Core Insights - Okta shares closed at $95.63, approximately 25% below the 52-week high of $127.57, with a year-to-date appreciation of 21.3%, outperforming the Zacks Computer and Technology sector and the Zacks Security industry [1][9] - The company has a strong liquidity position with $2.73 billion in cash and investments, and a free cash flow margin guidance raised to roughly 27% for fiscal 2026 [7][9] - Okta's innovative product portfolio and extensive partner base are driving customer growth and revenue, with over 20,000 customers and a significant increase in high-value contracts [15][16] Performance Comparison - Okta has outperformed peers such as CyberArk, Cisco, and Microsoft year to date, with respective share price appreciations of 12.9%, 15.9%, and 20% [2] - In terms of valuation, Okta is trading at a forward Price/Cash Flow of 22.51X, which is higher than the broader sector's 22.03X but lower than CyberArk's 73.58X and Microsoft’s 28.88X [8][10] Product and Market Position - The company is benefiting from strong demand for its new products, including Identity Governance and AI-powered capabilities, which enhance security and user experience [3][9] - Okta's new protocol, Cross App Access, aims to secure AI agents and improve security compliance, reflecting the company's commitment to protecting customers deploying AI [14] Financial Guidance - For fiscal 2026, Okta expects revenues between $2.85 billion and $2.86 billion, indicating a growth of 9-10% from fiscal 2025, with non-GAAP earnings guidance raised to $3.23-$3.28 per share [17][18] - The second-quarter fiscal 2026 revenue guidance is between $710 million and $712 million, suggesting a 10% year-over-year growth [19][20] Conclusion - Despite facing macroeconomic challenges and a competitive landscape, Okta's innovative portfolio and expanding customer base position it favorably for growth, supported by a Zacks Rank 2 (Buy) and a Growth Score of A [21]

27 May 2025 | 9:20PM EDT Okta (OKTA) 1QFY: Muted quarterly trends reignite debate on path to stable growth n Okta sees multiple ways to benefit from the increasing adoption of AI Agents at its customers. Auth for GenAI is in developer preview (expected GA soon), and is designed to help developers build AI Agents/workflows. Additionally, AI Agents have resulted in more non-human identities within Gabriela Borges, CFA +1(212)902-7839 | gabriela.borges@gs.com Goldman Sachs & Co. LLC Callie Valenti +1(212)357-2 ...

Financial Data and Key Metrics Changes - The company reported solid Q1 results with exceptional cash flow and record operating profitability and profit margin [16] - For Q2 FY '26, total revenue growth is expected to be 10%, with current RPO growth of 10% to 11%, and a non-GAAP operating margin of 26% [20] - For the full year FY '26, total revenue growth is projected at 9% to 10%, with a non-GAAP operating margin of 25% and a free cash flow margin of approximately 27% [20] Business Line Data and Key Metrics Changes - The governance portfolio, including Okta Identity Governance, lifecycle management, and workflows, has seen substantial growth, with workflow executions increasing nearly 400% over the past three years [8] - The Auth0 platform performed well, contributing positively to the overall results, particularly following a record Q4 [16][17] Market Data and Key Metrics Changes - The US public sector vertical has shown strength, with significant deals contributing to Q1 results, including federal contracts [18] - International markets experienced a deceleration compared to the US, but specific details on the impact were not disclosed [34] Company Strategy and Development Direction - The company is focused on product innovation, with new offerings such as Okta Identity Governance and Auth for GenAI, aimed at addressing evolving cyber threats and enhancing security [7][12] - Okta is positioning itself as a leader in identity security, emphasizing the importance of consolidating disparate identity systems for customers [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong customer conversations and the importance of identity solutions in the context of AI projects [26][30] - There is a cautious approach to guidance due to potential macroeconomic uncertainties, although no immediate impacts were observed in Q1 [28][30] Other Important Information - The company is committed to maintaining its investment levels despite a cautious macro outlook, indicating confidence in long-term growth opportunities [110] - The introduction of suite-based pricing for the Okta platform has shown positive results, with customers interested in purchasing multiple products [62] Q&A Session Summary Question: What factors influenced the additional conservatism in guidance? - Management noted that while Q1 results were strong, there is a cautious tone in the environment, prompting a conservative approach in guidance [28][30] Question: Was there any softness in April? - Management confirmed that there was no softness in April, and performance remained solid throughout the quarter [35] Question: How is the go-to-market specialization progressing? - Management reported a solid start to the specialization process, with strong performance in the Auth0 side and pipeline building [41][42] Question: What is the outlook for new logo pipeline in the workforce business? - Management expressed optimism about the new logo pipeline, highlighting the potential of new products to attract new customers [91][92] Question: How should investors interpret the guidance for CRPO? - Management explained that the guidance reflects a cautious approach due to macroeconomic factors, but emphasized that the underlying business remains strong [55][107]