Okta posts stronger-than-expected Q2 earnings, driving up stock prices; Revenue Performance Order increases by 18%

In a recent financial update, identity and access management company Okta (NASDAQ:OKTA) shared its second quarter fiscal 2026 results, which saw a significant boost in earnings and revenue.

The company reported adjusted earnings per share (EPS) of $0.91 for the quarter ended July 31, exceeding the consensus estimate of $0.85. This positive performance was reflected in the market, with Okta's shares increasing following the announcement.

Okta's revenue for the quarter increased 13% year over year to $728M, surpassing the estimate of $711.87M. Subscriptions accounted for $711M of the revenue, while Professional services totaled $17M.

The company also announced the acquisition of two Israeli startups, CertiK and Axiom, in deals estimated at approximately $200 million and $100 million respectively. The acquisition of CertiK, a leader in blockchain security, will strengthen Okta's security offerings. The acquisition of Axiom, a cloud-based identity and permissions management startup, will further enhance Okta's identity management capabilities.

Okta's CEO, Todd McKinnon, highlighted continued strength in new product adoption, the public sector, Auth0, and cash flow. He also emphasized the company's independence and neutrality, stating that in the age of AI, Okta's position will continue to give organizations the freedom to innovate securely and on their own terms.

The company's adjusted gross margin remained the same year over year at 82%, and free cash flow increased to $162M compared to $78M during the second quarter of fiscal 2025. Okta's remaining performance obligations increased 18% year over year to $4.152B.

Looking ahead, Okta projects third-quarter adjusted EPS of $0.74 to $0.75, which is in line with the $0.75 estimate. The company also projected revenue for the third quarter to range from $728M to $730M, exceeding the $723M estimate.

In summary, Okta's strong second quarter results, coupled with strategic acquisitions, position the company well for continued growth in the coming quarters.

Okta posts stronger-than-expected Q2 earnings, driving up stock prices; Revenue Performance Order increases by 18%