Shares of Okta Inc. (OKTA) tumbled 11.77% in after-hours trading on Tuesday, despite the identity management company reporting better-than-expected first-quarter results and raising its full-year earnings guidance. The sharp decline highlights investor concerns about the company's cautious outlook amid macroeconomic uncertainties.

For the first quarter of fiscal year 2026, Okta reported non-GAAP earnings per share of $0.86, significantly surpassing the analyst consensus of $0.77. Revenue for the quarter came in at $688 million, beating expectations of $680.3 million and representing a 12% year-over-year increase. The company's subscription revenue, which forms the bulk of its top line, also grew by 12% to reach $673 million.

Despite the strong quarterly performance, investors seemed to focus on the company's commentary regarding potential macroeconomic headwinds. 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. However, the company maintained its revenue projection for the fiscal year at $2.85 billion to $2.86 billion, suggesting caution about future growth prospects. This conservative stance, coupled with concerns about customer growth and cybersecurity challenges, appears to have spooked investors, leading to the significant after-hours sell-off.