Okta jumps after Q2 beat, raises 2027 revenue outlook

Okta Inc. shares jumped more than 19% in after-hours trading Wednesday, rising above $160 from a regular-session close of $134.42. The gain followed stronger-than-expected fiscal second-quarter results and an upward revision to the company’s fiscal 2027 revenue outlook.

For the quarter ended July 31, Okta reported revenue of $805 million, up 11% from a year earlier. Subscription revenue reached $793 million, a 12% increase. GAAP net income was $116 million, or $0.65 per diluted share, compared with $67 million, or $0.37, a year earlier. Adjusted earnings were $1.05 per share versus $0.91 a year earlier. GAAP operating income rose to $107 million, more than double the prior-year period.

Contracted revenue, measured as remaining performance obligations, increased 17% to $4.86 billion. Revenue expected to be recognized over the next 12 months rose 14% to $2.59 billion. Operating cash flow improved to $234 million from $167 million, and free cash flow rose to $227 million from $162 million.

Following the quarter, Okta lifted its fiscal 2027 revenue guidance to a range of $3.216 billion to $3.226 billion, implying about 10% to 11% annual growth. The company cited the quarter’s results and stronger enterprise demand for identity protections tied to AI for the change.

Okta said customers are seeking identity controls to manage AI agents that can connect to enterprise systems and act on users’ behalf. The company offers Okta for AI Agents and Auth0 for AI Agents to help customers discover agents, secure connections, set permissions and detect suspicious activity. Todd McKinnon, Okta’s CEO and co-founder, noted that agents require trusted identities and clear controls over what they can access and do.

Okta completed its acquisition of Permiso Security in July and plans to integrate Permiso’s runtime threat detection and identity posture management into its identity security platform. Permiso’s tools are designed to detect threats involving human, non-human and agent identities across multi-cloud environments, and its P0 Labs research team will join Okta’s research organization. The company said the acquisition extends visibility into suspicious behavior after authentication and enhances identity threat detection and response.