Okta Gears Up to Report Q2 Earnings: What's in Store for the Stock?

Okta OKTA is set to release second-quarter fiscal 2027 results on Aug. 26.

For the second quarter of fiscal 2027, Okta expects revenues in the range of $790-$794 million, implying 9% year-over-year growth. The company expects non-GAAP net income per share between 95 cents and 97 cents.

The Zacks Consensus Estimate for earnings has remained steady at 96 cents per share over the past 30 days, indicating a 5.49% year-over-year increase. The consensus mark for revenues is pegged at $792.14 million, indicating an 8.81% increase over the year-ago quarter’s reported figure. 

Okta’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with the average earnings surprise being 7.65%.

Okta, Inc. Price and EPS Surprise

Okta, Inc. price-eps-surprise | Okta, Inc. Quote

Let’s see how things have shaped up for Okta prior to this announcement:

Factors to Note for Okta

Okta’s second-quarter fiscal 2027 performance is expected to have benefited from an expanding portfolio across governance, privileged access, device access, authorization, posture management and AI-driven threat protection, which continues to support customer wins and cross-sell.  

In the first quarter of fiscal 2027, customers with more than $100K in annual contract value (ACV) increased 6% year over year to 5,180. Remaining Performance Obligations (RPOs) were $4.719 billion, up 16% year over year, and current RPO was $2.499 billion, up 12%. For the second quarter of fiscal 2027, management expects current RPO between $2.505 billion and $2.515 billion, implying 11% year-over-year growth and supporting forward subscription revenue visibility.

A major driver for Okta’s anticipated growth is the rapid adoption of its new and innovative products, particularly those focused on AI security. Products such as Okta Identity Governance, Okta Privileged Access and the newly introduced Auth0 for AI Agents and Okta for AI Agents have seen strong early demand. The company highlighted that new products represented about 25% of fiscal first-quarter 2027 bookings and that deals including new products have shown about a 40% ACV uplift, reinforcing the long-term cross-sell potential as agent deployments scale. This is expected to have driven significant value for customers in the to-be-reported quarter.  

Expanding partnerships and integrations are expected to have driven Okta’s top-line growth. Okta has formed alliances with major technology providers such as ServiceNow, Google, Amazon, OpenAI and Anthropic. These partnerships extend Okta’s reach into new AI-driven workflows and reinforce its position as an independent identity platform. The integration with ServiceNow’s AI Control Tower and Amazon Bedrock Agent core enables Okta to provide identity governance for agents across multiple platforms, meeting customer demands for flexibility and security in a rapidly evolving AI landscape. 

However, the company is facing competitive pressure from large platform vendors, and specialists remain intense; sales cycles can stay elongated in a cautious IT spend environment, and past security incidents still weigh on customer confidence, upsell momentum, and retention.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Okta has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Dell Technologies DELL has an Earnings ESP of +6.42% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dell Technologies shares have surged 251.2% in the year-to-date period. Dell Technologies is slated to report second-quarter fiscal 2027 results on Sept. 1.

Hewlett Packard HPE has an Earnings ESP of +9.96% and carries a Zacks Rank #2 at present.

Hewlett Packard shares have surged 122.5% in the year-to-date period. Hewlett Packard is set to report third-quarter fiscal 2026 results on Sept. 2. 

Intuit INTU has an Earnings ESP of +0.08% and carries a Zacks Rank #3 at present.

Intuit shares have plunged 44.6% in the year-to-date period. Intuit is set to report fourth-quarter fiscal 2026 results on Aug. 25.

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This article originally published on Zacks Investment Research (zacks.com).

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