Agentic identity drives record pipeline and a re-rating, but revenue growth remains in single digits.
OKTA · Earnings Call · 2026-05-28
The Pivot to Agentic Identity
Okta's latest earnings call was a full-throated embrace of the agentic era. For a company that built its franchise on workforce and customer identity, the message was unambiguous: AI agents are now the fastest-growing identity class, and Okta intends to be the control plane that governs them. As CEO Todd McKinnon declared, “The future of technology is agentic.” — Todd McKinnon, Chief Executive Officer and Cofounder · 2026-05-28 The stock reacted with a 114% rally over the last 90 days, even as the broader market pulled back from the peak.
This is not a bolt-on theme. Identity platform is now explicitly framed as the foundation for securing agents, not just people. The company has shipped Okta for AI Agents (GA in April) and Auth0 for AI Agents, and has published an industry blueprint to define the swim lanes. The strategic positioning rests on three pillars—distribution, product breadth, and neutrality—each reinforcing the other. "We are the only vendor with solutions that address both sides of the agent security problem," McKinnon noted, pointing to a secure agents value proposition that spans discovery, governance, and enforcement.
From Human Access to Autonomous Governance
The language on the call shifted dramatically from prior quarters. While earlier calls touched on AI agents as a future opportunity, this quarter it took center stage. In a prior call from December 2025, McKinnon had said, "It's always wrapped up in some other technological change... they're modernizing their security stacks so they can give AI agents access to all of their data resources." Now, the urgency is explicit. The company cited a stark statistic: 91% of enterprises have AI agents in production, but only 22% are confident they can govern them. This creates a "real problem today" that Okta is uniquely positioned to solve.
Every AI agent inside an enterprise is a new identity. ... We believe, over time, most large enterprises will have more identities than human ones.
That shift expands the attack surface but also elevates the strategic value of the identity layer, as McKinnon explained: "Governing autonomous systems requires the kind of control, audit, continuous intent-driven authorization, and real-time enforcement only an identity platform can deliver." This is a far cry from the company’s earlier focus on access management for employees.
Deals Are Bigger, but Revenue Is Still Tepid
Despite the narrative heat, the numbers remain anchored in reality. Total revenue came in at $765M, up 11% YoY—solid but not the hypergrowth the stock’s rally might suggest. The company reiterated FY27 guidance of 9-10% revenue growth, with a 1-point drag from deliberately shifting professional services to partners. Operating margin reached 10.2%, a testament to the leverage in the model. Free cash flow also improved, with a 20.8% margin.
Yet the encouraging signals are in the mix. New products now represent about 25% of bookings, up from the prior year, and the company sees a 40% ACV uplift when new products are attached to deals. Brett Tighe, CFO, emphasized that "the average deal size for these AI-specific deals is significantly larger than the average deal size for the rest of the company." This is a new dynamic; in earlier quarters, new product deals started small and scaled. Now, they come in large from the start, even as the average deal size metric spikes.
Net revenue retention also ticked up to 107%, driven by the strategic re-rating of Okta in customers’ eyes. "If you look at our 12% revenue growth, we look at net retention inflecting up to 107," McKinnon said, linking the AI narrative directly to financial momentum.
Riding the Global Wave, but with a Neutral Twist
Okta is not alone in chasing the agentic opportunity. The global keyword trajectory shows a surge in phrases like "Agentic AI" and "agent stack" across industries, and this quarter’s earnings reporters—from AMBA to API—are heavy on AI agent discussions. What differentiates Okta is its claim of independence. In a world where hyperscalers, model providers, and app vendors all want to own the agent layer, Okta positions itself as the neutral, federating identity plane. "They want flexibility and choice across multiple things," McKinnon said, referencing the anti-lock-in sentiment that is driving customers to consider Okta as the infrastructure of record.
This neutrality is not just a marketing tagline; it has concrete product implications. The company announced partnerships with ServiceNow, Google, Amazon Bedrock, OpenAI, and Anthropic—each integrating Okta’s governance into their agent ecosystems. As Eric Kelleher put it, "We want to make sure that we provide the identity control plane across all of their use cases and all of their vendors."
Bottom Line
Okta is executing a bold strategic pivot, repositioning a mature IAM vendor into the linchpin of agentic security. The stock market has already begun to reward the story, but the fundamental growth reacceleration has yet to materialize. The company is deliberately discounting AI contributions in guidance, calling it "prudent." If the record pipeline converts, this could be the beginning of a new growth orbital. If not, the rally may prove premature. For now, the market is giving Okta the benefit of the doubt, betting that the identity platform’s role in an autonomous world is still in its first inning.