Okta Inc. (NASDAQ: OKTA), a leading provider of cloud-based identity and access management solutions, witnessed a remarkable 15.87% surge in its stock price on Monday, March 3, 2025. The rally came after the company reported impressive fourth-quarter financial results for fiscal year 2025 and provided a strong outlook for the current fiscal year, driven by the growing demand for secure identity solutions amidst the AI revolution.

In the fourth quarter ended January 31, 2025, Okta's revenue climbed 13% year-over-year to $682 million, surpassing analyst estimates of $669.46 million. The company's adjusted earnings per share (EPS) of $0.78 also exceeded expectations of $0.74, reflecting a 24% increase compared to the same period last year.

Okta's financial performance was bolstered by accelerating subscription backlog, which rose 25% year-over-year to $4.215 billion. Additionally, the company generated record operating profitability and cash flow, with operating cash flow reaching $750 million, up from $512 million in the previous fiscal year.

Looking ahead, Okta provided robust guidance for fiscal year 2026. The company expects revenue to range between $2.85 billion and $2.86 billion, outperforming analyst estimates of $2.79 billion. Okta also forecasted adjusted EPS in the range of $3.15 to $3.20, well above the consensus estimate of $2.93.

During the earnings call, Okta's CEO, Todd McKinnon, expressed optimism about the company's position to capitalize on the rapidly evolving AI landscape. He stated, "In a rapidly evolving IT and security landscape, organizations are turning to Okta as their identity partner for our ability to deliver the broadest array of modern identity security with the flexibility to meet their demands."

Okta's strong performance and bullish outlook are driven by the increasing demand for secure identity solutions as organizations grapple with the potential risks associated with AI adoption. The company's collaboration with AWS, including reaching $1 billion in aggregate sales on the AWS Marketplace over the past four years, further highlights its ability to cater to the growing need for cloud-based identity management services.