Okta 2026 Q2 Earnings Strong Performance as Net Income Surges 131%

Okta (OKTA) reported its fiscal 2026 Q2 earnings on August 26, 2025. The company delivered results that exceeded expectations, with robust revenue growth and record net income. Okta also raised its full-year guidance, signaling confidence in its long-term growth trajectory.

Okta’s fiscal 2026 Q2 earnings surpassed expectations, with revenue rising 12.7% year-over-year to $728 million and net income surging 131% from the prior year, reflecting strong demand for its identity platform.

Revenue

Okta’s revenue in Q2 2026 reached $728 million, representing a 12.7% year-over-year increase. Subscription services, which constitute the core of the company’s offerings, accounted for the majority of the revenue with $711 million, while professional services and other revenue added $17 million. The continued strength in subscription income underscores the company's growing customer base and recurring revenue model.

Earnings/Net Income

Okta's earnings per share (EPS) grew significantly, reaching $0.38 in Q2 2026, a 111.1% increase from $0.18 in the prior year. The company’s net income also soared to $67 million, a 131.0% year-over-year jump from $29 million. This marked a new record high for Q2 net income and reflected improved profitability driven by operational efficiency and scale.

Price Action

Okta’s stock price saw mixed performance in the short term. The stock edged down 0.87% during the latest trading day, gained 0.45% during the most recent full trading week, and declined 9.44% month-to-date. These movements highlight the volatility often associated with high-growth technology stocks.

Post Earnings Price Action Review

The strategy of buying Okta shares immediately following the Q2 earnings report and holding for 30 days resulted in a -15.87% return, significantly underperforming the 58.85% benchmark return over the same period. With an excess return of -74.72% and a compound annual growth rate of -5.79% over three years, the strategy appeared ineffective. The strategy showed minimal drawdown and a negative Sharpe ratio of -0.11, indicating it offered no meaningful upside while posing poor risk-adjusted returns.

CEO Commentary

CEO Todd McKinnon emphasized Okta’s strong Q2 performance, driven by large enterprise customers, growth in the public sector, and the integration of new products such as those from the Acxiom Security acquisition. McKinnon highlighted the value of Okta’s unified identity platform in delivering differentiated solutions, including identity governance and AI-driven security. He expressed optimism about future growth through strategic investments in product innovation and securing AI-driven identity solutions, positioning Okta as a neutral, comprehensive cloud-native identity leader.

Guidance

Okta raised its guidance for Q3 and FY26, reflecting growing confidence in its long-term trajectory. For Q3, the company expects total revenue growth of 9% to 10%, a current RPO increase of 10%, a non-GAAP operating margin of 22%, and a free cash flow margin of approximately 21%. For FY26, Okta now projects total revenue growth of 10% to 11%, non-GAAP operating margin of 25% to 26%, and a free cash flow margin of approximately 28%. The updated guidance reflects optimism about the effectiveness of the company’s go-to-market strategies and its ability to scale profitably.

Additional News

Within the three weeks surrounding Okta’s Q2 earnings release, several key non-earnings related events occurred. Notably, the Nigerian government took action against fraudulent activities, with the Nigerian Education Loan Fund (NELFUND) warning universities over student loan fraud and the Economic and Financial Crimes Commission denying allegations of rights violations. Additionally, Nigeria’s political landscape remained active, with the Peoples Democratic Party facing internal debates over its 2027 presidential ticket zoning strategy. In the corporate sector, Akwa Ibom State celebrated the graduation of 35 Ibom Air pilots and engineers, while Lagos State launched a training program for agro-export farmers. These events reflect broader regional developments outside Okta’s core business.