Key Highlights
- Oracle surpassed fiscal Q4 expectations with adjusted EPS of $2.03 versus the $1.96 forecast, while revenue reached $19.18 billion against projections of $19.10 billion
- Shares tumbled approximately 10% in after-hours trading following disclosure of plans to secure an additional $40 billion via debt and equity offerings in fiscal 2027
- Cloud infrastructure sales skyrocketed 93% year-over-year to $5.8 billion, though traditional software revenue declined 2%
- The company’s remaining performance obligation (RPO) soared to $638 billion — a 363% increase — with over half attributed to a single long-term agreement with OpenAI
- Projected capital expenditures for fiscal 2027 are expected to reach approximately $70 billion, while fiscal 2026 free cash flow stood at negative $23.7 billion
Oracle delivered results that topped Wall Street’s expectations for both earnings and revenue in its fiscal fourth quarter, yet investors weren’t impressed. ORCL shares plummeted roughly 10% during extended trading hours after management unveiled plans to pursue another $40 billion in financing to support its artificial intelligence infrastructure expansion.
Shares had concluded Wednesday’s regular session with a modest 3% gain year-to-date, trailing the S&P 500’s 6% advance over the same period.
For the quarter that concluded on May 31, Oracle delivered adjusted earnings per share of $2.03, surpassing the $1.96 analyst consensus. Total revenue registered at $19.18 billion, narrowly exceeding the anticipated $19.10 billion, representing a 21% year-over-year increase.
Net income climbed to $4.22 billion, translating to $1.45 per share, compared to $3.43 billion in the prior-year period.
Cloud Services Shine While Traditional Software Struggles
Oracle Cloud Infrastructure revenue experienced explosive growth of 93%, reaching $5.8 billion, continuing the strong trajectory established over recent quarters.
However, the company’s traditional software business — historically Oracle’s core strength — showed signs of weakness. Legacy software sales contracted 2%, and cloud-based software also underperformed expectations. Overall software revenue managed only 2% growth to $11 billion.
Co-CEO Mike Sicilia recognized certain “delayed decision cycles” among clients in recent quarters but expressed confidence that demand for mission-critical software is recovering.
Management reaffirmed its fiscal 2027 revenue objective of $90 billion while elevating its adjusted EPS projection to $8.05, surpassing the $8.01 analyst consensus. First-quarter guidance projected 27% to 29% revenue expansion and adjusted EPS between $1.72 and $1.76, both marginally ahead of Wall Street estimates.
Aggressive Capital Deployment Strategy Continues
Oracle disclosed that it secured $43 billion through debt issuance and $5 billion via equity raises during fiscal 2026. The company now intends to pursue an additional $40 billion in fiscal 2027 — including a $20 billion share offering previously announced.
Capital expenditures surged 162% to $55.7 billion in fiscal 2026, with expectations calling for approximately $70 billion in fiscal 2027 — not including $20 billion to $25 billion in direct customer prepayments.
Free cash flow registered at negative $23.7 billion for the full year, while depreciation expenses nearly doubled to $7.62 billion.
The RPO — which represents future contracted revenue — jumped 363% to $638 billion. Bank of America analysts highlighted that more than half of this total stems from a single customer: OpenAI.
Oracle also announced plans to activate nearly one gigawatt of computing capacity in the current quarter — approximately matching its entire deployment throughout fiscal 2026.
During the quarter, Oracle appointed Hilary Maxson, previously with Schneider Electric, as its new Chief Financial Officer. Separately, Related Digital and Blackstone revealed $16 billion in financing for a new Oracle data center facility in Michigan.
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