Okta surges 20% as Q2 earnings beat lifts AI-agent outlook

Okta reported fiscal Q2 revenue of $805 million, up 11% from a year earlier and above the $795 million consensus, sending shares up 20% in extended trading.

"As AI agents transform every layer of technology, every agent needs a trusted identity and clear controls over what it can access and do," Chief Executive Todd McKinnon said.

Adjusted earnings came in at $1.05 a share, beating the 97-cent estimate, while GAAP net income rose 73% to $116 million. Remaining performance obligations, a measure of contracted revenue, grew 17% to $4.86 billion, and current RPO rose 14% to $2.59 billion.

Metric	Actual	Consensus	Beat/Miss
Revenue	$805M	$795M	+1.3%
Adjusted EPS	$1.05	$0.97	+8 cents
RPO	$4.86B	$4.70B	+3.4%

Management lifted full-year revenue guidance to $3.22 billion to $3.23 billion and adjusted EPS to $3.90 to $3.94. New products, led by Okta for AI Agents, accounted for 30% of bookings, with an average contract value uplift near 40% when bundled into a deal.

Okta made Okta for AI Agents generally available during the quarter and closed dozens of AI-related deals, several worth more than $1 million. McKinnon described one customer whose detected Claude agent count jumped from 50 to 1,500 in a matter of weeks, a surge feeding demand for agent-identity security. Chief Financial Officer Brett Tighe called the quarter a record for bookings outside the fourth quarter.

The company also closed its roughly $200 million acquisition of threat-detection startup Permiso Security on the day of the report. McKinnon said Okta intends to keep pursuing smaller tuck-in deals rather than acquire a large legacy company primarily for revenue.

Okta ended the quarter with $2.3 billion in cash and short-term investments after settling the final $350 million of convertible notes in cash during June. The company repurchased 1.5 million shares for $125 million, leaving $555 million under its buyback authorization. Customers holding $1 million or more in annual contract value grew more than 20% to over 600 accounts.

The guidance raise signals management expects demand to keep accelerating, with third-quarter revenue projected at $813 million to $817 million and adjusted EPS of 92 cents to 94 cents. Investors will watch whether AI-agent bookings convert into durable revenue, as management said the segment remains immaterial to the top line for fiscal 2027.

This article is for informational purposes only and does not constitute investment advice.