Okta (OKTA) Q1 FY27 earnings call: guidance and Q&A

How is Okta's AI mind share translating into actual customer adoption and securing of agents, or is it mostly talk at this stage?

Customers are deploying agents but are just beginning to implement governed adoption programs. Okta for AI agents and Auth0 for AI agents are seeing record interest and pipeline, though their revenue contribution in Q1 was not material. These AI conversations are elevating Okta's strategic importance, driving current business metrics like revenue growth, net retention, and cRPO.

“The pipeline is bigger than anything we've ever seen, like we don't get paid for pipeline.”

asked by John DiFucci · answered by Todd McKinnon

How are the macro environment, IT security budgets, and the evolving threat landscape (e.g., Mythos) influencing demand and sales cycles for Okta?

Cyber professionals are highly interested in new models like Glasswing and OpenAI, but this reinforces the importance of security fundamentals rather than causing panic. Boards and CEOs recognize the need for guardrails for agentic systems and continued security spending. This trend is accelerating investment in identity infrastructure and security, benefiting Okta, though agentic identity adoption is still early.

“I think this return to the fundamentals and known you have to fix our fundamentals is helping the identity market and the identity security market.”

asked by Brian Essex · answered by Todd McKinnon

Can you detail Okta's role in runtime authorization and policy enforcement for agentic systems, and how it interacts with embedded capabilities in hyperscaler and AI platforms?

Okta connects agents to resources, provides a directory, sets policies on what agents can connect to, and offers an authorization layer to control agent actions (e.g., read-only vs. read-write). The goal is to provide an independent, neutral identity layer that offers flexibility across various platforms (hyperscalers, foundation models, apps) without vendor lock-in, solving fundamental problems for customers.

“It's like a single sign-on or access management. Now all the protocols are different. So it's a new product capability and the way agents are built are different than some of these other apps are built.”

asked by Todd Weller · answered by Todd McKinnon

What is Okta's pricing strategy for AI agents, and what uplift are you seeing from AI agent deals?

Pricing for AI agents is currently based on an uplift to named users or monthly active users, aligning with customer consumption preferences and how agents are primarily used (on behalf of human users). This strategy aims for market share and reduced friction. The average deal size for AI-specific deals is significantly larger than other deals, indicating strong early uplift, though the model is expected to evolve.

“The average deal size for these AI-specific deals is significantly larger than the average deal size for the rest of the company.”

asked by Eric Heath · answered by Brett Tighe

How durable is the strong short-term bookings growth, and what is driving the mix shift where large customers now represent 85% of ACV?

The business performance is highly durable because identity is critical, sticky infrastructure that is hard to change once implemented. The new product portfolio, contributing 25% of bookings, also adds to this durability. The shift to 85% ACV from large customers is a direct result of years of focused investment and hard work targeting large enterprises, reflected in the growth of $100K+ and $1M+ customers.

“The bad news about identity is it's pretty hard to put in place, and it's pretty hard to change. The good news is that once it gets in is sticky and you're not going to take it as long as you kind of keep innovating at a reasonable level, you keep good customer relationships, you're going to have a very profitable long-term relationship.”

asked by Joshua Tilton · answered by Todd McKinnon

Given that many vendors have similar messaging around agentic security, how does Okta differentiate itself and cut through the market noise to reach decision-makers?

Okta differentiates through its published "blueprint" for the secure agentic enterprise, which clarifies roles and defines swim lanes for various security aspects. Customer traction and successful live implementations will be key. Okta's existing distribution (over 20,000 customers) and trusted position as a scalable, neutral identity provider give it credibility, as customers view the agentic problem as conceptually similar to existing identity challenges.

“We're trying to -- people want a blueprint. In fact, it was based on a customer conversation ahead. This guy, he was a great customer of Okta, and he's been in the value visiting a bunch of companies, and he said the same thing you said. He's like, 'Todd, I don't know how you're saying, you're all saying the same thing. It's like, you should really, you should come up with like a blueprint for us.'”

asked by Gray Powell · answered by Todd McKinnon