Okta's Q2 Earnings Call Highlights Growth, Optimism and Strategic Acquisitions

Okta reported strong Q2 results, highlighting growth in the public sector and a record pipeline generation. The company raised its FY 2026 guidance, projecting 10-11% revenue growth and a non-GAAP operating margin of 25-26%. Okta also acquired Acxiom Security to enhance its cybersecurity offerings and introduced the cross-app access standard. However, the company faced challenges in the federal vertical and stabilization of Net Revenue Retention (NRR).

Okta, Inc. (Nasdaq: OKTA) announced its second-quarter fiscal year 2026 financial results, showcasing robust growth and a record pipeline generation. The company reported a 13% year-over-year (YoY) increase in total revenue to $728 million, driven by a 12% YoY growth in subscription revenue to $711 million. Remaining Performance Obligations (RPO) grew by 18% YoY to $4.152 billion, with current RPO (cRPO) increasing by 13% YoY to $2.265 billion [1].

Okta's operating cash flow reached $167 million, while free cash flow stood at $162 million, both representing significant improvements over the prior year. The company's GAAP net income was $67 million, up from $29 million in the prior year, while non-GAAP net income increased to $169 million from $131 million. Non-GAAP diluted net income per share was $0.91, up from $0.72 in the prior year [1].

Okta's strong performance was attributed to continued adoption of its unified identity platform, particularly in the public sector, and the integration of Auth0. The company also highlighted the acquisition of Axiom Security, which is expected to enhance its cybersecurity offerings. However, the company faced challenges in the federal vertical and stabilization of Net Revenue Retention (NRR) [1].

Looking ahead, Okta raised its FY 2026 guidance, projecting total revenue growth of 10-11% YoY, with non-GAAP operating margins of 25-26%. The company expects non-GAAP diluted net income per share of $3.33 to $3.38 and a non-GAAP free cash flow margin of approximately 28% [1].

Okta will host a live webcast on August 26, 2025, at 2:00 p.m. Pacific Time to discuss the results and outlook. For more information, visit the company's investor relations website at investor.okta.com [1].

References:
[1] https://investor.okta.com/news-and-events/news-releases/news-details/2025/Okta-Announces-Second-Quarter-Fiscal-Year-2026-Financial-Results/