.

The expected dividend was assumed to be zero as the Company has never declared or paid any cash dividends and do not currently intend to declare dividends in the foreseeable future.

The fair value of each RSU award is based on the fair value of the underlying common stock as of the grant date.

2 unchanged sentences

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.

17 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

As of January 31, 2025 and 2024, the Company's restricted cash balance was $ 6 million and $ 8 million, respectively, primarily related to letters of credit for its facility lease agreements.

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

6 unchanged sentences

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 income 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 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 income and other, net in the consolidated statements of operations.

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

20 unchanged sentences

The useful lives of property and equipment are as follows:

Computers and equipment 3 years

Furniture and fixtures 7 years

Furniture and fixtures Shorter of 7 years or remaining lease term

Leasehold improvements Shorter of estimated useful life or remaining lease term

45 unchanged sentences

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

7 unchanged sentences

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Net Income (Loss) per Share

1 unchanged sentence

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

2 unchanged sentences

Accounting Pronouncements Recently Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which requires potential disclosure of incremental segment information on an annual and interim basis.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements.

The Company adopted this guidance in fiscal 2025 with no material impact to its consolidated financial statements.

Recent Accounting Pronouncements Not Yet 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 intends to adopt this guidance in fiscal 2026 and expects the adoption of the updated guidance to result in disclosure of additional disaggregated tax information.

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.

1 unchanged sentence

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.

Restructuring and Other Charges

6 unchanged sentences

Total $ 4 $ 11 $ 56

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:

8 unchanged sentences

Balance as of January 31, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2025 Restructuring Plan

During fiscal 2025, the Company approved a restructuring plan (the “2025 Restructuring Plan”) intended to reallocate resources toward priorities to drive growth.

The 2025 Restructuring Plan involved a reduction of the Company’s workforce by approximately 180 full-time employees.

The 2025 Restructuring Plan is expected to be substantially complete by the first quarter of fiscal 2026, and the Company recognized aggregate restructuring costs of $ 11 million in fiscal 2025.

2024 Restructuring Plan

During fiscal 2024, the Company approved a restructuring plan (the “2024 Restructuring Plan”) intended to improve operating efficiencies and profitability.

The 2024 Restructuring Plan involved a reduction of the Company’s workforce by approximately 400 full-time employees.

The 2024 Restructuring Plan was substantially complete by the first quarter of fiscal 2025 and the Company recognized aggregate restructuring costs of $ 24 million in fiscal 2024.

Separate from the 2024 Restructuring Plan, the Company recognized $ 4 million of severance and termination benefit costs related to an insignificant workforce reduction in fiscal 2024.

2023 Restructuring Plan & Real Estate Optimization Plan

During fiscal 2023, the Company approved a restructuring plan (the “2023 Restructuring Plan”) intended to reduce operating expenses and improve profitability.

The 2023 Restructuring Plan involved a reduction of the Company’s workforce by approximately 300 full-time employees.

The 2023 Restructuring Plan was substantially complete by the first quarter of fiscal 2024 and the Company recognized aggregate restructuring costs of $ 15 million in fiscal 2023.

Additionally, during fiscal 2023 the Company implemented a real estate optimization plan which provided for closing duplicative sites and decommissioning underutilized offices and floors.

As result, the Company recognized non-cash lease impairment charges of $ 28 million and $ 14 million in fiscal 2024 and fiscal 2023, respectively .

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.

Cash Equivalents and Investments

13 unchanged sentences

Certificates of deposit (Level 2)

treasury securities (Level 2)

Total cash equivalents 670 248

12 unchanged sentences

Total $ 1,695

Interest receivable of $ 24 million and $ 20 million is included in Prepaid expenses and other current assets on the consolidated balance sheets as of January 31, 2025 and 2024, respectively.

There were no material differences between the estimated fair value and amortized cost of our cash equivalents and short-term investments as of January 31, 2025 and 2024.

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.

47 unchanged sentences

Property and equipment, net $ 38 $ 43

Depreciation expense was $ 13 million in fiscal 2025 and $ 12 million in fiscal 2024 and 2023.

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

Deferred Revenue and Performance Obligations

6 unchanged sentences

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.

Remaining performance obligations for professional services and other contracts as of January 31, 2025 were not material.

Convertible Senior Notes, Net

Convertible Senior Notes

The convertible senior notes due in 2025 (“2025 Notes”) and 2026 (“2026 Notes” and together with the 2025 Notes, the “Notes”), are recorded at face value less unamortized debt issuance costs.

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.

1 unchanged sentence

2025 Convertible Senior Notes

The 2025 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 0.125 % per year.

Interest is payable in cash semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2020.

The 2025 Notes mature on September 1, 2025 unless earlier redeemed, repurchased or converted.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The terms of the 2025 Notes are governed by an Indenture by and between the Company and Wilmington Trust, National Association, as Trustee (the "2025 Indenture").

Upon conversion, the 2025 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 2025 Notes are convertible at an initial conversion rate of 5.2991 shares of Class A common stock per $1,000 principal amount of the 2025 Notes, which is equal to an initial conversion price of approximately $ 188.71 per share of Class A common stock, subject to adjustment under certain circumstances in accordance with the terms of the 2025 Indenture.

Prior to the close of business on the business day immediately preceding June 1, 2025, holders of the 2025 Notes may convert all or a portion of their 2025 Notes only in multiples of $1,000 principal amount, under the following circumstances:

• during any fiscal quarter commencing after the fiscal quarter ending on January 31, 2020 (and only during such fiscal quarter), if the last reported sale price of 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 2025 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 2025 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 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;

• upon the occurrence of specified corporate events, as described in the 2025 Indenture.

On or after June 1, 2025 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 2025 Notes regardless of the foregoing circumstances.

During the three months ended January 31, 2025, the conditions allowing holders of the 2025 Notes to convert during the three months ending April 30, 2025 were not met.

As of January 31, 2025, the 2025 Notes are classified as current liabilities due to their upcoming maturity on September 1, 2025.

The Company may redeem for cash all or any portion of the 2025 Notes, at its option, on or after September 6, 2022, 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) during any 30 consecutive trading day period (including the last trading day of such period) ending on and including the trading day preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the 2025 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.

Holders of the 2025 Notes who convert their 2025 Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the 2025 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 2025 Indenture), holders of the 2025 Notes may require the Company to repurchase all or a portion of their 2025 Notes at a price equal to 100 % of the principal amount of the 2025 Notes being repurchased, plus any accrued and unpaid interest.

The net carrying amount of the 2025 Notes consisted of the following:

As of January 31,

(dollars in millions)

Principal $ 510 $ 552

unamortized debt issuance costs

Net carrying amount $ 509 $ 549

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

The 2025 Capped Calls are purchased call options that give the Company the option to purchase approximately 6 million shares, subject to anti-dilution adjustments substantially identical to those in the 2025 Notes, of its Class A common stock for approximately $ 188.71 per share (subject to adjustment), corresponding to the approximate initial conversion price of the 2025 Notes, exercisable upon conversion of the 2025 Notes.

The 2025 Capped Calls have initial cap prices of $ 255.88 per share (subject to adjustment) and will expire in 2025, if not exercised earlier.

The 2025 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 2025 Notes under certain circumstances.

The 2025 Capped Calls are separate transactions and are not part of the terms of the 2025 Notes.

The 2025 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

2 unchanged sentences

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”).

7 unchanged sentences

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, 2025, the conditions allowing holders of the 2026 Notes to convert during the three months ending April 30, 2025 were not met, and as a result, the 2026 Notes were classified as noncurrent liabilities as of January 31, 2025.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

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.

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.

The net carrying amount of the 2026 Notes consisted of the following:

As of January 31,

(dollars in millions)

Principal $ 350 $ 608

unamortized debt issuance costs

Net carrying amount $ 349 $ 605

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2026 Capped Calls

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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

The following table presents the principal amounts and estimated fair values of financial instruments that are not recorded at fair value on the consolidated balance sheets:

As of January 31, 2025

Principal Amount

Estimated Fair Value

(dollars in millions)

2025 convertible senior notes $ 510 $ 494

2026 convertible senior notes $ 350 $ 329

The estimated fair values of the Notes, which are Level 2 financial instruments, were determined based on the quoted bid prices of the Notes in an over-the-counter market on the last trading day of the reporting period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

The Company has entered into various non-cancelable office space operating leases with original lease periods expiring between 2026 and 2031.

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(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 3.8 years and 4.5 years as of January 31, 2025 and January 31, 2024, respectively, and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 5.6 % and 5.5 % as of January 31, 2025 and January 31, 2024, respectively.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Maturities of operating lease liabilities, which do not include short-term leases, were as follows:

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Total lease payments 113

Less imputed interest ( 15 )

Less imputed interest and other

Total operating lease liabilities $ 101

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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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

vulnerability to data breaches, and dismissed in part and denied in part the claims based on allegations related to the Auth0 integration.

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.

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3:22-cv-08627 (filed Dec.

13, 2022) (the "California Federal Derivative Actions").

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 for plaintiffs, and staying the consolidated California Federal Derivative Actions during the pendency of the motion to dismiss in the securities class action lawsuit.

On February 22, 2023, the court entered a stipulated order consolidating the California Federal Derivative Actions, appointing co-lead counsel

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

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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, and executed a Memorandum of Understanding in connection therewith containing the agreed-upon material, non-monetary terms of the proposed settlement.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

While the Company and defendants have agreed in principle to settle the above-referenced derivative lawsuits, the Company is unable to predict the outcome or estimate the amount of loss or range of losses that could potentially result from these lawsuits.

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

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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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

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Available for ESPP 9,892

Awards Issued as Charitable Contributions

During fiscal 2025, 2024 and 2023, the Company issued 56,250 , 75,000 and 41,250 shares, respectively, of Class A common stock as charitable contributions and recognized $ 5 million, $ 6 million and $ 4 million, respectively, as general and administrative expense in the consolidated statements of operations.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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RSUs 476 475 490

Market-based RSUs

ESPP 16 17 26

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Expired ( 1 ) 30.56

Forfeited ( 4 ) 47.82

Outstanding as of January 31, 2026 1,070 $ 108.43 3.1 $ 36

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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 $ 47 million during fiscal 2025, while no windfall tax benefits were realized in fiscal years 2024 and 2023.

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 (inclusive of market-based RSUs) and related information was as follows:

A summary of RSU activity and related information was as follows:

Number of RSUs

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The Company granted 4,855,252 RSUs with an aggregate fair value of $ 491 million during fiscal 2026.

As of January 31, 2025 and 2024, there was a total of $ 672 million and $ 898 million, respectively, 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.

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.

During the first quarter of fiscal 2025, the Company began funding withholding taxes due upon the vesting of employee RSUs in certain jurisdictions by net share settlement, rather than its previous approach of selling shares of the Company’s common stock.

The amount of withholding taxes related to net share settlement of employee RSUs is reflected as (i) a reduction to additional paid-in-capital, and (ii) cash outflows for financing activities when the payments are made.

The shares withheld by the Company as a result of the net share settlement of RSUs are not considered issued and outstanding, and do not impact the calculation of basic net income (loss) per share attributable to the Class A and Class B common stockholders.

Market-based Restricted Stock Units

In March 2022, the Company granted market-based RSUs to certain members of management with an average grant date fair value of $ 244.73 .

The target number of market-based RSUs granted was 58,150 .

One-third of these market-based RSUs vest over each of a one-, two- and three-year performance period, each starting on February 1, 2022.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In March 2023, the Company granted market-based RSUs to certain members of management with an average grant date fair value of $ 149.78 .

The target number of market-based RSUs granted was 192,843 .

One-third of these market-based RSUs vest over each of a one-, two- and three-year performance period, each starting on February 1, 2023.

In March 2024, the Company granted market-based RSUs to certain members of management with an average grant date fair value of $ 182.15 .

The target number of market-based RSUs granted was 183,595 .

One-third of these market-based RSUs vest over each of a one-, two- and three-year performance period, each starting on February 1, 2024.

based on a Monte Carlo simulation as of the date of grant assuming expected volatility of 58.4 %, a risk-free rate of 3.87 %, and a dividend yield of 0 %.

For each granted market-based RSU award, the number of shares that can be earned ranges from 0 % to 200 % of the target number of shares based on the relative performance of the per share price of the Company’s common stock as compared to the Nasdaq Composite Index over the respective performance periods and subject to continuous employment through the vesting dates.

The average grant date fair value per target market-based RSU is determined using a Monte Carlo simulation approach.

Compensation expense for awards with market conditions is recognized over the service period using the accelerated attribution method and is not reversed if the market condition is not met.

As of January 31, 2026 there was a total of $ 46 million of unrecognized stock-based compensation expense related to unvested market-based RSUs, which is being recognized over a weighted-average period of 0.9 years.

The total fair value of market-based RSUs vested during fiscal 2026, 2025 and 2024 was $ 16 million, $ 7 million and $ 0 million, respectively.

Restricted Stock Awards

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The shares were purchased at a weighted-average purchase price of $ 71.68 per share, with proceeds of $ 42 million.

As of January 31, 2025 and January 31, 2024, there was $ 15 million and $ 16 million, respectively, of unrecognized stock-based compensation expense related to the ESPP which is being recognized over a weighted-average vesting period of 0.6 years.

As of January 31, 2026 there was $ 14 million of unrecognized stock-based compensation expense related to the ESPP which is being recognized over a weighted-average vesting period of 0.9 years.

Employee Defined Contribution Plan

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$ 20 $ 18 $ 18

For fiscal 2026, income tax expense resulted primarily from income tax expense related to profitable foreign tax jurisdictions offset by the favorable tax impact of certain U.S.

tax legislation.

For fiscal 2025, income tax expense resulted primarily from 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.

For fiscal 2024, the income tax expense resulted primarily from income tax expense related to profitable foreign jurisdictions, federal and state taxes resulting from limitations on tax attribute utilization, and the tax impact of shortfalls from stock-based compensation in the United Kingdom.

For fiscal 2023, income tax expense resulted primarily from income tax expense related to profitable foreign jurisdictions, the tax impact of shortfalls from stock-based compensation in the United Kingdom, and state taxes.

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted.

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.

The Company’s provision for income tax reflects the impact of the enactment of the Act.

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 and are insignificant.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for fiscal 2026 is as follows:

Year Ended January 31, 2026

(dollars in millions)

Federal Statutory Tax Rate $ 54 21.0 %

State and Local Income Taxes, Net of Federal (National) Income Tax Effect (1)

Foreign Tax Effects

Share based payment awards

United Kingdom 3 1.3

Other Foreign Jurisdictions 4 1.4

Effect of Cross-Border Tax Laws

Foreign Derived Intangible Income Deduction ( 3 ) ( 1.3 )

Research and development tax credits ( 24 ) ( 9.4 )

Changes in Valuation Allowances ( 51 ) ( 20.0 )

Nontaxable or Nondeductible Items

Share base payment awards 4 1.8

Nondeductible Officer Compensation 17 6.6

Changes in Unrecognized Tax Benefits 8 3.3

Other Adjustments — 0.3

Effective Tax Rate $ 20 7.9 %

(1) State taxes in NY and NYC made up the majority (greater than 50%) of the tax effect in this category.

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for fiscal 2025 and 2024:

Year Ended January 31,

2025 2024 2023

Tax at federal statutory rate 21.0 % 21.0 %

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Effect of foreign operations

8.1 ( 0.7 ) ( 1.0 )

Research and development credits ( 51.7 ) 5.3

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Provision to return true-up

( 7.1 ) 0.2 —

Unrecognized tax benefits

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Tax Cuts and Jobs Act enacted on December 22, 2017 amended Internal Revenue Code Section 174 to require that specific research and experimental (“R&E”) expenditures be capitalized and amortized over five years (U.S.

R&E) or fifteen years (non-U.S.

R&E) beginning in fiscal 2023.

As a result, for fiscal 2024 and 2023, the Company disavowed certain tax deductions, which resulted in the utilization of federal and state tax attributes to offset this impact.

The tax effects of temporary differences and related deferred tax assets and liabilities as of January 31, 2026 and 2025 were as follows:

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$ ( 28 ) $ ( 13 )

The Company has determined that it is not more likely than not that it will realize the benefits of its net deferred tax assets in the United States due to negative evidence such as a continued cumulative loss and an increase in net deferred tax assets despite attribute utilization.

Therefore, the Company has recorded a valuation allowance to reduce the carrying value of the U.S.

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deferred tax liabilities.

valuation allowance increased by $ 57 million and $ 9 million during fiscal 2025 and 2024, respectively.

valuation allowance decreased by $ 55 million and increased by $ 57 million during fiscal 2026 and 2025, respectively.

As of January 31, 2026, the Company had approximately $ 2,781 million of federal and $ 2,031 million of state net operating loss carryforwards available to offset future taxable income.

If not utilized, the federal and state net operating loss carryforwards will begin to expire in 2035 and 2026, respectively.

The federal and state net operating losses for fiscal 2025 consider the impacts of the amendments of prior-year federal and state tax returns as discussed in the effective tax rate reconciliation section.

As of January 31, 2025, the Company had approximately $ 34 million of UK net operating losses which do not expire.

As of January 31, 2026, the Company had approximately $ 30 million of UK net operating losses and $ 10 million of Israel net operating losses which do not expire.

As of January 31, 2026, the Company had federal research and development tax credit carryforwards of $ 158 million and California research and development tax credit carryforwards of $ 100 million.

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For all years presented, the Company has not accrued a material amount in interest and penalties related to unrecognized tax benefits.

The Company does not have any significant uncertain tax positions as of January 31, 2025 for which it is reasonably possible that the positions will increase or decrease within the next twelve months.

As the Company has net operating loss carryforwards for the U.S.

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For material foreign jurisdictions, the tax years open to examination include the tax years 2018 and forward.

Cash paid for income taxes, net of refunds received, by jurisdiction for fiscal 2026 was as follows:

Year Ended January 31, 2026

(dollars in millions)

Federal Taxes $ ( 3 )

New York State 2

Other State Jurisdictions 1

Foreign Taxes

Other Foreign Jurisdictions 2

Total income taxes paid (net of refunds)

Cash paid for income taxes, net of refunds received during fiscal 2025 and 2024 was $ 17 million and $ 13 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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Net income (loss) $ 224 $ 11 $ 27 $ 1 $ ( 339 ) $ ( 16 )

Gain on extinguishment of debt, net of interest expense 1

Interest and other (1)

— — ( 17 ) ( 1 ) — —

Reallocation of net income as a result of assumed conversion of Class B to Class A common shares 11 — — — — —

Net income (loss), diluted $ 235 $ 11 $ 10 $ — $ ( 339 ) $ ( 16 )

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Net income (loss) per share, diluted $ 1.31 $ 1.31 $ 0.06 $ 0.06 $ ( 2.17 ) $ ( 2.17 )

1 Under the if-converted method, net income is adjusted to reflect the assumption that the convertible senior notes were converted at the beginning of the period.

(1) Under the if-converted method, net income (loss) is adjusted to reflect the assumption that the convertible senior notes were converted at the beginning of the period.

Potentially dilutive securities excluded because they would be anti-dilutive were as follows:

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The Company entered into capped call transactions in connection with the issuance of the convertible senior notes.

The effect of the capped calls was also excluded from the calculation of diluted net income per share as the effect of the capped calls would have been anti-dilutive.

The effect of the capped calls was also excluded from the calculation of diluted net income (loss) per share as the effect of the capped calls would have been anti-dilutive.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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Other than the United States, no individual country exceeded 10% of total revenue for fiscal 2026, 2025 and 2024.

Property and equipment by geographic location is based on the location of the legal entity that owns the asset.

As of January 31, 2025 and 2024, the majority of the Company's long-lived assets, which primarily consist of property and equipment and operating lease right-of-use assets, were located in the United States.

Long-lived assets by geographic location are based on the location of the legal entity that owns the asset.

The following table sets forth the Company’s long-lived assets, primarily consisting of property and equipment, net and operating lease right-of-use assets, by geographic area:

As of January 31,

(dollars in millions)

United States $ 73 $ 94

Rest of World

Total $ 103 $ 117

Business Combinations

On February 1, 2024, the Company acquired all of the outstanding equity of Spera, an identity security platform provider.

The acquisition of Spera is expected to broaden the Company's identity threat detection and security posture management capabilities.

The Spera acquisition was accounted for as a business combination.

The acquisition date fair value of purchase consideration for Spera of $ 58 million was paid in cash.

Of this amount, $ 12 million of consideration was transferred to an escrow fund as partial security for any purchase price adjustments and indemnification obligations, and will be paid to the former Spera stockholders following the 18 -month anniversary of the closing date (less any such adjustments or indemnification obligations).

The Company recorded $ 18 million for developed technology intangible assets with an estimated useful life of 5 years and recorded $ 42 million of goodwill which is primarily attributed to the assembled workforce as well as the integration of Spera’s technology and the Company’s technology.

On September 4, 2025, the Company acquired all of the outstanding equity of Axiom Security Ltd (“Axiom”), a privately held company specializing in privileged access management solutions.

The acquisition of Axiom is expected to broaden the Company’s privileged access management capabilities.

The acquisition date fair value of purchase consideration of $ 54 million was paid in cash.

The Axiom acquisition was accounted for as a business combination.

The Company recorded $ 16 million for developed technology intangible assets with an estimated useful life of 3 years and preliminarily recorded $ 40 million of goodwill which is primarily attributed to the assembled workforce as well as the integration of Axiom’s technology and the Company’s technology.

None of the goodwill is expected to be deductible for U.S.

federal income tax purposes.

The Company entered into revesting agreements with Spera’s founders pursuant to which 238,795 additional shares of Okta’s Class A common stock were issued as of the closing date which vest over three years .

The $ 20 million fair value of the unvested restricted stock award is attributable to a post-combination service condition and will be accounted for by the Company separately from the business combination as stock-based compensation expense.

Acquisition related expenses incurred were not material.

The Company may continue to adjust the preliminary purchase price allocation after obtaining more information primarily relating to income based taxes and residual goodwill through the measurement period, no more than one year from the date of acquisition.

This acquisition did not have a material impact on the Company’s consolidated financial statements;

therefore, historical financial information and pro forma disclosures have not been presented.

therefore, historical and pro forma disclosures have not been presented.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data