Okta shares surged as much as 29% after the identity security company beat fiscal second-quarter estimates on earnings, revenue, and backlog, then raised its full-year revenue guidance. The rally was fueled by early evidence that AI agent security tools are converting into paid deals, though the guidance increase itself was modest next to the size of the stock move.
Okta, Inc. (NASDAQ: OKTA) shares surged as much as 29% after the identity security company beat fiscal second-quarter estimates, CNBC reported.
Earnings, revenue, and backlog all top estimates
Adjusted earnings per share came in at $1.05 versus $0.97 expected. Revenue rose 11% to $805 million versus $795 million expected. Net income totaled $116 million, up from $67 million a year earlier. Remaining performance obligations, a measure of backlog, climbed 17% to $4.86 billion, beating the $4.70 billion analysts anticipated.
Okta also raised its full-year revenue guidance to $3.22 billion to $3.23 billion and closed its acquisition of threat-detection startup Permiso Security, extending its platform into identity threat detection relevant to securing AI agents.
AI agent tools convert into paid deals
Okta made its "Okta for AI Agents" tool available to all customers during the quarter. As a result, new products accounted for 30% of total bookings, with dozens of AI-related deals closed, including a multi-million-dollar healthcare contract. CEO Todd McKinnon said: "As AI agents transform every layer of technology, every agent needs a trusted identity."
Analysts flag an early stage and stiff competition
Bank of America upgraded Okta but said adoption remains very early, disclosed metrics remain limited, and management continues to view AI as immaterial to fiscal 2027 results. The guidance increase itself was modest relative to the stock's reaction: full-year revenue guidance moved only from roughly $3.19 billion-$3.21 billion to $3.22 billion-$3.23 billion.
Okta also faces competition from CrowdStrike, Palo Alto Networks, and Zscaler as they pursue the same AI-driven security opportunity. Insider Monkey's database shows Okta was held by 58 hedge funds in Q2 2026, up from 49 in Q1. CrowdStrike was held by 89 funds, up from 79, and Palo Alto Networks by 89 funds, up from 87.
Source: Insider Monkey via Yahoo Finance
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