Oracle shares rose as much as 10% in extended trading on Tuesday after the software vendor reported quarterly results that surpassed Wall Street projections and boosted its revenue guidance for fiscal 2027.
Oracle sees $1.92 and $1.96 in adjusted earnings per share for the fiscal fourth quarter, with revenue growth between 19% and 20%. LSEG’s consensus included $1.70 per share and 20% revenue growth.
Here’s how the company did in the quarter relative to LSEG consensus:
- Earnings per share: $1.79 adjusted vs. $1.70 expected
- Revenue: $17.19 billion vs. $16.91 billion expected
Oracle’s overall revenue increased 22% year over year in the fiscal third quarter, which ended on Feb. 28, according to a statement. Net income rose to $3.72 billion, or $1.27 a share, from $2.94 billion, or $1.02 a share, in the same quarter a year earlier. Adjusted earnings per share excludes stock-based compensation expense.
The company reported $8.9 billion in total cloud revenue, including infrastructure and software as a service, or SaaS. The number was up 44% and more than the $8.85 billion consensus among analysts surveyed by StreetAccount.
Management pushed up the company’s fiscal 2027 revenue forecast by $1 billion to $90 billion. Analysts polled by LSEG had anticipated $86.6 billion.
Oracle said it generated $4.9 billion in cloud infrastructure revenue, up 84%, a faster pace than the 68% growth in the prior quarter. The company touted cloud business from Air France-KLM, Lockheed Martin, SoftBank Corp. and Microsoft’s Activision Blizzard video game subsidiary.
Shares of Oracle have plummeted over 50% from their September highs, falling along with other software vendors on broader artificial intelligence concerns as well as Wall Street’s specific fears about the company’s hefty debt load that’s funding its AI buildout.
“Thank God we have these coding tools now that allow us to build a comprehensive set of software, agent-based software, to implement, to automate a complete ecosystem like healthcare or financial services,” Larry Ellison, Oracle’s co-founder, technology chief and executive chairman, said on a conference call with analysts. “That’s what we’re doing at Oracle. That’s why we think we’re a disruptor. That’s why we think the SaaS apocalypse applies to others but not to us.”
As of Tuesday’s close, the stock had declined 23% in 2026, while the S&P 500 is down less than 1% in the same period.
Oracle has won large contracts to deliver cloud infrastructure to AI companies such as OpenAI, but has less cash on hand than larger competitors such as Amazon and Microsoft.
Renting out Nvidia graphics chips ekes out a smaller profit margin than selling software licenses, and Oracle reported $13.18 billion in negative free cash flow for the past 12 months.
During the quarter, Oracle announced plans to raise $45 billion to $50 billion in the fiscal year to expand its cloud infrastructure capacity. The company is planning for over 10 gigawatts worth of computing power coming online in the next three years, Clay Magouyrk, its other CEO, said on the call.
The across-the-board beat may help settle a nervous investor base, at least for the time being, as Oracle’s results and backlog point to a continuing surge in demand for AI infrastructure. Remaining performance obligations more than quadrupled to $553 billion from a year earlier — although it was slightly lower than StreetAccount’s $556 billion consensus — and the company said it has the capital to support that growth.
“Most of the increase in RPO in Q3 related to large scale AI contracts where Oracle does not expect to have to raise any incremental funds to support these contracts as most of the equipment needed is either funded upfront via customer prepayments so Oracle can purchase the GPUs, or the customer buys the GPUs and supplies them to Oracle,” the company said in the statement.
In Abilene, Texas, where Oracle and Crusoe are constructing a data center project for OpenAI, “two buildings are completely operational and the rest of the campus is on track,” Oracle said in a Sunday X post. The statement came after Bloomberg reported that Oracle and OpenAI had dropped plans to expand the site, though Oracle said media reports regarding Abilene were incorrect.
At the end of February, OpenAI announced a $110 funding round, with backing from Amazon and Nvidia, among others.
“Some of the largest consumers of AI Cloud capacity have recently strengthened their financial positions quite substantially,” Oracle said in its Tuesday statement.
Bloomberg reported last week that Oracle was planning layoffs.
“AI models for generating computer code have become so efficient that we have been restructuring our product development teams into smaller, more agile and productive groups,” Oracle said in the statement. “This new AI Code Generation technology is enabling us to build more software in less time with fewer people. Oracle is now building more SaaS applications for more industries at a lower cost.”
— CNBC’s Ari Levy contributed to this report.
WATCH: Inside Oracle’s risky AI bet
