Okta (NASDAQ:OKTA) executives used the company’s fiscal fourth-quarter 2026 earnings call to emphasize momentum with large enterprises, increasing partner involvement, and growing contributions from a portfolio of newer products that now includes offerings aimed at securing AI agents.
New products reach about 30% of Q4 bookings
Chief Executive Officer Todd McKinnon said Okta finished fiscal 2026 strongly, citing “continued strength with large enterprises, partner engagement, and contribution from our newer products.” He highlighted a group of newer products including Okta Identity Governance, Okta Privileged Access, Identity Security Posture Management, Identity Threat Protection, Okta Device Access, Fine Grained Authorization, and newly added AI-focused products Auth0 for AI Agents and Okta for AI Agents.
Okta Identity Governance (OIG) was described as the largest of the newer products. McKinnon said OIG now has over 2,000 customers, which he called notable progress in just over three years. He said customers are choosing OIG because it is a full cloud-native identity governance solution built into Okta’s unified platform rather than a “siloed point solution.”
Early AI-agent market traction and positioning
McKinnon repeatedly framed “agentic AI” as a catalyst making identity more central to security. Citing Okta’s “AI at Work” report, he said 91% of surveyed organizations are already using AI agents, but only 10% have a governance strategy in place. He argued that AI agents expand the attack surface through non-human identities and unsecured integrations, and that “AI security is identity security.”
Okta highlighted two AI-related deals in Q4:
- Auth0 for AI Agents: An existing Auth0 customer in financial services is building AI agents to help advisors make faster decisions. Okta said the agents require least-privileged access to sensitive customer information and integrations with internal systems and third-party services. The customer selected Auth0 for AI Agents for what management described as enterprise-grade identity for humans and agents, secure access to third-party MCP servers, and a “single source of truth.”
- Okta for AI Agents: A top global business and technology services provider selected Okta for AI Agents (available in early access as of January) to discover, control, and govern identities for a growing “sprawl” of agents deployed across multiple agent platforms, with centralization intended to strengthen cybersecurity posture.
On pricing, McKinnon said Okta is still early and is using customer feedback to refine models. He described two approaches: pricing as a multiplier tied to a human identity when agents augment a person’s work, and pricing based on the number of connections an agent makes when it is not coupled to a person, reflecting the value of securing those connections. He said the company was not yet ready to provide broader details on agentic pricing metrics.
In Q&A, management also said demand for the AI-agent products is visible in pipeline for fiscal 2027, but both McKinnon and Chief Financial Officer Brett Tighe cautioned the products are still small relative to Okta’s current scale. Tighe said investors would likely see traction in current remaining performance obligations (cRPO) before it appears in revenue.
Go-to-market execution, partners, and large-deal momentum
Tighe said Okta closed a record amount of total contract value in Q4 of nearly $1.3 billion and surpassed $3 billion in annual contract value. He pointed to improved sales productivity following go-to-market specialization implemented at the beginning of the fiscal year, along with a sustained focus on large customers and large deals.
Channel partners were also a recurring theme. Tighe said partners were engaged in 18 of the top 20 deals in Q4 and that partner involvement typically increases average deal size and improves close rates. He added that total contract value generated through AWS Marketplace grew more than 45% in fiscal 2026 to approximately $750 million.
Executives also discussed a decision to shift more professional services work to partners—particularly global systems integrators (GSIs)—as part of a broader plan to deepen relationships and help large enterprises manage change tied to AI adoption. Management said this move would reduce professional services revenue, but is intended to create longer-term subscription growth benefits. During Q&A, Tighe said the revenue impact should be more pronounced as fiscal 2027 progresses.
Capital allocation and share repurchase
Tighe said Okta ended Q4 with more than $2.5 billion in cash, cash equivalents, and short-term investments. He said the company announced a $1 billion share repurchase program in early January, citing what management believed was an undervalued share price. Tighe said Okta repurchased and retired over 875,000 shares in the remainder of January for a total cost of $79 million.
FY2027 outlook and key guidance considerations
For the first quarter of fiscal 2027, Okta guided to:
- Total revenue growth of 9%
- Current RPO growth of 10%
- Non-GAAP operating margin of 23% to 24%
- Free cash flow margin of 33% to 35%
For the full fiscal year 2027, Okta guided to:
- Total revenue growth of 9%
- Non-GAAP operating margin of 25% to 26%
- Free cash flow margin of 27% to 28%
Tighe highlighted three items embedded in the outlook. First, the 9% total revenue growth guide includes about a one-point impact from shifting more professional services to partners, which is expected to reduce professional services revenue. Second, free cash flow margin guidance includes about a one-point headwind tied to lower interest income, which he said reflects the combined impact of the share repurchase program, the company’s intent to settle the remainder of the 2026 notes in cash, and the interest rate environment. Third, Okta updated its non-GAAP tax rate assumption for Q1 and fiscal 2027 to 21% from 26% due to recent changes in federal tax laws.
McKinnon closed by outlining priorities for fiscal 2027 centered on growth: establishing Okta as a standard for securing agentic AI, landing bigger and growing faster with large customers across both Okta and Auth0, and becoming the default identity security solution for the U.S. federal vertical and highly regulated industries—an area management said has been among Okta’s fastest-growing verticals in recent years.
About Okta (NASDAQ:OKTA)
Okta, Inc is a publicly traded provider of identity and access management solutions, headquartered in San Francisco, California. Founded in 2009 by Todd McKinnon and Frederic Kerrest, the company completed its initial public offering in April 2017. Under the leadership of McKinnon as chief executive officer and Kerrest as chief operating officer, Okta has grown into a leading vendor in the cybersecurity space, focusing on secure user authentication, single sign-on and lifecycle management for digital identities.
At the core of Okta’s offering is the Okta Identity Cloud, a suite of cloud-native services that enable organizations to manage user access across web and mobile applications, on-premises systems and APIs.
