Prime Highlights:
- Oracle exceeded Wall Street expectations for the quarter, reporting stronger earnings and revenue while lifting its long-term revenue forecast.
- The company’s cloud business continued to grow rapidly, helping drive investor confidence and pushing its shares higher in extended trading.
Key Facts:
- Oracle reported $17.19 billion in revenue and adjusted earnings of $1.79 per share, both higher than analysts’ estimates.
- The company generated $8.9 billion in cloud revenue, a 44% year-over-year increase, with cloud infrastructure revenue reaching $4.9 billion, up 84%.
Background:
Oracle reported stronger-than-expected quarterly results, sending its shares up about 9% in extended trading after the software company beat Wall Street estimates and raised its long-term revenue outlook. The company credited rapid growth in its cloud business and strong demand for artificial intelligence infrastructure for the performance.
For the quarter ended February 28, Oracle reported adjusted earnings of $1.79 per share, exceeding analysts’ expectations of $1.70 per share. Revenue reached $17.19 billion, also higher than the projected $16.91 billion. Overall revenue rose 22% compared with the same quarter a year earlier, while net income increased to $3.72 billion from $2.94 billion in the previous year.
A major driver of the company’s growth was its cloud segment. Oracle reported $8.9 billion in total cloud revenue, including infrastructure and software-as-a-service (SaaS), a 44% increase from last year. Cloud infrastructure revenue alone reached $4.9 billion, rising 84% compared to the previous year as demand for computing services increased.
The company also improved its long-term financial outlook. Oracle increased its fiscal 2027 revenue forecast to $90 billion, up from its earlier estimate, and higher than analysts’ expectations of about $86.6 billion. For the fiscal fourth quarter, Oracle expects adjusted earnings between $1.92 and $1.96 per share with revenue growth of around 19% to 20%.
Oracle continues to expand its cloud infrastructure to support the rising demand for AI services. During the quarter, the company announced plans to raise between $45 billion and $50 billion in the fiscal year to expand its cloud infrastructure capacity. The firm is planning to bring more than 10 gigawatts of computing power online over the next three years.
Large enterprise customers are also contributing to the company’s growth. Oracle said it secured cloud contracts from organizations including Air France-KLM, Lockheed Martin, SoftBank Corp., and Activision Blizzard, a subsidiary of Microsoft.
In addition, the company reported that its remaining performance obligations, a measure of future contracted revenue, surged to $553 billion, more than four times higher than a year earlier. The growth largely reflects major AI infrastructure agreements, many of which are supported by customer prepayments or client-provided hardware.
Despite concerns about debt and heavy investment in AI infrastructure, Oracle’s latest results indicate that strong demand for cloud and AI computing continues to support the company’s long-term growth strategy.