Okta reported first-quarter revenue of $765 million on Thursday, up 11% from a year ago, beating analyst expectations and sending Okta stock up 8%.
Against analyst forecasts of $0.85 in adjusted earnings per share and $752 million in revenue, the results cleared both bars, per CNBC. Adjusted earnings per share landed at $0.91.
On a GAAP basis, the company earned $74 million, or $0.42 per diluted share, a step up from the $62 million, or $0.35 per diluted share, it recorded in the year-earlier quarter. Free cash flow reached $271 million, compared with $238 million a year earlier.
The company pointed to the rise of AI agents as a driver of demand for identity security tools. CEO Todd McKinnon said in a statement that AI agents are becoming a new workforce inside organizations, creating a wave of identities that must be secured alongside human users.
In an interview with CNBC, McKinnon said companies racing to build out agentic AI capabilities are turning to Okta for identity tools, even as that segment has yet to account for a majority of the company's revenue. "We're playing a long game here," he said. "It's not billions of dollars of token spend right now, it's plumbing for what's going to be required for the next five and 10 years."
Subscription backlog, measured as remaining performance obligations, rose 16% year over year to $4.719 billion. Current remaining performance obligations, which captures the backlog expected to be recognized over the next 12 months, grew 12% to $2.499 billion, the company said.
CFO Brett Tighe said the company is seeing continued strength with large enterprises and increased sales productivity. Okta's Identity Governance product was singled out as a contributor to results.
Looking ahead to the current quarter, the company guided to revenue between $790 million and $794 million, a range that brackets the $791 million Wall Street had penciled in, per CNBC, and implies roughly 9% year-over-year growth. The company expects non-GAAP diluted net income per share of $0.95 to $0.97 for the quarter.
For the full fiscal year 2027, Okta raised its revenue guidance to a range of $3.185 billion to $3.205 billion, representing growth of 9% to 10%, the company said. The company noted an approximately one percentage point headwind to revenue growth stemming from its decision to shift professional services work to partners. Full-year non-GAAP diluted net income per share is expected in the range of $3.79 to $3.87.