Key Highlights
- Oracle exceeded fiscal Q4 projections with adjusted earnings per share of $2.03 versus the anticipated $1.96, while revenue reached $19.18 billion against expectations of $19.10 billion
- Shares plummeted approximately 10% during after-hours trading following the announcement of a planned $40 billion capital raise via debt and equity for fiscal 2027
- Cloud infrastructure sales skyrocketed 93% annually to $5.8 billion, though software revenue declined 2%, missing projections
- The company’s remaining performance obligation (RPO) soared 363% to $638 billion, with over half attributable to a single long-term OpenAI agreement
- Projected capital spending for fiscal 2027 stands at approximately $70 billion, while fiscal 2026 concluded with negative $23.7 billion in free cash flow
Despite surpassing analyst projections for both bottom and top line results in its fiscal fourth quarter, Oracle couldn’t avoid a stock selloff. Shares of ORCL tumbled roughly 10% in extended trading following the database giant’s disclosure that it intends to secure an additional $40 billion in funding for its artificial intelligence infrastructure expansion.
Shares ended Wednesday’s regular session with a modest 3% gain year-to-date, trailing the S&P 500’s 6% advance.
For the three months concluding on May 31, Oracle delivered adjusted earnings of $2.03 per share, exceeding the Street’s $1.96 estimate. Total revenue registered at $19.18 billion, marginally topping the anticipated $19.10 billion and representing a 21% year-over-year increase.
Net profit climbed to $4.22 billion, translating to $1.45 per diluted share, compared with $3.43 billion in the prior-year period.
Cloud Momentum Contrasts with Software Weakness
Oracle Cloud Infrastructure sales exploded 93% to reach $5.8 billion, extending the robust growth trajectory observed in recent reporting periods.
However, the software division — historically Oracle’s core business — showed concerning deceleration. Traditional software license sales contracted 2%, while cloud-based software applications similarly underperformed expectations. Overall software revenue advanced just 2% to $11 billion.
Co-CEO Mike Sicilia recognized certain “delayed decision cycles” affecting customer purchasing patterns in recent months but expressed optimism that demand for mission-critical software solutions is experiencing a resurgence.
Management reaffirmed its fiscal 2027 revenue objective of $90 billion. The company elevated its adjusted earnings per share projection to $8.05, surpassing the analyst consensus of $8.01. First-quarter guidance indicated revenue expansion of 27% to 29% with adjusted EPS ranging from $1.72 to $1.76, both modestly above Wall Street estimates.
Aggressive Capital Deployment Continues
Oracle disclosed it secured $43 billion through debt issuance and $5 billion via equity offerings throughout fiscal 2026. The company now targets an additional $40 billion fundraise in fiscal 2027 — including $20 billion from a previously announced share offering.
Capital expenditures surged 162% to $55.7 billion in fiscal 2026, with projections calling for approximately $70 billion in fiscal 2027 — this figure excludes $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 remaining performance obligation — representing contracted revenue awaiting recognition — jumped 363% to $638 billion. Analysts at Bank of America highlighted that OpenAI accounts for more than half of this substantial backlog.
Oracle also disclosed plans to activate nearly one gigawatt of computational capacity during the current quarter — approximately matching its entire fiscal 2026 deployment.
During the reporting period, Oracle appointed Hilary Maxson, previously with Schneider Electric, as its new Chief Financial Officer. Separately, Related Digital and Blackstone unveiled $16 billion in financing for a new Oracle data center facility in Michigan.
