Loading...
01/10 00:30
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call indicates strong financial performance with a 10% revenue growth, robust public sector deals, and a solid cash position. Despite economic uncertainties and integration risks from the Axiom acquisition, the company shows resilience with improved operational efficiency and strategic sales force specialization. The Q&A highlights stable NRR, AI adoption trends, and a strategic focus on identity as a critical platform. Positive signals from public sector contracts and international market focus further support a positive sentiment. The stock price is likely to increase by 2% to 8% over the next two weeks.
Total Revenue Growth 9% to 10% for Q3 FY '26, and 10% to 11% for the full year FY '26. This growth reflects the company's prudent approach to forward guidance and the impact of go-to-market specialization.
Non-GAAP Operating Margin 22% for Q3 FY '26 and 25% to 26% for the full year FY '26. This increase is attributed to improved sales productivity and record pipeline generation.
Free Cash Flow Margin Approximately 21% for Q3 FY '26 and 28% for the full year FY '26. This reflects the company's focus on increasing profitability and cash flow.
Cash, Cash Equivalents, and Short-term Investments Approximately $2.9 billion at the end of Q2 FY '26. This strong balance sheet supports capital allocation priorities, including business investment, tuck-in M&A, and repurchasing of notes.
OCI (Okta Customer Identity) Bookings Substantial growth in the first half of FY '26, driven by deals in both the public and private sectors. This growth is a result of strategic reinvestment in the product.
New Products: Okta Identity Governance, Okta Privileged Access, Okta Device Access, Identity Security Posture Management, Identity Threat Protection with Okta AI, and Fine Grained Authorization contributed strongly in Q2. These products are part of Okta's Unified Identity Platform, which provides differentiated value to customers.
Acquisition: Okta signed a definitive agreement to acquire Axiom Security, a modern PAM vendor, to enhance Okta Privileged Access. The acquisition will integrate Axiom's technology to deliver superior security and compliance outcomes.
AI Security: Okta introduced 'Auth0 for AI Agents' and a new open standard called 'Cross App Access' to secure AI agents. These innovations aim to enhance identity security for AI workflows and provide better end-user experiences.
Public Sector Growth: Okta's public sector business performed strongly, with 5 of the top 10 deals in Q2 coming from the U.S. public sector, including the largest deal with a DoD agency. Renewals across federal agencies were robust.
Customer Identity Growth: Okta Customer Identity (OCI) bookings accelerated significantly in the first half of FY '26, driven by deals in both public and private sectors.
Financial Performance: Okta reported a strong balance sheet with $2.9 billion in cash, cash equivalents, and short-term investments. The company plans to settle $510 million in convertible notes maturing next week.
Profitability and Cash Flow: Non-GAAP operating margin for FY '26 is expected to be 25%-26%, with a free cash flow margin of approximately 28%. Q3 FY '26 guidance includes a non-GAAP operating margin of 22% and free cash flow margin of 21%.
Go-to-Market Specialization: Okta's specialized go-to-market teams showed improved sales productivity and record pipeline generation, indicating long-term growth potential.
Independence and Neutrality: Okta emphasized its independence and neutrality as a competitive advantage, particularly in the context of identity's central role in security.
Federal Vertical Uncertainty: While the company initially introduced conservatism in its outlook due to uncertainty in the macro environment and federal vertical, there were contract restructuring and delays in procurement processes with civilian agencies.
Competitive Pressures: The announcement of the Palo Alto CyberArk transaction highlights increasing competition in the identity security market, though Okta believes it won't meaningfully change the competitive landscape.
Supply Chain and Procurement Delays: Delays in procurement processes were noted, particularly in the public sector, which could impact the timing of revenue recognition.
Economic Uncertainty: The company had previously factored in macroeconomic uncertainty into its outlook, which could affect customer spending and contract renewals.
Integration Risks: The acquisition of Axiom Security introduces potential risks related to technology integration and customer retention during the transition.
Q3 FY '26 Revenue Growth: Expected total revenue growth of 9% to 10%.
Q3 FY '26 Current RPO Growth: Expected current RPO growth of 10%.
Q3 FY '26 Non-GAAP Operating Margin: Expected non-GAAP operating margin of 22%.
Q3 FY '26 Free Cash Flow Margin: Expected free cash flow margin of approximately 21%.
FY '26 Total Revenue Growth: Raised outlook to 10% to 11% growth.
FY '26 Non-GAAP Operating Margin: Raised outlook to 25% to 26%.
FY '26 Free Cash Flow Margin: Raised outlook to approximately 28%.
The selected topic was not discussed during the call.
The earnings call indicates strong financial health with a positive outlook on revenue growth, operating margin, and cash flow. The Q&A section reveals optimism about AI capabilities and strategic partnerships, although lacking specific future guidance. The company's effective sales realignment and diversified product portfolio mitigate potential headwinds. Overall, the positive financial metrics and strategic initiatives suggest a likely stock price increase.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
