Okta Beats Q2 FY27 Estimates and Raises FY Guidance on AI‑Driven Identity Security Demand

Okta reported fiscal second-quarter FY27 revenue of $805 million, up 11% year over year, with subscription revenue of $793 million, up 12%. Adjusted earnings landed at $1.05 per share against a FactSet consensus of $0.97. GAAP net income was $116 million, and the company generated $234 million of operating cash flow and $227 million of free cash flow. OKTA moved sharply after the release, with post-market gains reported at 12% by Investing.com, 15.7% by TechStock, 16.3% by StockStory and as much as 20% by CNBC .

The guidance raise did more work than the quarter itself. Okta now expects full-year 2027 revenue of $3.216 billion to $3.226 billion against a FactSet estimate of $3.199 billion, and adjusted EPS of $3.90 to $3.94 versus $3.85 . Both the Wall Street Journal and Investor's Business Daily framed the lift around enterprises deploying AI agents, which need machine identities authenticated much the way employees do.

Backlog is the number that supports that framing. Remaining performance obligations rose 17% year over year to $4.858 billion, and current RPO, the portion expected to convert within a year, grew 14% to $2.585 billion. That is an acceleration in committed revenue rather than a one-quarter beat, and TechStock tied a $3.5 billion increase in market value directly to the faster backlog growth. Bloomberg noted the annual revenue view moving up while double-digit growth holds.

Worth holding alongside the pop: SentiSense's analyst consensus for OKTA sits at a $146.34 average price target across 43 analysts, in a band running from $75 to $180, with 35 of 44 rated analysts at buy. The reaction suggests investors are paying for the outlook rather than the print, so the things to watch next quarter are whether current RPO holds its acceleration and whether Auth0 for AI Agents converts pilots into recognized revenue rather than bookings.

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