It has been about a month since the last earnings report for Oracle (ORCL Quick QuoteORCL - Free Report) . Shares have lost about 11.9% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Oracle due for a breakout? 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 catalysts.

Oracle Q3 Earnings Beat Estimates, Cloud Growth Fuels Revenues

Oracle reported third-quarter fiscal 2026 non-GAAP earnings of $1.79 per share, which beat the Zacks Consensus Estimate by 5.29% and surged 21% year over year in dollar terms and 16% in constant currency (cc).

Revenues beat the consensus mark by 1.77% and climbed 22% in USD and 18% in cc year over year to $17.2 billion, driven by explosive growth in cloud infrastructure as Oracle continues to establish itself as the destination of choice for AI workloads. This marks the first quarter in over 15 years where both organic total revenues and non-GAAP EPS grew at 20% or more in USD.

Oracle's Remaining Performance Obligations ended Q3 at $553 billion, up 325% from the prior year and up $29 billion sequentially. The majority of Q3's RPO increase related to large-scale AI contracts where most equipment is either funded upfront via customer prepayments or supplied directly by the customer, eliminating the need for Oracle to raise incremental capital for these contracts.

ORCL's Q3 Top-Line Details

Cloud Infrastructure revenues (IaaS) surged 84% in USD and 81% in cc to $4.9 billion, a marked acceleration from the 68% growth reported in the prior quarter. Oracle Cloud Database revenues within IaaS rose 35%, while Multicloud Database revenues soared 531% year over year. The continued buildout of multicloud regions and GPU-powered infrastructure is driving unprecedented demand from AI-focused customers.

Cloud Application revenues (SaaS) were $4.0 billion, up 13% in USD and 11% in cc. Fusion Cloud ERP revenues reached $1.1 billion, up 17% in USD and 14% in cc. NetSuite Cloud ERP revenues also hit $1.1 billion, growing 14% in USD and 11% in cc.

Total cloud revenues (SaaS plus IaaS) surged 44% in USD and 41% in cc to $8.9 billion, accelerating sharply from the 34% growth rate reported in the prior-year quarter. Cloud revenues now account for 52% of Oracle's overall revenues.

Software revenues increased 3% in USD but declined 1% in cc to $6.1 billion. Hardware revenues came in at $714 million, up 2% in USD but down 2% in cc. Services revenues increased 12% in USD and 8% in cc to $1.4 billion.

Operating Details of Oracle

GAAP total operating expenses increased 20% in USD year over year to $11.7 billion. Cloud and software expenses rose 66% to $4.8 billion, reflecting heavy investments in expanding cloud infrastructure capacity to serve accelerating AI demand.

Non-GAAP total operating expenses were $9.8 billion. Non-GAAP operating income was $7.4 billion, up 19% in USD and 14% in cc. Non-GAAP operating margin stood at 43%. GAAP operating income reached $5.5 billion, up 25% in USD and 19% in cc, with GAAP operating margin at 32%.

GAAP net income was $3.7 billion, with diluted GAAP EPS of $1.27, up 24% in USD and 16% in cc. Non-GAAP net income was $5.2 billion, up 23% in USD and 18% in cc.

ORCL's Q3 Balance Sheet & Cash Flow

As of Feb. 28, 2026, Oracle's short-term deferred revenues were $9.9 billion. Over the trailing 12 months, operating cash flow was $23.5 billion, up 13% in USD. Free cash flow for the trailing 12 months was negative $13.2 billion as Oracle continues aggressive investments in data center build-outs to support accelerating cloud and AI demand.

Total notes payable and borrowings stood at approximately $108.1 billion as of Feb. 28, 2026. In February 2026, Oracle announced plans to raise up to $50 billion in debt and equity financing and, within days, raised $30 billion through a combination of investment-grade bonds and mandatory convertible preferred stock, with a record order book that was substantially oversubscribed. The at-the-market equity portion of the financing program had not yet been initiated at the close of the quarter.

The board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock, payable to stockholders of record as of the close of business on April 9, 2026, with a payment date of April 24, 2026.

Strategic Highlights

During the fiscal third quarter, Oracle acquired a 15% equity stake and a board seat in the newly independent TikTok U.S. following the separation of its U.S. data operations from ByteDance. Financial results from this investment will be reflected in fiscal fourth-quarter 2026 via nonoperating income or loss using the equity method.

Oracle continued to advance its AI capabilities with the deployment of more than 1,000 embedded AI agents within Oracle back-office and industry applications, with Fusion applications alone including a thousand AI agents live as part of standard service. The company achieved more than 2,000 customer go-lives in fiscal Q3 across applications and industry suites.

AI code generation technology is enabling Oracle to build more software in less time with fewer people, allowing the company to expand its SaaS application suites across more industries at a lower cost. Notable competitive wins in the third quarter included Memorial Hermann Health System, University of New South Wales, Gray Media, Investec Bank, HID Global Corporation and a major Wall Street bank, each migrating significant workloads from competitors to Oracle Fusion Cloud solutions.

In Abilene, TX, where Oracle and Crusoe are constructing a data center for OpenAI, two buildings are fully operational, and the rest of the campus remains on track. Oracle's 10-gigawatt data center and power build is being funded largely by partners, materially decoupling Oracle's CapEx requirements from out-of-pocket expenditures.

Guidance

For the fourth quarter of fiscal 2026, Oracle provided the following forward-looking guidance assuming current currency exchange rates. Total cloud revenues are expected to grow from 44% to 48% in cc and from 46% to 50% in USD. Total revenues are expected to grow from 18% to 20% in cc and from 19% to 21% in USD. Non-GAAP earnings per share are expected to grow between 15% and 17%, coming in the range of $1.92-$1.96 in cc and $1.96-$2.00 in USD.

For full-year fiscal 2026, management maintained its revenue expectation of $67 billion and reaffirmed capital expenditure guidance of $50 billion. For fiscal 2027, Oracle raised its total revenue guidance to $90 billion, up from the prior $89 billion target, reflecting confidence in continuing AI-driven demand. Currency is expected to have a 4-percentage-point positive effect on revenues in fiscal Q4 2026.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Oracle has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of C. 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. Notably, Oracle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.