Okta, Inc. (OKTA) Earnings

metirFinance

Oct 2026upcoming

Next quarter

Reports Dec 1, 2026.

Consensus is $0.43 EPS for Oct 2026 across 10 estimates, ranging $0.40 to $0.45.

OKTA Jul 2026

Reported Aug 26, 2026

: 31.82%
: +28.63%

: $0.44
: $0.58
: —
: $805.00M

Reported results

: $805.00M; from $728.00M
: 79.63%; from 76.92%
: $107.00M; from $41.00M
: 13.29%; from 5.63%
: $116.00M; from $67.00M
: $0.65; from $0.37

Highlights

Revenue: Q2 FY2027 revenue was $805 million, up 11% year over year from $728 million and 5% sequentially from $765 million; subscription revenue rose 12% to $793 million.
Backlog: Remaining performance obligations increased 17% year over year to $4.858 billion, while current RPO rose 14% to $2.585 billion, supporting continued subscription growth.
Earnings: Reported EPS was $0.58 versus consensus of $0.44, a 31.82% surprise; the filing reported GAAP diluted EPS of $0.65 and non-GAAP diluted EPS of $1.05.
Profitability: GAAP operating income reached $107 million, or a 13% margin, versus $41 million and 6% a year ago and $56 million and 7% in Q1.
Customer expansion: Customers with annual contract value above $100,000 rose to 5,255 from 4,945, while dollar-based net retention improved to 107% from 106%.
Cash generation: Operating cash flow was $234 million and free cash flow was $227 million, representing margins of 29% and 28%, respectively, versus 23% and 22% a year ago.
Capital allocation: Okta repurchased 1.542 million shares for $125 million during the quarter; $555 million remained under its $1 billion authorization, while it also paid $350 million to settle the 2026 Notes.
Outlook: Q3 revenue guidance is $813 million-$817 million, or 10% growth, and full-year revenue guidance is $3.216 billion-$3.226 billion, or 10%-11% growth, including a roughly one-point professional-services headwind.

Analysis

Okta’s Q2 FY2027 was a solid beat-and-execute quarter: revenue of $805 million grew 11% year over year from $728 million and 5% sequentially from $765 million, while reported EPS of $0.58 exceeded the $0.44 consensus estimate by 31.82%. The filing shows GAAP diluted EPS of $0.65, versus $0.37 a year ago and $0.42 in Q1. GAAP net income rose to $116 million from $67 million last year and $74 million in the prior quarter, while operating income more than doubled year over year to $107 million from $41 million.

The defining feature was strengthening subscription momentum alongside disciplined profitability. Subscription revenue grew 12% to $793 million, RPO accelerated to 17% growth and cRPO to 14%, and management cited core Workforce and Customer Identity demand plus newer products led by Identity Governance. Cash generation was also unusually strong, with $227 million of free cash flow, up from $162 million a year ago. The company maintained a prudent outlook, guiding to 10% third-quarter growth and 10%-11% full-year growth, while shifting professional-services work to partners. Okta also used cash for $125 million of quarterly repurchases and settled its $350 million convertible notes.

Subscription growth and backlog

Okta’s growth remained concentrated in its recurring platform business. Subscription revenue increased $82 million, or 12%, to $793 million, while professional-services and other revenue fell 33% to $12 million as the company accelerated its shift toward global systems integrators. Existing-customer expansion and new customers supported the subscription increase, with dollar-based net retention at 107%.

Enterprise base: Customers above $100,000 of annual contract value increased to 5,255 from 4,945 a year earlier.
Backlog: Total RPO was $4.858 billion, up 17% year over year, with $2.585 billion expected to be recognized over the next 12 months, or 53% of total RPO.
Product contribution: Management said core Okta Workforce and Customer Identity produced ACV acceleration, while newer offerings led by Identity Governance also contributed to top-line growth.

Profitability and operating leverage

Profitability improved materially from both the year-ago quarter and Q1. GAAP operating income was $107 million, or 13% of revenue, compared with $41 million, or 6%, a year ago and $56 million, or 7%, in Q1. Non-GAAP operating income was $226 million, with a 28% margin, versus $202 million and 28% a year ago.

Gross margin: GAAP gross margin expanded to 80% from 77% a year ago; subscription gross margin improved to 82% from 80%, helped by lower acquired-technology amortization and better spend efficiency.
Expense mix: Research and development rose 2% to $163 million, sales and marketing rose 10% to $273 million, and general and administrative fell 13% to $98 million.
Net income: GAAP net income increased 73% year over year to $116 million, while non-GAAP net income rose to $194 million from $169 million.
Stock compensation: Stock-based compensation declined to $114 million from $144 million, though it remained a significant non-GAAP adjustment.

Cash flow and capital allocation

Cash generation was a major strength of the quarter. Operating cash flow reached $234 million, or 29% of revenue, versus $167 million and 23% a year ago. Free cash flow was $227 million, or 28% of revenue, compared with $162 million and 22% last year. For the first six months, operating cash flow was $511 million and free cash flow was $498 million.

Repurchases: Okta repurchased and retired 1.542 million Class A shares for $125 million in Q2 at an average price of $81.06; $555 million remained available under the $1 billion program.
Debt settlement: The company paid the remaining $350 million principal of its 2026 Notes in cash at maturity on June 15, eliminating the associated convertible-note and capped-call exposure.
Liquidity: Cash, cash equivalents and short-term investments totaled $2.299 billion at July 31, down from $2.553 billion at January 31 after the debt settlement and repurchases.

Guidance and strategic investment

Okta kept a cautious forward posture despite the Q2 beat. Third-quarter revenue guidance of $813 million-$817 million implies 10% year-over-year growth, with current RPO of $2.590 billion-$2.600 billion, non-GAAP operating income of $196 million-$200 million and free cash flow of $175 million-$185 million. Full-year guidance calls for $3.216 billion-$3.226 billion of revenue, $830 million-$840 million of non-GAAP operating income and $910 million-$930 million of free cash flow.

Professional services: The full-year revenue outlook includes an approximately one-percentage-point growth headwind from moving more professional-services work to partners.
Interest income: Full-year free-cash-flow guidance includes an approximately one-point headwind from lower interest income after share repurchases and the cash debt settlement.
Identity security: Okta completed its acquisition of Permiso Security on August 26. Permiso’s cloud-native platform is intended to extend identity threat detection and response across human, non-human and agentic identities in multi-cloud environments; consideration was not yet disclosed.

Okta, Inc.

Peers