Okta Shares Surge 15% Following Strong Q2 Results Driven by AI Security Demand

Okta shares jumped approximately 15 percent in after-hours trading following the publication of fiscal second-quarter financial results that exceeded analyst projections, buoyed by expanding corporate demand for software designed to secure artificial intelligence agents.

During the quarter, the identity management vendor made its security tool, Okta for AI Agents, generally available across its customer base. Management reported that new products generated 30 percent of total bookings, supported by dozens of AI-focused transactions, including a multi-million-dollar agreement signed with a healthcare enterprise, as first reported by CNBC Business.

The company reported quarterly net income of $116 million, or 65 cents per share, expanding from $67 million, or 37 cents per share, in the corresponding period last year. Revenue increased 11 percent from the $728 million reported in the prior-year fiscal quarter.

Customer backlog metrics also surpassed Wall Street targets. Total remaining performance obligations rose 17 percent year over year to $4.86 billion, exceeding the $4.70 billion consensus estimate compiled by StreetAccount. Current remaining performance obligations slated for recognition over the next 12 months climbed 14 percent to $2.59 billion.

Addressing the emerging security footprint of autonomous AI software, Chief Executive Officer Todd McKinnon told CNBC Business that the market for agentic AI protection remains in its initial phases, citing security incidents such as the OpenAI Hugging Face breach as catalysts for enterprise interest. McKinnon noted that while network security remains the largest sector in cybersecurity today, identity management will become the dominant category over the next five to ten years as millions of autonomous agents deploy across corporate networks.

The earnings report follows broader momentum across the cybersecurity industry, where enterprise vendors have actively pursued acquisitions to defend against AI-driven threats. That trend has propelled share prices for peers such as CrowdStrike Holdings and Palo Alto Networks to historical highs, while Okta stock has gained 55 percent year to date.

Alongside its earnings release, Okta finalized its purchase of threat detection startup Permiso Security on Wednesday in a deal valued at roughly $200 million. McKinnon told CNBC Business that the company intends to prioritize targeted acquisitions that integrate directly into its existing technology stack rather than pursuing large legacy takeovers solely to expand top-line revenue.

Following the second-quarter performance, Okta revised its full-year financial outlook upward. The vendor now forecasts annual revenue between $3.22 billion and $3.23 billion, up from its previous projection of $3.19 billion to $3.21 billion and above the $3.2 billion average analyst estimate tracked by LSEG. Okta also raised its full-year adjusted earnings expectation to between $3.90 and $3.94 per share, topping Wall Street expectations of $3.84 per share.