Okta, Inc. (Nasdaq: OKTA) reported its fiscal 2027 first‑quarter results on May 28, 2026, showing total revenue of $765 million—up 11% year‑over‑year—and operating cash flow of $277 million. The company highlighted growth in subscription backlog, continued profitability, and a cash‑rich balance sheet, all of which are relevant to enterprise identity‑management buyers.
Okta’s First‑Quarter Fiscal 2027 Financial Highlights
Okta announced total revenue of $765 million for the quarter ended April 30, 2026, representing an 11% increase from the same period a year earlier. Subscription revenue rose in line, reaching $750 million, also up 11% YoY. The subscription backlog (RPO) grew 16% to $4.719 billion, while the current RPO (cRPO) expected to be recognized within 12 months increased 12% to $2.499 billion.
GAAP operating income was $56 million (7% of revenue), up from $39 million (6%) a year ago. Non‑GAAP operating income rose to $191 million, or 25% of revenue, compared with $184 million (27%) in the prior year. GAAP net income reached $74 million, and GAAP basic and diluted earnings per share were $0.42, up from $0.36 and $0.35 respectively. Non‑GAAP net income was $168 million, with diluted EPS of $0.91 versus $0.86 a year earlier.
Cash flow remained robust: net cash from operations was $277 million (36% of revenue) and free cash flow was $271 million (35% of revenue). Cash, cash equivalents, and short‑term investments totaled $2.589 billion at quarter‑end.
Outlook and Guidance for FY 2027
Okta provided a cautious outlook for the second quarter and full fiscal year. For Q2, the company expects total revenue of $790 million to $794 million (9% YoY growth) and cRPO of $2.505 billion to $2.515 billion (11% YoY). Non‑GAAP operating income is projected at $204 million to $208 million, yielding a 26% operating margin, and non‑GAAP diluted EPS of $0.95 to $0.97.
Full‑year guidance anticipates total revenue of $3.185 billion to $3.205 billion (9%–10% YoY growth). The outlook reflects an estimated one‑percentage‑point headwind from Okta’s decision to accelerate the shift of its professional services business to partners. Non‑GAAP operating income is expected between $806 million and $826 million (25%–26% margin), with diluted EPS of $3.79 to $3.87. Non‑GAAP free cash flow is forecast at $855 million to $885 million, representing a 27%–28% margin, after accounting for a modest reduction in interest income linked to a stock repurchase program and the planned cash settlement of the 2026 Notes.
Effective February 1, 2026, Okta adopted a projected non‑GAAP tax rate of 21%, down from 26%, due to the One Big Beautiful Bill Act. This rate applies prospectively to the guidance provided.
Operational Context and Market Position
CEO Todd McKinnon framed the results around the rise of AI agents, noting that “AI agents are rapidly becoming a new workforce inside every organization, creating a wave of identities that must be secured and governed alongside human users.” CFO Brett Tighe linked the performance to “last year’s go‑to‑market specialization,” citing strength with large enterprises and the “success of our new product portfolio, particularly Okta Identity Governance.” The company’s cash generation and backlog growth suggest continued demand for its identity‑as‑a‑service platform among enterprises seeking to manage both human and machine identities.
Key Takeaways
- Total revenue rose 11% YoY to $765 million, with subscription revenue also up 11% to $750 million.
- Operating cash flow reached $277 million and free cash flow $271 million, while cash and short‑term investments stood at $2.589 billion.
- FY 2027 revenue guidance is $3.185 billion to $3.205 billion, reflecting a 9%–10% YoY growth target and a one‑percentage‑point headwind from the professional‑services shift.
TechInsyte's Take
Okta’s solid top‑line growth and strong cash generation reinforce its position as a core provider of enterprise identity services, especially as organizations extend identity controls to AI agents. The modest guidance adjustments—particularly the professional‑services headwind—signal a strategic shift toward partner‑driven services. CIOs and security leaders should monitor Okta’s upcoming Q2 webcast for deeper insight into how the new Identity Governance suite and AI‑focused roadmap may affect integration plans and budgeting.
Source: Businesswire
