TLDR
- Oracle falls after hours despite 47% Q4 cloud revenue growth.
- ORCL drops as AI data center spending pressures free cash flow.
- Oracle Q4 IaaS revenue jumps 93% amid stronger AI demand.
- Oracle backlog hits $638B as large AI cloud contracts expand.
- Oracle guides FY2027 revenue to $90B despite stock weakness.
Oracle shares fell after the company reported strong fourth-quarter cloud growth and record annual revenue. ORCL closed at $201.26, down 2.21%, then dropped after hours to $191.99, down 4.61%. The decline came despite sharp gains in cloud infrastructure, earnings, and remaining performance obligations.
Oracle Reports Record Q4 Revenue as Cloud Demand Accelerates
Oracle reported fourth-quarter revenue of $19.2 billion, up 21% from the prior year. Cloud revenue reached $9.9 billion, rising 47% as demand expanded across infrastructure and applications. However, the stock still moved lower after the market digested the results.
Cloud Infrastructure revenue rose 93% to $5.8 billion, making it the fastest-growing major segment. Cloud Applications revenue increased 10% to $4.1 billion, while software revenue fell 2% to $6.8 billion. The shift showed continued customer movement from on-premise software toward Oracle’s cloud platform.
Oracle also reported stronger profitability during the quarter. GAAP earnings per share rose 21% to $1.45, while non-GAAP earnings per share climbed 24% to $2.11. GAAP operating income increased 20% to $6.1 billion, supported by revenue growth and cost controls.
RPO Jumps as AI Contracts Drive Oracle Cloud Backlog
Oracle ended the quarter with remaining performance obligations of $638 billion. That figure rose $85 billion from the previous quarter and increased 363% from last year. The backlog reflected large AI cloud infrastructure contracts and long-term customer commitments.
The company said most recent RPO growth came from large AI agreements. In many cases, customers prepaid Oracle for GPUs or supplied the hardware directly. As a result, Oracle said prepaid and customer-supplied hardware now totals $75 billion.
That structure reduces the capital Oracle must raise for AI data center expansion. Still, Oracle raised $43 billion in debt and $5 billion in equity during fiscal 2026. It also expects to raise about $40 billion in fiscal 2027 through debt and equity financing.
FY 2027 Guidance Highlights Faster Growth and Heavy AI Spending
For fiscal 2026, Oracle reported total revenue of $67.4 billion, up 17%. Cloud revenue increased 39% to $34.0 billion, while Cloud Infrastructure revenue jumped 77% to $18.1 billion. Cloud Applications revenue rose 11% to $15.9 billion.
Oracle generated operating cash flow of $32.0 billion, up 54% for the fiscal year. However, free cash flow was negative $23.7 billion as the company expanded cloud infrastructure. That spending remained tied to AI data center demand and long-term capacity plans.
For Q1 fiscal 2027, Oracle expects revenue growth of 27% to 29%. It also expects cloud revenue to grow 58% to 64% in U.S. dollars. For full fiscal 2027, Oracle confirmed $90 billion in revenue guidance and raised non-GAAP EPS guidance to $8.05.
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