So Okta rose to rapid growth and IPO as the stand-alone leader in enterprise identity for apps, acquired Auth0 to own it for developers, and now coming up on $3 Billion in ARR, it has settled into a more mature state:
- $2.75B in ARR
- Growing 12%, projected to slow to 10%
- Non-GAAP operating margins of 27%
- Free Cash Flow margins of 35% (!)
- $18B market cap, so ~6x ARR
Net net it’s a story of new customer growth of 7% combined with slowing NRR of 106%. That math combines roughly to 12% growth.
5 Interesting Learnings:
The Core 5: Revenue & Growth Metrics
1. The $100K ACV Customer Metric That Matters Most
The Numbers: 4,870 customers >$100K ACV (+7% YoY) generating the majority of Okta’s $2.75B ARR. Like many seeing slowing growth, Okta has concentrated more and more on its larger, more enterprise accounts.
The Learning: At scale, customer count growth in your premium tier matters more than total customer adds. These 4,870 customers likely represent 70%+ of revenue despite being <25% of total customers.
2. Net Retention Compression: From 122% to 106%
The Numbers: NRR dropped from 122% (Q2 FY23) to 106% (Q1 FY26) – a 16 point decline over 3 years
The Learning: Plan for 4-6 points of NRR compression annually once you hit $1B+ ARR. The math gets harder when your base gets bigger, but 106% NRR at $2.6B scale is still a stong growth engine.
3. Current RPO Growth Predicts Your Next 4 Quarters
The Numbers: cRPO grew 14% YoY to $2.2B, down from 21% total RPO growth
The Learning: cRPO (next 12 months of bookings) is your best leading indicator. When cRPO growth diverges significantly from total RPO growth, it signals contract duration changes or booking seasonality shifts.
4. Revenue Growth Deceleration Timeline is Measurable
The Numbers: Revenue growth: 22% (FY23) → 18% (FY24) → 15% (FY25) → 12% (Q1 FY26)
The Learning: Expect ~3-4 points of growth deceleration annually at mega-scale. Okta’s following the classic SaaS maturity curve – the key is maintaining predictability in the deceleration.
5. International Revenue as a Growth Vector Indicator
The Numbers: International revenue represents ~20% of total ($141M of $688M in Q1)
The Learning: At $2.6B ARR with only 20% international, there’s massive expansion opportunity. Best-in-class SaaS companies typically see 35-40% international mix at this scale.
The Bonus 5: Operational Excellence Metrics
6. Operating Leverage Efficiency: The 25x Multiplier Effect
The Numbers: Operating margin expansion from -0.5% (FY23) to 26.7% (Q1 FY26) = 2,720 basis points improvement
The Learning: When you nail operational efficiency, every point of margin improvement amplifies. Okta’s proving that mature SaaS can deliver 25%+ operating margins while maintaining growth.
7. Free Cash Flow Margin: The True Profitability Test
The Numbers: FCF margin jumped from 3.5% (FY23) to 34.7% (Q1 FY26) – nearly 10x improvement
The Learning: FCF margin > 30% at $2B+ scale puts you in the SaaS elite tier. This metric separates the truly efficient operators from the revenue-at-any-cost players.
8. The Gross Margin Ceiling Discovery
The Numbers: Non-GAAP subscription gross margin plateaued at 83.9% vs. total gross margin of 81.9%
The Learning: There’s a ceiling to SaaS gross margins (~85% for pure software). Once you hit it, operating leverage must come from OpEx efficiency, not gross margin expansion.
9. Headcount-to-Revenue Efficiency Gains: $480,000 Per Employee
The Numbers: 5,754 employees generating $688M quarterly revenue = $480k revenue per employee per quarter
The Learning: $475K+ annual revenue per employee is the benchmark for efficient SaaS operations. Okta’s hitting this while growing, proving you can scale without proportional headcount growth.
10. The Rule of 40 Evolution Pattern
The Numbers: Rule of 40 scores: 25% (FY23) → 40% (FY24) → 43% (FY25) → 42% (Q1 FY26) The Learning: Rule of 40 scores >40% represent SaaS excellence. The slight Q1 dip (42% vs 43%) shows even great companies face quarterly fluctuations – focus on the trend, not single data points.
Bottom Line: These 10 metrics show how world-class SaaS companies evolve from growth engines to profit machines while maintaining market leadership.
