Okta Current Backlog Growth Accelerates to 14%
The identity provider booked $805 million of revenue in the quarter ended July 31, 2026, and lifted third-quarter revenue guidance to $813 million to $817 million.
Okta, Inc. (OKTA), the independent identity provider, reported that current remaining performance obligations rose 14% from a year earlier, a faster pace than the 12% year-over-year increase recorded in each of the two preceding quarters.
CFO Brett Tighe said second-quarter performance was highlighted by accelerating cRPO, success with the company’s largest customers, and strong profitability and cash flow. He said steady momentum from core workforce and customer identity drove annual contract value acceleration in both businesses, and that top-line growth also benefited from new products, led by Okta Identity Governance.
cRPO was $2.585 billion at July 31, 2026. Total remaining performance obligations were $4.858 billion, up 17% year-over-year, after 16% growth in the prior quarter and 15% two quarters earlier.
Total revenue was $805 million, up 11% from a year earlier, matching the year-over-year rate in the first quarter of fiscal 2027 and the fourth quarter of fiscal 2026. Subscription revenue was $793 million, up 12%, after 11% growth in both of the two prior quarters. Professional services and other revenue was $12 million, down from $17 million a year earlier.
GAAP operating income was $107 million, or 13% of revenue, compared with $56 million, or 7% of revenue, in the first quarter of fiscal 2027 and $46 million, or 6%, in the fourth quarter of fiscal 2026. Non-GAAP operating income was $226 million, or 28% of revenue, after $191 million, or 25%, in the prior quarter and $202 million, or 26%, two quarters earlier. GAAP net income was $116 million, or $0.65 a share on a diluted basis. Non-GAAP net income was $194 million, or $1.05 a share.
GAAP gross margin was 80%, versus 77% a year earlier. Non-GAAP gross margin was 82%, unchanged from the year-ago quarter.
Operating cash flow was $234 million, or 29% of revenue, and free cash flow was $227 million, or 28%. A year earlier those margins were 23% and 22%. Cash, cash equivalents, and short-term investments were $2.299 billion at July 31, 2026. During the quarter the company settled the remaining principal of the 2026 Notes for $350 million in cash.
Chief Executive Officer Todd McKinnon said that as AI agents transform every layer of technology, every agent needs a trusted identity and clear controls over what it can access and do, and that Okta helps organizations discover agents, secure their connections, govern their actions, and respond when something goes wrong.
For the third quarter of fiscal 2027, the company expects total revenue of $813 million to $817 million, representing 10% year-over-year growth, versus a prior outlook of $790 million to $794 million, or 9%. It expects current RPO of $2.590 billion to $2.600 billion, 11% to 12% year-over-year, versus a prior range of $2.505 billion to $2.515 billion, or 11%. Non-GAAP operating income is expected at $196 million to $200 million, a 24% to 25% margin, versus a prior $204 million to $208 million, or 26%. Non-GAAP diluted earnings are expected at $0.92 to $0.94 a share, versus a prior $0.95 to $0.97. Non-GAAP free cash flow is expected at $175 million to $185 million, a 21% to 23% margin, versus a prior $155 million to $165 million, or 20% to 21%.
For full-year fiscal 2027, the company now expects total revenue of $3.216 billion to $3.226 billion, 10% to 11% year-over-year. That figure reflects an approximately one percentage point impact to total revenue growth from accelerating the shift of professional services to partners, a change expected to create a headwind to professional services revenue. Full-year non-GAAP operating income is expected at $830 million to $840 million, a 26% margin. Non-GAAP diluted earnings are expected at $3.90 to $3.94 a share. Non-GAAP free cash flow is expected at $910 million to $930 million, a 28% to 29% margin, with about a one percentage point impact from lower interest income after the stock repurchase program and the 2026 Notes settlement.