Okta 2026 Q1 Earnings Record Net Income Surges 255%

Okta (OKTA) reported its fiscal 2026 Q1 earnings on May 27th, 2025. The company's performance surpassed expectations with a significant turnaround in profitability. Despite maintaining a conservative outlook due to macroeconomic uncertainties, Okta's net income reached a record high. The company's guidance for the next quarter remains in line, focusing on growth and efficiency. Okta's results exceeded analyst expectations, reflecting a strong performance in large customer engagements and new product contributions. The future outlook includes continued investment in innovation to maintain its market leadership.

Revenue
Okta's total revenue increased by 11.5% to $688 million in 2026 Q1, compared to $617 million in 2025 Q1. The subscription segment was a major contributor, generating $673 million, while professional services and other revenue reached $15 million.

Earnings/Net Income
Okta returned to profitability with an EPS of $0.36 in 2026 Q1, rebounding from a loss of $0.24 per share in 2025 Q1, marking a 250.0% positive change. Net income reached $62 million, a 255.0% improvement from a net loss of $40 million in 2025 Q1. This strong EPS signals a robust financial recovery.

Price Action
The stock price of Okta has edged down 0.40% during the latest trading day, has edged down 0.74% during the most recent full trading week, and has surged 23.60% month-to-date.

Post-Earnings Price Action Review
The strategy of buying Okta shares after a revenue drop quarter-over-quarter on the financial report release date and holding for 30 days resulted in a 27.43% return, falling short of a benchmark return of 39.33%, with an excess return of -11.90% and a CAGR of 8.51% over the past three years. The strategy exhibited a maximum drawdown of -50.61% and a Sharpe ratio of 0.15, with a volatility of 58.01%. Despite the recent price surge, the approach showed limitations, indicating potential risks for investors relying solely on this strategy for consistent returns.

CEO Commentary
Todd McKinnon, Chief Executive Officer & Co-Founder, expressed satisfaction with Okta's performance in Q1 2026, emphasizing strength in large customer engagements, new product contributions, and record profitability. He highlighted that innovation remains crucial, particularly in addressing evolving cyber threats, with products like Okta Identity Governance and Auth for GenAI gaining traction. The CEO noted that the company is becoming integral to customers' IT infrastructure, driven by a nearly 400% increase in Workflow executions over three years. While McKinnon conveyed optimism about the future and the ongoing consolidation of identity systems, he acknowledged the importance of continuous investment and innovation to maintain market leadership.

Guidance
For Q2 FY '26, Okta expects total revenue growth of 10%, with current RPO growth projected between 10% to 11%. The non-GAAP operating margin is anticipated to be 26%, and free cash flow margin is estimated at approximately 19%. For the full year FY '26, total revenue growth is guided at 9% to 10%, with a non-GAAP operating margin of 25% and a free cash flow margin of around 27%. The company remains focused on growth and efficiency while factoring in potential macroeconomic uncertainties.

Additional News
In recent weeks, Okta announced significant developments beyond its earnings. The company has entered into a multi-year partnership with the McLaren Racing Formula 1 Team, marking a strategic move to enhance brand visibility in global markets. Additionally, Okta introduced major changes to its developer ecosystem by launching the Integrator Free Plan, aimed at improving architecture for developer organizations. This initiative underscores Okta's commitment to innovation and its ongoing efforts to strengthen identity security solutions. The company also continues to focus on addressing cybersecurity challenges as artificial intelligence models advance from prototypes to production.