Oracle Shares Rally as Cloud Infrastructure Revenue Surges in Q1

Oracle shares surged 7% in extended trading on Thursday after the software provider reported stronger-than-expected quarterly results.

Here is how the company performed relative to LSEG consensus:

• Earnings per share: $1.92 adjusted vs. $1.74 expected
• Revenue: $19.35 billion vs. $19.14 billion expected

Oracle’s revenue increased 30% year over year in the fiscal first quarter, which concluded on August 31, according to a statement. Net income reached $4.68 billion, or $1.56 per share, up from $2.93 billion, or $1.01 per share, a year ago.

For the fiscal second quarter, Oracle projected adjusted earnings per share of $1.85 to $1.93, with revenue growth ranging from 30% to 34%. LSEG-surveyed analysts anticipated $1.89 in adjusted earnings per share and $21.20 billion in revenue, indicating 32% growth.

Much of Oracle’s expansion is driven by data center growth as it seeks to establish a larger footprint in the artificial intelligence boom. However, the company maintains a weaker cash position than hyperscaler competitors and carries a lower credit rating. Free cash flow has been negative since last year, and the company currently holds $125 billion in debt.

During the quarter, the company reported delivering 850 megawatts of data center capacity.

As of Thursday’s close, Oracle shares had fallen 22% year-to-date, while the S&P 500 gained roughly 11%.

Cloud revenue surged 62% during the quarter to $11.6 billion, exceeding the $11.51 billion consensus among analysts polled by StreetAccount. Revenue from cloud infrastructure more than doubled to $7.4 billion, surpassing the $7.09 billion consensus estimate.

Oracle’s software category contributed $5.5 billion in revenue, a 3% decline that fell short of StreetAccount’s $5.61 billion consensus.

For the 2027 fiscal year, Oracle now expects adjusted earnings per share of $8.10 on at least $90 billion in revenue. LSEG consensus had called for $8.07 in earnings per share and $89.76 billion in revenue.

At the end of the quarter, Oracle’s remaining performance obligations stood at $664 billion, exceeding StreetAccount’s $630.6 billion consensus. This sum includes contracted but unrecognized revenue, deferred revenue, and uncollected invoices. According to the statement, new AI contracts will not impact Oracle’s plans to raise capital.

During the quarter, Oracle announced AI agents for human resources teams and secured a Pentagon contract worth up to $7 billion over a decade.

Executives will discuss the results with analysts on a conference call beginning at 5 p.m. ET.

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