OKTA · Okta, Inc.

Okta's Q1 FY2027 results exceeded expectations on key metrics, driven by continued adoption of its identity platform and successful go-to-market specialization. Revenue of $765M (+11% YoY) was in line with guidance, with subscription revenue also growing 11% to $750M. The professional services segment remained flat at $15M, consistent with management's strategy to shift services to partners. Billings momentum was strong, with RPO growing 16% to $4.719B and cRPO up 12% to $2.499B, indicating healthy future revenue visibility. On profitability, GAAP operating income improved to $56M (7% margin) from $39M (6% margin) a year ago, while non-GAAP operating income rose to $191M but margin contracted to 25% from 27% due to increased sales and marketing investments. The bottom line saw GAAP net income of $74M ($0.42 per diluted share) and non-GAAP net income of $168M ($0.91 per diluted share), both above consensus. Cash generation remained robust, with operating cash flow of $277M (36% margin) and free cash flow of $271M (35% margin). The balance sheet remains strong with $2.589B in cash and short-term investments. Management commentary highlighted the secular tailwind from AI agent identity security and the success of Okta Identity Governance. CEO Todd McKinnon emphasized the company's position as a neutral identity provider for the secure agentic enterprise. CFO Brett Tigge noted that go-to-market specialization is driving results, particularly with large enterprises. Guidance for Q2 FY2027 implies revenue of $790-794M (9% YoY growth), non-GAAP operating income of $204-208M (26% margin), and non-GAAP diluted EPS of $0.95-0.97. For the full fiscal year, revenue is expected at $3.185-3.205B (9-10% growth), with non-GAAP operating margin of 25-26% and free cash flow of $855-885M (27-28% margin). The company also returned $248M to shareholders via share repurchases during the quarter. Overall, Okta delivered a solid quarter with strong operational metrics and provided a prudent outlook, balancing growth and profitability.