Identity‑management leader Okta reported third‑quarter results that beat Wall Street estimates, yet the stock slipped more than 3% in after‑hours trading after the company chose not to provide guidance for fiscal 2027.
Key financial highlights versus LSEG consensus:
- Earnings per share: 82 cents adjusted, versus an expected 76 cents.
- Revenue: $742 million, ahead of the $730 million forecast.
Revenue grew almost 12% year‑over‑year to $742 million, while net income surged 169% to $43 million, or 24 cents per share, up from a breakeven position a year earlier. Subscription revenue, the core driver of the business, climbed 11% to $724 million, topping the $715 million estimate.
Okta’s CFO Brett Tighe explained that the company refrained from offering preliminary guidance for the upcoming fiscal year because of the pronounced seasonality that typically characterizes the fourth quarter. “Providing guidance would require a level of conservatism that we’re not ready to adopt at this point,” he said.
This quarter also saw the launch of a new capability that enables enterprises to build AI‑powered agents and automate routine tasks. CEO Todd McKinnon told reporters that the upside from AI agents has not yet been fully reflected in the current quarter’s results and could eventually expand the company’s total addressable market well beyond its existing base over the next five years.
“We’re investing now and positioning the business for a future where AI agents play a major role in identity security,” McKinnon said in an interview.
Looking ahead, Okta projects fourth‑quarter revenue of $748 million to $750 million and adjusted earnings of 84 cents to 85 cents per share. Analysts on average anticipate $738 million in revenue and 84 cents in EPS for the period.
The company’s subscription backlog—sometimes called “returning performance obligations”—rose 17% year‑over‑year to $4.29 billion, comfortably beating the $4.17 billion StreetAccount estimate. This growing backlog underscores the sticky nature of Okta’s recurring‑revenue model and suggests a solid runway for future growth.
Okta’s performance comes amid a broader boom in the cybersecurity sector. The year has featured high‑profile acquisitions, such as Palo Alto Networks’ purchase of a cloud‑security firm and Google’s expansion of its enterprise security portfolio, as well as a wave of initial public offerings from niche security players. This environment has helped lift investor sentiment for identity‑management solutions, which are increasingly viewed as critical control points in increasingly complex, AI‑driven IT landscapes.
Despite the positive earnings beat, the stock has risen only about 4% year‑to‑date, indicating that investors remain cautious until Okta delivers a clearer outlook for fiscal 2027 and demonstrates how its AI initiatives translate into measurable revenue growth.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/13973.html
