Oracle reported adjusted earnings of $2.11 per share for the fiscal fourth quarter ended in May, with revenue of $19.18 billion. Analysts had expected, on average, $1.97 per share and $19.09 billion in revenue, so the company beat consensus on those headline metrics.
Investors, however, focused on Oracle's cloud segment: total cloud revenue amounted to $9.91 billion, below the analyst consensus of $9.99 billion. The shortfall was driven largely by the Cloud Applications business, which generated $4.13 billion in revenue versus the $4.17 billion that analysts had forecast.
A bright spot was Oracle Cloud Infrastructure (OCI), the company’s infrastructure cloud service, which produced $5.79 billion in revenue—slightly above the $5.72 billion expected. That indicates continued demand for AI data centers and compute capacity.
RPO and longer-term target
Oracle said its Remaining Performance Obligations (RPO)—the value of signed but unfulfilled contracts—rose to $638 billion, significantly above the $589.5 billion analysts had anticipated. The company also reiterated its prior target of reaching $90 billion in revenue in fiscal 2027.
Nearly $40 billion capital-raising plan and market reaction
Simultaneously with the earnings release, Oracle announced plans to raise roughly $40 billion in financing, through a mix of debt and equity. The proceeds are intended primarily for building new data centers and expanding AI infrastructure.
Markets reacted to the combination of the weaker-than-expected total cloud revenue and the large planned capital raise: Oracle shares fell by about 10% in after-hours trading.
Why this matters
The report delivered a mixed message. Operational results and OCI’s growth point to persistent demand for cloud and AI-related capacity, while slower growth in Cloud Applications and the sizeable capital-raising plan raised short-term investor concerns. At the same time, the rise in RPO improves visibility into future contract-backed revenue.
This article is not investment advice or a recommendation.
