Okta's stock rises as momentum in AI agents fuels an earnings beat

By Christine Ji and Hannah Pedone

Okta provides 'subdued' guidance, as the current-quarter profit outlook misses expectations but the full-year outlook is above forecasts

Okta beat the FactSet analysts' consensus for revenue and earnings per share for the fiscal fourth quarter.

Artificial-intelligence agents that can autonomously complete tasks have been all the rage in 2026, and Okta's fourth-quarter results showed that the company is capitalizing on that momentum.

Okta (OKTA) reported a revenue and earnings beat on Wednesday, sending shares up 1.8% in after-hours trading even as guidance for the current quarter came in below analysts' expectations.

Fourth-quarter revenue came in at $761 million, up 11% from a year ago, and above the $750 million projected by analysts tracked by FactSet. The cloud-based identity-software provider logged adjusted earnings per share that rose to 90 cents from 78 cents a year ago, and beat the FactSet analysts' consensus of 85 cents.

CEO Todd McKinnon attributed the strong revenue growth to the company's new agentic AI security features, which provide controls for agent identity, access and authorization. A rising wave of interest in AI agents translated into increased deals for Okta, McKinnon told MarketWatch.

"These agents need to be tracked and the customers need to know what they're connecting to," McKinnon added, emphasizing the need for increased cybersecurity features as AI agents become more powerful.

For the fiscal fourth quarter that ended Jan. 31, Okta saw current remaining performance obligations - a measure of subscription backlog expected to be recognized over the next 12 months - grow 12% to $2.51 billion, while analysts tracked by FactSet were expecting $2.45 billion.

See more: Okta CEO Todd McKinnon has words of caution for people jumping ship to work at AI startups

However, Okta provided weaker revenue guidance for the current first quarter and the full fiscal year. The company expects first-quarter revenue of $749 million to $753 million for the current quarter, which is below the $755 million that analysts were modeling. Okta guided for 84 cents to 86 cents in adjusted EPS, missing analysts' consensus view of 87 cents.

Okta's cRPO guidance for the current quarter came in slightly higher than Wall Street's expectations: The company projects current backlog between $2.44 billion and $2.45 billion, narrowly beating analysts' estimates of $2.43 billion.

McKinnon said the cRPO guidance is likely more "subdued" because the year is "back-end loaded."

"I think a lot of the ramp of the revenue will come later in the year," he added.

For the full year, Okta expects revenue of $3.17 billion to $3.19 billion, compared with the FactSet consensus of $3.17 billion. The company is modeling $3.74 to $3.82 in adjusted earnings per share, compared with the analyst consensus of $3.66.

In January, Okta announced a $1 billion share repurchase program. It's a playbook that has been popular among software companies in recent months as executives look to return value to shareholders amid a sector-wide selloff.

"We're aggressively buying back shares," McKinnon said. "We think the stock is undervalued and we'll continue to do that."

Read: Salesforce's record $50 billion stock-buyback plan is proving controversial on Wall Street

-Christine Ji -Hannah Pedone

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-04-26 2017ET