Oracle reported a robust first quarter of fiscal 2027, with total revenue rising 30% to $19.3 billion. The company said growth was driven largely by its cloud business, and within that segment by infrastructure services needed for AI workloads.
Key figures
- Total revenue: $19.3 billion, +30% year-over-year.
- Cloud revenue: $11.6 billion, +62%.
- Cloud infrastructure (IaaS): $7.4 billion, +121% (Bloomberg consensus: $7.19 billion).
- Cloud applications: $4.2 billion, +10%.
- Traditional software business: $5.5 billion, -3%.
Oracle attributed the decline in on-premises software sales to customers continuing to migrate to cloud-based services.
Profitability and EPS
- GAAP operating income: $6.7 billion, +57%.
- Net income: $4.76 billion, up from $2.93 billion a year earlier.
- Adjusted (one-time-item excluded) EPS: $1.92 versus analysts’ $1.75 expectation.
AI infrastructure build-out and contracts
AI is at the center of Oracle’s transformation. The company has been rapidly expanding its own cloud infrastructure to train and run increasingly large AI models and builds data centers for major AI customers, including OpenAI. During the quarter Oracle put an additional 850 megawatts of data-center capacity into service, and said it delivered more than 300,000 GPUs to customers using its AI cloud services since the end of the prior quarter (May-end).
Oracle reported more than $30 billion of new AI cloud contracts in the quarter, and its backlog of contracted but not yet fulfilled orders rose to $664 billion. Management said demand for cloud services tied to training and running AI models continues to exceed available supply.
Investment, cash flow and financing
The rapid expansion comes at a high cost. Oracle spent $28.5 billion on capital expenditures in the quarter, up from $8.5 billion a year earlier. Operating cash flow rose 184% to $23.1 billion, but free cash flow was negative $5.4 billion.
During the quarter the company completed a previously announced share-sale program that raised $20 billion at market prices. Oracle said the structure of its new AI contracts does not require additional capital raising beyond the financing plans it has already disclosed.
Market response and risks
Investors have been closely watching Oracle’s financing needs: the stock had fallen about 38% from its June 1 annual high to the close before the earnings release. TD Cowen analysts pointed to concerns over financing requirements, rising component costs and construction issues at data centers as drivers of the pullback. After the earnings, Oracle shares rose about 4% in after-hours trading.
Outlook
Oracle expects the rapid growth to continue into the next quarter, forecasting revenue growth of 30–34% and cloud revenue expansion of 65–71% in dollar terms. For the full fiscal 2027 year the company is targeting at least $90 billion in revenue and $8.10 of adjusted EPS.
Note: this article is for informational purposes and does not constitute investment advice.
Promotions noted in the source: Portfolio Investment Day (October 21) and AI & Digital Transformation 2026 conference (November 26).
