Okta Q2 Preview: Growth Expectations and Margin Guidance Under Scrutiny

Okta is set to report Q2 fiscal 2026 results after the market close on Tuesday, August 26. The company is expected to post a non-GAAP EPS of $0.84 on revenue of around $711 million, a significant slowdown in growth to around 10% YoY. Investors will be watching for remaining performance obligations (RPO), which grew 21% last quarter, and margins, as the company aims to maintain a non-GAAP operating margin of 27%. The stock has been highly volatile and underperforming the market year-to-date, making this report a critical test of the company's long-term strategy.

Okta, Inc. (OKTA) is scheduled to release its Q2 fiscal 2026 earnings report after the market close on Tuesday, August 26. The company is expected to post a non-GAAP EPS of $0.84 on revenue of around $711 million, marking a significant slowdown in growth to around 10% year-over-year (YoY) [1]. Investors will be closely monitoring key metrics such as remaining performance obligations (RPO), which grew by 21% in the previous quarter, and margins, as Okta aims to maintain a non-GAAP operating margin of 27% [2].

The stock has been highly volatile and underperforming the market year-to-date, making this report a critical test of the company's long-term strategy. Analysts expect Okta's revenue to come in at $711.04 million, representing a 10.1% YoY increase [1]. The consensus EPS estimate has remained unchanged at $0.84 per share over the last 30 days [1].

Okta's revenue is forecasted to break down as follows:
- Revenue from subscription services is expected to be $696.61 million, a 10.2% YoY increase [1].
- Revenue from professional services and other sources is projected to be $14.49 million, a 3.5% YoY increase [1].

Analysts also predict that the company's current remaining performance obligations (cRPO) will reach $2.20 billion, compared to the year-ago value of $2.00 billion [1]. The consensus among analysts is that the remaining performance obligations will reach $4.10 billion, up from $3.51 billion in the previous year [1].

Okta's gross margin from subscription services is projected to reach 83.6%, compared to the previous estimate of 78.0% [1]. The company aims to maintain a non-GAAP operating margin of 27% [2].

Okta's stock has experienced a change of -4.8% in the past month compared to the +1.7% move of the Zacks S&P 500 composite. The company has a Zacks Rank #3 (Hold) and is expected to mirror the overall market performance in the near future [1].

Investors will be keen to see how Okta's results align with analyst expectations and the company's long-term strategic vision. The stock's valuation of 4.7 times calendar year 2026 estimated revenue should provide some support for the stock, despite concerns about revenue growth trajectory through fiscal year 2027 [2].

References:
[1] https://www.nasdaq.com/articles/insights-okta-okta-q2-wall-street-projections-key-metrics
[2] https://www.investing.com/news/analyst-ratings/jefferies-lowers-okta-stock-price-target-to-100-on-smb-pressure-93CH-4203968