Todd McKinnon, chief executive officer of Okta Inc., speaks to Bloomberg TV in London, England, on Friday, April 11, 2025.
Chris J. Ratcliffe | Bloomberg | Getty Images
Octa Shares rose 20% in after-hours trading after the identity software provider beat Wall Street’s fiscal second-quarter estimates.
Here’s how the company performed compared to LSEG’s estimates:
Earnings per share: $1.05 adjusted vs. 97 cents expected Earnings: $805 million vs. $795 million expected
Sales were up 11% from $728 million in the same period last year, Okta said. Net income was $116 million, or 65 cents per share, up from $67 million, or 37 cents per share, in the year-ago period.
During the quarter, the company made Okta for AI Agents tools available to all customers to manage and secure agents. New products accounted for 30% of all bookings, and Okta said it has closed dozens of AI deals, including a multi-million dollar deal with a healthcare company.
The growth of agent AI and the rise of agent-orchestrated cyber hacks are forcing enterprises to invest more in tools to manage new swarms of identities.
CEO Todd McKinnon told CNBC that the agent AI security opportunity is still in a “very early stage” and that recent incidents like the OpenAI Hug Face hack are only “sparking interest.”
“Networks are the biggest cyber category right now, but if you look five to 10 years down the road with millions of agents moving around, it’s definitely going to be identity,” he said. “Don’t try to spread yourself too thin into all the other categories. I think that really pays off.”
Against this backdrop, cyber companies have made major acquisitions to expand their capabilities to address emerging AI threats. That pushed up the stock prices of the following peer companies: cloud strike and palo alto networks to record highs. Okta stock is up 55% this year.
Okta signed a deal with threat detection startup Permiso Security on Wednesday worth about $200 million. McKinnon said Okta will continue to focus on smaller acquisitions that complement its current stack.
“You’re going to see us doing more of these tuck-in things,” he said. “We’re not going to buy a large legacy company just to increase revenue.”
Remaining performance obligations, or subscription backlog, rose 17% year over year to $4.86 billion, beating the $4.7 billion expected by analysts compiled by Street Account. Current remaining performance obligations, or outstanding balances for subscriptions to be recognized within the next 12 months, increased 14% to $2.59 billion.
The company has raised its full-year forecast. Okta currently expects revenue to be in the range of $3.22 billion to $3.23 billion. This was a slight increase from the approximately $3.19 billion to $3.21 billion offered in the previous quarter and LSEG’s estimate of $3.2 billion.
Adjusted earnings are expected to be in the range of $3.90 to $3.94 per share, compared with Wall Street’s estimate of $3.84.
octa stock chart
