Oracle 2026 Q2 Earnings Strong Revenue Growth and Record Net Income

Oracle reported robust fiscal 2026 Q2 results on Dec 10th, 2025, with revenue and earnings surpassing expectations. The company demonstrated significant momentum in cloud infrastructure and AI adoption, while maintaining long-term profitability.

Oracle’s Q2 revenue surged 14.2% year-over-year to $16.06 billion, driven by strong performance across cloud and software segments. The company raised guidance for cloud growth and emphasized disciplined capital allocation to support AI expansion.

Revenue

Oracle’s revenue growth was fueled by its cloud and software businesses, with cloud infrastructure revenue rising 68% to $4.08 billion. Software license sales, however, declined 21% year-over-year to $939 million, contributing to a 3% drop in overall software revenue to $5.88 billion. Hardware revenue remained relatively stable at $776 million, while services revenue grew 7.4% to $1.43 billion. The company’s total cloud revenue reached $7.98 billion, reflecting 34% year-over-year growth.

Earnings/Net Income

Oracle’s earnings surged with a 89.4% year-over-year increase in EPS to $2.14 and a 94.7% rise in net income to $6.13 billion. This marks 20+ years of consecutive profitability, underscoring operational resilience amid strategic investments in AI and cloud infrastructure.

Price Action

Oracle’s stock edged up 0.55% in the latest trading day, gaining 7.36% for the week but declining 6.79% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Oracle shares on the earnings beat date and selling 30 days later yielded moderate returns but underperformed the market. With a CAGR of 7.19%, the strategy trailed the benchmark by 31.34%. A maximum drawdown of 0.00% and a Sharpe ratio of 0.27 indicated minimal risk but limited growth potential.

CEO Commentary

CEOs Mike Sicilia and Clay Magouyrk highlighted cloud infrastructure growth (66% YoY), AI adoption, and cross-selling synergies. Sicilia emphasized 11% Q2 cloud apps revenue growth and the “One Oracle” strategy, while Magouyrk noted 400 MW of new capacity and disciplined capital allocation.

Guidance

Oracle projected Q3 FY26 cloud revenue growth of 37%-41% (constant currency) and 40%-44% (USD), with total revenue growth of 16%-18%. Non-GAAP EPS guidance stood at $1.64-$1.68 (constant currency) and $1.70-$1.74 (USD). CapEx is expected to increase by ~$15B YoY due to RPO monetization.

Additional News

Oracle’s $2.7 billion sale of its Ampere stake to SoftBank boosted earnings but raised questions about long-term chip strategy. The company also announced a $300 billion OpenAI partnership, securing computing power for AI infrastructure. Additionally, co-CEOs Mike Sicilia and Clay Magouyrk reaffirmed Oracle’s commitment to maintaining an investment-grade debt rating amid aggressive cloud expansion.

Oracle’s shares dropped 11% post-earnings due to revenue missing estimates and weak guidance, despite a record $523 billion RPO backlog. The company’s focus on AI and cloud infrastructure remains central to its growth strategy.