Oracle’s stock gained 4% in extended trading following the release of stronger-than-anticipated quarterly results. The software vendor reported revenue growth of nearly 30% year-over-year for the fiscal first quarter ended August 31, with net income of $4.68 billion or $1.56 per share, compared to $2.93 billion or $1.01 per share in the year-earlier period.
Cloud services remained a significant growth driver, with cloud revenue surging 62% to $11.61 billion, exceeding the consensus estimate of $11.51 billion. Cloud infrastructure revenue more than doubled to $7.4 billion, beating the $7.09 billion analyst consensus. Software category revenue reached $5.55 billion but declined approximately 3% and fell short of the $5.61 billion consensus expectation.
For the fiscal second quarter, the company projected adjusted earnings per share between $1.85 and $1.93, with revenue growth anticipated between 30% and 34%. This guidance straddled analyst expectations of $1.89 in adjusted earnings per share and $21.20 billion in revenue. Looking further ahead to fiscal 2027, Oracle guided for $8.10 in adjusted earnings per share on at least $90 billion in revenue, slightly above consensus estimates.
The company’s expansion strategy remains heavily focused on data center buildout to capitalize on artificial intelligence opportunities. Capital expenditures surged to $28.50 billion from $8.50 billion year-over-year, as Oracle delivered 850 megawatts of data center capacity during the quarter. However, this aggressive investment strategy has strained the company’s balance sheet, with debt reaching $125 billion and negative free cash flow of $5.4 billion compared to negative $362 million previously. Management addressed concerns about potential delays at a New Mexico data center facility, stating no current evidence suggests delays relative to fiscal 2027 projections.
Oracle’s shares have declined 22% year-to-date through Thursday’s close, significantly underperforming the S&P 500’s gain of approximately 11%.
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