Oracle Corporation

New York Stock Exchange
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Very Bullish +85

Oracle Announces Fiscal Year 2026 Third Quarter Financial Results - PR Newswire

📈 Total Q3 FY26 revenue hit $17.2 billion, up 22% in USD and 18% in constant currency.

☁️ Cloud revenue surged to $8.9 billion, representing a 44% increase in USD and 41% in constant currency.

🚀 Cloud Infrastructure (IaaS) revenue exploded by 84% in USD to reach $4.9 billion.

💰 Non-GAAP earnings per share rose 21% to $1.79, beating guidance in both USD and constant currency.

🤖 Remaining Performance Obligations jumped 325% year-over-year to $553 billion due to large AI contracts.

📉 Software revenue grew modestly by 3% in USD but declined 1% in constant currency to $6.1 billion.

💵 Oracle raised its FY27 total revenue guidance to $90 billion, up from previous estimates.

🏦 The company successfully raised $30 billion in debt and equity financing shortly after announcing a potential $50 billion program.

💸 Operating cash flow for the last twelve months reached $23.5 billion, a 13% increase in USD.

📅 Q4 FY26 revenue is expected to grow between 18% and 20% in constant currency.

🏭 Capital expenditures for fiscal year 2026 are projected at $50 billion.

💰 A quarterly dividend of $0.50 per share was declared with a payment date of April 24, 2026.

Bullish Signals
  • Total revenue grew 22% in USD and 18% in constant currency, marking the first quarter in over 15 years with double-digit organic growth in both metrics.
  • Cloud revenue accelerated significantly to $8.9 billion, up 44% in USD, driven by strong demand for AI training and inferencing workloads.
  • Non-GAAP earnings per share increased 21% to $1.79, exceeding management's guidance in both USD and constant currency.
  • Remaining Performance Obligations surged 325% year-over-year to $553 billion, indicating a robust pipeline of large-scale AI contracts.
  • Oracle raised its fiscal year 2027 total revenue guidance to $90 billion, signaling strong confidence in future growth prospects.
  • The company successfully executed a capital raise of $30 billion through bonds and mandatory convertible preferred stock with an oversubscribed order book.
  • AI code generation technology is enabling the company to build more software faster with fewer people, improving productivity and margins.
  • Operating cash flow grew 13% in USD to $23.5 billion over the last twelve months, demonstrating strong liquidity generation.
Risk Factors
  • Software revenue declined 1% in constant currency to $6.1 billion, indicating potential headwinds in traditional software licensing or pricing pressures.
  • The company faces intense competition for AI cloud capacity as demand grows faster than supply, which could impact long-term growth rates if not managed.
  • Capital expenditures are expected to reach $50 billion for fiscal year 2026, representing a significant cash outflow required to support infrastructure expansion.
Full Analysis
Oracle Corporation (NYSE: ORCL) reported exceptional financial results for its third quarter of fiscal year 2026, exceeding expectations across key metrics. Total revenue reached $17.2 billion, representing a 22% increase in USD and an 18% rise in constant currency. This marked the first quarter in over 15 years where both organic total revenue and non-GAAP earnings per share grew by 20% or more in USD terms. Cloud performance was a primary driver, with cloud revenue surging to $8.9 billion, up 44% in USD and 41% in constant currency. Specifically, Cloud Infrastructure (IaaS) revenue jumped 84% in USD to $4.9 billion, while Cloud Application (SaaS) revenue grew 13% to $4.0 billion. The company highlighted significant growth in its Oracle Cloud Database segment, which rose 35%, and Multicloud Database Revenue, which saw a massive 531% increase in USD. Profitability metrics also showed strong improvement. Non-GAAP earnings per share increased 21% to $1.79, while GAAP net income reached $3.7 billion. The company's Remaining Performance Obligations (RPO) climbed to $553 billion, a 325% year-over-year increase largely driven by large-scale AI contracts that require minimal incremental capital expenditure from Oracle due to upfront customer funding or equipment supply. Looking ahead, Oracle raised its fiscal year 2027 total revenue guidance to $90 billion and provided specific guidance for the upcoming fourth quarter of fiscal 2026. Management expects Q4 total revenue growth between 18% and 20% in constant currency, with cloud revenue growing between 44% and 48%. The board also declared a quarterly cash dividend of $0.50 per share, payable on April 24, 2026.