Oracle Posts Record Quarter as Cloud Infrastructure Revenue Nearly Doubles
Oracle posted record Q4 revenue of $19.2B on Wednesday, beating Wall Street estimates on both the top and bottom lines.
Its cloud infrastructure business grew 93% year-over-year. Shares fell in after-hours trading on concerns about the company's $90B capital expenditure plan for fiscal 2027.
Non-GAAP earnings per share came in at $2.11 for the quarter, ahead of analyst expectations of $1.97, per Yahoo Finance.
Total Q4 revenue of $19.18B topped the consensus estimate of $19.09B.
Cloud Infrastructure, or IaaS, revenue hit $5.8B in Q4, beating analyst estimates of $5.72B.
Total cloud revenue of $9.9B came in just below the $9.99B Wall Street had penciled in, per Yahoo Finance.
Backlog Points to Demand Beyond the Quarter
Remaining performance obligations — a measure of signed contracts not yet fulfilled — reached $638B at the end of Q4. That figure came in well ahead of analyst expectations of $589.5B, per Yahoo Finance. It represented a 363% increase year-over-year.
Much of that jump came from large-scale AI contracts where customers either prepaid Oracle for GPUs or supplied their own hardware directly. The prepaid and customer-supplied portions of those AI contracts now total $75B. Oracle says this reduces the capital it must raise for datacenter construction.
For the full fiscal year 2026, total revenue reached $67.4B, up 17% year-over-year. Full-year cloud revenue came in at $34B, up 39%. IaaS climbed 77% to $18.1B. Full-year operating cash flow hit a record $32B, up 54%.
The $90B Spending Plan
Oracle said it plans to spend as much as $90B on capital expenditures in fiscal 2027, well ahead of Wall Street's estimate of $69.24B. To fund the buildout, Oracle plans to raise roughly $40B through a mix of debt and equity. That includes a previously announced $20B at-the-market equity issuance.
Free cash flow was negative $23.7B for fiscal 2026 as those investments ramped up, per the earnings release. In fiscal 2026, Oracle raised $43B in debt financing. It also raised $5B in equity to fund its infrastructure expansion.
For Q1 FY2027, Oracle guided for total revenue growth of 27% to 29% in US dollar terms. Cloud revenue growth is expected to come in between 58% and 64%. The company reaffirmed its full-year FY2027 target of $90B in total revenue. It also raised its non-GAAP EPS guidance to $8.05.
On the same day as earnings, the Trump administration awarded Oracle a contract to build a government-wide cloud-based HR platform. The platform would replace the individual systems of federal agencies.
The Office of Personnel Management said it completed hands-on testing and live demonstrations before selecting Oracle. Contract value wasn't disclosed, with final cost depending on data migration complexity and security requirements, per Reuters.
