01—Abstract
Summary
Summary of the 10-Q filed March 11, 2026. Cited figures are marked; the original filing is the authoritative source.
Oracle Corporation's (ORCL) third quarter and year-to-date results for the period ending February 28, 2026, indicate robust growth, primarily driven by its cloud and software business.
Total revenues saw a significant increase year-over-year, with cloud revenues, particularly from infrastructure, showing substantial expansion. This growth is supported by increased investment in data center capacity. The company's balance sheet reflects a substantial increase in cash and cash equivalents, largely due to strong operating cash flows and significant debt issuances, including $43 billiona in senior notes.
Oracle also successfully issued $5 billionb in Mandatory Convertible Preferred Stock. While debt levels have increased, the company maintains compliance with its covenants and appears to have sufficient liquidity. Profitability remains strong, with an increase in operating income.
However, increased operating expenses, particularly in cloud infrastructure and research and development, are notable. The company also reported significant restructuring charges related to its 2026 Restructuring Plan. Investors should monitor the ongoing shift towards cloud services and the associated investments and expense growth.
02—Key points
Key Highlights
- Total revenues increased by 22% to $17.19 billion in Q3 fiscal 2026 compared to the prior year period.
- Cloud revenues grew significantly, up 24% to $15.03 billion for the cloud and software segment in Q3 fiscal 2026.
- Net income increased to $3.72 billion ($1.27 diluted EPS) for Q3 fiscal 2026, up from $2.94 billion ($1.02 diluted EPS) in Q3 fiscal 2025.
- The company issued $43.0 billion in senior notes during the first nine months of fiscal 2026, increasing its debt.
- Cash, cash equivalents, and marketable securities significantly increased to $39.13 billion as of February 28, 2026.
- Operating expenses rose by 20% to $11.73 billion in Q3 fiscal 2026, driven by cloud infrastructure investments and R&D.
- A new $10.0 billion revolving credit agreement was entered into in March 2026.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed March 11, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $17.19B$14.13B | +21.7% |
| R&D Expenses | $2.61B$2.43B | +7.3% |
| Operating Expenses | $11.73B$9.77B | +20.0% |
| Operating Income | $5.46B$4.36B | +25.4% |
| Interest Expense | $1.18B$892.00M | +32.3% |
| Net Income | $3.72B$2.94B | +26.7% |
| EPS (Basic) | $1.29$1.05 | +22.9% |
| EPS (Diluted) | $1.27$1.02 | +24.5% |
| Shares Outstanding (Basic) | 2.87B2.80B | +2.7% |
| Shares Outstanding (Diluted) | 2.91B2.87B | +1.3% |
05—Questions
Frequently Asked Questions
What is driving Oracle's revenue growth?
Oracle's revenue growth is primarily driven by its Cloud and Software business, particularly strong performance in Cloud Applications and Cloud Infrastructure. Customers are increasingly adopting Oracle's cloud offerings, leading to sustained revenue increases in this segment.
How has Oracle's financial position changed, particularly regarding debt and cash?
Oracle has significantly increased its cash, cash equivalents, and marketable securities, reaching $39.13 billion as of February 28, 2026. This increase is largely due to substantial proceeds from issuing $43.0 billion in senior notes and $5.0 billion in Mandatory Convertible Preferred Stock, alongside strong operating cash flows. While debt levels have risen, the company reports compliance with covenants and adequate liquidity.
What is the impact of the company's investments in cloud infrastructure?
The company is making significant investments in its cloud infrastructure to meet growing customer demand. This is reflected in the substantial increase in cloud and software expenses, particularly infrastructure costs. While these investments are driving revenue growth, they are also increasing operating expenses.
Are there any significant legal proceedings that could impact Oracle?
Oracle is involved in several legal proceedings, including a class action lawsuit in the Netherlands concerning privacy regulations and a securities class action regarding its cloud infrastructure business. The company believes it has meritorious defenses in both cases and does not expect a material impact on its financial position or results of operations.
06—Continue