San Francisco, August 27, 2026, 06:28 (EDT)
- Okta was priced at $162.50 ahead of Thursday’s session, marking a 20.89% gain from the previous day’s close.
- The current subscription backlog totaled $2.585 billion, surpassing Wall Street’s forecast by $75 million.
- Free cash flow increased by 40% to $227 million, with the margin expanding by 5.8 points.
Okta Inc. (NASDAQ:OKTA) shares surged 20.89% to $162.50 in premarket deals as of 04:08:52 EDT. The gain came after Okta beat quarterly backlog estimates, providing firmer proof of demand despite a limited guidance raise. The jump signaled about $4.9 billion in market value added from Wednesday’s $23.57 billion cap Yahoo Finance quote.
The identity-security company posted current remaining performance obligations totaling $2.585 billion, representing a 14% increase year-over-year and surpassing consensus estimates of $2.510 billion by $75 million. The 3% outperformance is significant, as cRPO reflects contracted subscription revenue anticipated over the next 12 months Investor’s Business Daily estimates.
Total revenue climbed 11% to reach $805 million. Subscription revenue advanced 12% to $793 million, comprising 98.5% of total sales. Adjusted earnings came in at $1.05 per share, surpassing the analyst consensus of 97 cents by 8.2%.
| Investor metric | Q2 FY2027 / latest | Comparison | Change or gap |
|---|---|---|---|
| Revenue | $805 million | $728 million same period last year | +11% |
| Current RPO | $2.585 billion | $2.510 billion consensus | +$75 million |
| Free cash flow | $227 million | $162 million year ago | +40% |
| FY2027 revenue midpoint | $3.221 billion | $3.200 billion prior midpoint | +$21 million |
| Premarket price | $162.50 | $146.34 average analyst target | 11.0% above target |
Free cash flow climbed to $227 million from $162 million, while its margin expanded to 28.1% from 22.3%, Okta said in its presentation. Cash conversion outpaced the rate of sales, according to the company’s investor presentation.
Operating leverage was reflected in the reported figures. GAAP operating income totaled $107 million, up from $41 million in the same period a year ago. The GAAP operating margin widened to 13%, compared to 6% previously.
Management lifted its fiscal 2027 revenue outlook to a range of $3.216 billion to $3.226 billion, compared to a previous forecast of $3.19 billion to $3.21 billion. The midpoint of the new guidance reflects a rise of only $21 million, or 0.7%, even with the boost in bookings momentum Wall Street Journal.
Projected third-quarter revenue between $813 million and $817 million surpassed forecasts. The midpoint of $815 million was 0.9% higher than the $808.1 million FactSet consensus. The company expects cRPO to increase 11% to 12%, down from 14% growth in the previous quarter.
The quarter’s results were powered by the main business, rather than future product expectations. Chief Financial Officer Brett Tighe noted that annual contract value was rising in both workforce and customer identity segments. Additional growth also came from new offerings, particularly Okta Identity Governance Okta earnings release.
Customer quality saw steady gains. The number of accounts with annual contract value above $100,000 increased by 6% to reach 5,255. Dollar-based net retention remained steady at 107%, up one point from a year earlier.
The valuation check is instant. Yahoo’s mean analyst target of $146.34 was 11% under the premarket price. Okta shares were up 55.45% in 2026 as of Wednesday, compared with a 12.13% increase for the S&P 500.
Risks: Early premarket increases may be lost once liquidity picks up. The firm maintains its outlook for revenue to rise just 10% to 11% this year. Outsourcing of professional services is set to trim reported growth by roughly one percentage point.
The quarter thus underlines a more limited takeaway. Okta saw a pickup in contracted subscription demand along with improved cash margins. For the higher valuation to persist, cRPO growth must continue to outpace revenue, while maintaining renewal rates.
