Okta shares have gained 157.5% this year, to $222.66 at the 28 October close. They closed 28.63% higher on 27 August, the day after the Q2 FY2027 results.
The business grows at about 10%. Revenue rose 10.6% YoY to $805 million, while current remaining performance obligations (cRPO, contracted revenue due within 12 months) grew 14.1% YoY.
The second catalyst was Oktane, Okta's annual conference, in September. Okta showcased agent single sign-on and Okta for AI Agents. At its Investor Summit, the CEO said identity will be the biggest market in cybersecurity within five years.
Okta's pitch is that every AI agent needs its own identity, credentials and access rules. It sells that layer to any company, regardless of which cloud it runs on. The post-Oktane sell-side notes we reviewed all focus on agent security. Yet management still calls AI revenue immaterial for FY2027.
OKTA is a Systematic Portfolio holding. In today's note, we cover the business, the quarter, cash flow, valuation and what today's share price implies.
Housekeeping: I will write up MSFT next week. NET reports earnings next week. We will write it up shortly after if it remains a portfolio holding.
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DISCLAIMER: This newsletter is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice, nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
