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Okta (OKTA -13%) is under pressure today despite reporting solid upside results for Q1 (Apr) last night. Okta, which is a cybersecurity company focused on identity and access management, grew revenue 11.5% yr/yr to $688 mln. That was above analyst expectations, but the upside was a bit more muted than recent quarters and it marked the fourth consecutive quarter where yr/yr revenue growth got smaller. To its credit, Okta provided upside EPS and revenue guidance for Q2 (Jul).

• However, based on the questions on the call, it is clear analysts were disappointed to see Okta only reaffirm full year revenue guidance despite the Q1 upside. That seems to be the main issue for the weakness today. Okta said that it's now factoring in potential risks related to the uncertain economic environment for the remainder of FY26.
• Management elaborated a bit more during the Q&A. Okta said it was very happy with its Q1 result and it made a lot of great progress. However, the macro played a role in the guidance. While Okta did not see any macro impact on Q1, the decision to reaffirm was more based on customer conversations, reading the news, talking to the sales teams etc. Okta said it feels like the tone in the market has changed a bit, so it decided to be conservative.
• Another potential concern was its cRPO metric. It rose 14% yr/yr to $2.227 bln, which was above the $2.185-2.190 bln prior guidance. However, the Q2 cRPO guidance of $2.200-2.205 bln computes as +10-11%, which is a bit of a slowdown and the hard number represents a sequential decline from Q1, which is not typical for Q2. In fairness, Okta tends to guide conservatively with cRPO, so it may just be them low balling guidance a bit. But the guide did spark some discussion on the call.
• Okta responded that there was no softness in April, it was very predictable. And the company is coming off a blow-out Q4 where Okta says it ran the table. Even despite that, Okta had a solid performance in Q1, including through April. Okta said it has heard some chatter about the industry seeing some softness in April, but the company did not see that. The cRPO guidance is mainly factoring in uncertainty in the macro going forward.

Our sense is that Okta is under pressure today mainly because the reaffirm for FY26 revenue is being seen as a letdown. The muted cRPO guidance is likely playing a role as well. Sentiment is likely also likely having an impact. Recall that Okta is coming off a blowout Q4 result, so expectations were running high heading into this report. Unlike most tech names, Okta came into this report trading near a 2+ year high, which tells us sentiment was elevated. As such, it's not surprising that the stock is pulling back sharply on the muted guidance.