Okta 2026 Q3 Earnings Surpasses Estimates as Net Income Surges 168.8%

Okta (OKTA) reported fiscal 2026 Q3 results that exceeded expectations, with revenue rising 11.6% to $742 million and net income hitting a 10-year high. The company raised full-year guidance, reflecting confidence in its identity management solutions and AI-driven innovations.

Revenue

Okta’s total revenue climbed to $742 million in Q3 2026, a 11.6% increase from $665 million in the prior year. Subscription revenue, the company’s core offering, led with $724 million, representing 97.5% of total revenue. Professional services and other revenue contributed an additional $18 million, rounding out the total. The growth was driven by enterprise demand for identity governance and AI-centric solutions.

Earnings/Net Income

Earnings per share (EPS) surged 166.7% to $0.24 in Q3 2026 from $0.09 in Q3 2025. Net income reached $43 million, marking a 168.8% increase from $16 million a year earlier. This marked the highest net income for a fiscal Q3 in a decade, underscoring improved profitability and cost management. The EPS growth reflects strong operational leverage and disciplined execution.

Post-Earnings Price Action Review

The strategy of buying Okta shares after a revenue increase quarter-over-quarter on the earnings release date and holding for 30 days yielded moderate returns but underperformed the benchmark. With a compound annual growth rate (CAGR) of 16.53%, the approach trailed the benchmark by 13.51%. The strategy’s maximum drawdown of 0.00% and Sharpe ratio of 0.35 indicated low risk but conservative returns, making it suitable for stability-focused investors.

CEO Commentary

CEO Todd McKinnon highlighted Q3’s success in large customer growth and product innovation, particularly in Okta Identity Governance and AI-driven solutions like Okta for AI Agents. He emphasized the company’s role as the “identity layer for AI agents” and cited early wins in the financial services sector. McKinnon expressed confidence in Okta’s ability to redefine identity management through AI security and strategic partnerships.

Guidance

CFO Brett Tighe outlined Q4 expectations, including 10% revenue growth, 25% non-GAAP operating margin, and ~31% free cash flow margin. For FY26, guidance was revised to 11% total revenue growth and 26% non-GAAP operating margin. The company plans to invest in sales specialization and product innovation while maintaining fiscal discipline. No FY27 guidance was provided due to Q4’s seasonal significance.

Additional News

Okta announced a strategic partnership with a major financial services client to deploy its AI-driven identity governance solutions, signaling growing demand in the sector. The company also launched a new channel partnership program to expand its go-to-market capabilities. Additionally, Okta’s board approved a $500 million share repurchase program, reflecting confidence in its long-term financial strength and shareholder value.

Article Polishing

The article has been revised for clarity, flow, and consistency, with all original statistics retained. Transitions between sections have been enhanced, and punctuation errors corrected. The structure adheres to the original format, with bold headings and numerical data preserved. A

placeholder has been inserted after the “Revenue” section to accommodate visual content.