10-QPeriod: Q1 FY2027

ORACLE CORP Quarterly Report for Q1 Ended Aug 31, 2026

Filed September 11, 2026For Securities:ORCLORCL-PD

Summary

Oracle Corporation's Q1 FY2027 results show robust top-line growth driven by its Cloud and Software segment, which now represents 89% of total revenues. Total revenues increased by 30% year-over-year to $19.3 billion, with Cloud revenues soaring by 61% and comprising 60% of total revenue. This strong performance, particularly in Cloud Infrastructure, highlights the ongoing strategic shift and customer adoption of Oracle's cloud offerings. Despite significant investments in cloud infrastructure, leading to a substantial increase in capital expenditures and operating expenses, the company demonstrated improved operating income and profitability. Financially, Oracle significantly bolstered its cash position through a $19.9 billion "at-the-market" equity offering, alongside strong operating cash flows. However, free cash flow turned negative primarily due to these substantial capital expenditures aimed at expanding data center capacity. The company maintains a strong liquidity position, with over $37 billion in cash, cash equivalents, and marketable securities, and a substantial remaining performance obligation backlog of $664 billion, indicating strong future revenue potential. Investors should note the strategic investment in cloud infrastructure as a key driver for future growth.

Key Highlights

  • 1Total revenues grew 30% to $19.3 billion, driven by a 33% increase in Cloud and Software revenues.
  • 2Cloud revenues surged 61% to $11.6 billion, now representing 60% of total revenues, with Cloud Infrastructure being a major growth driver.
  • 3Operating income increased by 57% to $6.7 billion, reflecting improved profitability.
  • 4Cash and cash equivalents and marketable securities increased by 16% to $37.1 billion, boosted by a $19.9 billion equity offering.
  • 5Capital expenditures significantly increased by 235% to $28.5 billion, primarily for data center expansion to support cloud growth.
  • 6Remaining performance obligations (RPO) grew to $664 billion, indicating strong future revenue visibility.
  • 7Earnings per share (EPS) increased substantially to $1.56 (diluted) from $1.01 in the prior year.

Frequently Asked Questions

The primary driver of Oracle's revenue growth is its Cloud and Software business, specifically its cloud offerings. Cloud revenues increased by 61% year-over-year, fueled by customer adoption of both Cloud Applications and Cloud Infrastructure.

Oracle has significantly increased its capital expenditures by 235% to $28.5 billion, primarily to expand its data center capacity to support cloud growth. This investment, along with higher cloud and software expenses, led to a substantial increase in operating expenses, though the overall revenue growth has outpaced expense growth, resulting in improved operating income.

The substantial increase in remaining performance obligations to $664 billion from $455 billion a year ago indicates a strong backlog of future contracted revenue. This provides significant visibility into future revenue streams and reflects growing customer commitments to Oracle's cloud and software services.

Oracle raised $19.9 billion in net proceeds from its 'at-the-market' equity offering during the quarter. This significantly boosted the company's cash reserves, contributing to the increase in cash, cash equivalents, and marketable securities to $37.1 billion, and providing substantial liquidity.