Okta Inc (OKTA)
Interest coverage
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -63,000 | -314,000 | -790,000 | -757,514 | -232,526 |
| Interest expense | US$ in thousands | 5,000 | 8,000 | 11,000 | 92,182 | 72,660 |
| Interest coverage | -12.60 | -39.25 | -71.82 | -8.22 | -3.20 |
January 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $-63,000K ÷ $5,000K
= -12.60
The interest coverage ratio of Okta Inc. over the specified periods demonstrates a persistent and significant challenge in meeting interest obligations through earnings. As of January 31, 2021, the company exhibited a negative interest coverage ratio of -3.20, indicating that its earnings before interest and taxes (EBIT) were insufficient to cover interest expenses, resulting in a deficit of 3.20 times interest expense. This negative trend worsened markedly in subsequent years, with the ratio deteriorating to -8.22 by January 31, 2022, and further declining to -71.82 on January 31, 2023. The extremely low and negative values signify a substantial inability to service interest costs from operating earnings, reflecting potentially severe financial distress or reliance on non-operating income or debt restructuring strategies. Although the ratio improved somewhat to -39.25 on January 31, 2024, and further to -12.60 on January 31, 2025, it remains problematic. The trend indicates ongoing difficulties in generating sufficient earnings to cover interest obligations, highlighting concerns regarding the company's interest payment capacity over this period.
Peer comparison
Jan 31, 2025