Okta, Inc. (OKTA): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed assessment of Okta, Inc.'s (OKTA) product portfolio, and honestly, the BCG Matrix is the right tool to map their shift from a pure growth story to a profitable, maturing platform. The core Workforce Identity Cloud is definitely a Cash Cow, generating an impressive $730 million in Free Cash Flow in FY 2025 with 98% of revenue being sticky subscriptions, but the overall growth story is slowing, with guidance for Q4 FY26 at just 10% year-over-year as the Customer Identity Cloud faces heavy bundling competition. We need to see if the high-growth Stars like Identity Governance can truly power the next phase, especially since the low-share Professional Services segment is posting a -22% gross margin loss; stick around to see where you should be placing your bets on this evolving platform.

Background of Okta, Inc. (OKTA)

You're looking at Okta, Inc. (OKTA), which is known as the leading independent identity partner in the market. Honestly, their core business is providing cloud-based identity management solutions, helping organizations securely connect their employees, partners, and customers to the right applications and services. It's all about managing who gets access to what, securely and seamlessly.

Let's look at the scale. For the full fiscal year 2025, which ended on January 31, 2025, Okta, Inc. reported total revenues of $2.610 billion. That represented a 15% increase year-over-year. To be fair, the vast majority of this revenue comes from their recurring model; subscription services accounted for 98% of that total, hitting $2.556 billion for the year.

The company finished that fiscal year with 19,650 customers on its platform. More recently, for the third quarter of fiscal year 2026, which concluded on October 31, 2025, the top line came in at $742 million, showing a 12% jump compared to the same quarter the year before. This growth is supported by a strong backlog, as Remaining Performance Obligations (RPO) increased 17% year-over-year in that quarter.

Operationally, you're seeing a shift toward profitability. In that same Q3 fiscal 2026 period, Okta, Inc. posted a GAAP operating income of $23 million, a significant turnaround from the operating loss of $16 million reported in the year-ago quarter. Furthermore, the efficiency of the subscription model is clear, with the free cash flow margin hitting 28.4% for the quarter.

Strategically, Okta, Inc. continues to expand its portfolio to address more complex enterprise needs. Key areas of focus and adoption include newer solutions like Okta Identity Governance (OIG), Okta Privileged Access (OPA), and Identity Threat Protection (ITP) powered by Okta AI. For instance, the Identity Governance solution alone ended fiscal 2025 with over 1,300 customers and more than $100 million in annual contract revenue.

Okta, Inc. (OKTA) - BCG Matrix: Stars

Okta Identity Governance (OIG) and Okta Privileged Access (OPA) are positioned as high-growth upsells within the Okta, Inc. portfolio. The overall Identity and Access Management Market is projected to grow at a 14.4 percent Compound Annual Growth Rate (CAGR) through 2032, establishing the high-growth environment for these products.

These new modules are driving cross-sell momentum within the large enterprise base. The company reported continued strength with large customers during the third quarter ended October 31, 2025. The total Remaining Performance Obligations (RPO), which reflects future committed revenue including these modules, stood at $4.292 billion, marking a 17 percent year-over-year increase. Current RPO (cRPO), the portion expected in the next 12 months, grew 13 percent year-over-year to $2.328 billion in the same quarter.

Identity Threat Protection with Okta AI is a nascent, high-growth security feature. The company has been engaged with over 100 of its current customers, which combined represent over $200 million in existing Annual Recurring Revenue (ARR), regarding AI security. The need for management and security of agentic technologies is consuming conversations with customers, with 90 percent of surveyed organizations having deployed agents, but only 10 percent being confident in their governance. The company acquired Axiom Security for $54 million to accelerate Okta Privileged Access growth.

The company is seeing strong early interest in new AI security products, a defintely hot market. The overall business performance supports this positioning, with Q3 Fiscal Year 2026 total revenue reaching $742 million, an increase of 12 percent year-over-year. Subscription revenue, the core of these offerings, was $724 million, up 11 percent year-over-year.

Here's a look at the latest reported growth metrics from the third quarter of fiscal year 2026:

The company's market position in the broader sector is also notable:

• Okta, Inc. holds 15.6 percent share of the global identity and access management (IAM) market.
• For the full fiscal year 2026, Okta, Inc. expects total revenue between $2.906 billion and $2.908 billion.
• The company's non-GAAP operating margin for Q3 FY2026 was 24 percent.

The focus on these high-value modules is intended to maintain leadership until the overall market growth rate potentially decelerates, allowing these products to transition into Cash Cows. The company is increasing sales and marketing expense, showing confidence in addressing this opportunity.

Okta, Inc. (OKTA) - BCG Matrix: Cash Cows

You're looking at the engine room of Okta, Inc. (OKTA)'s financial strength, which is definitely the Workforce Identity Cloud (WIC). This platform is the core, sticky offering, holding a high market share in a mature segment of the identity space. It's where the company has achieved a competitive advantage, meaning it prints cash reliably.

The numbers from the full fiscal year 2025 really show this stability. The Non-GAAP Operating Income came in at a strong $587 million, representing a healthy 22% margin. That margin is what we look for in a true Cash Cow-high profitability from a dominant position.

The revenue stream itself is incredibly dependable. Subscription revenue, which is the lifeblood of this model, constituted about 98% of total revenue for FY 2025. That predictability lets you plan capital allocation with much greater certainty, so you don't have to worry about sudden swings.

Here's the quick math on cash generation, which is the ultimate test for a Cash Cow. Free Cash Flow reached an impressive $730 million in FY 2025. That's cash flowing in that can be redeployed to fund growth areas, like those Question Marks we'll discuss later, or to shore up the balance sheet.

Cash Cows are the products that businesses strive for because they generate more cash than they consume. For Okta, Inc. (OKTA), this segment allows for minimal investment in promotion and placement because the market is established and adoption is high. Investments shift toward efficiency in supporting infrastructure to further boost that cash flow.

Consider the key financial indicators that define this quadrant's success for Okta, Inc. (OKTA) based on the FY 2025 results:

• Core Platform Market Position: Workforce Identity Cloud (WIC)
• Market Maturity: High share in a mature segment
• Profitability Driver: High profit margins achieved
• Investment Strategy: Maintain productivity, milk gains passively

To give you a clearer picture of the financial performance underpinning this Cash Cow status, look at these key metrics from the fiscal year:

The focus here isn't on massive top-line growth acceleration, but on optimizing the existing base. You want to invest just enough to keep the infrastructure efficient and the customer base happy, ensuring that $730 million in Free Cash Flow keeps coming. If onboarding takes 14+ days, churn risk rises, which is a direct threat to this cash stream.

Finance: draft 13-week cash view by Friday.

Okta, Inc. (OKTA) - BCG Matrix: Dogs

You're looking at the parts of Okta, Inc. (OKTA) that aren't driving the growth story, and that's the Professional Services and other revenue segment. This area fits squarely into the Dog quadrant because it's operating in a low-growth market relative to the core subscription business and has a low market share, which we can infer from its small revenue contribution. Honestly, these units tie up capital without offering much return.

This segment is necessary, particularly for those large, complex deployments where hands-on help is needed to get customers fully onboarded and realizing value from the platform. But, the financial reality is tough. This segment operates at a significant loss, posting a negative gross margin of -22% in Q3 FY26. That means for every dollar of service revenue recognized, Okta, Inc. is losing 22 cents just covering the direct costs of delivering that service. It's a cash drag, even if it's a small one in the grand scheme.

Here's a quick look at the numbers for this unit compared to the main engine, Subscription revenue, using the latest available data points. The core business is clearly where the value is, so you see the massive disparity in scale and profitability.

The numbers clearly show why this isn't a focus area for investment. Expensive turn-around plans here usually don't pay off because the market itself isn't expanding rapidly for this type of offering. You're better off focusing resources where the growth is.

The implications for Okta, Inc.'s strategy regarding this Dog segment are clear:

• Minimize cash consumption in the unit.
• Avoid large capital commitments for expansion.
• Maintain just enough presence for critical customer needs.
• Consider divestiture or significant restructuring.
• The segment's revenue was only about 2% of total Q3 FY26 revenue.

Finance: draft 13-week cash view by Friday.

Okta, Inc. (OKTA) - BCG Matrix: Question Marks

You're looking at the products or business units that are burning cash now but hold the key to future dominance-the Question Marks. For Okta, Inc., this quadrant is heavily influenced by the Customer Identity Cloud (CIC) portfolio, largely built around the Auth0 acquisition, and its aggressive pivot into securing the nascent AI agent ecosystem.

The Customer Identity Cloud (CIC) faces a tough road. It operates in a high-growth market-digital customer identity-but runs headlong into deeply bundled offerings, particularly from hyperscalers like Microsoft. This segment needs significant investment to fend off these integrated competitors and capture market share before the market matures and growth slows.

The pressure on expansion within the existing customer base is visible in the retention metrics. The dollar-based net retention rate for the trailing 12-month period in Q3 FY2025 stood at 108%. While still positive, this figure is lower than what the market has come to expect from Okta, Inc., signaling that expansion revenue from existing customers is decelerating, which is a classic symptom of a Question Mark needing a decisive strategy.

The overall revenue growth trajectory confirms this need for action. The full fiscal year 2025 saw total revenue growth of 15%. Looking ahead, the guidance for the fourth quarter of fiscal 2026 projects total revenue growth of 10% year-over-year, and the full fiscal year 2026 guidance is for revenue between $2.906 billion and $2.908 billion, representing an 11% growth rate year-over-year. This deceleration from the 15% achieved in FY 2025 to the guided 10% to 11% range for FY 2026 suggests that the core business is slowing its ascent, putting more pressure on new bets to perform.

Here's a quick look at the deceleration in growth expectations:

The high-risk, high-reward play here is the push into securing the AI agent identity space with the launch of Auth0 for AI Agents. This is a massive potential market, with IDC predicting global AI spending to hit $500 billion by 2027. However, the market is fraught with trust issues that Okta, Inc. must solve to win. The Auth0 Customer Identity Trends Report 2025 indicated that 60% of surveyed consumers are concerned about AI's impact on digital identity, privacy, and security. If Okta, Inc. can successfully position its platform as the essential security layer for these new non-human identities, this Question Mark could rapidly transition into a Star. If not, the investment required to maintain relevance in this new frontier could see this segment regress toward the Dog quadrant.

The current customer base metrics show the scale Okta, Inc. is working with, which underpins the potential for these Question Marks:

• Total Customer Base (End of Q3 FY2026): Over 20,000
• Customers with $100,000+ Annual Contract Value (ACV) (End of Q3 FY2026): 4,705
• Year-over-Year Growth in $100,000+ ACV Customers (Q3 FY2026): 8%
• Subscription Backlog (RPO) (End of Q3 FY2026): $4.292 billion

The strategy is clear: pour capital into securing the AI agent identity space and aggressively drive upsell/cross-sell within the CIC to boost that lagging net retention rate. Finance: finalize the FY2027 capital allocation plan for R&D focused on AI security by January 15th.