Okta, Inc.

Okta did not give the full Q1 income statement in the prepared remarks transcript, but management repeatedly described Q1 FY27 as a strong quarter with 12% revenue growth, net retention of 107, and current RPO growth of 12% mentioned in Q&A. New products were approximately 25% of Q1 bookings, and management said AI-specific products were not materially contributing yet. The company ended Q1 with approximately $2.6 billion in cash, cash equivalents and short-term investments, repurchased and retired just over 3 million shares for $241 million, and plans to settle the remaining $350 million principal of its convertible notes in cash next month. For Q2 FY27, Okta expects total revenue growth of 9%, current RPO growth of 11%, non-GAAP operating margin of 26%, and free cash flow margin of 20% to 21%. For full-year FY27, the company now expects total revenue growth of 9% to 10%, non-GAAP operating margin of 25% to 26%, and free cash flow margin of 27% to 28%; guidance includes about a 1-point impact from shifting more professional services to partners and about a 1-point impact to free cash flow margin from lower interest income tied to repurchases and cash settlement of the notes.

Todd McKinnon’s message was that Okta is well positioned for the AI-agent era because enterprises will need a neutral identity layer to govern autonomous systems. He emphasized three advantages: distribution across more than 20,000 customers, product breadth spanning workforce, customer, governance, PAM, and agent security, and neutrality across cloud/model/agent ecosystems. His tone was confident and expansive, but he kept saying the AI products are still early and that the near-term effect is more about strategic pull-through than direct revenue contribution.

Brett Tighe highlighted broad-based go-to-market improvement, including higher sales productivity, strong pipeline build, low AE attrition, and meaningful growth in partner-sourced bookings, including multiple million-dollar-plus deals. On the balance sheet, he cited approximately $2.6 billion of cash, cash equivalents and short-term investments, and said the company will pay the remaining $350 million of convert principal in cash next month. He also noted repurchases of just over 3 million shares for $241 million and said $680 million remains under the $1 billion buyback program launched in January. On guidance, he reiterated prudent forecasting and said FY27 includes roughly a 1-point headwind from shifting professional services to partners and about a 1-point free cash flow margin headwind from lower interest income.

Analysts repeatedly pressed on how real the AI-agent opportunity is today versus just being a story, and management said customers are already deploying agents but are still early in formalizing governed, managed rails. Todd said the AI agent pipeline is bigger than anything they have seen, but the products are not yet materially contributing to Q1; he also said the main near-term effect is that AI conversations are lifting Okta’s strategic importance and helping pull through other products. Questions also focused on pricing and deal structure, and Todd said current pricing is still tied to named users or monthly active users, with some time-bound one-year experiments, while Brett said AI-specific deals themselves are already sizable. On partnerships such as ServiceNow, Google, Amazon Bedrock, OpenAI and Anthropic, management said these are mainly about interoperability and neutral control-plane positioning, not yet a direct measured win-rate boost.