Okta (OKTA), the identity and access management cybersecurity company, delivered a robust fiscal second-quarter report that reassured investors after a rocky start to the year.
Revenue climbed 13% year-over-year to $728 million, easily topping Wall Street’s $711 million estimate. Adjusted earnings came in at $0.91 per share, beating expectations of $0.84.
The upbeat results were welcomed by the market, sending shares up nearly 6% in early trading Wednesday. The move comes after months of investor caution, as concerns about government contract delays and macro uncertainty weighed on the stock. This quarter’s performance and forward-looking guidance suggest many of those fears were overblown.
Guidance Turns Bullish After Conservative Stance
Management lifted its full-year revenue forecast to a range of $2.88 billion to $2.89 billion, up from its prior $2.85–$2.86 billion projection. Annual adjusted earnings guidance was also raised to $3.33–$3.38 per share, compared with earlier projections of $3.23–$3.28.
For the upcoming quarter, Okta expects revenue between $728 million and $730 million—above consensus—and EPS in line with forecasts at $0.74–$0.75. Importantly, leadership indicated it will take a less cautious approach to guidance going forward, a shift from the overly conservative tone that rattled investors after Q1.
CEO Todd McKinnon highlighted strong adoption in the public sector, where five of Okta’s top ten deals last quarter were with government agencies, including the Department of Defense. This sector has become a key growth driver, alongside expanding demand for its Auth0 platform and newer products.
Management lifted its full-year revenue forecast to a range of $2.88 billion to $2.89 billion, up from its prior $2.85–$2.86 billion projection. Annual adjusted earnings guidance was also raised to $3.33–$3.38 per share, compared with earlier projections of $3.23–$3.28.
For the upcoming quarter, Okta expects revenue between $728 million and $730 million—above consensus—and EPS in line with forecasts at $0.74–$0.75. Importantly, leadership indicated it will take a less cautious approach to guidance going forward, a shift from the overly conservative tone that rattled investors after Q1.
CEO Todd McKinnon highlighted strong adoption in the public sector, where five of Okta’s top ten deals last quarter were with government agencies, including the Department of Defense. This sector has become a key growth driver, alongside expanding demand for its Auth0 platform and newer products.
Positioning in a Growing Market
Beyond the quarter, Okta appears well-positioned in a cybersecurity landscape that is undergoing rapid consolidation. Rival Palo Alto Networks (PANW) recently announced a $25 billion acquisition of CyberArk (CYBR), underscoring the importance of identity as the new perimeter in enterprise security. With over 20,000 customers, Okta has a larger installed base than many competitors, offering ample cross-sell opportunities.
Beyond the quarter, Okta appears well-positioned in a cybersecurity landscape that is undergoing rapid consolidation. Rival Palo Alto Networks (PANW) recently announced a $25 billion acquisition of CyberArk (CYBR), underscoring the importance of identity as the new perimeter in enterprise security. With over 20,000 customers, Okta has a larger installed base than many competitors, offering ample cross-sell opportunities.
Analysts remain constructive. Truist upgraded Okta to Buy with a $125 target, citing the company’s strong positioning in identity security and emerging opportunities in “machine identities”—digital certificates, bots, and AI agents that also require protection. Guggenheim reiterated a Buy rating with a $138 price target, describing current valuations as an “attractive entry point.”
At roughly $94 per share, Okta trades at about 19 times forward free cash flow estimates—seen as fair by some analysts, but potentially undervalued if growth accelerates. Average analyst price targets suggest over 30% upside from current levels.
Conclusion
Okta’s latest earnings report marks a turning point for the stock. After stumbling earlier this year, the company delivered results that exceeded expectations, raised its full-year outlook, and showed renewed confidence in its growth trajectory. With government contracts strengthening, product adoption expanding, and analysts highlighting identity security as a long-term growth driver, Okta looks set to regain investor trust.
For retail investors, the takeaway is clear: while competition in cybersecurity remains intense, Okta’s leadership in identity security and improved guidance could offer a compelling opportunity for those seeking exposure to this critical segment of digital defense.
Okta’s latest earnings report marks a turning point for the stock. After stumbling earlier this year, the company delivered results that exceeded expectations, raised its full-year outlook, and showed renewed confidence in its growth trajectory. With government contracts strengthening, product adoption expanding, and analysts highlighting identity security as a long-term growth driver, Okta looks set to regain investor trust.
For retail investors, the takeaway is clear: while competition in cybersecurity remains intense, Okta’s leadership in identity security and improved guidance could offer a compelling opportunity for those seeking exposure to this critical segment of digital defense.
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