Shares of Okta Inc. (NASDAQ: OKTA) plummeted 12.35% in after-hours trading on Tuesday, despite the identity management company reporting better-than-expected first-quarter results for fiscal year 2026. The sharp decline highlights investor concerns about the company's cautious outlook amid macroeconomic uncertainties.

For the first quarter, Okta reported non-GAAP earnings per share of $0.86, significantly surpassing the analyst consensus of $0.77. Revenue came in at $688 million, beating expectations of $680.3 million and representing a 12% year-over-year increase. However, the company's conservative stance on future growth prospects appears to have spooked investors.

While Okta raised its full-year earnings per share guidance to a range of $3.23 to $3.28, up from the previous forecast of $3.15 to $3.20, it maintained its revenue projection for the fiscal year at $2.85 billion to $2.86 billion. CFO Brett Tighe explained on the earnings call that the company is now factoring in potential risks related to the uncertain economic environment for the remainder of FY26. "It's based on customer conversations, reading the news, talking to the sales teams--it's out there and the tone feels like it's changed," Tighe stated. This cautious outlook, coupled with concerns about customer growth and potential cybersecurity challenges, appears to have triggered the significant sell-off.