Okta Inc. saw its shares climb sharply on Thursday after the identity management company delivered fiscal first-quarter results that topped Wall Street expectations, driven by increasing demand for its access management solutions tailored for both human users and artificial intelligence agents.
The stock surged 5.8% to close at $94.72 during regular trading and added further gains in after-hours activity, rising more than 1% to $96.10, according to market data. The positive reaction came despite broader jitters in the cybersecurity sector following a weak forecast from peer Zscaler Inc. earlier in the week.
For the quarter ended April 30, Okta reported revenue of $765 million, up 11% year over year and above the $752 million consensus estimate compiled by FactSet. Adjusted earnings per share came in at $0.91, beating the $0.85 expected by analysts. On a GAAP basis, net income reached $74 million, compared to $62 million in the same period last year.
A key metric closely watched by investors, current remaining performance obligations (cRPO), which represents subscription backlog expected to convert into revenue over the next 12 months, rose 12% to $2.499 billion. This signals sustained momentum in contract signings and renewals.
Chief Executive Todd McKinnon emphasized the growing importance of securing non-human identities, stating that "AI agents are rapidly becoming a new workforce" and that organizations need to apply the same rigorous access controls to these digital entities as they do for employee accounts. The company is betting that the proliferation of agentic AI—software that acts autonomously on behalf of users or businesses—will create a new wave of demand for identity management solutions.
New product offerings, including identity governance tools, accounted for 35% of bookings during the quarter, up from previous periods. McKinnon noted that this figure demonstrates that newer solutions are driving a larger share of growth rather than merely serving as add-ons. Chief Financial Officer Brett Tighe attributed the strong performance to improved large-enterprise demand and better sales productivity following go-to-market changes implemented last year.
Looking ahead, Okta guided for second-quarter revenue in the range of $790 million to $794 million, with adjusted earnings per share between $0.95 and $0.97. For the full fiscal year 2027, the company raised its outlook, projecting revenue of $3.185 billion to $3.205 billion and adjusted EPS of $3.79 to $3.87.
However, the company flagged some headwinds. The transition of professional services to partners is expected to reduce annual revenue growth by approximately one percentage point. Additionally, the free cash flow forecast incorporates lower interest income from stock buybacks and the settlement of remaining 2026 notes.
During the quarter, Okta generated $277 million in operating cash flow and $271 million in free cash flow. The company deployed $248 million toward share repurchases, returning capital to shareholders even as it continues to invest in AI-related growth initiatives.
The stock's intraday high reached $100.60 before paring gains, reflecting cautious optimism amid sector volatility. The cybersecurity space had been rattled earlier in the week when Zscaler's disappointing forecast dragged down shares of Palo Alto Networks and CrowdStrike, though some analysts argued Zscaler's issues were company-specific rather than indicative of broader sector weakness.
