Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Okta's Q2 FY2027 results were defined by a sharp improvement in profitability alongside double-digit subscription revenue growth. Management attributed the revenue increase to more users, additional solutions sold to existing customers, and new customer additions, with dollar-based net retention reaching 107%. Subscription gross margin expanded to 82% as lower amortization and improved spend efficiency reduced cost of revenue. The main tension is that while remaining performance obligations grew, professional services revenue declined as Okta shifts those engagements to partners, and cash balances fell due to share repurchases and the 2026 Notes repayment.
Revenue
$805M
+10.58% YoY
EPS (Diluted)
$0.65
+75.68% YoY
Gross Margin
79.6%
+2.7 pts YoY
Operating Income
$107M
+160.98% YoY
Source: SEC XBRL
Okta (OKTA) reported Q2 FY2027 revenue of $805M, up 10.6% year over year. Operating margin was 13.3%, up 7.7 points from 5.6% a year earlier. OKTA's fiscal Q2 FY2027 corresponds to calendar Q3 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Sep 2026This filing | 1.05 | 0.98 | Beat +6.7% |
| Jun 2026 | 0.91 | 0.87 | Beat +4.7% |
| Mar 2026 | 0.90 | 0.86 | Beat +4.2% |
| Dec 2025 | 0.82 | 0.77 | Beat +6.4% |
Adjusted (non-GAAP) EPS of $1.05 versus the $0.98 analyst consensus — a +6.7% beat for Sep 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.65.
Compiled by AI from 10-Q Item 2 of this filing
Okta's trailing 12-month dollar-based net retention rate rose to 107% as of July 31, 2026 from 106% a year earlier, and customers with ACV above $100,000 increased to 5,255 from 4,945, reflecting expansion within existing customers and larger enterprise adoption.
Source: 10-Q Item 2 MD&A
Current remaining performance obligations rose to $2.585 billion from $2.265 billion, and total RPO rose to $4.858 billion from $4.152 billion, indicating strong contracted revenue visibility.
Source: 10-Q Item 2 MD&A
Okta repurchased 4,569,262 shares for $366 million during the six months ended July 31, 2026 under its $1 billion authorization, with $555 million remaining available.
Source: 10-Q Item 2 MD&A
The 2026 Notes matured on June 15, 2026, and Okta settled the full remaining $350 million principal amount outstanding in cash, contributing to financing cash outflows.
Source: 10-Q Item 2 MD&A
Compiled by AI from this SEC filing · 1 high, 4 medium, 0 low
Cash and equivalents fell 12.9% year over year to $763 million, and the company used $794 million in financing activities during the first six months, primarily for buybacks and debt repayment. This reduces the liquidity buffer and could strain financial flexibility if operating cash flow weakens.
Source: 10-Q Cash Flow Statement (XBRL)
Current assets declined 13.4% year over year while current liabilities fell 23.5%, producing a current ratio of 1.53. The decline in liquid current assets reduces the cushion available for unexpected obligations.
Source: 10-Q Balance Sheet (XBRL)
ROE was 1.66% and ROA was 1.27% for the period, reflecting that significant assets and equity generate relatively modest net income. Any slowdown in revenue growth or margin expansion could keep returns subdued.
Source: 10-Q Balance Sheet (XBRL)
Research and development expense increased 1.9% year over year to $163 million, while total revenue grew 10.6%. If investment in R&D and other operating costs accelerates without proportional revenue growth, operating margin expansion may stall.
Source: 10-Q Income Statement (XBRL)
Okta repurchased $372 million of stock in the first six months of fiscal 2027 compared with none in the prior-year period, contributing to negative financing cash flow of $794 million. Sustained buybacks could further reduce cash reserves and limit funds for organic investment or acquisitions.
Source: 10-Q Cash Flow Statement (XBRL)
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $M | 805.00 $M | 728.00 $M | +10.58% |
Cost of Revenue $M | 164.00 $M | 168.00 $M | -2.38% |
Gross Profit $M | 641.00 $M | 560.00 $M | +14.46% |
Operating Income $M | 107.00 $M | 41.00 $M | +160.98% |
Net Income $M | 116.00 $M | 67.00 $M | +73.13% |
EPS (Basic) $ | 0.67 $ | 0.38 $ | +76.32% |
EPS (Diluted) $ | 0.65 $ | 0.37 $ | +75.68% |
R&D Expense $M | 163.00 $M | 160.00 $M | +1.88% |
Answers draw on this SEC filing and the data on this page
Okta reported Q1 FY2027 revenue of $765M, up 11.2% year over year, while operating income rose 43.6% to $56M and operating cash flow increased 14.9% to $277M. Source: 10-Q Item 2 MD&A, pp.19-20, 26; 10-Q Income Statement and Cash Flow Statement (XBRL), p.N/A.
Okta delivered a strong FY2026, achieving its first full-year GAAP operating profit of $149M and a 739% surge in net income to $235M on 11.8% revenue growth to $2.92B, signaling a meaningful inflection toward profitability.