Okta Inc (NASDAQ:OKTA) shares are set to open about 18% higher on Thursday after the identity management software company reported fiscal second-quarter results that beat Wall Street expectations for revenue and adjusted earnings.
Okta reported total revenue of $805 million for the quarter ended July 31, up 11% from $728 million a year earlier and ahead of estimates of about $794 million. Subscription revenue increased 12% to $793 million.
Non-GAAP diluted earnings were $1.05 per share, compared with $0.91 a year earlier and above the consensus estimate of about $0.97.
GAAP net income was $116 million, up from $67 million in the year-ago quarter. GAAP operating income rose to $107 million from $41 million.
Current remaining performance obligations increased 14% year over year to $2.585 billion, while total remaining performance obligations rose 17% to $4.858 billion.
Okta generated $234 million in operating cash flow and $227 million in free cash flow during the quarter. Non-GAAP operating income was $226 million, representing a 28% margin.
The company also raised its fiscal 2027 outlook. Okta now expects full-year revenue of $3.216 billion to $3.226 billion, up from its previous range of about $3.19 billion to $3.21 billion. Full-year non-GAAP diluted earnings are now expected at $3.90 to $3.94 per share, compared with a previous outlook of about $3.84.
For the third quarter, Okta expects revenue of $813 million to $817 million and non-GAAP diluted earnings of $0.92 to $0.94 per share.
“As AI agents transform every layer of technology, every agent needs a trusted identity and clear controls over what it can access and do,” CEO and co-founder Todd McKinnon said in the company's earnings release.
“As the leading independent and neutral identity provider, Okta helps organizations discover agents, secure their connections, govern their actions, and respond when something goes wrong, giving them the flexibility and control they need to deploy agents safely and at scale.”