Identity management company Okta (NASDAQ: OKTA) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 11.2% year on year to $765 million. The company expects next quarter’s revenue to be around $792 million, close to analysts’ estimates. Its non-GAAP profit of $0.91 per share was 6.7% above analysts’ consensus estimates.

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StockStory’s Take

Okta’s first quarter results drew a positive response from the market, with management crediting growth in large enterprise adoption, increased partner engagement, and broader product traction. CEO Todd McKinnon highlighted significant momentum from both core identity platforms—Okta and Auth0—as well as new offerings in identity governance and privileged access. Management emphasized that new products, including solutions for AI agent identity management, now make up a rising share of bookings, underscoring the company’s ability to adapt to evolving security needs.

Looking ahead, Okta’s guidance is anchored in expectations for continued large enterprise demand, rising adoption of its AI agent security products, and expansion of its identity governance suite. Management detailed that while AI-related products are still in early stages, customer interest and pipeline growth are at unprecedented levels. CFO Brett Tighe noted, “We are investing heavily in R&D to support these opportunities and expect our diversified product portfolio to drive sustainable, profitable growth.”

Key Insights from Management’s Remarks

Management attributed the quarter’s progress to large enterprise wins, partner-driven sales, and new identity products, while highlighting how AI security is shaping Okta’s strategic trajectory.

• Large enterprise momentum: Okta continued to expand its footprint among major organizations, with large customers now representing 85% of annual contract value. This shift reflects targeted investments in serving more complex, high-value identity needs across sectors.
• AI identity products launch: The introduction of Okta for AI Agents and Auth0 for AI Agents marked a key milestone, providing enterprises with tools to discover, govern, and control AI agents as first-class identities. Although revenue contribution remains limited so far, early customer engagement and pipeline growth are strong.
• New product portfolio contribution: Newer products—including identity governance and privileged access solutions—accounted for roughly 25% of total bookings, illustrating Okta’s success in diversifying its offering and capturing a wider array of identity use cases.
• Partner ecosystem expansion: Okta saw meaningful increases in partner-sourced bookings, particularly through strategic alliances with leading technology vendors such as ServiceNow, Google, Amazon, and Anthropic. These collaborations enhance Okta’s ability to integrate across multi-cloud and multi-platform environments.
• Sales organization stability: Management cited improved sales productivity and low account executive attrition, following prior organizational changes. The specialized go-to-market team structure has led to greater focus and execution, supporting ongoing pipeline build and customer acquisition.

Drivers of Future Performance

Management’s outlook is shaped by rising demand for AI-centric identity solutions, continued enterprise expansion, and a disciplined investment approach to product innovation.

• AI security product adoption: Okta expects its AI agent identity offerings to become a significant growth driver as enterprises increasingly recognize the need to govern not just human, but also machine and autonomous identities. Management noted that while the products are still early in their lifecycle, they are seeing record customer interest and deal sizes, with a focus on pricing strategies that minimize friction and maximize market share.
• Large enterprise and public sector focus: The company plans to build on recent success with large organizations and government entities, emphasizing durable, long-term customer relationships. Okta’s identity governance and privileged access products are increasingly landing as standalone solutions or displacing legacy systems, supporting a broader push into complex identity environments.
• Partner-led services strategy: Okta is shifting more professional services work to global systems integrators, aiming to scale capacity and increase partner-sourced revenue. This transition is intended to free internal resources for architectural consulting and high-value strategic work, while also improving the company’s reach and integration capabilities across diverse technology stacks.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will monitor (1) customer adoption rates and revenue contribution from Okta’s new AI agent identity products, (2) continued traction in large enterprise and public sector deals, and (3) the effectiveness of Okta’s partner-led services model. Execution on these priorities, along with measurable progress in product integration with key technology partners, will be critical for sustained growth.

Okta currently trades at $102.47, up from $95.87 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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