At around the same time that the earnings press release hit the wire, we've posted supplemental commentary to our IR website. Today's meeting will include forward-looking statements pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding our financial outlook and market positioning. A reconciliation between GAAP and non-GAAP financial measures and a discussion of the limitations of using non-GAAP financial measures versus their closest GAAP equivalents are available in our earnings press release. I'll also share how Okta secures AI, which represents a significant new opportunity and a catalyst for growth.
We believe these new products will continue to provide incredible value to our customers and will be a growth driver for many years to come. Earlier in Q3, we had a record number of customers and partners come to Octane in Las Vegas to hear how Okta secures AI. Okta has prioritized our efforts to focus on helping customers solve this business imperative and capture what we believe will be the next catalyst for growth and meaningful market within the identity security space. Okta is helping the customer to safely deploy AI across their business, and the addition of Okta for AI agents represented a significant ACV uplift compared to their prior contract.
To wrap things up, we're pleased with another solid quarter of results, and we believe we're best positioned to win the exciting new market segment of securing AI. And now here's Brett to cover the financial commentary and talk about how we're positioned for long-term profitable growth. My commentary will provide insights into our Q3 performance and then move into our outlook for Q4 and FY 2026. The continued positive trends we are seeing across our go-to-market KPIs reinforce our confidence that this specialization strategy is the right path to accelerate long-term growth.
| Metric | Period | Current guidance |
|---|---|---|
| Total revenue growth | Q4 FY2026 | 10% (new) |
| Current RPO growth | Q4 FY2026 | 9% (new) |
| Current RPO | Q4 FY2026 | $2.45 billion (new) |
| Non-GAAP operating margin | Q4 FY2026 | 25% (new) |
| Free cash flow margin | Q4 FY2026 | approximately 31% (new) |
| Total revenue growth | Full year FY2026 | 11% (raised) |
| Non-GAAP operating margin | Full year FY2026 | 26% (raised) |
| Free cash flow margin | Full year FY2026 | approximately 29% (raised) |
| Metric | YoY | Note |
|---|---|---|
| Million-dollar deals | +17% | Growing focus on larger enterprise and strategic accounts, where most of the company's growth is concentrated. |
| Sales and marketing expense | Up | The company increased quota-carrying sales rep capacity over the past two quarters out of confidence in the demand opportunity. |
| Net retention rate | About 106% | Strong gross retention offset by the mix of new business versus upsells; it tracked within the expected range. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Securing AI agents (Okta for AI Agents / Auth0 for AI Agents) | Discussed Cross-app Access in the prior quarter | Positioned as the company's number-one priority and next major growth catalyst, with over 100 customers engaged and Cross-app Access now recognized as an MCP extension | Expanding |
| Go-to-market specialization | Changes implemented in February, described as on track in Q1 and Q2 | Reinforced as working, with rising AE productivity, low attrition, and high tenure giving confidence to add sales capacity | Improving |
| New product adoption (Governance, Privileged Access, ISPM, suites) | Described as meaningful contributors in prior quarters | Continuing to drive a healthy share of total bookings as specialized reps sell directly to economic buyers | Steady |
| Adding sales capacity | Began adding capacity in Q2 | Added more in Q3, plan to add more in Q4 and into FY2027 in a methodical, metered fashion | Increasing |