Okta Revenue Beats Estimates as AI Agent Security Drives Growth

Okta reported fiscal second-quarter results that exceeded Wall Street expectations, with revenue reaching $805 million against analyst estimates of $795 million, according to details first reported by CNBC. The identity software provider's shares climbed approximately 15% in after-hours trading following the announcement.

The company posted adjusted earnings of $1.05 per share, beating the 97-cent consensus. Revenue grew 11% year-over-year from $728 million in the same period last year. Net income more than doubled to $116 million, or 65 cents per share, compared to $67 million a year earlier.

AI Agent Security Emerges as Growth Driver

Okta's performance reflects surging enterprise demand for tools that manage and secure AI agents. The company made its Okta for AI Agents product generally available during the quarter, and new products now represent 30% of total bookings. Okta closed dozens of AI-related deals, including a multi-million-dollar contract with a healthcare organization.

CEO Todd McKinnon told CNBC the agentic AI security market remains in its early stages, with recent incidents like the OpenAI Hugging Face breach accelerating customer interest. He positioned identity management as the future dominant cybersecurity category, predicting it will eclipse network security as millions of AI agents proliferate across enterprise environments.

Strategic Acquisitions and Market Position

Okta completed its acquisition of threat detection startup Permiso Security on Wednesday, a deal valued at approximately $200 million. McKinnon indicated the company will pursue additional smaller acquisitions that complement its existing technology stack rather than large legacy platform purchases aimed purely at revenue expansion.

The broader cybersecurity sector has entered an acquisition phase as companies race to address AI-driven threats. Competitors including CrowdStrike and Palo Alto Networks have reached record valuations, while Okta shares have surged 55% year-to-date.

Forward Guidance Raised

Okta increased its full-year revenue outlook to a range of $3.22 billion to $3.23 billion, up from prior guidance of $3.19 billion to $3.21 billion. The company now expects adjusted earnings between $3.90 and $3.94 per share, exceeding the Wall Street estimate of $3.84.

Remaining performance obligations—a measure of subscription backlog—jumped 17% year-over-year to $4.86 billion, surpassing analyst expectations of $4.70 billion. Current remaining performance obligations, representing revenue to be recognized within 12 months, increased 14% to $2.59 billion.

Why it matters

The proliferation of AI agents creates exponentially more digital identities that enterprises must manage and secure. Okta's results demonstrate that identity management is evolving from a traditional IT function into a critical AI security layer, positioning specialized providers to capture significant market share as organizations deploy autonomous agents at scale. The shift suggests identity platforms may become essential infrastructure for the agentic AI era.

These details were first reported by CNBC.