Okta Inc. reported second-quarter revenue of $805 million, exceeding the $793 million consensus estimate by 1.51%, while adjusted earnings per share reached $1.05 compared with the $0.97 forecast, an 8.25% beat. The company’s stock surged 19.4% in after-hours trading to $160.50, extending a 2.92% gain during regular hours.
Gross profit margin remained robust at 77.44%, while cash, cash equivalents and short-term investments totaled approximately $2.3 billion. Okta also eliminated its remaining $350 million in convertible debt after repayment in June and repurchased about 1.5 million shares for $125 million, leaving $555 million available under its $1 billion buyback program.
New products contributed roughly 30% of bookings in the quarter, with deals including these offerings generating an average annual contract value uplift of about 40%. The company now serves over 600 customers with annual contract values exceeding $1 million, up more than 20% year-over-year. Okta also completed the acquisition of Spera, a cloud-native identity security platform.
Full-year fiscal 2027 guidance calls for revenue growth of 10% to 11%, with non-GAAP operating margins projected at 26% and free cash flow margins of 28% to 29%. For the third quarter, Okta expects revenue growth of about 10%, current remaining performance obligations growth of 11% to 12%, non-GAAP operating margins of 24% to 25%, and free cash flow margins of 21% to 23%. Analysts had forecasted full-year earnings per share of $4.06.
Chief Executive Todd McKinnon highlighted the company’s strategic focus on AI integration, noting that identity has become the primary control plane for securing AI agents. He stated that Okta for AI Agents has received 24 significant enhancements in the past two months. Chief Financial Officer Brett Tighe described the quarter as a record bookings period for a non-Q4 quarter, driven by strong pipeline conversion and deal expansions.
Okta also achieved Impact Level 5 authorization, the highest unclassified cloud authorization for the U.S. Department of Defense, though public sector revenue remains below 10% of total business. The company has shifted professional services to global system integrator partners, reducing such services to about 1% of total revenue.
