Shares of Okta (OKTA) sank in after-hours trading after the identity management company reported earnings for its first quarter of Fiscal Year 2026. Earnings per share came in at $0.86, which beat analysts’ consensus estimate of $0.77 per share. Sales increased by 12% year-over-year, with revenue hitting $688 million and Subscription revenue making up $673 million of the total. This also beat analysts’ expectations of $680.28 million and continues OKTA’s trend of subscription revenue growth, as demonstrated by the image below from Main Street Data.
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Interestingly, CEO Todd McKinnon attributed the company’s growth to organizations increasingly relying on Okta for their identity security needs, as the company offers a wide range of modern security solutions that can adapt to their specific requirements. As a result, the firm’s subscription backlog increased by 21% to $4.084 billion.
2026 Outlook
Looking forward, management has provided the following guidance for 2026:
- Q2 revenue between $710 million and $712 million versus estimates of $708.8 million
- Q2 adjusted earnings per share of $0.83 to $0.84 compared to expectations of $0.79
- FY26 revenue between $2.85 billion and $2.86 billion versus estimates of $2.862 billion
- FY26 adjusted earnings per share of $3.23 to $3.28 compared to expectations of $3.20
As you can see, guidance was mostly better than expected, although full year revenue came in slightly below estimates at the midpoint. This could be the reason why the stock fell in after-hours trading, especially since it rallied in the past month heading into earnings.
Is OKTA Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on OKTA stock based on 21 Buys, 14 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average OKTA price target of $124.65 per share implies 0.2% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
