Okta shares rose 4% in extended trading on Tuesday after the identity software maker reported fiscal results that exceeded Wall Street projections.

Here’s how the company did in comparison with LSEG consensus:

• Earnings per share: 91 cents adjusted vs. 84 cents expected
• Revenue: $728 million vs. $711.8 million expected

Okta’s revenue grew about 13% year over year in the fiscal second quarter, which ended on July 31, according to a statement. Net income of $67 million, or 37 cents per share, was up from $29 million, or 15 cents per share, in the same quarter last year.

In May, Okta adjusted its guidance to reflect macroeconomic uncertainty. But business has been going well, said Todd McKinnon, Okta’s co-founder and CEO, in an interview with CNBC on Tuesday.

“It was much better than we thought,” McKinnon said. “Yeah, the results speak for themselves.”

U.S. government customers are being more careful about signing up for deals after President Donald Trump launched the Department of Government Efficiency in January.

“But even under that additional review, we did really well,” McKinnon said.

Net retention rate, a metric to show growth with existing customers, came to 106% in the quarter, unchanged from three months ago.

Companies will need to buy software to manage the identities of artificial intelligence agents working in their environments, which should lead to expansions with customers, McKinnon said. Selling suites of several kinds of Okta software should also boost revenue growth, he said.

Management called for 74 cents to 75 cents in adjusted earnings per share and $728 million to $730 million in revenue for the fiscal third quarter. Analysts surveyed by LSEG had expected earnings of 75 cents per share, with $722.9 million in revenue. Okta expects $2.260 billion to $2.265 billion in current remaining performance obligation, a measurement of subscription backlog to be recognized in the next 12 months, just above StreetAccount’s $2.26 billion consensus.

The company bumped up its fiscal 2026 forecast. It sees $3.33 to $3.38 in full-year adjusted earnings per share, with $2.875 billion to $2.885 billion in revenue. The LSEG consensus showed $3.28 in adjusted earnings per share on $2.86 billion in revenue. Okta’s full fiscal year guidance from May included $3.23 to $3.28 per share and $2.850 billion to $2.860 in revenue.

Late last month, Palo Alto Networks, a cybersecurity company that announced an expanded partnership with Okta in July, announced plans to acquire Okta rival CyberArk for about $25 billion.

“Palo Alto is going to be like, ‘You have to buy security from us, and your endpoint from us and your SIEM [security information and event management] from us and your network from us,’ ” McKinnon said. “We just think that’s wrong, because customers need choice. It’s very unlikely they’re going to get every piece of technology or every piece of security from one vendor.”

A Palo Alto spokesperson did not immediately respond to a request for comment.

Earlier on Tuesday, Okta said it had agreed to acquire Israeli startup Axiom Security, which sells software for managing data access. The companies did not disclose terms of the deal.

As of Tuesday’s close, Okta shares were up 16%, while the technology-heavy Nasdaq was up 11%.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

WATCH: We’re moving from prototype to production when it comes to agents, says Okta CEO Todd McKinnon

Apple on Tuesday sent invites to the media and analysts for a launch event at its campus on September 9 at 10 A.M pacific time.

The tagline on the invite is: “Awe dropping.”

Apple is expected to release new iPhones, as it usually does in September. This year’s model would be the iPhone 17. It also often announces new Apple Watch models in September.

While Apple’s launch events used to be held live, with executives demonstrating features on stage, since 2020 they have been pre-recorded videos. Apple said it would stream the event on its website.

Analysts expect Apple to release a lineup of new phones with updated processors and specs, including a new slim version that trades battery life and cameras for a light weight and design.

Since losing her 15-year-old son Riley to suicide following a sextortion scheme through Meta’s Messenger app, Mary Rodee has worked with advocacy groups to push for stronger protections for children online. 

“I hold them solely responsible,” Rodee said about Meta in an interview with CNBC. “They have a responsibility for the safety of their users.”

Rodee is among a number of parents who are increasingly critical of organizations that are supposed to help children stay safe but accept money from Meta and other social media companies. Among these groups is the National Parent Teacher Association. 

The National PTA is a nonprofit with more than 20,000 chapters and nearly 4 million members across the country that works with schools and families to advocate for children. The group’s website says its members “share a commitment to improving the education, health and safety of all children.”

A report published Tuesday by tech watchdog organization Tech Transparency Project alleges the group’s relationship with Meta “gives a sheen of expert approval” to the social media company’s “efforts to keep young users engaged on its platforms.” The report claims that Meta’s tactics are used to counter concerns that services like Instagram can be harmful to teens in an attempt to shape the public narrative. 

“As Meta has come under growing pressure over its impact on kids and their well-being, the company has responded with a range of tactics to influence the public debate,” TTP wrote.

Meta has sponsored the National PTA for years, while the education advocacy group has promoted the company’s child safety initiatives without always noting its financial ties, TTP found.

The National PTA and Meta, the parent company of Facebook and Instagram, have worked together since at least 2010. Meta’s presence is listed in the group’s events and social media posts.

“It’s unforgivable,” said Rodee of Canton, New York. “I just can’t get over these groups that convince themselves that there’s not blood on their hands, that this money is clean.”

Both Meta and the National PTA declined to share how much the social media company has contributed to the group.

“We’re proud to partner with expert organizations to educate parents about our safety tools and protections for teens, as many other tech companies do,” a Meta spokesperson told CNBC in a statement.

In a statement to CNBC, the National PTA said that it doesn’t endorse any social media platform and it accepts sponsorship from Meta to have a “seat at the table” and to be a “strong, clear voice for parents and children.”

“Our collaboration with Meta provides an opportunity to help inform families about safety on its apps and the available tools (e.g., parental controls, age-gated features) and resources (e.g., parent’s guides, online safety centers),” the National PTA said in its statement.

Meta worked with the National PTA in 2017 to help roll out Messenger Kids, a chat app for children under 13 that the company said was developed in consultation with parent and safety groups, TTP wrote in its report. Facebook became a founding sponsor of the PTA Connected initiative the following year in 2018, the National PTA said in its statement to CNBC.

The National PTA can often be seen supporting Meta products on its Instagram account. For example, a post shared in June shows a group of PTA members at a digital safety workshop in front of a poster with Meta and the National PTA’s logo.

Riley, Rodee’s son, was a victim of sextortion on Meta’s platforms. Sextortion is the act of threatening to expose sexually compromising information unless certain demands are met. He was blackmailed by a person posing as a teenage girl on Facebook Messenger, Rodee said.

The fake account demanded Riley pay $3,500. He then took his own life, Rodee said. Sextortion schemes like this are on the rise across social media. The U.S. Department of Homeland Security received more than 3,000 sextortion tips in 2022, according to the Justice Department.

The Federal Trade Commission accused Meta in 2023 of misleading parents about their ability to control who their children communicate with on the Messenger Kids app. Meta has denied wrongdoing and is challenging both the FTC’s proposed restrictions and the constitutionality of the agency’s process.

A federal master complaint filed in March 2024 in California by school districts and local governments as part of a multi-district lawsuit against major social media companies alleges that platforms like Instagram and Facebook were intentionally designed to be addictive to young users. The complaint names the National PTA as one of the organizations Meta uses to reach children in schools.

“While Instagram may try to characterize this work as helpful to addressing youth mental health problems, they were more candid in other documents about using this as a strategy to get more teen users,” the filing states. “The goal of the parents plan was to get ‘parents to think, my kids are on social media, and my FAVORITE app for them to be on is Instagram, bar none.'”

In September 2024, Meta announced Instagram Teen Accounts, which gives users between 13 and 17 certain safeguards on the app. The release announcing the accounts included a quote from National PTA President Yvonne Johnson, without disclosing that Meta was a national sponsor of the organization.

“Given that parents today are grappling with the benefits and challenges of the internet and digital media for their teens, our association applauds Meta for launching Instagram Teen Accounts,” Johnson said in the release.

Instagram’s Teen Accounts feature has received mixed responses when it comes to how effectively it protects kids. Some users still saw inappropriate content on Instagram, according to a report from ParentsTogether.

“This strategy of telling parents that these products are safer than they really are puts kids in danger,” said Shelby Knox, online safety campaign director at ParentsTogether.

The Meta spokesperson said that Teen Accounts give protections to limit who can contact teens on Instagram.

Other parent groups like Smartphone Free Childhood U.S. and Parents for Safe Online Spaces have reached out to the National PTA to voice their concern of accepting money from social media companies that they say are dangerous to their children.

The National PTA’s other sponsors also include Google, YouTube, TikTok and Discord.

In 2024, TikTok gave the National PTA more than $300,000 for programs about teens and social media, even as the platform itself faced mounting criticism over its impact on teens.

The PTA is just one example of Meta’s strategy, according to the TTP report. Meta also created Trust, Transparency & Control Labs, also known as TTC Labs, in 2017. The organization works to collaborate on safety efforts.

While TTC Labs is clearly labeled as a Meta creation, TTC has produced reports on Instagram Teen Accounts and Horizon Worlds. Meta has cited these reports as evidence of its commitment to child safety.

Meta and other social media platforms have been blamed for causing harm to children. 

A bipartisan group of 42 attorneys general sued Meta in 2023, alleging features on Facebook and Instagram are addictive and are aimed at kids and teens.

In July, Meta said it eliminated 600,000 profiles linked to predatory behavior and enhanced direct messaging protections on Instagram.

“PTAs in schools are trusted organizations, so their support of companies that are using people and children for profit is just unforgivable,” Rodee said.

If you are having suicidal thoughts or are in distress, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.

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