Okta just delivered a solid earnings beat that shows enterprise identity management is having a moment. The company topped Wall Street's Q3 estimates with $742 million in revenue - up nearly 12% year-over-year - while CEO Todd McKinnon signals that AI agents could expand their market beyond current expectations. Despite the strong numbers, shares dipped 3% after hours as investors digest what this means for the competitive cybersecurity landscape.
Okta just proved that enterprise identity management isn't just surviving the current tech landscape - it's thriving. The company's Q3 earnings report released Tuesday evening shows revenue climbing to $742 million, handily beating Wall Street's $730 million estimate and marking a solid 12% jump from the $665 million posted in the same period last year.
The numbers tell a story of steady enterprise adoption. Adjusted earnings per share hit 82 cents, surpassing the 76-cent consensus estimate, while net income nearly tripled to $43 million from $16 million a year ago. But it's the subscription revenue that really matters here - that grew 11% to $724 million, ahead of the $715 million analysts were expecting.
What's particularly interesting is how Okta is positioning itself for the AI boom. During the quarter, the company rolled out new capabilities that let businesses build AI agents and automate tasks through their identity platform. CEO Todd McKinnon told CNBC in a Tuesday interview that the AI agent opportunity "could exceed Okta's core total addressable market over the next five years."
"It's not in the results yet, but we're investing, and we're capitalizing on the opportunity like it will be a big part of the future," McKinnon explained. That's the kind of forward-looking statement that suggests Okta sees AI as more than just a feature add-on - it's potentially a whole new revenue stream.
The company's subscription backlog, technically called "returning performance obligations," jumped 17% year-over-year to $4.29 billion, beating StreetAccount's $4.17 billion estimate. That's contracted revenue already in the bank, which gives Okta visibility into future quarters and shows enterprise customers are committing to longer-term identity management solutions.
