Okta projected third-quarter revenue above market estimates on Wednesday, a sign that demand for its identity authentication services remains resolute from businesses looking to tighten security in the face of rising cyber attacks.

Okta's shares rose 10% after the bell, after the company also raised its annual revenue and adjusted earnings forecast.

The San Francisco-based company provides identity services, such as single sign-on and multi-factor authentication that are used for logging in to online applications and websites, to a roster of customers, including Microsoft-backed OpenAI.

Okta also recently expanded into the Indian market, and even set up its first innovation center in the Asia-Pacific there as it attempts to capitalize on the growing demand in the region.

The company now forecasts annual adjusted earnings between $1.17 to $1.20 per share, from $0.88 to $0.93 per share expected earlier. It also raised its revenue expectations for fiscal year 2024 to $2.21 billion to $2.21 billion from $2.18 billion to $2.19 billion earlier.

Okta is banking on resilient demand for its security identification products on rising security threats in the information technology sector. It projected third-quarter adjusted earnings of 29 to 30 cents per share, compared with estimates of 20 cents.

The company expects revenue in the current quarter to be between $558 million and $560 million, above analysts' average estimate of $552.4 million, according to Refinitiv data.

Subscription backlog, a measure of future revenue, rose 8% to $3.03 billion.

The identification software provider's revenue rose 23% in the second quarter from a year earlier to $556 million, beating expectations of $534.5 million. Its peer Cyberark Software also topped quarterly revenue expectations in June, in a positive sign for the sector.

Okta, which laid off 5% of its workforce in February in an bid to lower its cost bill and improve margins, posted earnings of 31 cents, excluding items, compared to estimates of 22 cents.

  - Reuters