The stock of Okta (OKTA) is up 5% after the identity software company reported financial results that beat Wall Street forecasts and raised its forward guidance.

The San Francisco-based company announced Fiscal second quarter earnings per share (EPS) of $0.91 versus $0.84 that had been expected among analysts. Revenue in the period totaled $728 million, which was ahead of Wall Street's expectation for $711.8 million. Sales were up 13% from a year earlier.

In its earnings release, Okta said that its U.S. government clients are being more careful about signing up for deals after President Donald Trump launched the Department of Government Efficiency (DOGE) earlier this year. Net retention rate, a metric that shows growth among existing customers, came to 106% in Fiscal Q2, unchanged from the previous three months.

In terms of forward guidance, Okta said it now expects earnings of $0.74 to $0.75 and revenue of $728 million to $730 million for the current quarter. Analysts had expected earnings of $0.75 on $722.9 million in sales.

The company also raised its Fiscal 2026 forecast, saying it sees $3.33 to $3.38 in full-year earnings, with $2.875 billion to $2.885 billion in revenue. The consensus among analysts was for $3.28 in earnings per share and $2.86 billion in revenue.

Earlier on Aug. 26, Okta announced that it is acquiring Israeli start-up company Axiom Security, which sells software for managing data access. The companies did not disclose terms of the deal or a price for the acquisition.

The stock of Okta has a consensus Moderate Buy rating among 36 Wall Street analysts. That rating is based on 23 Buy, 11 Hold, and two Sell recommendations issued in the last three months. The average OKTA price target of $121.70 implies 32.92% upside from current levels. These ratings are likely to change after the company's financial results.