Oracle’s software division posted significant growth in its latest quarter, with total revenue reaching $19.35 billion, surpassing analyst expectations of $19.14 billion. The company’s net income climbed 60% to $4.7 billion compared to $2.93 billion a year prior.
Cloud services emerged as a primary driver of growth, with cloud revenue increasing 62% year-over-year to $11.6 billion. Within this segment, cloud infrastructure revenue surged 121%, while cloud application revenue expanded 10%. The company delivered an additional 850 megawatts of data center capacity and booked over $30 billion in additional AI cloud contracts during the period. Oracle also distributed more than 300,000 graphics processing units to its AI Cloud customers.
Management provided forward guidance indicating second-quarter revenue growth between 30% and 34%, with cloud revenue expected to rise between 64% and 70%. The company projects total fiscal 2027 revenue of at least $90 billion. These infrastructure investments support contracted cloud demand from major clients including Nvidia, Meta, OpenAI, Advanced Micro Devices, and SpaceX’s AI division.
The company’s balance sheet reflects the substantial capital deployment, with total debt reaching $125 billion. During the quarter, Oracle posted negative free cash flow of $5.4 billion, compared to negative free cash flow of $362 million in the prior year period. Share performance remained mixed, with initial gains following the earnings announcement ultimately reversing to a nearly 2% decline by market close. Despite the quarterly results, Oracle shares have declined approximately 20% year-to-date amid investor concerns regarding the company’s elevated debt levels.
Citi analysts maintained a buy rating following the earnings release, characterizing the results as solid and suggesting the company had “cleared the runway” for its upcoming investor day presentation.
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