Okta Inc (OKTA)
Profitability ratios
Return on sales
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 76.32% | 74.33% | 70.61% | 69.51% | 73.94% |
| Operating profit margin | -2.84% | -20.33% | -42.14% | -59.00% | -24.44% |
| Pretax margin | 1.76% | -14.89% | -43.11% | -65.35% | -31.86% |
| Net profit margin | 1.07% | -15.69% | -43.86% | -65.25% | -31.88% |
The profitability ratios of Okta Inc. reveal a notable trend of significant improvement over the analyzed period from January 2021 to January 2025.
Starting with gross profit margin, the company experienced a decline from 73.94% in January 2021 to 69.51% in January 2022, followed by a slight increase to 70.61% in January 2023. This upward movement continued more substantially into 2024 and 2025, reaching 74.33% and 76.32%, respectively. The overall trend indicates a gradual strengthening in gross margin, suggesting better control over cost of goods sold relative to revenue or an enhancement in pricing strategies.
In terms of operating profit margin, the company showed an initial positive sign of narrowing losses, with the margin improving from -24.44% in January 2021 to -59.00% in January 2022, and then improving again to -42.14% in January 2023. The most significant improvement occurred between 2023 and 2025, where the operating margin rose from -42.14% to -20.33% in 2024, and then to -2.84% in 2025. This indicates persistent efforts to reduce operating losses, moving towards nearly breakeven operational profitability.
Pretax and net profit margins followed a similar trajectory, with deep losses in 2021 and 2022 reflected by negative margins of -31.86% and -65.35%, respectively. The margin improved notably in subsequent years, reaching -43.11% in 2023, and then a marked recovery to -14.89% in 2024. By January 2025, both pretax and net profit margins turned positive, at 1.76% and 1.07%, respectively, signifying a transition towards operational profitability.
Overall, the analysis indicates that Okta Inc. has been progressively narrowing its operating and net losses, with key profitability ratios approaching or crossing into positive territory in 2024 and 2025. The improvement in gross profit margin supports the growth in profitability, while reductions in operating expenses and better cost management likely contributed to the enhanced operating and bottom-line margins.
Return on investment
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -0.78% | -5.12% | -8.41% | -8.33% | -6.19% |
| Return on assets (ROA) | 0.30% | -3.95% | -8.76% | -9.22% | -8.07% |
| Return on total capital | -0.98% | -5.33% | -14.45% | -12.79% | -33.50% |
| Return on equity (ROE) | 0.44% | -6.03% | -14.91% | -14.33% | -38.37% |
The profitability ratios for Okta Inc. from January 31, 2021, to January 31, 2025, reveal a significant upward trend in the company's financial performance.
Starting with Operating Return on Assets (Operating ROA), the ratio remained negative throughout the period, indicating that operating activities did not generate positive returns initially. The Operating ROA declined from -6.19% in 2021 to a low of -8.41% in 2023, reflecting ongoing operational challenges. However, by 2024, there was notable improvement to -5.12%, and further positive development occurred by 2025 with an increase to -0.78%. This suggests that the company's core operational efficiency is gradually improving, nearing a breakeven point.
Similarly, Return on Assets (ROA) followed a consistent negative trajectory from -8.07% in 2021 to -9.22% in 2022 and -8.76% in 2023, emphasizing challenges in asset utilization and profitability. The trend shifted favorably in 2024, with ROA improving to -3.95%, and reaching a small positive value of 0.30% in 2025. This marks a significant turnaround, indicating that asset management and overall profitability are nearing positive territory.
The Return on Total Capital displayed an even more pronounced negative trend, with values declining from -33.50% in 2021 to -14.45% in 2023. In 2024, the ratio improved substantially to -5.33%, and by 2025, it approached breakeven at -0.98%. The data points to an effective utilization of capital improving over this period, although the company has yet to generate consistent positive returns on total capital.
Return on Equity (ROE), a key indicator of shareholder profitability, was markedly negative at -38.37% in 2021, reflecting significant losses relative to shareholders' equity. The ratio improved substantially over the period, reaching -14.33% in 2022, -14.91% in 2023, and further narrowing to -6.03% in 2024. By 2025, ROE turned positive, recorded at 0.44%, indicating that the company has transitioned into generating net income attributable to shareholders.
Overall, the data indicates that Okta Inc. has been transitioning from a period of significant losses to a phase of recovering profitability. The trend towards less negative ratios and eventual positive values in 2025 suggests improvements in operational efficiency, asset utilization, and shareholder returns. While the company has not yet achieved sustained positive profitability across all metrics, the observed trajectory signals a progressive enhancement of financial performance.