Okta tops first-quarter results on agentic AI demand

Okta has reported impressive results for its fiscal first quarter, surpassing Wall Street expectations thanks to a significant rise in demand for identity security solutions driven by the emergence of agentic artificial intelligence. The company recorded an 11% increase in revenue compared to the same period last year. The identity security provider's net income climbed to $74 million, translating to 42 cents per share, up from $62 million, or 35 cents per share, a year earlier. In an interview with CNBC, CEO Todd McKinnon highlighted that while the demand for identity tools is surging due to agentic AI, it currently does not constitute the majority of the company’s revenue. “We’re playing a long game here,” McKinnon remarked, emphasizing that the current investments in AI represent foundational work for future requirements over the next five to ten years. He believes this approach makes them less vulnerable to transient market hype. As organizations increasingly explore the deployment of AI at scale, McKinnon sees this trend as beneficial for Okta's long-term growth. The rise of AI agents is heightening the focus on tools that ensure the verification of these agents and protect businesses from potential cyber threats. Recent events, such as the delayed public rollout of Anthropic's Mythos model due to security concerns, have amplified these apprehensions. Moreover, the software industry is undergoing significant changes as developers introduce tools that could disrupt traditional software-as-a-service business models. In response to this evolving landscape, Okta is investing more in solutions tailored for AI agents and initiatives aimed at achieving net-zero emissions for these technologies. The company's guidance for the current quarter aligns closely with market expectations, predicting revenues between $790 million and $794 million, compared to an anticipated $791 million. Additionally, Okta's remaining performance obligations, a key indicator of subscription backlog, exceeded estimates, showcasing strong future growth potential.