1Password passes US$500M in annual revenue on AI demand

Toronto-based 1Password said Thursday its annual recurring revenue has passed US$500 million (about C$702 million), up from US$400 million a year ago, as demand grows from developers building and securing AI agents.

The identity security company said in a news release that net new annual recurring revenue grew by about 60 per cent through the first three quarters of its 2026 fiscal year, and by about 90 per cent year over year in the third quarter. It said it has kept a double-digit free cash flow margin.

1Password said more than 200,000 businesses now use its products, including 85 per cent of the Forbes AI 50 list of top private AI companies. The number of customers paying more than US$100,000 a year grew by more than 40 per cent, and net new customers added in the third quarter rose 150 per cent from a year earlier.

The company said monthly active use of its developer and AI security tools by people grew 200 per cent year over year, while use by autonomous AI agents and other non-human identities grew 500 per cent. Those tools are now used in 16 per cent of business accounts.

“The fact that we’re accelerating through that speaks to the AI influence on our business and our growth,” chief executive David Faugno told BetaKit, which first reported the numbers in Canadian dollars. Faugno said the company sees a path to US$1 billion in annual recurring revenue over the next several years.

The company also unveiled 1Password for Agents on Thursday, a product for consumers and small businesses that lets people approve task-specific access for personal AI agents without exposing passwords to the agent or the model behind it. For larger organizations, its Unified Access platform applies the same approach, giving agents access only for a specific task and revoking it when the task ends.

1Password said it is working with AI labs and technology companies including Anthropic, Meta, NVIDIA, OpenAI, Perplexity and Snowflake to build the tools into the workflows where agents are built and run.

Faugno said the shadow AI problem, where employees and developers run agents their employers do not know about, could be “massively larger” than the shadow IT problem that came before it, because far more agents than people are likely to be running online.

Business customers account for more than 75 per cent of 1Password’s revenue, the company said. Faugno told BetaKit the company is not yet ready to go public and wants more predictability in its sales before considering an initial public offering, and he did not give a timeline.

The milestone comes as Ottawa and the private sector push to grow Canadian scale-ups. The federal government this week unveiled a plan to boost venture capital, and Canadian technology firms continue to raise money for AI work, such as Toronto’s Aerium. Security has also been in focus after Ottawa took some websites offline over a PHP flaw.

If you find reporting like this useful, consider supporting Canada News Media, an independent Canadian newsroom with no corporate parent.

Sources: 1Password news release, Oct. 22, 2026; BetaKit.