Okta (OKTA) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue grew 11% year-over-year to $765 million, with subscription revenue also up 11% to $750 million, driven by large enterprise strength, upselling, and new product contributions, especially in AI agent identity management.

• Remaining performance obligations reached $4.719 billion, up 16% year-over-year, with current RPO at $2.499 billion, up 12% year-over-year.

• Net income rose to $74 million, with diluted EPS of $0.42, and non-GAAP operating margin was 24.9%–25%.

• Large customers now represent 85% of ACV, with those above $100K ACV increasing 6% year-over-year to 5,180.

• Okta and Auth0 platforms, along with new AI agent products, continue to drive momentum and strategic positioning.

Financial highlights

• Q1 FY27 total revenue: $765 million (+11% YoY); subscription revenue: $750 million (+11% YoY); gross profit: $595 million (+12% YoY); gross margin: 78%–82%.

• Non-GAAP operating margin: 24.9%–25%; free cash flow margin: 35%–35.5%; operating cash flow: $277 million.

• Net retention rate increased to 107% for the trailing twelve months.

• Ended Q1 with $2.589–$2.6 billion in cash, equivalents, and short-term investments.

• Repurchased and retired over 3 million shares for $241–$248 million; $680 million remains under the $1 billion repurchase program.

Outlook and guidance

• Q2 FY27 guidance: revenue of $790–$794 million (+9% YoY), CRPO growth of 9%, non-GAAP operating margin of 26%, and free cash flow margin of 20%–21%.

• FY27 guidance: revenue of $3.185–$3.205 billion (+9%–10% YoY), non-GAAP operating margin of 25%–26%, free cash flow margin of 27%–28%, and non-GAAP diluted EPS of $3.79–$3.87.

• Guidance reflects a 1-point revenue impact from shifting professional services to partners and a 1-point free cash flow impact from lower interest income.

• Non-GAAP tax rate reduced to 21% from 26% due to new legislation.