Oracle Corp. sees about 50% of its backlog convert into sales over the next 36 months.

  • Revenue in the cloud infrastructure division soared 121% to $7.4 billion, beating consensus expectations. 
  • Remaining performance obligations surged to a record $664 billion following more than $30 billion in new AI cloud contract bookings during the quarter. 
  • Oracle raised its full-year fiscal 2027 revenue forecast to at least $90 billion and adjusted EPS expectations to $8.10. 

Oracle Corp. (ORCL) stock jumped about 7% after-hours on Thursday after the cloud services provider’s first-quarter results showed triple-digit growth in its cloud infrastructure business as the tech giant expands its footprint in artificial intelligence.

For the quarter ended August, the company posted earnings of $1.92 per share, surpassing analyst consensus estimates of $1.74 per share, as per Fiscal.ai. Total revenue jumped 30% year over year to $19.35 billion, exceeding Wall Street projections of $19.14 billion.

AI Demand And Infrastructure Expansion

Oracle's focus on positioning itself as a core provider of AI computing power and building data center capacity for customers like OpenAI, Nvidia, Uber, Amazon AWS, and Microsoft Azure proved pivotal during the quarter. Cloud revenue soared 62% to $11.6 billion, outperforming expectations of $11.51 billion.

“We completed our planned Azure and AWS regional footprint expansion, reaching 70 multi-cloud database regions and 119 availability zones,” Chief Executive Officer Clay Magouyrk said in the earnings call. 

Cloud infrastructure was the standout performer, with sales more than doubling to $7.4 billion, up 121% versus analyst forecasts of $7.09 billion to $7.19 billion. Oracle added 850 megawatts of data center capacity and delivered over 300,000 GPUs to customers during the quarter.

Meanwhile, Oracle booked more than $30 billion in additional AI cloud contracts in Q1, increasing its remaining performance obligations, or backlog, to $664 billion. Based on how those new contracts are structured, Oracle confirmed there is no incremental impact on its plans to raise capital. 

“We now expect around half of our RPO (Remaining Performance Obligations) to convert into sales over the next 36 months,” Oracle CFO Hilary Maxson told in an earnings call.  

However, the company's software segment declined 3%, generating $5.5 billion in revenue and slightly missing consensus estimates of $5.61 billion.

Capital Expenditure And Financing

To sustain its rapid expansion, Oracle reported $28.5 billion in capital expenditures for the quarter. Chief Financial Officer Hilary Maxson affirmed the company’s forecast of $70 billion in full-year capital spending, with an additional $20 billion to $25 billion allocated for prepayments of essential components.

During the quarter, Oracle completed a previously announced $20 billion at-the-market equity offering. The company confirmed that its $30 billion in newly booked AI cloud contracts will have no incremental impact on its capital-raising plans. Total debt stands at $125 billion, and heavy spending kept free cash flow negative.

ORCL Stock: Q2 FY27 And Full FY2027 Guidance

For the second quarter of fiscal 2027, Oracle projects total revenue growth of 30% to 34%, beating analyst expectations of 32%, and earnings of $1.85 to $1.93 per share, compared to expectations of $1.89 per share.

The firm expects Q2 cloud revenue growth of 65% to 71%. For the full fiscal year 2027, Oracle raised its targets, with total revenue expected to reach at least $90 billion, ahead of the $89.76 billion consensus.

ORCL Stock: Retail View 

Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘extremely high’ message volumes. 

ORCL shares has lost 21.2% year-to-date. 

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