Okta Inc - Ordinary Shares - Class A

FY27 financial outlook (guidance) is solid; FY27 revenue growth expected ~9–10% - Q2 FY27 guidance: Total revenue growth +9% YoY, current RPO +11%, non-GAAP operating margin 26%, free cash flow margin 20–21%. - Full-year FY27 guidance: Total revenue growth +9–10%, non-GAAP operating margin 25–26%, free cash flow margin 27–28%. - Headwinds baked into guidance: ~1 point of FY27 revenue impact from shifting more professional services to partners (GSIs) (starts to materialize in Q2). - FCF headwind baked into guidance: ~1 point impact from lower interest income due to stock repurchases and planned cash settlement of remaining 2026 notes.

Strong early performance + durability; bookings momentum broad-based - Management emphasized a strong start to FY27, with broad-based execution in pipeline build, sales productivity, and low AE attrition. - New products portfolio ~25% of Q1 bookings, up meaningfully vs Q1 last year. - New products included → ~40% ACV uplift (internal uplift metric cited). - Durability framing: leaders argue identity spending is “infrastructure-like” (hard to rip/replace once installed), supporting sustainability even amid AI hype.

AI “agentic identity” is the core strategic growth narrative, but it’s still early for revenue contribution - Todd expects enterprises are deploying agents already, but most are currently laying “rails” for governed, secure adoption rather than fully monetizing at scale. - Example cited: dev teams are viewing agents but initially using static tokens / “non-secure” setups—customers are now working on monitoring, secure connections, and multi-platform governance. - Important caution/negative: management explicitly said AI agent products were not materially contributing to Q1 results (only minimal contribution; reflected only lightly in guide). - Opportunity is still large: pipeline and strategic importance are high, but timing to material revenue depends on customers building these governance/enforcement foundations.