Key Takeaways
- Oracle exceeded Q4 expectations with adjusted EPS of $2.03 versus $1.96 anticipated, and revenue reaching $19.18 billion against $19.10 billion forecasts
- Shares plummeted roughly 10% in after-hours trading following disclosure of an additional $40 billion capital raise planned for fiscal 2027 through debt and equity
- Cloud infrastructure sales skyrocketed 93% annually to $5.8 billion, though legacy software revenue declined 2%
- The company’s remaining performance obligation (RPO) surged 363% to $638 billion, with over half attributed to one major multi-year agreement with OpenAI
- Fiscal 2027 capital spending is projected at approximately $70 billion, following negative free cash flow of $23.7 billion in fiscal 2026
Despite surpassing Wall Street’s fourth-quarter projections for both top and bottom lines, Oracle couldn’t escape a sharp selloff. Shares of ORCL tumbled roughly 10% during extended trading hours following management’s announcement of an additional $40 billion fundraising initiative to support its artificial intelligence infrastructure expansion.
The technology giant’s shares had gained only 3% year-to-date through Wednesday’s close, trailing the S&P 500’s 6% advance.
In the quarter that concluded on May 31, Oracle delivered adjusted earnings per share of $2.03, exceeding the Street’s $1.96 estimate. Total revenue reached $19.18 billion, marginally above the anticipated $19.10 billion, representing a 21% year-over-year increase.
The company reported net income of $4.22 billion, translating to $1.45 per share, compared with $3.43 billion in the prior-year period.
Cloud Shines While Software Struggles
Oracle Cloud Infrastructure sales exploded 93% to reach $5.8 billion, extending the robust growth trajectory seen in recent quarters.
However, software — traditionally Oracle’s cornerstone business — showed weakness. Traditional software revenue contracted 2%, while cloud-based software also underperformed expectations. Total software revenue expanded a modest 2% to $11 billion.
Co-CEO Mike Sicilia recognized some “delayed decision cycles” among enterprise customers in recent quarters but expressed confidence that demand for mission-critical software is rebounding.
Management reaffirmed its fiscal 2027 revenue objective of $90 billion. The company elevated its adjusted EPS projection to $8.05, surpassing the analyst consensus of $8.01. First-quarter guidance indicated 27% to 29% revenue expansion and adjusted earnings per share between $1.72 and $1.76, both marginally exceeding Wall Street forecasts.
Massive Capital Deployment Continues
Oracle disclosed that it secured $43 billion through debt offerings and $5 billion via equity issuance during fiscal 2026. The company now intends to raise an additional $40 billion in fiscal 2027 — including a previously announced $20 billion share offering.
Capital expenditures exploded 162% to $55.7 billion in fiscal 2026, with management projecting approximately $70 billion for fiscal 2027 — not including $20 billion to $25 billion in direct customer prepayments.
The company generated negative free cash flow of $23.7 billion for the full year, while depreciation expenses nearly doubled to $7.62 billion.
The remaining performance obligation — representing contracted but not yet recognized revenue — soared 363% to $638 billion. Bank of America analysts highlighted that OpenAI accounts for more than 50% of this backlog through a single contract.
Oracle also indicated plans to activate nearly one gigawatt of computing capacity in the current quarter — approximately matching its entire fiscal 2026 deployment.
The quarter saw Oracle appoint 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.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
