Okta Inc (NASDAQ:OKTA) shares jumped 24% on Friday after the identity security company reported first-quarter results that topped Wall Street estimates and raised its full-year outlook, with analysts pointing to accelerating demand and an emerging artificial intelligence tailwind.
The San Francisco-based company posted revenue of $765 million for its fiscal first quarter of 2027, up 11% year-over-year and ahead of analyst estimates of $752 million.
Adjusted earnings per share came in at $0.91, beating the consensus estimate of $0.85. Subscription revenue rose 11% to $750 million, while free cash flow reached $271 million, representing a 35% margin.
Current remaining performance obligations, a closely watched indicator of near-term demand, grew 12% year-over-year to $2.5 billion, beating the midpoint of guidance by roughly two percentage points. Net revenue retention accelerated to 107% from 106% in the prior quarter.
Okta raised its full-year fiscal 2027 revenue guidance to a midpoint of $3.195 billion, up approximately $15 million from prior guidance and modestly above the consensus estimate of $3.186 billion. The company projected full-year adjusted EPS of $3.79 to $3.87 and a non-GAAP free cash flow margin of 27% to 28%.
For the second quarter, Okta guided revenue of $790 million to $794 million and adjusted EPS of $0.95 to $0.97.
Jefferies analysts called the second-quarter cRPO guidance a bullish signal and describing the valuation as attractive at 4.8 times estimated calendar 2027 revenue. The bank cited broad-based strength in new products, which represented approximately 25% of first-quarter bookings, along with improved channel partner contributions following Okta's strategic decision to reduce its emphasis on professional services.
Jefferies noted that if Okta follows its historical pattern of beating guidance, second-quarter cRPO growth could reach around 13% year-over-year, marking a second consecutive quarter of acceleration. The bank added that the uptick does not appear to be driven by agentic security products, characterizing that category as a more likely tailwind in fiscal 2028.