Oracle Q1 Earnings Beat Estimates, Cloud Growth Accelerates

Oracle ORCL reported first-quarter fiscal 2027 non-GAAP earnings of $1.92 per share, which beat the Zacks Consensus Estimate by 10.3% and increased 30% in dollar terms and 30% in constant currency (cc) on a year-over-year basis.

Total quarterly revenues increased 30% year over year to $19.3 billion, which beat the consensus mark by 1.11%, reflecting extraordinarily strong demand for Oracle's industry-leading cloud infrastructure and applications suites, particularly from AI-focused enterprises.

Cloud revenues (IaaS + SaaS) increased 62% to $11.6 billion, driven by 121% growth in Cloud Infrastructure (IaaS) and a 10% rise in Cloud Applications (SaaS). This marked a dramatic acceleration in cloud infrastructure growth compared with the prior quarter's 93% growth rate, signaling unprecedented momentum from AI and high-performance computing customer demand.

Oracle's Remaining Performance Obligations ended the first quarter at $664 billion, up $209 billion from the prior year and $26 billion sequentially from the end of the fiscal fourth quarter. The company booked more than $30 billion of additional AI cloud contracts in the fiscal first quarter, with most representing large-scale AI infrastructure deals where customers prepaid for cloud infrastructure capacity. This substantial backlog provides exceptional visibility into future revenue growth.

Oracle Corporation Price, Consensus and EPS Surprise

Oracle Corporation price-consensus-eps-surprise-chart | Oracle Corporation Quote

ORCL's Q1 Top-Line Details

Cloud Infrastructure revenues (IaaS) surged 121% in USD and 120% in cc to $7.4 billion, marking a notable acceleration from the fiscal fourth quarter's 93% growth rate. Cloud Application revenues (SaaS) were $4.2 billion, up 10% in USD and 10% in cc.

Total cloud revenues (SaaS plus IaaS) surged 62% in USD and 61% in cc to $11.6 billion, demonstrating that cloud remains the dominant driver of Oracle's growth trajectory. Cloud revenues now represent 60% of total quarterly revenues, reflecting the significant shift in the business toward infrastructure and applications.

Software revenues were down 3% to $5.5 billion, reflecting customers' continued migration from on-premises software to the Cloud. Services revenues were $1.4 billion, up 5%, and Hardware revenues were $0.8 billion, up 15%.

Operating Details of Oracle

Oracle generated first-quarter GAAP operating income of $6.7 billion, up 57%, while non-GAAP operating income rose to $8.2 billion, up 31%, driven by strong revenue growth and the scale benefits from cloud infrastructure expansion.

GAAP net income available to common shareholders reached $4.7 billion, up 60%, and non-GAAP net income available to common shareholders grew to $5.8 billion, up 34%. Fiscal first-quarter GAAP earnings per share increased to $1.56, up 55%, and non-GAAP earnings per share climbed to $1.92, up 30%.

ORCL's Balance Sheet & Cash Flow

Oracle's high operating income translated to a record fiscal first-quarter operating cash flow of $23 billion, up 184%. However, free cash flow was negative $5.4 billion for the fiscal first quarter as Oracle continued aggressive capital investment to support cloud infrastructure growth and customer demand.

Oracle completed a $20 billion at-the-market equity issuance during the fiscal first quarter, part of its previously disclosed capital investment program. The company spent $28.5 billion on capital expenditures during the quarter, reflecting the massive buildout of data center infrastructure. For fiscal 2027, Oracle expects capital expenditures to reach $90 to $95 billion, primarily for continued infrastructure expansion.

Total notes payable and borrowings stood at approximately $125.3 billion as of Aug. 31, 2026 (current portion of $7.6 billion and non-current portion of $117.7 billion). The board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock, consistent with prior quarters.

Forward Guidance

Oracle provided the following forward-looking guidance for second-quarter fiscal 2027. Total Revenues are expected to grow from 30% to 34% in both cc and USD. Total Cloud revenues are expected to grow between 64% and 70% in cc and 65% and 71% in USD. Non-GAAP earnings per share are expected to be between $1.83 and $1.91 in cc and between $1.85 and $1.93 in USD.

For fiscal 2027, the company raised full-year revenue guidance to at least $90 billion and raised non-GAAP EPS guidance to $8.10, indicating robust confidence in sustained cloud momentum throughout the year.

Zacks Rank & Other Stocks to Consider

Oracle currently carries a Zacks Rank #2 (Buy).

Advanced Energy Industries AEIS, Astera Labs ALAB and ACM Research ACMR are some other top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. AEIS, ALAB and ACMR sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AEIS shares have risen 28.1% in the year-to-date period. The Zacks Consensus Estimate for AEIS’ third-quarter 2026 earnings suggests year-over-year growth of 74.7%. The consensus estimate has been revised upward in the past 30 days.

ALAB shares have gained 64.8% in the year-to-date period. The Zacks Consensus Estimate for ACIW’s third-quarter 2026 earnings indicates a year-over-year growth of 143%. The consensus estimate has been revised upward in the past 30 days.

ACMR shares have surged 77.2% in the year-to-date period. The Zacks Consensus Estimate for ACMR’s third-quarter 2026 earnings suggests a year-over-year rise of 143%. The consensus estimate has been revised upward in the past 30 days.

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