ORACLE CORP (ORCL): Results of Operations and Financial Condition
ORACLE CORP (ORCL) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 For Immediate Release Contact: Ken Bond Deborah Hellinger Oracle Investor Relations Oracle Corporate Communications 1.650.607.0349 1.212.508.7935 ken.bond@oracle.com deborah.hellinger@oracle.com Oracle Announces Q1 Results Driven by Triple Digit Growth in Cloud Infra
How this was made
The 30-second read
Why it matters
The earnings beat and updated guidance are likely to lift Oracle's stock, reinforcing bullish sentiment in the enterprise cloud space.
Market read
Oracle's strong cloud performance and upward‑revised revenue outlook provide a catalyst for tech‑sector buying and may influence related cloud competitors.
What to watch
Potential supply‑chain constraints for GPU components and higher capital spending could pressure margins despite revenue growth.
Oracle reported Q1 FY27 total revenue of $19.3 billion, up 30%, led by 121% growth in Cloud Infrastructure revenue to $7.4 billion.
Revenue, cloud revenue, operating income, net income and earnings per share all increased sharply year over year, led by triple-digit Cloud Infrastructure growth. The company also guided for continued Q2 revenue and cloud growth, although free cash flow was negative amid elevated capital expenditures.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $19,345 | – | 30% |
| Cloud revenueGAAP | $11,607 | – | 62% |
| Software revenueGAAP | $5,550 | – | (3%) |
| Hardware revenueGAAP | $774 | – | 15% |
| Services revenueGAAP | $1,414 | – | 5% |
| Total operating expensesGAAP | $12,617 | – | 18% |
| Total operating expensesnon-GAAP | $11,194 | – | 29% |
| Cloud and software operating expensesGAAP | $6,400 | – | 77% |
| Hardware operating expensesGAAP | $281 | – | 58% |
| Services operating expensesGAAP | $1,052 | – | (4%) |
| Sales and marketing expenseGAAP | $1,811 | – | (12%) |
| Research and development expenseGAAP | $2,401 | – | (4%) |
| General and administrative expenseGAAP | $376 | – | 0% |
| Amortization of intangible assetsGAAP | $202 | – | (52%) |
| Restructuring and otherGAAP | $94 | – | (77%) |
| Operating incomeGAAP | $6,728 | – | 57% |
| Operating incomenon-GAAP | $8,151 | – | 31% |
| Operating marginGAAP | 35% | – | 612 bp. |
| Operating marginnon-GAAP | 42% | – | 35 bp. |
| Interest expenseGAAP | $(1,428) | – | 55% |
| Non-operating income, netGAAP | $307 | – | 323% |
| Income before income taxesGAAP | $5,607 | – | 64% |
| Provision for income taxesGAAP | $847 | – | 69% |
| Net incomeGAAP | $4,760 | – | 63% |
| Net incomenon-GAAP | $5,839 | – | 36% |
| Net income available to common shareholdersGAAP | $4,679 | – | 60% |
| Net income available to common shareholdersnon-GAAP | $5,758 | – | 34% |
| Basic earnings per share attributable to common shareholdersGAAP | $1.58 | – | – |
| Diluted earnings per share attributable to common shareholdersGAAP | $1.56 | – | 55% |
| Diluted earnings per share attributable to common shareholdersnon-GAAP | $1.92 | – | 30% |
| Diluted weighted average common shares outstandingGAAP | 3,000 | – | 3% |
| Remaining Performance Obligationsother | $664 billion | – | up $209 billion year-over-year |
| GAAP operating cash flowGAAP | $23,103 | – | 184% |
| Capital expendituresGAAP | $(28,499) | – | – |
| Free cash flownon-GAAP | $(5,396) | – | – |
| Net cash outlay for capital expendituresnon-GAAP | $17,966 | – | – |
| Effective tax rateGAAP | 15.1% | – | – |
| Effective tax ratenon-GAAP | 16.9% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Cloud applicationsCloud Apps (SaaS) revenue increased 10% in USD and constant currency. | $4,219 | – | 10% |
| Cloud infrastructureCloud Infrastructure (IaaS) revenue increased 121% in USD and 120% in constant currency. | $7,388 | – | 121% |
| Software licenseThe filing cited customers’ continuing migration from on-premises software to the Cloud. | $655 | – | (15%) |
| Software supportThe filing cited customers’ continuing migration from on-premises software to the Cloud. | $4,895 | – | (1%) |
| HardwareNot provided in the filing. | $774 | – | 15% |
| ServicesNot provided in the filing. | $1,414 | – | 5% |
| AmericasNot provided in the filing. | $13,711 | – | – |
| Europe/Middle East/AfricaNot provided in the filing. | $3,726 | – | – |
| Asia PacificNot provided in the filing. | $1,908 | – | – |
Q2 FY 2027 outlook
- RevenueTotal revenues are expected to grow between 30% and 34% in constant currency and USD.
- NoteTotal Cloud revenue is expected to grow between 64% and 70% in constant currency and between 65% and 71% in USD.
- NoteNon-GAAP earnings per share is expected to be between $1.83 and $1.91 in constant currency and between $1.85 and $1.93 in USD, which represents growth of 19% to 23% in constant currency and 21% to 25% in USD excluding a one-time gain from Q2 FY2026.
- NoteFor fiscal year 2027, we now expect total revenue to be at least $90 billion, and non-GAAP EPS to be at $8.10.
- NoteIncluding the investment gain, Q2 FY27 non-GAAP earnings per share is expected to decline between -19% and -15% in constant currency and decline between -18% and -14% in USD.
Capital returns
- The board of directors declared a quarterly cash dividend of $0.50 per share of outstanding common stock.
- The dividend will be paid to stockholders of record as of the close of business on October 9, 2026, with a payment date of October 23, 2026.
- Payments of dividends to stockholders were $(1,565) for the three months ended August 31, 2026.
- Oracle completed the sale of $20 billion of common stock (before commissions) through an At-the-Market equity program during Q1 FY 2027.
- Proceeds from issuances of common stock via at-the-market program, net of issuance costs were $19,909.
What drove it
- Oracle delivered 850MW additional datacenter capacity during Q1 FY27.
- Oracle booked more than $30 billion of additional AI cloud contracts in Q1.
- Oracle delivered more than 300,000 GPUs to AI Cloud customers since the end of Q4 and almost triple the capacity delivered in Q4 FY26.
- The filing stated that customer demand for AI Cloud Training and Inferencing Services continues to grow faster than supply.
- Cloud Infrastructure and Cloud Applications demand drove non-GAAP operating income growth, according to the filing.
- Oracle cited customers’ continuing migration from on-premises software to the Cloud as the reason software revenue declined.
Concerns
- Free cash flow was $(5,396) as capital expenditures were $(28,499).
- Software revenue was $5,550, down (3%), while software license revenue was $655, down (15%) and software support revenue was $4,895, down (1%).
- Cloud and software operating expenses were $6,400, up 77%.
- Interest expense was $(1,428), up 55%.
- The filing stated that demand for AI Cloud Training and Inferencing Services continues to grow faster than supply.
What to watch
- Delivery of datacenter capacity and GPUs to support AI Cloud customer demand.
- Cloud Infrastructure revenue growth following Q1 growth of 121% in USD.
- Q2 FY27 total revenue growth guidance of between 30% and 34% in constant currency and USD.
- Q2 FY27 Total Cloud revenue growth guidance of between 64% and 70% in constant currency and between 65% and 71% in USD.
- Capital expenditures, net cash outlay for capital expenditures, operating cash flow and free cash flow.
- RPO conversion following Q1 RPO of $664 billion.
Balance sheet and cash flow
- Cash and cash equivalents were $36,369 at August 31, 2026, compared with $31,289 at May 31, 2026.
- Marketable securities were $708 at August 31, 2026, compared with $605 at May 31, 2026.
- Notes payable and other borrowings, current were $7,625 at August 31, 2026, compared with $7,199 at May 31, 2026.
- Notes payable and other borrowings, non-current were $117,712 at August 31, 2026, compared with $122,342 at May 31, 2026.
- Property, plant and equipment, net was $127,845 at August 31, 2026, compared with $99,957 at May 31, 2026.
- Net cash provided by operating activities was $23,103, compared with $8,140 in the prior-year quarter.
- Net cash used for investing activities was $(28,580), compared with $(8,718) in the prior-year quarter.
- Net cash provided by financing activities was $13,111, compared with $210 in the prior-year quarter.
- Cash, cash equivalents and restricted cash at end of period was $38,934, compared with $10,445 in the prior-year quarter.
Analysis
Oracle reported a strong Q1 FY27, with total revenue of $19,345, up 30%, and cloud revenue of $11,607, up 62%. Cloud Infrastructure revenue was $7,388 and increased 121%, while Cloud Applications revenue was $4,219 and increased 10%. The filing attributed the period to infrastructure execution, including delivery of 850MW of additional datacenter capacity, and stated that demand for AI Cloud Training and Inferencing Services continues to grow faster than supply.
The revenue mix continued to shift toward cloud. Software revenue was $5,550, down (3%), which Oracle attributed to customers’ continuing migration from on-premises software to the Cloud. Within software, license revenue was $655, down (15%), and software support revenue was $4,895, down (1%). Hardware revenue was $774, up 15%, and services revenue was $1,414, up 5%.
Profitability increased materially. GAAP operating income was $6,728, up 57%, and the GAAP operating margin was 35%, compared with 29%. Non-GAAP operating income was $8,151, up 31%, with a 42% non-GAAP operating margin. GAAP net income available to common shareholders was $4,679, up 60%, and non-GAAP net income available to common shareholders was $5,758, up 34%. GAAP diluted EPS was $1.56 and non-GAAP diluted EPS was $1.92.
Cash generation and investment intensity were both elevated. GAAP operating cash flow was $23,103, up 184%, while capital expenditures were $(28,499) and non-GAAP free cash flow was $(5,396). The filing also reported $17,966 of net cash outlay for capital expenditures. Oracle completed the sale of $20 billion of common stock before commissions through its ATM equity program, and proceeds net of issuance costs were $19,909. Cash and cash equivalents were $36,369, while current and non-current notes payable and other borrowings were $7,625 and $117,712, respectively.
For Q2 FY27, Oracle expects total revenue growth of between 30% and 34% in constant currency and USD, and Total Cloud revenue growth of between 64% and 70% in constant currency and between 65% and 71% in USD. It expects non-GAAP EPS of between $1.83 and $1.91 in constant currency and between $1.85 and $1.93 in USD, excluding a one-time gain from Q2 FY2026. For FY2027, the company now expects total revenue to be at least $90 billion and non-GAAP EPS to be at $8.10. RPO reached $664 billion after Oracle booked more than $30 billion of additional AI cloud contracts in Q1.
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so no comparison of reported results with prior guidance is available.
- GAAP and non-GAAP gross margin were not reported.
- Q2 FY27 gross-margin guidance was not reported.
- Q2 FY27 operating-expense guidance was not reported.
- Q2 FY27 tax-rate guidance was not reported.
- GAAP basic earnings-per-share year-over-year percentage change was not reported.
- Quarter-over-quarter percentage changes were not reported for the listed metrics.
- Share repurchases were not reported.
- No verbatim quotes from named executives were included in the filing text.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Oracle's Q1 FY27 earnings release filed on SEC Form 8‑K includes detailed financials and forward‑looking guidance.
Ticker impact
Oracle reported Q1 FY27 results with 30% revenue growth and issued updated guidance for Q2 and full FY 2027.
expect upside as investors price in strong cloud growth and higher full-year revenue expectations
Record cloud revenue growth and upward‑revised full‑year revenue target to $90B signal strong momentum; guidance beats prior expectations, likely driving buying pressure.
Market effects
Cloud infrastructure and AI services sector may see broader rally as Oracle's growth validates demand.
U.S. technology stocks could benefit from Oracle's upbeat outlook.
Positive guidance from a major cloud provider supports global AI and data‑center investment themes.
Counterpoint
If the market has already priced in the strong cloud growth, the upside may be limited and the stock could face short‑term profit‑taking.
Key entities
- companyOracle Corporation
U.S. cloud and enterprise software provider reporting Q1 FY27 results.
