Results
1Q2 revenue grew 11% and subscription revenue grew 12% year-over-year
Remaining performance obligations (RPO) grew 17% year-over-year; current remaining performance obligations (cRPO) grew 14% year-over-year
Operating cash flow of $234 million and free cash flow of $227 million
Management commentary
“As AI agents transform every layer of technology, every agent needs a trusted identity and clear controls over what it can access and do,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta.
“As the leading independent and neutral identity provider, Okta helps organizations discover agents, secure their connections, govern their actions, and respond when something goes wrong, giving them the flexibility and control they need to deploy agents safely and at scale.”
“Our Q2 performance was highlighted by accelerating cRPO, success with our largest customers, and strong profitability and cash flow,” said Brett Tighe, Chief Financial Officer of Okta.
“Steady momentum from core Okta workforce and customer identity drove ACV acceleration in both businesses.
Top-line growth also benefited from strong contributions from our portfolio of new products, led by Okta Identity Governance.”
Results
Second Quarter Fiscal 2027 Financial Highlights:
4Revenue: Total revenue was $805 million , an increase of 11% year-over-year.
Subscription revenue was $793 million, an increase of 12% year-over-year.
RPO: RPO, or subscription backlog, was $4.858 billion, an increase of 17% year-over-year. cRPO, which represents subscription backlog expected to be recognized over the next 12 months, was $2.585 billion, up 14% compared to the second quarter of fiscal 2026.
GAAP Operating Income: GAAP operating income was $107 million , or 13% of total revenue, compared to GAAP operating income of $41 million , or 6% of total revenue, in the second quarter of fiscal 2026.
Non-GAAP Operating Income: Non-GAAP operating income was $226 million, or 28% of total revenue, compared to a non-GAAP operating income of $202 million, or 28% of total revenue, in the second quarter of fiscal 2026.
GAAP Net Income: GAAP net income was $116 million, compared to GAAP net income of $67 million in the second quarter of fiscal 2026.
GAAP basic and diluted net income per share were $0.67 and $0.65, respectively, compared to a GAAP basic and diluted net income per share of $0.38 and $0.37, respectively, in the second quarter of fiscal 2026.
Non-GAAP Net Income: Non-GAAP net income was $194 million, compared to non-GAAP net income of $169 million in the second quarter of fiscal 2026.
Non-GAAP diluted net income per share was $1.05, compared to non-GAAP diluted net income per share of $0.91 in the second quarter of fiscal 2026.
Cash Flow: Net cash provided by operations was $234 million, or 29% of total revenue, compared to net cash provided by operations of $167 million, or 23% of total revenue, in the second qua rter of fiscal 2026.
8Free cash flow was $227 million, or 28% of total revenue, compared to $162 million, or 22% of total revenue, in the second quarter of fiscal 2026.
Cash, cash equivalents, and short-term investments were $2.299 billion at July 31, 2026 .
During the quarter, the Company settled the remaining principal amount of the 2026 Notes for $350 million in cash.
Outlook
Financial Outlook:
For Q3 and FY27 we continue to take a prudent approach to forward guidance.
For the third quarter of fiscal 2027, the Company expects:
5Total revenue of $813 million to $817 million, representing a growth rate of 10% year-over-year;
7Current RPO of $2.590 billion to $2.600 billion , representing a growth rate of 11% to 12% year-over-year;
Non-GAAP operating income of $196 million to $200 million, which yields a non-GAAP operating margin of 24% to 25%;
Non-GAAP diluted net income per share of $0.92 to $0.94, assuming diluted weighted-average shares outstanding of approximately 184 million and a non-GAAP tax rate of 21%; and
Non-GAAP free cash flow of $175 million to $185 million, yielding a free cash flow margin of 21% to 23%.
For the full year fiscal 2027, the Company now expects:
6Total revenue of $3.216 billion to $3.226 billion , representing a growth rate of 10% to 11% year-over-year;
2Reflected in the revenue guidance is an approximately one percentage point impact to total revenue growth resulting from our decision to accelerate the shift of professional services business to our partners.Guidance lowered
This change is expected to create a headwind to professional services revenue.Guidance lowered
Non-GAAP operating income of $830 million to $840 million, which yields a non-GAAP operating margin of 26%;
Non-GAAP diluted net income per share of $3.90 to $3.94, assuming diluted weighted-average shares outstanding of approximately 184 million and a non-GAAP tax rate of 21%; and
Non-GAAP free cash flow of $910 million to $930 million, which yields a free cash flow margin of 28% to 29%.
3Reflected in the free cash flow guidance is an approximately one percentage point impact related to lower interest income due to the combined impact from the stock repurchase program and our settlement of the 2026 Notes in cash.Guidance lowered
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