Oracle Q4 Earnings Call Highlights

Key Points

• Oracle posted a record fiscal Q4 with revenue of $19.2 billion, up 21%, while full-year revenue topped $67 billion for the first time. Cloud infrastructure revenue jumped 93% and cloud applications rose 10%, reflecting strong AI and cloud demand.
• Future revenue visibility surged as remaining performance obligations climbed to $638 billion, up 363%. Oracle said it signed $67 billion in AI infrastructure contracts during the quarter and now has $75 billion in combined prepaid or bring-your-own-hardware commitments.
• Oracle is ramping up investment and guiding for major growth in fiscal 2027, including about $70 billion in net cash capital expenditures and roughly $40 billion in financing. Management forecasts 34% constant-currency revenue growth for fiscal 2027, with first-quarter cloud revenue expected to rise 58% to 64%.

Oracle NYSE: ORCL reported a record fiscal fourth quarter and outlined plans for another year of heavy capital investment as executives said demand for AI infrastructure, cloud database services and cloud applications is driving a sharp increase in contracted future revenue.

On the company’s fourth-quarter and fiscal 2026 earnings call, Chief Financial Officer Hilary Maxson said revenue reached $19.2 billion in the quarter, up 21% in U.S. dollars. Cloud infrastructure revenue grew 93%, which Maxson attributed to demand for AI workloads and database services, while cloud applications revenue rose 10%.

Non-GAAP operating income increased 22% to $8.6 billion, and non-GAAP earnings per share were $2.11, up 24% in U.S. dollars. Maxson said EPS growth included a one-time net gain on investment; excluding that gain, non-GAAP EPS rose 20%.

For the full fiscal year, Oracle surpassed $67 billion in revenue for the first time. Non-GAAP operating income was $29 billion, up 16%, and non-GAAP EPS was $7.63, up 27%, including one-time investment gains. Excluding those gains, non-GAAP EPS was $6.83. Cash flow from operations was $32 billion, up 54%.

RPO Surges on AI and Cloud Demand

Maxson said Oracle’s remaining performance obligations, or RPO, ended the year at $638 billion, up 363%. She described the figure as “unprecedented” and said it gives the company visibility into future revenue growth backed by long-term customer commitments.

Oracle expects 12% of RPO to be recognized over the next 12 months and another 34% between 13 and 36 months. Maxson said those percentages are expected to accelerate in coming quarters based on the company’s current long-term outlook.

Chief Executive Officer Clay Magouyrk said Oracle signed $67 billion in AI infrastructure contracts during the quarter, with the majority structured as either bring-your-own-hardware or prepaid arrangements. He said Oracle now has $75 billion in combined bring-your-own-hardware or prepaid customer contracts, adding that those contracts have “no degradation in margin” compared with other contracts.

Magouyrk also said Oracle delivered more than 1.2 gigawatts of capacity to customers in fiscal 2026 and expects fiscal first-quarter delivery to approach 1 gigawatt, nearly matching the capacity delivered over the prior four quarters combined. He said global GPU utilization was 97.5% and that, when 35,000 GPUs from 59 customers came up for renewal in the fourth quarter, 49% of customers renewed for 92% of those GPUs, with most of the remaining capacity resold to other customers in the same quarter.

Cloud Applications and Database Businesses Grow

Chief Executive Officer Mike Sicilia said Oracle Cloud Applications generated $4.1 billion in revenue in the quarter, up 10%, while SaaS deferred revenue increased 16%. He said Oracle took thousands of customers live during the quarter, including more than 300 in Fusion alone.

Sicilia cited customer activity including Exelon adopting Oracle’s utilities platform, Wright County Sheriff’s Office going live with Oracle’s Public Safety Suite, Westfield Insurance implementing Fusion ERP and Piraeus Bank going live with Oracle Banking. He also said Oracle continued its electronic health record deployment at the U.S. Department of Veterans Affairs, adding four VA medical centers in Michigan during the quarter and four more in Ohio in early June.

Oracle also said the U.S. Office of Personnel Management announced an agency-wide award to Oracle for Fusion HCM, though Sicilia noted that award was not part of fourth-quarter bookings.

In database, Sicilia said cloud database revenue grew 29% in the quarter, with multi-cloud revenue up 404% year over year and bookings up 325%. He said Oracle is still in the “early innings” of multi-cloud database growth as it opens new regions and partnerships, including with other cloud providers.

AI Agents and New Pricing Models

Sicilia said customers have moved beyond AI experimentation and are looking to deploy “enterprise-grade, complete agentic solutions” to help run their businesses. He said Oracle has delivered more than 1,000 AI agents across its application suites over the past year.

Oracle is also introducing new pricing models for agentic AI features. Sicilia said many AI capabilities in Oracle’s core applications will continue to be included at no extra charge, while customers can buy additional agentic capacity through token bundles usable across application suites. He said Oracle is also introducing outcome-based commercial models, such as pricing interview agents based on the number of candidates screened or hospitality upsell agents based on a percentage of consumer upsell transactions.

During the fourth quarter, Oracle began a limited rollout of token bundles, with 33 customers including Aon Services Corporation and Liberty Energy pre-purchasing tokens for access to more advanced reasoning and models, Sicilia said.

Capital Spending and Fiscal 2027 Outlook

Oracle’s full-year net cash outlay for capital expenditures was $48 billion, including prepayments and timing impacts of about $8 billion. For fiscal 2027, Maxson said Oracle expects net cash outlay for capital expenditures of about $70 billion. That figure includes customer prepayments and timing impacts expected at $20 billion to $25 billion, meaning reported capital expenditures will be higher by that amount.

To support its investment program, Maxson said Oracle expects to raise about $40 billion in debt and equity in fiscal 2027, including a previously announced $20 billion at-the-market equity issuance. She said Oracle does not anticipate raising additional debt funding in calendar 2026.

Oracle guided for fiscal 2027 total revenue growth of 34% in constant currency. Maxson said non-GAAP EPS is expected to be $8.05, up 18% in constant currency, excluding one-time investment gains recorded in fiscal 2026 from Ampere and Bloom Energy.

For the fiscal first quarter of 2027, Oracle expects total revenue growth of 27% to 29% in U.S. dollars, cloud revenue growth of 58% to 64%, and non-GAAP EPS of $1.72 to $1.76, up 17% to 20% in U.S. dollars. Maxson said revenue and earnings are expected to accelerate in the second half of the year as additional data center capacity comes online.

Executives Address Margins, Contracts and Competition

In response to analyst questions about component cost inflation, Magouyrk said recent increases in capital expenditures were largely tied to timing rather than component prices. He said Oracle uses fixed-price contracts when it has certainty on costs, but when supply chain or future cost risks are higher, contracts include mechanisms that allow costs to float so Oracle is not left with reduced margins.

Asked how investors should evaluate returns during the heavy investment period, Maxson said Oracle sees high-20s return on invested capital at steady state for large infrastructure projects at the project level, once revenues have ramped.

On competition in AI data centers, Magouyrk said Oracle remains focused on customer satisfaction and service delivery. He said demand continues to exceed supply, and that Oracle’s ability to design, secure, operate and support large-scale cloud infrastructure is central to retaining and winning customers.

Oracle said it expects to announce fiscal first-quarter 2027 results on September 10 and plans to hold its Investor Day on October 28 in Las Vegas.

About Oracle NYSE: ORCL

Oracle Corporation is a multinational technology company that develops and sells database software, cloud engineered systems, enterprise software applications and related services. The company is widely known for its flagship Oracle Database and a portfolio of enterprise-grade software products that support data management, application development, analytics and middleware. Over recent years Oracle has expanded its focus to include cloud infrastructure and cloud applications, positioning itself as a provider of both platform and software-as-a-service solutions for large organizations.

Oracle's product and service offerings include Oracle Database and the Autonomous Database, Oracle Cloud Infrastructure (OCI), enterprise resource planning (ERP), human capital management (HCM) and supply chain management (SCM) cloud applications (often grouped under Oracle Fusion Cloud Applications), middleware such as WebLogic, and developer technologies including Java and MySQL.

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