Okta, Inc. 10-Q

Item 1. Financial Statements OKTA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in millions, shares in thousands, except per share data) July 31, 2026 January 31, 2026 (unaudited) Assets Current assets: Cash and cash equivalents $ 763 $ 858 Short-term investments 1,536 1,695 Accounts receivable, net 469 687 Deferred commissions 173 171 Prepaid expenses and other current assets 148 233 Total current assets 3,089 3,644 Property and equipment, net 33 38 Operating lease right-of-use assets 53 65 Deferred commissions, noncurrent 331 332 Intangible assets, net 80 91 Goodwill 5,487 5,487 Other assets 65 53 Total assets $ 9,138 $ 9,710 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 10 $ 12 Accrued expenses and other current liabilities 106 104 Accrued compensation 158 213 Convertible senior notes, net — 350 Deferred revenue 1,751 1,875 Total current liabilities 2,025 2,554 Operating lease liabilities, noncurrent 53 72 Deferred revenue, noncurrent 30 30 Other liabilities, noncurrent 57 55 Total liabilities 2,165 2,711 Commitments and contingencies (Note 7) Stockholders’ equity: Preferred stock, par value $ 0.0001 per share; 100,000 shares authorized; no shares issued and outstanding as of July 31, 2026 and January 31, 2026 — — Class A common stock, par value $ 0.0001 per share; 1,000,000 shares authorized; 167,136 and 169,670 shares issued and outstanding as of July 31, 2026 and January 31, 2026, respectively — — Class B common stock, par value $ 0.0001 per share; 120,000 shares authorized; 7,681 and 7,687 shares issued and outstanding as of July 31, 2026 and January 31, 2026, respectively — — Additional paid-in capital 9,348 9,553 Accumulated other comprehensive income 2 13 Accumulated deficit ( 2,377 ) ( 2,567 ) Total stockholders’ equity 6,973 6,999 Total liabilities and stockholders' equity $ 9,138 $ 9,710 See Notes to Condensed Consolidated Financial Statements. 4 OKTA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in millions, shares in thousands, except per share data) (unaudited) Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Revenue: Subscription $ 793 $ 711 $ 1,543 $ 1,384 Professional services and other 12 17 27 32 Total revenue 805 728 1,570 1,416 Cost of revenue: Subscription 145 147 295 283 Professional services and other 19 21 39 40 Total cost of revenue 164 168 334 323 Gross profit 641 560 1,236 1,093 Operating expenses: Research and development 163 160 326 314 Sales and marketing 273 246 551 483 General and administrative 98 113 196 216 Total operating expenses 534 519 1,073 1,013 Operating income 107 41 163 80 Interest expense — ( 1 ) ( 1 ) ( 2 ) Interest income and other, net 19 27 42 57 Interest and other, net 19 26 41 55 Income before provision for income taxes 126 67 204 135 Provision for income taxes 10 — 14 6 Net income $ 116 $ 67 $ 190 $ 129 . Net income per share, basic $ 0.67 $ 0.38 $ 1.09 $ 0.74 Net income per share, diluted $ 0.65 $ 0.37 $ 1.07 $ 0.72 . Weighted-average shares used to compute net income per share, basic 174,298 175,460 175,198 174,827 Weighted-average shares used to compute net income per share, diluted 178,808 180,966 178,233 181,356 See Notes to Condensed Consolidated Financial Statements. 5 OKTA, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) (unaudited) Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Net income $ 116 $ 67 $ 190 $ 129 Other comprehensive income (loss): Net change in unrealized gains or losses on available-for-sale securities ( 3 ) ( 4 ) ( 5 ) ( 2 ) Foreign currency translation adjustments ( 4 ) — ( 6 ) 15 Other comprehensive income (loss) ( 7 ) ( 4 ) ( 11 ) 13 Comprehensive income $ 109 $ 63 $ 179 $ 142 See Notes to Condensed Consolidated Financial Statements. 6 OKTA, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (dollars in millions, shares in thousands) (unaudited) Three and Six Months Ended July 31, 2026 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, 2026 169,670 — 7,687 — $ 9,553 $ 13 $ ( 2,567 ) $ 6,999 Issuance of common stock, net 1,017 — — — 3 — — 3 Taxes withheld related to net share settlement of equity awards — — — — ( 50 ) — — ( 50 ) Common stock repurchased ( 3,027 ) — — — ( 242 ) — — ( 242 ) Stock-based compensation — — — — 119 — — 119 Other comprehensive loss — — — — — ( 4 ) — ( 4 ) Net income — — — — — — 74 74 Balances as of April 30, 2026 167,660 — 7,687 — $ 9,383 $ 9 $ ( 2,493 ) $ 6,899 Issuance of common stock, net 1,012 — — — 25 — — 25 Taxes withheld related to net share settlement of equity awards — — — — ( 52 ) — — ( 52 ) Common stock repurchased ( 1,542 ) — — — ( 125 ) — — ( 125 ) Conversion of Class B common stock to Class A common stock 6 — ( 6 ) — — — — — Stock-based compensation — — — — 117 — — 117 Other comprehensive loss — — — — — ( 7 ) — ( 7 ) Net income — — — — — — 116 116 Balances as of July 31, 2026 167,136 — 7,681 — $ 9,348 $ 2 $ ( 2,377 ) $ 6,973 7 Three and Six Months Ended July 31, 2025 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, 2025 165,650 — 7,809 — $ 9,219 $ ( 12 ) $ ( 2,802 ) $ 6,405 Issuance of common stock, net 1,446 — 166 — 9 — — 9 Taxes withheld related to net share settlement of equity awards — — — — ( 54 ) — — ( 54 ) Conversion of Class B common stock to Class A common stock 65 — ( 65 ) — — — — — Stock-based compensation — — — — 128 — — 128 Other comprehensive income — — — — — 17 — 17 Net income — — — — — — 62 62 Balances as of April 30, 2025 167,161 — 7,910 — $ 9,302 $ 5 $ ( 2,740 ) $ 6,567 Issuance of common stock, net 1,146 — 47 — 24 — — 24 Taxes withheld related to net share settlement of equity awards — — — — ( 49 ) — — ( 49 ) Conversion of Class B common stock to Class A common stock 130 — ( 130 ) — — — — — Settlement of capped calls related to convertible senior notes — — — — 2 — — 2 Stock-based compensation — — — — 147 — — 147 Other comprehensive loss — — — — — ( 4 ) — ( 4 ) Net income — — — — — — 67 67 Balances as of July 31, 2025 168,437 — 7,827 — $ 9,426 $ 1 $ ( 2,673 ) $ 6,754 See Notes to Condensed Consolidated Financial Statements. 8 OKTA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Six Months Ended July 31, 2026 2025 Cash flows from operating activities: Net income $ 190 $ 129 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 231 272 Depreciation and amortization 37 48 Amortization of deferred commissions 92 76 Deferred income taxes — 3 Other, net 4 4 Changes in operating assets and liabilities: Accounts receivable 217 201 Deferred commissions ( 96 ) ( 80 ) Prepaid expenses and other assets 17 ( 9 ) Operating lease right-of-use assets 10 9 Accounts payable ( 1 ) ( 2 ) Accrued compensation ( 56 ) ( 75 ) Accrued expenses and other liabilities 7 ( 11 ) Operating lease liabilities ( 17 ) ( 14 ) Deferred revenue ( 124 ) ( 143 ) Net cash provided by operating activities 511 408 Cash flows from investing activities: Capitalized software ( 11 ) ( 5 ) Purchases of property and equipment ( 2 ) ( 3 ) Purchases of securities available-for-sale and other ( 1,033 ) ( 720 ) Proceeds from maturities and redemption of securities available-for-sale 1,157 848 Proceeds from sales of securities available-for-sale and other 84 1 Purchases of intangible assets ( 2 ) — Payments for business acquisitions, net of cash acquired — ( 3 ) Net cash provided by investing activities 193 118 Cash flows from financing activities: Payments upon maturity of convertible senior notes ( 350 ) — Taxes paid related to net share settlement of equity awards ( 100 ) ( 102 ) Proceeds from settlement of capped calls related to convertible senior notes — 2 Repurchases of common stock ( 372 ) — Proceeds from stock option exercises 4 10 Proceeds from shares issued in connection with employee stock purchase plan 24 23 Net cash used in financing activities ( 794 ) ( 67 ) Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash ( 5 ) 10 Net increase (decrease) in cash, cash equivalents and restricted cash ( 95 ) 469 Cash, cash equivalents and restricted cash at beginning of period 864 415 Cash, cash equivalents and restricted cash at end of period $ 769 $ 884 Supplementary cash flow disclosure: Cash paid during the period for: Operating leases $ 19 $ 18 Non-cash activities: Operating lease right-of-use assets exchanged for lease liabilities — 2 Reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above: Cash and cash equivalents $ 763 $ 876 Restricted cash, current included in prepaid expenses and other current assets — 2 Restricted cash, noncurrent included in other assets 6 6 Total cash, cash equivalents and restricted cash $ 769 $ 884 See Notes to Condensed Consolidated Financial Statements. 9 OKTA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Overview and Basis of Presentation Description of Business Okta, Inc. (the “Company”) is the leading independent identity provider. 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, artificial intelligence (“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 unaudited condensed 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”) for interim periods. Accordingly, they do not include all of the financial information and footnotes required by GAAP for complete financial statements. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of January 31, 2026, included herein, was derived from the audited financial statements as of that date. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair statement of the results of operations for the interim periods presented but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year ending January 31, 2027 or any future period. The Company’s fiscal year ends on January 31. References to fiscal 2027, for example, refer to the fiscal year ending January 31, 2027. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 5, 2026. 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 Software-as-a-Service (“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 condensed consolidated financial statements and related notes. Use of Estimates The preparation of condensed 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 condensed 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, 10 OKTA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) uncertain tax positions, assets and liabilities acquired in business combinations and loss contingencies related to litigation. 2. Accounting Standards and Significant Accounting Policies Significant Accounting Policies For a summary of the Company’s significant accounting policies refer to “Note 2. Summary of Significant Accounting Policies” of its Annual Report on Form 10-K for the fiscal year ended January 31, 2026. 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 and enhance disclosure requirements. The guidance removes all references to software development stages and introduces the concept of “significant development uncertainty,” which if present, prevents capitalization. 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. Cash Equivalents and Investments Cash Equivalents and Short-term Investments In estimating fair value, the Company uses a three-tier fair value hierarchy 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. The following tables present the estimated fair value of cash equivalents and short-term investments: As of July 31, 2026 As of January 31, 2026 (dollars in millions) Cash equivalents: Money market funds (Level 1) $ 530 $ 654 U.S. government securities (Level 2) — 16 Total cash equivalents 530 670 Short-term investments (Available-for-sale): U.S. government securities (Level 2) 1,399 1,459 Corporate debt securities (Level 2) 117 180 Certificates of deposit (Level 2) 20 56 Total short-term investments 1,536 1,695 Total $ 2,066 $ 2,365 11 OKTA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) The following table presents the contractual maturities of the Company’s short-term investments: As of July 31, 2026 Estimated Fair Value (dollars in millions) Due within one year $ 1,090 Due between one to five years 446 Total $ 1,536 Interest receivable of $ 19 million and $ 24 million is included in Prepaid expenses and other current assets on the condensed consolidated balance sheets as of July 31, 2026 and January 31, 2026, respectively. There were no material differences between the estimated fair value and amortized cost of cash equivalents and short-term investments as of July 31, 2026 and January 31, 2026. 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 July 31, 2026 and January 31, 2026. 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 July 31, 2026 and January 31, 2026, the balance of strategic investments was $ 45 million and $ 33 million, respectively. 4. Deferred Commissions Sales commissions capitalized as contract costs totaled $ 59 million and $ 48 million for the three months ended July 31, 2026 and 2025, respectively, and $ 96 million and $ 80 million for the six months ended July 31, 2026 and 2025, respectively. Amortization of contract costs totaled $ 47 million and $ 40 million for the three months ended July 31, 2026 and 2025, respectively, and $ 92 million and $ 76 million for the six months ended July 31, 2026 and 2025, respectively. 5. 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 the three months ended July 31, 2026 and 2025 that was included in the deferred revenue balances at the beginning of the respective periods was $ 722 million and $ 651 million, respectively, and $ 1,265 million and $ 1,144 million in the six months ended July 31, 2026 and 2025, respectively. Transaction Price Allocated to the Remaining Performance Obligations Transaction price allocated to the remaining performance obligations (“RPO”) 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 were $ 4,858 million as of July 31, 2026 . Of this amount, the Company expects to recognize revenue of $ 2,585 million, or 53 %, over the next 12 months, with the balance to be recognized as revenue thereafter. 12 OKTA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) 6. Convertible Senior Notes, Net Convertible Senior Notes The 2026 convertible senior notes (“2026 Notes”) matured on June 15, 2026, and the Company settled the full remaining $ 350 million principal amount outstanding in cash. 7. Commitments and Contingencies 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. There were no such material matters as of July 31, 2026. Warranties and Indemnification To date, the Company has not incurred significant costs and has not accrued any material liabilities in the accompanying condensed consolidated financial statements as a result of its warranty and indemnification obligations. 8. Employee Incentive Plans and Stockholders’ Equity The Company’s equity incentive plans provide for granting stock options, restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) 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 Plan (“ESPP”) to eligible employees. Stock-based compensation expense was recorded in the following cost and expense categories in the Company’s condensed consolidated statements of operations: Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 (dollars in millions) Cost of revenue Subscription $ 15 $ 21 $ 31 $ 38 Professional services and other 1 2 3 5 Research and development 36 51 77 98 Sales and marketing 32 35 61 67 General and administrative 30 35 59 64 Total $ 114 $ 144 $ 231 $ 272 The following table presents total unrecognized stock-based compensation expense related to outstanding equity awards as of July 31, 2026: Unrecognized Stock-based Compensation Expense (in millions) Weighted-average remaining period (in years) Unvested RSUs $ 645 2.2 years Unvested RSAs 12 1.8 years Unvested market-based RSUs 74 1.4 years ESPP 8 0.5 years Total $ 739 Market-based Restricted Stock Units In March 2026, the Company granted market-based RSUs to certain members of management. The target number of market-based RSUs granted was 396,603 . One-third of these market-based RSUs vest over each of a 13 OKTA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) one-, two- and three-year performance period, each starting on February 1, 2026. 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 $ 133.81 average grant date fair value per target market-based RSU was 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. Share Repurchase Program In January 2026, the Company’s board of directors (the “board”) authorized a stock repurchase program (the “Share 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 three and six months ended July 31, 2026, the Company repurchased and immediately retired 1,542,442 and 4,569,262 shares, respectively, of its Class A common stock for an aggregate amount, including commissions, of $ 125 million and $ 366 million, respectively, under the Share Repurchase Program. As of July 31, 2026, $ 555 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases. 9. Income Taxes For the three and six months ended July 31, 2026, the Company recorded a provision for income taxes of $ 10 million and $ 14 million on pre-tax income of $ 126 million and $ 204 million, respectively. The effective tax rate for the three and six months ended July 31, 2026 was approximately 7.7 % and 6.6 %, respectively. The effective tax rate differs from the statutory rate primarily as a result of a full valuation allowance against the U.S. deferred tax assets, the favorable tax impact of the One Big Beautiful Bill Act (the “Act”), the tax effect of foreign operations, the integration of Axiom Security Ltd, and U.S. federal and state taxes. The Act was enacted on July 4, 2025. 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. For the three months ended July 31, 2025, the Company recorded an insignificant provision for income taxes on pre-tax income of $ 67 million. For the six months ended July 31, 2025, the Company recorded a provision for income taxes of $ 6 million on pre-tax income of $ 135 million. The effective tax rate for the three and six months ended July 31, 2025 was approximately 0.5 % and 4.6 %, respectively. The effective tax rate differs from the statutory rate primarily as a result of a full valuation allowance against the U.S. deferred tax assets, the favorable tax impact of the Act, the tax effect of foreign operations, and other U.S. federal and state taxes. 14 OKTA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) 10. Net Income Per Share The following tables present the calculation of basic and diluted net income per share. Net income is reported in millions and rounded from amounts in thousands; as a result, net income per share may not recalculate exactly due to rounding. Three Months Ended July 31, 2026 2025 Class A Class B Class A Class B (dollars in millions, shares in thousands, except per share data) Basic net income per share: Numerator: Net income, basic $ 111 $ 5 $ 64 $ 3 Denominator: Weighted-average shares outstanding, basic 166,614 7,684 167,615 7,845 Net income per share, basic $ 0.67 $ 0.67 $ 0.38 $ 0.38 . Diluted net income per share: Numerator: Net income $ 111 $ 5 $ 64 $ 3 Reallocation of net income as a result of assumed conversion of Class B to Class A common shares 5 — 3 — Net income, diluted $ 116 $ 5 $ 67 $ 3 Denominator: Number of shares used in basic calculation 166,614 7,684 167,615 7,845 Weighted-average effect of diluted securities related to: Employee share-based awards 4,438 72 2,642 456 Convertible senior notes — — 2,408 — Assumed conversion of Class B to Class A common shares 7,756 — 8,301 — Number of shares used in diluted calculation 178,808 7,756 180,966 8,301 Net income per share, diluted $ 0.65 $ 0.65 $ 0.37 $ 0.37 15 OKTA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Six Months Ended July 31, 2026 2025 Class A Class B Class A Class B (dollars in millions, shares in thousands, except per share data) Basic net income per share: Numerator: Net income, basic $ 182 $ 8 $ 123 $ 6 Denominator: Weighted-average shares outstanding, basic 167,512 7,686 166,934 7,893 Net income per share, basic $ 1.09 $ 1.09 $ 0.74 $ 0.74 . Diluted net income per share: Numerator: Net income $ 182 $ 8 $ 123 $ 6 Interest and other 1 — — 2 — Reallocation of net income as a result of assumed conversion of Class B to Class A common shares 8 — 6 — Net income, diluted $ 190 $ 8 $ 131 $ 6 Denominator: Number of shares used in basic calculation 167,512 7,686 166,934 7,893 Weighted-average effect of diluted securities related to: Employee share-based awards 2,591 136 2,634 621 Convertible senior notes 308 — 3,274 — Assumed conversion of Class B to Class A common shares 7,822 — 8,514 — Number of shares used in diluted calculation 178,233 7,822 181,356 8,514 Net income per share, diluted $ 1.07 $ 1.07 $ 0.72 $ 0.72 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. Potentially dilutive securities excluded because they would be anti-dilutive were as follows: Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 (shares in thousands) Employee share-based awards 695 1,227 3,194 2,835 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 for the period that the convertible senior notes were outstanding as the effect of the capped calls would have been anti-dilutive. The remaining outstanding capped calls expired unexercised as a result of the maturity of the 2026 Notes on June 15, 2026. 11. Business Combinations 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 16 OKTA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) be deductible for U.S. federal income tax purposes. 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 condensed consolidated financial statements; therefore, historical and pro forma disclosures have not been presented. 12. Subsequent Events On August 26, 2026, the Company completed its acquisition of Permiso Security Inc. (“Permiso”). The acquisition of Permiso, a cloud-native identity security platform that detects and mitigates threats across human, non-human, and agentic identities in multi-cloud environments, is expected to help broaden the Company’s identity threat detection and response capabilities. The Company is currently evaluating the measurement of consideration transferred and post-combination costs. 17 OKTA, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS