Toronto-based cybersecurity software company 1Password announced on Thursday that it has crossed $500 million USD ($702 million CAD) in annual recurring revenue (ARR), up from $400 million about a year ago. The technology firm achieved this milestone amid rising AI adoption and while maintaining a double-digit free cash flow margin.
1Password also revealed that it has added approximately 20,000 business customers during this time (bringing its total to more than 200,000), and brought the number of clients paying more than $100,000 annually for its services up more than 40 percent year-over-year, while improving its net retention.
David Faugno,
“The fact that we’re accelerating through that speaks to the AI influence on our business and our growth.”
1Password
This growth has been fuelled by demand for 1Password’s developer and AI security tools, which have seen monthly active usage among human users jump 200 percent and autonomous AI agents soar 500 percent year-over-year. The company aims to build on this with the release of a new platform on Thursday to help clients deploy personal AI agents.
These types of offerings have helped 1Password post net-new ARR growth of 60 percent in 2026 and 90 percent year-over-year during the third quarter, specifically. The firm claims it now caters to 85 percent of the Forbes AI 50 list, which ranks top private AI startups.
In an interview with BetaKit, 1Password CEO David Faugno chalked much of the company’s recent rise up to developers seeking to securely leverage AI agents to build software.
“When you get bigger, the growth rates are supposed to go down while at large numbers,” Faugno said. “The fact that we’re accelerating through that speaks to the AI influence on our business and our growth.”
Founded in 2005 and formally known as AgileBits, 1Password is one of Canada’s most valuable tech companies. It sells identity security and access management software to help individuals and corporate clients like Canva, CIBC Capital Markets, Cursor, Eleven Labs, Hugging Face, Notion, Perplexity, Salesforce, Stripe, and Workday secure their sign-in credentials for apps and websites.
Since its launch, 1Password has evolved from a consumer-facing password manager to a broader digital security platform for businesses, and has leaned heavily into helping customers navigate the security challenges associated with deploying AI agents. Faugno thinks “the shadow AI wave will be massively larger than the shadow IT wave” that preceded it, given that there are simply far more agents running amok online than people.
Faugno expects AI to be a “key driver” for not just 1Password but nearly every business going forward. He predicted that while growth in the use of AI “will persist unabated,” and “software as we know it historically will be changed forever,” where that growth might show up in revenue will take different turns over time.
For now, Faugno said, “where I think the world is coalescing is, agents need just the access that you want them to have, just for the time that they need it, specifically for the task they’re doing on your behalf, and that’s what 1Password does.”
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Agentic AI adoption has also fuelled what the CEO characterized as “a resurgence” in the consumer-facing side of 1Password. While business-to-business sales are still responsible for over 75 percent of its revenue, that gap has not widened since 2025.
When BetaKit sat down with Faugno in late 2025, he argued that the firm possessed the profile of a public company but wanted to advance its AI product roadmap further and ensure it could deliver greater predictability and repeatability before seriously entertaining the possibility of an initial public offering (IPO).
Faugno said in an interview this week that while setting up the infrastructure to “port” the company’s security model over to agentic AI use-cases “was not super straightforward,” 1Password has moved “pretty far down the path” of what it set out to do on the AI transformation front a year ago, adding that this groundwork is now manifesting in product releases like the platform it unveiled on Thursday.
But the CEO indicated the firm still has more building to do and will need to see greater predictability in its sales motion before pursuing an IPO. He did not share a more detailed timeline of when that might occur.
Faugno said he sees an achievable path to 1Password hitting $1 billion USD in ARR over the next several years, especially if its growth continues to accelerate.
Feature image courtesy Alex Broadway/Web Summit/Sportsfile via Flickr.
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