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Oracle Q1 Earnings Match Estimates, Cloud Growth Fuels Revenue Rise
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Key Takeaways
Oracle posted Q1 fiscal 2026 earnings of $1.47 per share, meeting estimates and rising 6% Y/Y in USD.
Revenues jumped 12% to $14.9B, driven by major AI cloud contracts with firms like OpenAI and NVIDIA.
Total cloud revenues surged 28% to $7.2B, with infrastructure consumption up 57% and database revenue up 32%.
Oracle (ORCL - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings of $1.47 per share, which met the Zacks Consensus Estimate and increased 6% year over year in USD and 4% in constant currency (cc).
Revenues rose 12% in USD and 11% in cc year over year to $14.9 billion, driven by Oracle becoming the go-to place for AI workloads. The company signed four multi-billion-dollar contracts with three different customers in the first quarter, securing significant cloud infrastructure contracts with leading AI companies, including OpenAI, xAI, Meta, NVIDIA and AMD. The figure lagged the Zacks Consensus Estimate by 0.59%.
Revenues from the Americas increased 15.4% year over year to $9.66 billion, accounting for 64.7% of total revenues. Europe/Middle East/Africa climbed 7.8% year-over-year to $3.48 billion and contributed 23.3% of total revenues. The remaining revenues came from the Asia Pacific region, which increased 4.5% year-over-year to $1.78 billion, representing 11.9% of total revenues.
Oracle Corporation Price, Consensus and EPS Surprise
Software support revenues increased 1% year over year to $4.96 billion, driven by Oracle Cloud Infrastructure, strategic cloud applications and cloud database services. Software license revenues decreased 12% year over year to $766 million, reflecting the continued transition from on-premise to cloud-based solutions.
Cloud Infrastructure revenues came in at $3.3 billion, up 55% in USD and 54% in cc.
Cloud application revenue was $3.8 billion and up 11% in USD and 10% in cc, while strategic back-office application revenue was $2.4 billion, up 16% in cc.
Total cloud revenues (SaaS plus IaaS) were up 28% in USD and 27% in cc to $7.2 billion.
Oracle Cloud Infrastructure consumption revenue was up 57% and demand continues to dramatically outstrip supply. Cloud database services, which were up 32%, now have annualized revenues of nearly $2.8 billion. Autonomous Database revenues were up 43% year over year.
Multi-cloud database revenues, where Oracle Cloud Infrastructure regions are embedded in AWS, Azure and Google Cloud Platform, grew an extraordinary 1,529% in the first quarter.
Fusion Cloud ERP revenues came in at $1 billion, up 17% in USD and 16% in cc. NetSuite Cloud ERP revenues of $1 billion increased 16% in USD and 15% in cc.
Total software revenues for the quarter were $5.7 billion, down 1% in USD and 2% in cc. Software license revenues were down 12% in USD to $766 million. Software support revenues remained stable at $4.96 billion, growing 1% in USD.
Hardware revenues were $670 million, up 2% in USD and 1% in cc. Services revenues increased 7% in USD and 5% in cc to $1.35 billion.
Oracle is currently live in multiple cloud regions and continues expanding its global infrastructure footprint. The company has 34 multi-cloud data centers now live inside of Azure, Google Cloud Platform and AWS, and will deliver another 37 data centers for a total of 71.
Operating Details of Oracle
The non-GAAP total operating expenses increased 14% year over year in cc to $8.69 billion.
The non-GAAP operating income was $6.2 billion, up 9% year over year in USD and 7% in cc. Operating income grew 7% to $6.2 billion. The company has been on an accelerated journey to adopt AI internally to run its operations more efficiently, contributing to improved operational performance despite increased investments in cloud infrastructure capacity.
ORCL’s Q1 Balance Sheet & Cash Flow
As of Aug. 31, 2025, Oracle had cash and cash equivalents and marketable securities of $11 billion compared with $11.2 billion as of May 31, 2025.
Operating cash flow was $8.1 billion, up from $7.4 billion in the prior year. Free cash flow was negative $362 million, reflecting $8.5 billion of capital expenditures tied to new data centre build-outs.
Oracle's Remaining Performance Obligations now stand at $455 billion, up by $317 billion sequentially and 359% from last year.
Cloud RPO grew nearly 500% on top of 83% growth last year and now represents a substantial portion of total RPO. Approximately 33% of the total RPO is expected to be recognized as revenues over the next 12 months.
The company repurchased 440,000 shares for $95 million and paid $1.4 billion in dividends during the quarter.
Oracle also announced that its board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on Oct. 9, 2025, with a payment date of Oct. 23, 2025.
Guidance
For the second quarter of fiscal 2026, Oracle provided specific financial targets assuming current currency exchange rates. Total revenues are expected to grow from 12% to 14% in cc and are expected to grow from 14% to 16% in USD at current exchange rates. Non-GAAP earnings per share are expected to grow between 8% to 10% and be between $1.58 and $1.62 in cc. Non-GAAP earnings per share are expected to grow 10% to 12% and be between $1.61 and $1.65 in USD. The earnings per share guidance assumes a base tax rate of 19%, though management noted that one-time tax events could cause actual rates to vary as they did in the first quarter. Total cloud revenue is expected to grow from 32% to 36% in cc and is expected to grow from 33% to 37% in USD.
Oracle provided ambitious guidance for fiscal 2026, expressing strong confidence in accelerating growth rates. Oracle expects Cloud Infrastructure to grow 77% to $18 billion in fiscal 2026 and then increase to $32 billion, $73 billion, $114 billion and $144 billion over the subsequent four years. Much of the revenue in this five-year forecast is already booked in the reported RPO.
For fiscal year 2026, Oracle remains confident and committed to full-year total revenue growth of 16% in cc. The company expects RPO to likely grow to exceed $0.5 trillion.
Oracle indicated that capital expenditures will increase substantially to around $35 billion in fiscal 2026, up from the previous guidance. The vast majority of capital expenditure investments are for revenue-generating equipment going into data centers and not for land or buildings. The increased investment is expected to drive further revenue and profit growth acceleration as more capacity comes online to convert the large RPO backlog into accelerating revenue and profit growth.
Amphenol’s shares have appreciated 59.5% year to date. The Zacks Consensus Estimate for Amphenol’s 2025 earnings is pegged at $3.03 per share, up 5 cents over the past 30 days, indicating an increase of 60.32% from the year-ago quarter’s reported figure.
F5’s shares have surged 22.9% year to date. The Zacks Consensus Estimate for F5’s fiscal 2025 earnings is pegged at $15.38 per share, up 0.8% over the past 30 days, indicating a gain of 15% from the year-ago quarter’s reported figure.
CrowdStrike’s shares have jumped 20.4% year to date. The Zacks Consensus Estimate for CrowdStrike’s fiscal 2026 earnings per share is pegged $3.67 per share, up 4.9% over the past seven days, indicating a decline of 6.6% from the year-ago quarter’s reported figure.
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Oracle Q1 Earnings Match Estimates, Cloud Growth Fuels Revenue Rise
Key Takeaways
Oracle (ORCL - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings of $1.47 per share, which met the Zacks Consensus Estimate and increased 6% year over year in USD and 4% in constant currency (cc).
Revenues rose 12% in USD and 11% in cc year over year to $14.9 billion, driven by Oracle becoming the go-to place for AI workloads. The company signed four multi-billion-dollar contracts with three different customers in the first quarter, securing significant cloud infrastructure contracts with leading AI companies, including OpenAI, xAI, Meta, NVIDIA and AMD. The figure lagged the Zacks Consensus Estimate by 0.59%.
Revenues from the Americas increased 15.4% year over year to $9.66 billion, accounting for 64.7% of total revenues. Europe/Middle East/Africa climbed 7.8% year-over-year to $3.48 billion and contributed 23.3% of total revenues. The remaining revenues came from the Asia Pacific region, which increased 4.5% year-over-year to $1.78 billion, representing 11.9% of total revenues.
Oracle Corporation Price, Consensus and EPS Surprise
Oracle Corporation price-consensus-eps-surprise-chart | Oracle Corporation Quote
ORCL's Q1 Top-Line Details
Software support revenues increased 1% year over year to $4.96 billion, driven by Oracle Cloud Infrastructure, strategic cloud applications and cloud database services. Software license revenues decreased 12% year over year to $766 million, reflecting the continued transition from on-premise to cloud-based solutions.
Cloud Infrastructure revenues came in at $3.3 billion, up 55% in USD and 54% in cc.
Cloud application revenue was $3.8 billion and up 11% in USD and 10% in cc, while strategic back-office application revenue was $2.4 billion, up 16% in cc.
Total cloud revenues (SaaS plus IaaS) were up 28% in USD and 27% in cc to $7.2 billion.
Oracle Cloud Infrastructure consumption revenue was up 57% and demand continues to dramatically outstrip supply. Cloud database services, which were up 32%, now have annualized revenues of nearly $2.8 billion. Autonomous Database revenues were up 43% year over year.
Multi-cloud database revenues, where Oracle Cloud Infrastructure regions are embedded in AWS, Azure and Google Cloud Platform, grew an extraordinary 1,529% in the first quarter.
Fusion Cloud ERP revenues came in at $1 billion, up 17% in USD and 16% in cc. NetSuite Cloud ERP revenues of $1 billion increased 16% in USD and 15% in cc.
Total software revenues for the quarter were $5.7 billion, down 1% in USD and 2% in cc. Software license revenues were down 12% in USD to $766 million. Software support revenues remained stable at $4.96 billion, growing 1% in USD.
Hardware revenues were $670 million, up 2% in USD and 1% in cc. Services revenues increased 7% in USD and 5% in cc to $1.35 billion.
Oracle is currently live in multiple cloud regions and continues expanding its global infrastructure footprint. The company has 34 multi-cloud data centers now live inside of Azure, Google Cloud Platform and AWS, and will deliver another 37 data centers for a total of 71.
Operating Details of Oracle
The non-GAAP total operating expenses increased 14% year over year in cc to $8.69 billion.
The non-GAAP operating income was $6.2 billion, up 9% year over year in USD and 7% in cc. Operating income grew 7% to $6.2 billion. The company has been on an accelerated journey to adopt AI internally to run its operations more efficiently, contributing to improved operational performance despite increased investments in cloud infrastructure capacity.
ORCL’s Q1 Balance Sheet & Cash Flow
As of Aug. 31, 2025, Oracle had cash and cash equivalents and marketable securities of $11 billion compared with $11.2 billion as of May 31, 2025.
Operating cash flow was $8.1 billion, up from $7.4 billion in the prior year. Free cash flow was negative $362 million, reflecting $8.5 billion of capital expenditures tied to new data centre build-outs.
Oracle's Remaining Performance Obligations now stand at $455 billion, up by $317 billion sequentially and 359% from last year.
Cloud RPO grew nearly 500% on top of 83% growth last year and now represents a substantial portion of total RPO. Approximately 33% of the total RPO is expected to be recognized as revenues over the next 12 months.
The company repurchased 440,000 shares for $95 million and paid $1.4 billion in dividends during the quarter.
Oracle also announced that its board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on Oct. 9, 2025, with a payment date of Oct. 23, 2025.
Guidance
For the second quarter of fiscal 2026, Oracle provided specific financial targets assuming current currency exchange rates. Total revenues are expected to grow from 12% to 14% in cc and are expected to grow from 14% to 16% in USD at current exchange rates. Non-GAAP earnings per share are expected to grow between 8% to 10% and be between $1.58 and $1.62 in cc. Non-GAAP earnings per share are expected to grow 10% to 12% and be between $1.61 and $1.65 in USD. The earnings per share guidance assumes a base tax rate of 19%, though management noted that one-time tax events could cause actual rates to vary as they did in the first quarter. Total cloud revenue is expected to grow from 32% to 36% in cc and is expected to grow from 33% to 37% in USD.
Oracle provided ambitious guidance for fiscal 2026, expressing strong confidence in accelerating growth rates. Oracle expects Cloud Infrastructure to grow 77% to $18 billion in fiscal 2026 and then increase to $32 billion, $73 billion, $114 billion and $144 billion over the subsequent four years. Much of the revenue in this five-year forecast is already booked in the reported RPO.
For fiscal year 2026, Oracle remains confident and committed to full-year total revenue growth of 16% in cc. The company expects RPO to likely grow to exceed $0.5 trillion.
Oracle indicated that capital expenditures will increase substantially to around $35 billion in fiscal 2026, up from the previous guidance. The vast majority of capital expenditure investments are for revenue-generating equipment going into data centers and not for land or buildings. The increased investment is expected to drive further revenue and profit growth acceleration as more capacity comes online to convert the large RPO backlog into accelerating revenue and profit growth.
ORCL’s Zacks Rank and Stocks to Consider
Currently, Oracle carries a Zacks Rank #3 (Hold).
Amphenol (APH - Free Report) , F5 (FFIV - Free Report) and CrowdStrike (CRWD - Free Report) are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
Amphenol, F5 and CrowdStrike sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Amphenol’s shares have appreciated 59.5% year to date. The Zacks Consensus Estimate for Amphenol’s 2025 earnings is pegged at $3.03 per share, up 5 cents over the past 30 days, indicating an increase of 60.32% from the year-ago quarter’s reported figure.
F5’s shares have surged 22.9% year to date. The Zacks Consensus Estimate for F5’s fiscal 2025 earnings is pegged at $15.38 per share, up 0.8% over the past 30 days, indicating a gain of 15% from the year-ago quarter’s reported figure.
CrowdStrike’s shares have jumped 20.4% year to date. The Zacks Consensus Estimate for CrowdStrike’s fiscal 2026 earnings per share is pegged $3.67 per share, up 4.9% over the past seven days, indicating a decline of 6.6% from the year-ago quarter’s reported figure.