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

Okta reported its fiscal 2026 Q2 earnings on August 27, 2025, with results and guidance exceeding expectations. The company delivered revenue growth and raised its full-year forecasts, attributing strong performance to increased demand from AI platform developers. Okta also removed macroeconomic uncertainties from its outlook, signaling confidence in continued momentum.

Revenue
Okta's total revenue rose 12.7% year-over-year to $728 million, driven by its core subscription business, which accounted for nearly all of the company’s revenue at $711 million. Professional services and other revenue added an additional $17 million, completing the company’s financial performance for the quarter.

Earnings/Net Income
Okta’s earnings surged, with EPS rising 111.1% to $0.38, and net income climbing 131.0% to $67 million. This marked the highest net income in the past ten years and reflected the company’s improved profitability and operational efficiency.

Price Action
The stock price of Okta fell 4.52% during the latest trading day but gained 2.20% over the past week. Month-to-date, the stock declined 4.92%.

Post-Earnings Price Action Review
A 30-day trading strategy based on buying OKTA shares immediately after the earnings report yielded a -15.87% return, significantly underperforming the benchmark of 58.85% over the same period. The strategy exhibited a negative CAGR of -5.79%, no drawdown, and a Sharpe ratio of -0.11, indicating poor risk-adjusted returns.

CEO Commentary
CEO Todd McKinnon highlighted the company’s strong Q2 performance, driven by growth from large customers, new product offerings like Okta Privileged Access and Identity Threat Protection, and expansion in the public sector. He also announced the Axiom Security acquisition, which strengthens Okta’s capabilities in identity security and privileged access management. McKinnon emphasized Okta’s position as the only comprehensive cloud-native identity platform and its focus on securing AI.

Guidance
For Q3 FY’26, Okta expects 9% to 10% revenue growth, a non-GAAP operating margin of 22%, and free cash flow margin of ~21%. Full-year FY’26 guidance includes revenue growth of 10% to 11%, a non-GAAP operating margin of 25% to 26%, and free cash flow margin of ~28%.

Additional News
On August 27, 2025, Okta’s stock price rose 4.2% in pre-market trading following its Q2 earnings report, which exceeded expectations. The company attributed its strong performance to increased demand from enterprises developing AI platforms. This pre-market rise reflected investor optimism over Okta’s ability to capitalize on the AI-driven transformation in enterprise identity and access management.