SAN FRANCISCO, August 26, 2026, 16:49 EDT — Okta’s stock climbed 15.7%, boosting its market capitalization by $3.5 billion as the company reported an acceleration in backlog growth.
- Okta shares rose 15.66% after the close to $155.47, up from the regular session’s $134.42 finish.
- Revenue for the fiscal second quarter increased 11% to $805 million.
- Remaining performance obligations rose 17% to $4.858 billion.
- Okta raised the midpoint of its fiscal-year free-cash-flow forecast by $50 million, reaching $920 million.
Okta, Inc. (NASDAQ:OKTA) shares jumped after the identity software provider exceeded quarterly expectations and lifted its full-year forecast. Shares traded at $155.47 as of 16:46 EDT, rising 15.66% in after-hours action from the regular session close latest quote.
The action suggested an increase of about $3.50 billion in equity value. This represents 15.4 times Okta’s quarterly free cash flow, as well as 3.8 times the updated full-year midpoint.
Revenue for the fiscal second quarter rose 11% to $805 million. Adjusted earnings reached $1.05 per share, surpassing analyst expectations of $0.97. Subscription revenue climbed 12% to $793 million company results.
| Metric | Q2 FY2027 | Q2 FY2026 | Change |
|---|---|---|---|
| Revenue | $805 million | $728 million | up 11% |
| Subscription revenue | $793 million | $711 million | up 12% |
| RPO | $4.858 billion | $4.152 billion | increase of 17% |
| Current RPO | $2.585 billion | $2.265 billion | rose 14% |
| Free cash flow | $227 million | $162 million | jumped 40% |
Backlog expansion presented a clearer indicator. Current remaining performance obligations rose by 14%, and total obligations increased by 17%. Each growth rate topped the reported revenue growth.
Okta increased its full-year revenue outlook midpoint by $26 million to $3.221 billion. The midpoint for adjusted operating income was raised by $19 million to $835 million. The company lifted its adjusted earnings forecast by nine cents to $3.92 per share prior guidance.
The cash-flow adjustment was more significant. Okta increased the midpoint to $920 million, up from $870 million. This updated range suggests an annual margin between 28% and 29%.
Third-quarter outlook was mixed. Revenue guidance at the midpoint reached $815 million, surpassing the consensus of about $808 million. Earnings guidance at 93 cents per share came in one cent shy of forecasts Wall Street Journal.
Chief Executive Todd McKinnon linked demand with machine identities. “Every agent needs a trusted identity and clear controls,” he said. Chief Financial Officer Brett Tighe pointed to large clients and Okta Identity Governance.
Profitability rose in tandem with bookings. GAAP operating income totaled $107 million, representing a 13% margin. Adjusted operating income amounted to $226 million, accounting for 28% of revenue.
Approximately 5.9 million Okta shares traded during regular hours, about 1.6 times its 65-day average volume. Before the results were released, the stock was up 2.92% MarketWatch.
Analysts maintain a generally positive outlook, though their stance is more restrained than current market momentum. Out of 46 ratings, the consensus recommendation is Overweight. The average price target stands at $147.18, which is 5.3% under the after-hours price, while the $161 median target indicates a 3.6% potential gain analyst estimates.
Okta was trading at $155.47, representing about 39.7 times its projected adjusted earnings at the midpoint. This valuation reflects expectations for continued backlog conversion and robust cash flow. The after-hours increase additionally reduces margin for execution missteps.
Risks persist. The outlook for third-quarter free-cash-flow suggests a margin of 21% to 23%, trailing the 28% seen in the second quarter. Enterprise contract renewals, rivals and potential security breaches may also hamper existing commitments.
Okta will hold its earnings call at 17:00 EDT. Investors are watching for developments in sales efficiency and indications that demand for AI agents is resulting in stable contracts.
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