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Okta Shares Surge 15% Following Strong Earnings Beat Driven by AI Security Demand
Technology Services · Internet Software/Services · cnbc · 2026-08-26
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Okta shares jumped after the identity security firm reported fiscal second-quarter results that beat analyst expectations, bolstered by rising demand for AI-focused tools.
What Happened
Earnings and Revenue Performance: Okta delivered a strong fiscal second-quarter performance, reporting adjusted earnings of $1.05 per share on $805 million in revenue, both exceeding Wall Street expectations. This represents an 11% year-over-year revenue increase, with net income rising significantly to $116 million compared to the same period last year.
AI-Driven Growth Strategy: The company is seeing substantial traction with its new AI-focused product offerings, which accounted for 30% of total bookings during the quarter. CEO Todd McKinnon emphasized that the rise of agentic AI is creating a critical need for identity security, positioning the firm to capture long-term demand as cyber threats evolve.
Operational and M&A Activity: Okta continues to bolster its capabilities through strategic acquisitions, recently closing a $200 million deal for threat detection startup Permiso Security. Management indicated a preference for these smaller, complementary "tuck-in" acquisitions rather than large-scale legacy company purchases to maintain focus and efficiency.
Forward Guidance and Backlog: Reflecting confidence in its current trajectory, Okta raised its full-year revenue guidance to a range of $3.22 billion to $3.23 billion. The company also reported a 17% increase in subscription backlog, signaling robust future demand as it continues to outperform analyst estimates for both revenue and earnings per share.