SAN FRANCISCO, August 28, 2026, 04:43 (EDT) — Okta’s stock climbed 28.6% after the company reported cRPO growth accelerating to 14%.
- Okta’s stock ended Thursday’s session at $172.91, rising 28.6%.
- Current remaining performance obligations increased by 14% to reach $2.585 billion.
- Free cash flow for the quarter was $227 million, accounting for 28% of revenue.
- Guidance for fiscal 2027 free cash flow increased to a range of $910 million to $930 million.
Shares of Okta Inc. NASDAQ:OKTA jumped 28.6% on Thursday following reports of faster backlog growth and an upgraded annual forecast. The stock ended the session at $172.91, gaining $38.49.
The scale of the move signals more than just an earnings outperformance. Okta generated free cash flow equal to 28% of its revenue. Its short-term subscription backlog grew at a faster pace as well.
Current remaining performance obligations climbed 14% to $2.585 billion, following 13% growth in the prior year. Total RPO rose 17% to reach $4.858 billion, providing improved revenue visibility for investors.
Revenue rose 11% to $805 million. Subscription revenue advanced 12% to $793 million. GAAP operating income jumped to $107 million, more than double, boosting the operating margin to 13% from 6% company results.
Free cash flow rose by 40%, reaching $227 million. The margin widened by six percentage points to 28%. As of July 31, cash, equivalents and short-term investments stood at $2.299 billion.
Chief Executive Todd McKinnon stated, “Every agent needs a trusted identity and clear controls over what it can access and do.” The statement directly connects AI adoption with Okta’s authentication and governance solutions earnings release.
| Metric | Q2 FY2027 | Q2 FY2026 | Change |
|---|---|---|---|
| Revenue | $805 million | $728 million | up 11% |
| Subscription revenue | $793 million | $711 million | increased 12% |
| RPO | $4.858 billion | $4.152 billion | rose 17% |
| cRPO | $2.585 billion | $2.265 billion | gained 14% |
| GAAP operating income | $107 million | $41 million | jumped 161% |
| Free cash flow | $227 million | $162 million | advanced 40% |
Management projects third-quarter revenue to range between $813 million and $817 million. The company anticipates cRPO to be between $2.590 billion and $2.600 billion, which represents growth of 11% to 12% against a tougher comparison.
Okta increased its full-year revenue outlook to a range of $3.216 billion–$3.226 billion. The company projects free cash flow between $910 million and $930 million, with an anticipated margin of 28% to 29%.
Markets reflected a significant repricing as trading volume climbed to approximately 16.36 million shares, well above the average of 4.52 million. Shares hit a 52-week peak of $174.85 and closed close to that mark market data.
Wall Street moved rapidly. Needham and Cantor Fitzgerald increased their price targets to $200. Evercore raised its target to $185, and Barclays set its target at $180. Bank of America shifted its rating to Neutral with a target price of $170 analyst actions.
The closing price has surpassed multiple targets. Okta’s market capitalization rose to approximately $30.1 billion. Investors are focused on persistent backlog expansion and continued cash generation, rather than just a single robust quarter.
Risks: Okta’s growth trails previous years’ pace. Significant contracts contribute to cRPO volatility. AI security rivals are gaining ground, and high valuation provides little margin for missteps.
The next assessment is simple. Okta needs to maintain cRPO growth close to double digits and sustain a free-cash-flow margin that nears 30%. Thursday’s share surge reflects investor expectations for strong advances in both areas.
