Okta, Inc.

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 asone 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,

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, clarifying when to begin capitalizing costs, and enhancing disclosure requirements. This guidance is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual periods, with early adoption permitted. Entities can adopt the new standard using a prospective, modified, or retrospective transition approach. The Company is currently evaluating the impact of adopting this guidance, including the timing of adoption (early or standard) and the selection of an appropriate transition method.

3. 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:

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

Interest receivable of $22 million and $24 million is included in Prepaid expenses and other current assets on the condensed consolidated balance sheets as of April 30, 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 April 30, 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 April 30, 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 April 30, 2026 and January 31, 2026, the balance of strategic investments was $39 million and $33 million, respectively.

4. Deferred Commissions

Sales commissions capitalized as contract costs totaled $37 million and $32 million for the three months ended April 30, 2026 and 2025, respectively. Amortization of contract costs totaled $45 million and $36 million for the three months ended April 30, 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 April 30, 2026 and 2025 that was included in the deferred revenue balances at the beginning of the respective periods was $696 million and $627 million, 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 $4,719 million as of April 30, 2026. Of this amount, the Company expects to recognize revenue of $2,499 million, or 53%, over the next 12 months, with the balance to be recognized as revenue thereafter.

6. Convertible Senior Notes, Net

Convertible Senior Notes

The 2026 convertible senior notes (“2026 Notes”) are recorded at face value less unamortized debt issuance costs. As of April 30, 2026, the 2026 Notes are classified as current liabilities due to their upcoming maturity on June 15, 2026.

Fair Value Measurements

As of April 30, 2026, the estimated fair value of the 2026 Notes, which are not recorded at fair value on the condensed consolidated balance sheets, was $348 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.

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 April 30, 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:

The following table presents total unrecognized stock-based compensation expense related to outstanding equity awards as of April 30, 2026:

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 one-, two- andthree-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 months ended April 30, 2026, the Company repurchased and immediately retired 3,026,820 shares of its Class A common stock for an aggregate amount, including commissions, of $241 million under the Share Repurchase Program. As of April 30, 2026, $680 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.

9. Income Taxes

For the three months ended April 30, 2026, the Company recorded a provision for income taxes of $4 million on pretax income of $78 million. The effective tax rate for the three months ended April 30, 2026 was 4.6%. 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, 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 April 30, 2025, the Company recorded a provision for income taxes of $6 million on pretax income of $68 million. The effective tax rate for the three months ended April 30, 2025 was 8.5%. 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 tax effect of foreign operations, and U.S. federal and state taxes.

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.

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

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.

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 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.