Okta shares surged about 20% in after-hours trading Wednesday and extended the move to a 21.5% gain Thursday, reaching $163.37, after fiscal second-quarter 2027 results beat Wall Street expectations across the board.
Revenue came in at $805 million, up 11% year over year, ahead of the $793 million consensus estimate. Adjusted earnings per share were $1.05, compared with the $0.96 analysts had expected. The quarter marked Okta’s strongest bookings for any non-fourth-quarter period, with current remaining performance obligations rising 14% to $2.59 billion.
CEO Todd McKinnon highlighted AI agents as a growing demand driver, saying every agent needs a trusted identity and clear controls over what it can access and do. Okta launched Okta for AI Agents and won dozens of AI-related deals during the quarter, including several worth more than $1 million. CFO Brett Tighe said AI-related revenue is expected to remain immaterial in fiscal 2027, with a more meaningful contribution possible from fiscal 2028 onward.
New products represented about 30% of bookings, led by Okta Identity Governance, and deals that included at least one new product averaged roughly 40% higher annual contract value. Okta also completed the acquisitions of Spera and Promeso and received Impact Level 5 authorization from the U.S. Department of Defense.
Okta raised full-year fiscal 2027 revenue guidance to $3.216 billion to $3.226 billion from $3.185 billion to $3.205 billion, and lifted EPS guidance to $3.90 to $3.94 from $3.79 to $3.87. Third-quarter guidance calls for revenue of $813 million to $817 million and adjusted EPS of $0.92 to $0.94.
Several analysts raised their price targets following the report. Oppenheimer moved to $190, KeyBanc to $190, RBC Capital to $195, DA Davidson to $190, Piper Sandler to $160, and Citi to $165. Bernstein raised its target to $143 from $141 and said the quarter finally showed the subscription growth and cRPO acceleration it had been waiting for.
Despite the bullish analyst sentiment, insiders sold roughly 165,000 shares valued at about $21.8 million over the past 90 days, including CFO Brett Tighe’s sale of 65,000 shares in June under a pre-arranged Rule 10b5-1 trading plan. Institutional investors hold 86.64% of the stock. Okta ended the quarter with $2.3 billion in cash and no convertible debt after settling its remaining 2026 notes, and repurchased about 1.5 million shares for $125 million.
