Oracle Q4 Earnings Beat Estimates, Cloud Growth Fuels Revenues

Oracle ORCL reported fourth-quarter fiscal 2026 non-GAAP earnings of $2.11 per share, which beat the Zacks Consensus Estimate by 7.65% and surged 24% in dollar terms and 23% in constant currency (cc) on a year-over-year basis.Total quarterly revenues beat the consensus mark by 0.54% and increased 21% year over year to $19.2 billion, reflecting broad-based demand for Oracle's industry-leading cloud technology and applications suites.Cloud revenues (IaaS + SaaS) increased 47% to $9.9 billion, driven by 93% growth in Cloud Infrastructure (IaaS), and 10% growth in Cloud Applications (SaaS). This represents a notable acceleration in cloud infrastructure growth compared to prior quarters, signaling unprecedented demand from AI-focused customers.Oracle's Remaining Performance Obligations ended the fourth quarter at $638 billion, up 363% from the prior year and $85 billion sequentially from the end of the fiscal third quarter. Most of the RPO increase in both the fiscal third and fourth quarters was large-scale AI contracts where the customer prepaid Oracle for the purchase of the GPUs, or the customer bought and supplied the GPUs to Oracle. This substantial backlog provides remarkable visibility into future revenue growth.Oracle Corporation Price, Consensus and EPS Surprise Oracle Corporation price-consensus-eps-surprise-chart | Oracle Corporation QuoteORCL's Q4 Top-Line DetailsCloud Infrastructure revenues (IaaS) surged 93% in USD and 92% in cc to $5.8 billion, marking another dramatic acceleration from the fiscal third quarter's 84% growth rate. Cloud Application revenues (SaaS) were $4.1 billion, up 10% in USD and 9% in cc.Total cloud revenues (SaaS plus IaaS) surged 47% in USD and 46% in cc to $9.9 billion, demonstrating that cloud remains the primary driver of Oracle's growth trajectory. Cloud revenues now represent 52% of total quarterly revenues.Software revenues were down 2% to $6.8 billion, reflecting customers' continuing migration from on-premise software to the Cloud. Services revenues were $1.5 billion, up 13%, and Hardware revenues were $0.9 billion, up 9%.Operating Details of OracleOracle generated fourth-quarter GAAP operating income of $6.1 billion, up 20%, while non-GAAP operating income rose to a record $8.6 billion, up 22%, driven by strong revenue growth and operating efficiency actions taken during the quarter.GAAP net income available to common shareholders reached $4.2 billion, up 23%, and non-GAAP net income available to common shareholders grew to $6.2 billion, up 26%. Fiscal fourth-quarter GAAP earnings per share increased to $1.45, up 21%, and non-GAAP earnings per share climbed to $2.111, up 24%.ORCL's Balance Sheet & Cash FlowOracle's strong operating income translated to a record fiscal year operating cash flow of $32 billion, up 54%. However, free cash flow was negative $23.7 billion for fiscal 2026 as Oracle continued to execute on investments to support the growth of its Cloud Infrastructure business.Total notes payable and borrowings stood at approximately $129.5 billion as of May 31, 2026 (current portion of $7.2 billion and non-current portion of $122.3 billion). In fiscal 2026, Oracle raised $43 billion in debt financing and $5 billion in equity financing. In fiscal 2027, Oracle expects to raise approximately $40 billion through a combination of debt and equity financing, including its previously announced $20 billion at-the-market equity issuance.The board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock, consistent with prior quarters.Strategic Highlights and Capital Investment ProgramOracle's capital investment program supports the pursuit of unprecedented opportunities in AI Cloud Infrastructure. The company continues aggressive expansion in its datacenter build-out to support accelerating cloud and AI demand.The large increases in Oracle's RPO and revenues are driven by the growing demand for cloud infrastructure for AI training and inference. Oracle is building datacenters that are intended to use clean energy from natural gas fuel cells to generate electricity with minimal emissions.Our database and applications businesses are both benefiting from Oracle's early adoption of AI. The Oracle Multicloud AI Database grew 404% in the fiscal fourth quarter, making it the fastest-growing business ever. Additionally, the Oracle Health application suite will soon include a completely new AI version of the Cerner hospital and clinic patient care management system. We expect this new AI patient care management system to push the growth rate of the overall Oracle Health business into double-digits in fiscal 2027.Forward GuidanceOracle provided the following forward-looking guidance for first-quarter fiscal 2027. Total Revenues are expected to grow from 27% to 29% in both constant currency and USD. Total Cloud revenues are expected to grow between 57% and 63% in constant currency and 58% and 64% in USD. Non-GAAP earnings per share are expected to grow in the range of 16-19% and be between $1.71 and $1.75 in constant currency. Non-GAAP earnings per share are projected to increase 17% to 20% and be between $1.72 and $1.76 in USD.For fiscal 2027, the company confirmed prior revenue guidance of $90 billion and raised non-GAAP EPS guidance to $8.05, indicating growth of 18% after adjusting for the one-time events of selling its Ampere chip business and Bloom Energy warrants in fiscal 2026.ORCL’s Zacks Rank & Stocks to ConsiderCurrently, ORCL carries a Zacks Rank #3 (Hold).Applied Materials AMAT, Advanced Energy Industries AEIS and Dell Technologies DELL are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector.Applied Materials and Advanced Energy Industries carry a Zacks Rank #2 (Buy) each, while Dell Technologies sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Long-term earnings growth rates for Applied Materials, Advanced Energy Industries and Dell Technologies are currently pegged at 29.6%, 30.1% and 26.3%, respectively.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks