A month has gone by since the last earnings report for Oracle (ORCL Quick QuoteORCL - Free Report) . Shares have added about 17.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Oracle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

Oracle Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Oracle reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.70 per share, which beat the Zacks Consensus Estimate by 3.66% and increased 5% year over year in USD and 3% in constant currency (cc).

Revenues rose 11% in USD and cc year over year to $15.9 billion, driven by continued momentum from its Oracle Cloud Infrastructure (“OCI”) business, including winning cloud-computing contracts from AI-focused startups. The figure beat the Zacks Consensus Estimate by 2.31%, encouraging investors’ enthusiasm for the company’s ascendant cloud business.

Revenues from the Americas increased 12.2% year over year to $10.03 billion and accounted for 63.1% of total revenues. Europe/Middle East/Africa climbed 12.9% year over year to $3.99 billion and contributed 25.1% of total revenues. The remaining revenues came from Asia Pacific, which increased 3.9% year over year to $1.87 billion.

ORCL's Q4 Top-Line Details

Cloud services and license support revenues increased 14% year over year and in cc to $11.7 billion, driven by OCI, strategic cloud applications and cloud database services. Cloud license and on-premise license revenues increased 9% year over year (up 8% at cc) to $2 billion. 

The company's strategic SaaS products are seeing strong bookings and higher renewal rates, contributing to accelerated growth.

Total cloud revenues (SaaS plus IaaS) were up 27% year over year at $6.7 billion. Cloud Infrastructure (IaaS) revenues came in at $3 billion, up 52% year over year. Cloud Application (SaaS) revenues of $3.7 billion increased 12% year over year.

Fusion Cloud ERP (SaaS) revenues came in at $1 billion, up 22% year over year. NetSuite Cloud ERP (SaaS) revenues of $1 billion increased 18% year over year. 

Hardware revenues were $850 million, up 1% year over year (flat in cc). Services revenues decreased 2% year over year and in cc to $1.34 billion.

Oracle is currently live in 23 cloud regions with its database in cloud services and has another 47 planned. Database subscription revenues, which include database license support, were up 7%. 

Infrastructure subscription revenues in the quarter, which include license support, were $6.7 billion, up 19%. Application subscription revenues, which include product support, were $5 billion, up 8% year over year. 

The company’s strategic back-office SaaS applications now have annualized revenues of $9.3 billion and were up 20%. Software license revenues were up 8% to $2 billion.

Oracle Cloud Infrastructure consumption revenues were up 62% and demand continues to dramatically outstrip supply. Infrastructure cloud services now have an annualized revenues of nearly $12 billion. Cloud database services, which were up 31%, now have annualized revenues of $2.6 billion. Autonomous Database consumption revenue was up 47% on top of the 27% growth reported last year.

As on-premise databases migrate to the cloud, either on OCI directly or through the company’s database at cloud services with Azure, Google or AWS, Oracle now expects that cloud database revenues collectively will be the third driver of revenue growth alongside OCI and strategic SaaS.

Operating Details of Oracle

The non-GAAP total operating expenses increased 16% year over year and in cc to $8.86 billion.

The non-GAAP operating income was $7.03 billion, up 5% year over year and 4% at cc. The non-GAAP operating margin was 44%, which contracted 244 basis points (bps) on a year-over-year basis and 266 bps in cc.

ORCL’s Q4 Balance Sheet & Cash Flow

As of May 31, 2025, Oracle had cash & cash equivalents and marketable securities of $11.2 billion compared with $17.8 billion as of Feb. 28, 2025.

Operating cash flow came in at $20.8 billion and negative free cash flow came in at $394 million.

ORCL’s remaining performance obligations now stand at $138 billion, up $8 billion sequentially and 41% from last year.

Cloud RPO grew 56% on top of the 80% growth last year and now represents nearly 80% of total RPO. Approximately 33% of the total RPO is expected to be recognized as revenues over the next 12 months.

The company purchased more than 1 million shares for a total of $150 million. Oracle also announced that its board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock. This increased dividend will be paid to stockholders of record as of the close of business on July 10, 2025, with a payment date of July 24, 2025.

Guidance

For the first quarter of fiscal 2026, Oracle provided specific financial targets assuming current currency exchange rates. Total revenues are expected to grow 11-13% in cc and 12-14% in USD. Total cloud revenues are projected to grow 26-30% in both cc and USD. Non-GAAP earnings per share are expected to be in the range of $1.44-$1.48 in cc (representing 4-6% growth) and between $1.46 and $1.50 in USD (representing 5-7% growth). The guidance assumes a base tax rate of 19%, though management noted that one-time tax events could cause actual rates to vary. Currency is expected to have a modest 2 cents positive effect on EPS and a flat to 1% positive effect on revenues, depending on rounding.

Oracle provided robust guidance for fiscal 2026, expressing strong confidence in accelerating growth rates. The company expects total cloud revenues (applications plus infrastructure) to grow more than 40% in cc, representing a significant acceleration from the 24% growth achieved in fiscal 2025. Cloud infrastructure revenues are projected to grow even more dramatically at over 70%, up from 51% in the prior year. Total company revenues are expected to reach at least $67 billion, representing 16% growth in cc and exceeding their previous guidance by more than $1 billion. RPO is anticipated to grow more than 100% in fiscal 2026, reflecting strong contracted future business.

Oracle also indicated that capital expenditures will increase substantially to more than $25 billion in fiscal 2026, up from $21.2 billion in fiscal 2025, as they work to meet overwhelming demand from their backlog and bring more capacity online. Management expressed confidence that this increased investment will drive further revenues and profit growth acceleration.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates review.

VGM Scores

Currently, Oracle has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of F on the value side, putting it in the bottom 20% quintile for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Oracle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Oracle is part of the Zacks Computer - Software industry. Over the past month, Synopsys (SNPS Quick QuoteSNPS - Free Report) , a stock from the same industry, has gained 14.4%. The company reported its results for the quarter ended April 2025 more than a month ago.

Synopsys reported revenues of $1.6 billion in the last reported quarter, representing a year-over-year change of +10.3%. EPS of $3.67 for the same period compares with $3.00 a year ago.

For the current quarter, Synopsys is expected to post earnings of $3.84 per share, indicating a change of +12% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Synopsys has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.