Okta Inc (NASDAQ:OKTA) reported third quarter fiscal 2026 results that exceeded Wall Street expectations across key metrics, including revenue, earnings per share, and forward guidance.
The cloud-based identity management service reported revenue of $742 million, up roughly 12% year-over-year and above analyst estimates of around $730 million.
Subscription revenue was $724 million, an increase of 11% compared to the year-ago quarter.
Adjusted earnings per share (EPS) came in at $0.82, beating expectations of approximately $0.75.
Okta’s subscription backlog, or remaining performance obligations (RPO), was $4.29 billion, up 17% year-over-year. The portion expected to be recognized over the next 12 months (cRPO) increased 13% to $2.328 billion.
“We delivered another quarter of solid results highlighted by continued strength with large customers, adoption of new products like Okta Identity Governance, and strong cash flow,” Okta CEO Todd McKinnon said in a statement. “We are confident in our strategy and excited to carry this momentum into the fourth quarter and beyond.”
Looking ahead, Okta provided guidance for Q4, with revenue projected at roughly $749 million, slightly above analyst expectations of $737.5 million.
For the full fiscal year, management now expects revenue of approximately $2.91 billion, modestly above the consensus forecast of $2.89 billion, and adjusted EPS in the range of $3.43 to $3.44, compared to the prior estimate of $3.37.
Jefferies highlighted Okta’s focus on growth, noting that Q3 cRPO growth of 13% year-over-year exceeded consensus by 3%, though Q4 cRPO guidance of 8.9% growth slightly missed the 9.1% estimate.
Management did not provide fiscal year 2027 revenue guidance but endorsed its historical growth framework, implying potential revenue growth above 9% year-over-year, according to the firm.
The analysts wrote that Q3 cRPO of $2.328 billion beat the midpoint of guidance by $66 million, reflecting strength in large customers and workforce upsells. They noted that macro conditions and the recent government shutdown had minimal impact on results.
For Q4, cRPO guidance implies more modest bookings growth compared to Q3, with management guiding closer to the “pin” amid tough year-over-year comparisons.
Jefferies also pointed out that Okta’s non-GAAP operating margin of 24% in Q3 exceeded expectations, and free cash flow margins of 28% beat forecasts by 7 percentage points.
Management continues to invest in growth, particularly on go-to-market initiatives, while adhering to the Rule of 40, they highlighted. Headcount increased by 291 employees in the quarter, the largest sequential gain since Q2 2023, which the analysts wrote may limit near-term leverage but could support future growth.
Shares of Okta added 1.2% to trade hands at about $83 following the release of its Q3 report.