Okta 2026 Q3 Earnings Net Income Surges 168.8%

Okta (OKTA) reported fiscal 2026 Q3 earnings on Dec 03rd, 2025, with revenue rising 11.6% to $742 million and EPS climbing 166.7% to $0.24. The company raised full-year guidance for revenue growth and profitability, while CEO Todd McKinnon emphasized momentum in AI security and large customer upsells.

Revenue

Okta’s total revenue reached $742 million in Q3 2026, driven by a 11.6% year-over-year increase. Subscription revenue led the growth, contributing $724 million, complemented by $18 million from professional services and other segments. The subscription model remains the core of Okta’s business, accounting for 98% of total revenue in the nine months ended October 2025.

Earnings/Net Income

The company’s EPS surged to $0.24, reflecting a 166.7% year-over-year increase, while net income hit $43 million—a 168.8% rise from $16 million in Q3 2025. These results underscore Okta’s strengthening profitability and efficient cost management. The EPS growth highlights the company’s ability to convert revenue into profits, marking continued earnings momentum.

Post-Earnings Price Action Review

The strategy of buying OKTA when it beats revenue and holding for 30 days resulted in a -60.13% return, significantly underperforming the benchmark return of 84.40%. The strategy’s Sharpe ratio was -0.30, with a maximum drawdown of 0.00% and a volatility of 55.54%, indicating a high-risk, low-reward approach.

CEO Commentary

CEO Todd McKinnon highlighted strength in large customer upsells and new products like Okta Identity Governance and AI security solutions. He emphasized the company’s leadership in securing AI, calling it a “significant new opportunity,” and expressed confidence in executing its growth strategy through Q4.

Guidance

For Q4 FY 2026, Okta expects total revenue growth of 10%, non-GAAP operating margin of 25%, and free cash flow margin of ~31%. Full-year guidance now includes 11% total revenue growth and a 26% non-GAAP operating margin, reflecting disciplined investment and margin expansion.

Additional News

Okta’s recent strategic focus on AI security solutions and identity governance has drawn attention, with CEO Todd McKinnon calling it a “catalyst for growth.” Analysts from Scotiabank, Needham, and BTIG revised price targets downward but maintained “Buy” or “Sector Perform” ratings, citing strong cRPO growth and margin discipline. The company also announced plans to expand its AI agent security offerings, targeting over 100 existing customers with combined $200 million in ARR.

Additional News

Okta’s CEO Todd McKinnon reiterated confidence in the company’s AI security leadership, a key differentiator in a competitive market. Analysts highlighted the 13% year-over-year growth in cRPO, exceeding consensus estimates, but expressed caution over the lack of fiscal 2027 guidance. Meanwhile, the company’s go-to-market investments and focus on product innovation, including AI agent security, signal long-term strategic priorities.

Article Polishing

The stock price of Okta has jumped 14.21% during the latest trading day, has climbed 6.38% during the most recent full trading week, and has dropped 5.67% month-to-date.