Okta Inc (OKTA)
Interest coverage
| Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 63,000 | -26,000 | -88,000 | -122,000 | -237,000 | -329,000 | -432,310 | -562,674 | -664,015 | -790,000 | -855,970 | -851,106 | -922,356 | -782,649 | -627,865 | -480,552 | -249,563 | -198,585 | -188,692 | -188,655 |
| Interest expense (ttm) | US$ in thousands | 4,000 | 5,000 | 5,000 | 6,000 | 7,000 | 8,000 | 9,412 | 10,412 | 11,412 | 11,412 | 32,406 | 52,550 | 72,422 | 92,182 | 91,373 | 90,597 | 84,656 | 72,660 | 60,709 | 46,167 |
| Interest coverage | 15.75 | -5.20 | -17.60 | -20.33 | -33.86 | -41.12 | -45.93 | -54.04 | -58.19 | -69.23 | -26.41 | -16.20 | -12.74 | -8.49 | -6.87 | -5.30 | -2.95 | -2.73 | -3.11 | -4.09 |
April 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $63,000K ÷ $4,000K
= 15.75
The analysis of Okta Inc's interest coverage ratio over the provided period reveals a persistent negative value from July 31, 2020, through October 31, 2024, indicating significant challenges in generating sufficient earnings to cover interest expenses. The ratio, which measures the company's ability to meet its interest obligations through its earnings before interest and taxes, has shown a declining trend, reaching as low as -69.23 in January 2023. This consistent negative trajectory underscores a prolonged period of financial stress, with the company failing to produce positive earnings that can cover interest payments, potentially suggesting substantial operating losses or high interest expenses relative to earnings.
However, a notable shift occurs starting in the first quarter of 2025. The interest coverage ratio transitions from negative to positive, with April 30, 2025, recording a ratio of approximately 15.75. This marked change indicates an improvement in the company's capacity to meet its interest obligations, reflecting either a significant increase in earnings, a reduction in interest expenses, or a combination of both. The trend towards increasingly positive values suggests a firm move toward financial stability in terms of debt servicing capability.
Overall, the historical data demonstrates a period of financial difficulty characterized by negative coverage ratios, with an apparent turnaround beginning in early 2025 that signals potential strengthening in core earnings or restructuring efforts. Nonetheless, the prior sustained negative ratios point to ongoing operational or financial challenges that the company has been navigating.
Peer comparison
Apr 30, 2025