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Okta Shares Jump 15% as AI Identity Security Demand Drives Quarterly Beat

Okta topped fiscal Q2 estimates on strong AI-related identity security demand, sending shares up 15%. The company raised full-year guidance and closed its Permiso Security acquisition.

AI News Feed · 2026-08-27 08:27

The company reported adjusted earnings of $1.05 per share, exceeding the 97 cents expected by analysts surveyed by LSEG. Revenue came in at $805 million, above the $795 million consensus, and rose 11% from $728 million a year earlier. Net income totaled $116 million, or 65 cents per share, up from $67 million, or 37 cents per share in the same quarter last year.

During the quarter, Okta made its Okta for AI Agents tool broadly available to all customers. The product, which helps manage and secure AI agents, contributed to new products accounting for 30% of total bookings. Okta said it closed dozens of AI deals, including a multi-million-dollar contract with a healthcare company.

CEO Todd McKinnon told CNBC that the agentic AI security opportunity is still "very early" and recent incidents, such as the OpenAI Hugging Face hack, are only "catalyzing interest." He said, "Network is the biggest cyber category now, but if you look out five or 10 years, with millions of agents running around, it's definitely going to be identity. Not trying to spread ourselves too thinly across all these other categories, I think it's really going to pay off."

Against this backdrop, cybersecurity companies have embarked on a massive acquisition spree to scale capabilities against new AI threats, driving shares of peers like CrowdStrike and Palo Alto Networks to record highs. Okta shares have risen 55% so far this year.

Okta on Wednesday closed its acquisition of threat detection startup Permiso Security for roughly $200 million. McKinnon said Okta will continue leaning into smaller acquisitions that complement its existing stack. "You'll see us do more of these tuck-in things," he said. "We're not going to buy some big legacy company just to have more revenue."

Remaining performance obligations, a measure of subscription backlog, jumped 17% year over year to $4.86 billion, surpassing the $4.70 billion estimate from analysts polled by StreetAccount. Current remaining performance obligations, or backlog expected to be recognized in the next 12 months, rose 14% to $2.59 billion.

The company raised its full-year guidance. Okta now expects revenue in the range of $3.22 billion to $3.23 billion, up from the roughly $3.19 billion to $3.21 billion provided last quarter, and above the $3.2 billion LSEG estimate. Adjusted earnings are expected to be between $3.90 and $3.94 per share, versus the $3.84 analysts expected.