Okta, Inc. Q2 FY2026 earnings call

• Solid Q2 results with strength in large customers, Auth0, new products, public sector, and cash flow.
• Encouraging signals from go-to-market realignment, including improved sales productivity and record pipeline generation.
• Public sector business had strong renewals and multiple new/upsell deals, with five of top 10 deals in Q2 from US public sector.
• Announced acquisition of Acxiom Security to accelerate Okta Privilege growth, integrating technology into Okta Privilege Access.
• Introduced cross-app access as an open standard to control AI agent access, with strong interest from partners.
• Previewed Oktane Conference with keynotes, product demos, and Q&A for analysts/investors.

New products such as Okta Identity Governance, Okta Privilege Access, and Okta Device Access, along with identity security posture management, identity threat protection with Okta AI, and fine-grained authorization contributed strongly in Q2. The public sector business saw strong renewals across federal, with multiple new business and upsell deals, including a big deal with DOD. However, specific absolute revenue figures and contribution percentages weren't detailed in absolute terms but emphasized the positive performance of these segments.

• For FY 2026, total revenue growth revised to 10%-11%, non-GAAP operating margin 25%-26%, free cash flow margin ~28%.
• Removed macro caveat from guidance as it didn't materialize in Q2 and expected to continue for remainder of fiscal year.
• Q3 and FY 2026 guidance factors in go-to-market specialization rolled out at start of fiscal year.

Q: Brad Zelnick asked about NRR stabilization and macro impact on guidance.

A: Todd McKinnon noted strategy of being one-stop shop for identity is working, Brett Tighe said macro caveat removed as it didn't play out, NRR trends depend on mix of new business and upsell.

Q: Matt Hedberg asked about AI native cohort adoption.

A: Todd McKinnon said AI native cohort adoption similar to other cohorts but growing fast, Okta well-positioned, focusing on identity security for internal operations and agent building.

Q: Eric Heath asked about identity being independent and RPO for DOD deal.

A: Todd McKinnon explained identity should be independent for cost and fragmentation reasons, Brett Tighe said DOD deal RPO value same as current RPO as it's a one-year deal.

Q: Brian Essex asked about go-to-market specialization evolution.

A: Eric Kelleher said specialization showing productivity gains, record pipeline, Brett Tighe added partner productivity improved with nice growth in pipe gen.

Q: Josh Tilton asked about AI impact on identity and Acxiom acquisition.

A: Todd McKinnon explained addressing current identity issues with AI, Acxiom brings PAM experts and infrastructure security tech, cross-app access for AI agent connections.

Q: Gregg Moskowitz asked about upsell/cross-sell and suites.

A: Brett Tighe said upsell/cross-sell continues to work, Eric Kelleher mentioned suites designed for customers to engage with Okta's identity fabric vision.