OKTA · Forward model · Bear case

The Bear case, 20 quarters out

Model as of 2026-08-29

Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.

Reported lines only. Okta operates as ONE reportable segment and disaggregates revenue into exactly two lines in its statements of operations - Subscription and Professional services and other - and this model carries exactly those two. All fourteen historical quarters, 2023 Q2 through 2026 Q3, are disclosed figures read from the 8-K Exhibit 99.1 of each quarter; nothing is apportioned and nothing is estimated. Every quarter's two lines sum to reported total revenue exactly, $793m + $12m = $805m at the basis quarter. There is no Workforce-versus-Customer-Identity split and no quarterly geographic split to be had; either would be manufactured. QUARTER LABELS ARE FISCAL. The r40 label is the calendar quarter each fiscal period ENDS in, so '2026 Q3' here is the three months ended 31 July 2026, Okta's fiscal 2027 second quarter. Seasonality index 0 is therefore the quarter ending 31 JANUARY, not January-March. FREE CASH FLOW IS NOT OKTA'S FREE CASH FLOW. The engine computes it as EBITDA less capex less tax. Okta's reported figure is operating cash flow less property, equipment and capitalised software, so it also includes interest income - about $19m in the basis quarter - and the working-capital inflow from deferred revenue and deferred commissions. The $2,299m generating that interest is added back separately as net cash, so counting it inside free cash flow as well would double-count it. The model's first projected year runs a 25.9% free-cash-flow margin against Okta's guided 28-29% for fiscal 2027 and a 31.3% trailing-twelve-month reported margin, and the model's Rule of 40 therefore runs below the site's own R40 card for the same quarter. Okta's reported free cash flow is also heavily seasonal on collections, 12% to 42% of revenue across the stored quarters, while the engine produces a smooth margin: compare annual totals, never one projected quarter. Margins are on Okta's NON-GAAP basis - 84.0% subscription and -50.0% services gross margin in the basis quarter - while our stored series holds the GAAP figure, about two points lower. Corporate overhead is zero because the vertical margins are already struck at a consolidated level; adding an overhead line would double-count operating expense. Tax is a constant 15%, between the disclosed 7.7% effective rate under a full US valuation allowance and the 21% non-GAAP planning rate management adopted on 1 February 2026; fair value moves about 1.2% per point. Shares are 178,808,000 GAAP diluted, matching the filed statements and our stored company profile; management's own guidance assumes the 184,448,000 non-GAAP count, which would lower fair value by about 3.2%. The $555m remaining on the $1bn buyback pushes the other way and is NOT modelled - a buyback is a financing use of cash, not an operating outlay, and charging it as capex would understate free cash flow. There is no capital programme: Okta has no fab, plant or joint venture, and the $13m of half-year capital spending is already inside the vertical capex intensities. The reference price is the $172.91 close of 27 August 2026, the session after the print, not the $134.42 that our stored profile still carries. No consensus figure is used anywhere: the available feed mixes three different EPS bases for the same quarter, so every beat quoted here is measured against Okta's own prior guidance instead.

Where each case comes from

From cash flow to fair value

The projected path

The published model's 20 quarters. The horizon and sliders above do not change this table.

Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.

Model revisions

Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.