TLDR
- Okta stock surged roughly 20% in after-hours trading after Q2 revenue hit $805 million, up 11% year over year, beating estimates of $793 million
- Q2 EPS came in at $1.05, above the $0.96 analyst consensus
- New products made up 30% of bookings; deals including a new product averaged 40% higher annual contract value
- Okta raised full-year fiscal 2027 revenue guidance to $3.216B-$3.226B and EPS outlook to $3.90-$3.94
- Wall Street holds a Strong Buy consensus on OKTA with an average price target of $148.79, implying roughly 11% upside
Okta (OKTA) stock jumped about 20% in after-hours trading on Wednesday after the company posted second-quarter fiscal 2027 results that topped expectations on both revenue and earnings.
Revenue came in at $805 million, up 11% year over year, beating the consensus estimate of $793 million. EPS landed at $1.05, ahead of the $0.96 analysts had penciled in.
CEO Todd McKinnon pointed to AI agents as a growing driver of demand. “Every agent needs a trusted identity and clear controls over what it can access and do,” he said. The quarter marked a record bookings period for any non-fourth quarter in Okta’s history.
Current remaining performance obligations, a forward-looking revenue indicator, grew 14% to $2.59 billion. The company had over 600 customers generating more than $1 million in annual contract value, a cohort that grew more than 20% year over year.
$OKTA Q2’27 EARNINGS HIGHLIGHTS
🔹 Revenue: $805M (Est. $795M) 🟢; +11% YoY
🔹 Adj. EPS: $1.05 (Est. $0.97) 🟢; +15% YoY
🔹 cRPO: $2.59B; +14% YoY
🔹 Free Cash Flow: $227M (Est. $162M) 🟢; +40% YoYFY27 Guide:
🔹 Revenue: $3.22B-$3.23B (Est. $3.2B) 🟡
🔹 EPS: $3.90-$3.94 (Est.…— Wall St Engine (@wallstengine) August 26, 2026
New products represented about 30% of bookings in the quarter, with Okta Identity Governance leading the way. Deals that included at least one new product came in at roughly 40% higher average contract value compared to deals without them.
AI Agents and New Products Drive Growth
Okta launched Okta for AI Agents, a product designed to help enterprises discover, govern and secure AI agents. The company won dozens of AI-related deals during the quarter, including several worth more than $1 million.
Management was measured on expectations, though. CFO Brett Tighe said AI-related revenue is expected to remain immaterial in fiscal 2027, with a more meaningful contribution possible from fiscal 2028 onward.
Channel partners played a role across the board. Partners were involved in all 20 of Okta’s largest deals, and its biggest deal was sourced entirely by a partner.
The company also completed the acquisitions of Spera and Promeso during the quarter. Promeso adds behavioral and post-authentication risk detection, including 400 native risk detections compared to 90 in Okta’s existing product. Okta also received Impact Level 5 authorization from the U.S. Department of Defense.
Capital Allocation and Outlook
Free cash flow reached $227 million, or 28% of revenue, up from 22% a year ago. Okta ended the quarter with $2.3 billion in cash and no convertible debt after settling its remaining 2026 notes.
The company repurchased roughly 1.5 million shares for $125 million during the quarter, with $555 million remaining under its $1 billion buyback authorization.
Okta raised its full-year fiscal 2027 revenue guidance to $3.216B-$3.226B, up from $3.185B-$3.205B. EPS guidance was lifted to $3.90-$3.94 from $3.79-$3.87.
For Q3, Okta expects revenue of $813M-$817M, current RPO of $2.59B-$2.60B, and free cash flow of up to $185 million.
Wall Street holds a Strong Buy consensus on OKTA based on 29 Buy ratings, four Holds and one Sell over the past three months. The average price target of $148.79 implies about 11% upside from current levels.
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