OKTA 2Q25:Marginal Business Improvement, But Limited Inflection This Quarter

Last quarter’s results and guidance were relatively conservative, largely due to sales restructuring and macro headwinds. Based on our recent channel checks, overall conditions are better than Q1, and momentum should gradually improve into Q3 and Q4, though the pace remains slow.

We expect Q2 to follow a familiar pattern of modest beats and conservative guidance into Q3 and full year. There is some chance for slightly less conservative guidance (possibly a modest raise to the full-year growth outlook). However, considering that new products like PAM and IGA still lag competitors in capabilities, and that Okta’s AI Agent–related offerings are more complex and later to market (still in limited trials and refinement), commercialization remains further out. Therefore, Q2 is unlikely to mark a major inflection point in fundamentals.

Below are some of the detailed findings from our research

Workforce Identity Management

Channel Partner A: *Enterprises continue to operate in hybrid environments, and security demand shows no signs of decline. Sequential growth remains in the low single digits, with no visible slowdown.
*
IT Consulting Firm C: Workforce Identity is tracking steady growth (~10% YoY), accounting for ~50% of revenue.

CIAM Dynamics

As a more mature product, CIAM continues to see robust demand, growing faster than Workforce Identity.

CSP1: Okta’s CIAM is steadily expanding, supported by prior acquisitions and integration into the broader Workforce platform.

IT Consulting Firm (Cognizant): CIAM is growing faster (~15% YoY), representing ~20% of revenue.