Oracle — Q1 FY27 Earnings Summary

Financial Performance

• Total revenues reached a record $19.3 billion, a 30% increase in USD and constant currency compared to Q1 FY26.
• Total cloud revenues (IaaS + SaaS) hit a record $11.6 billion, up 62% in USD and 61% in constant currency.
• Cloud Infrastructure (IaaS) revenue surged 121% in USD and 120% in constant currency to $7.4 billion.
• Cloud Applications (SaaS) revenue grew 10% in USD and constant currency to $4.2 billion.
• Software revenues declined 3% to $5.5 billion, driven by customer migration from on-premises to the cloud.
• Services revenues were $1.4 billion, up 5%, and Hardware revenues were $0.8 billion, up 15%.
• GAAP operating income was $6.7 billion, up 57%, while non-GAAP operating income rose to $8.2 billion, up 31%.
• GAAP net income available to common shareholders was $4.7 billion, up 60%, and non-GAAP net income was $5.8 billion, up 34%.
• GAAP earnings per share (EPS) increased 55% to $1.56, and non-GAAP EPS rose 30% to $1.92.
• Operating cash flow reached a record $23 billion, up 184% year-over-year.
• Free cash flow was negative $5 billion due to investments in Cloud Infrastructure capacity.
• Remaining Performance Obligations (RPO) increased $209 billion year-over-year to $664 billion.

Guidance and Future Outlook

• Q2 FY27 total revenue is expected to grow between 30% and 34% in constant currency and USD.
• Q2 FY27 total cloud revenue is projected to grow between 64% and 70% in constant currency and 65% to 71% in USD.
• Q2 FY27 non-GAAP EPS guidance is $1.83 to $1.91 in constant currency and $1.85 to $1.93 in USD.
• Full-year FY27 total revenue is expected to be at least $90 billion.
• Full-year FY27 non-GAAP EPS is expected to be $8.10.
• Management notes that excluding a one-time gain from Q2 FY26, Q2 FY27 non-GAAP EPS growth is expected to be 19% to 23% in constant currency and 21% to 25% in USD.

Business Segments and Product Lines

• Oracle delivered 850MW of additional datacenter capacity in Q1.
• Over 300,000 GPUs were delivered to AI Cloud customers since the end of Q4 FY26, nearly triple the capacity delivered in Q4 FY26.
• The company booked more than $30 billion of additional AI cloud contracts in Q1.
• New Oracle AI Data Platform launched, which automatically generates Enterprise Ontologies for private data reasoning.
• New 100% Agentic AI Health Care Management System introduced for hospitals and clinics, featuring specialized AI agents for various medical specialties.

Market and Competitive Landscape

• Customer demand for AI Cloud Training and Inferencing Services continues to grow faster than supply.
• The market trend shows continued migration from on-premises software to the cloud.

Risks and Challenges

• Free cash flow was negative $5 billion due to heavy capital investment in Cloud Infrastructure.
• Risks include the ability to secure and manage datacenter capacity, sourcing of technology components like GPUs, and potential AI product performance issues.
• Forward-looking statements are subject to risks regarding economic conditions, government contracting, cybersecurity, and regulatory changes.

Management Commentary and Tone

• Management highlighted strong execution in the infrastructure business and broad-based demand for Cloud Infrastructure and Cloud Applications.
• The tone reflects confidence in the growth of AI cloud services and the successful delivery of significant capacity.
• Management confirmed that the structuring of new AI cloud contracts has no incremental impact on plans to raise capital.

Other Key Points

• Oracle completed the sale of $20 billion of common stock through an At-the-Market (ATM) equity program during Q1 FY27.
• The Board of Directors declared a quarterly cash dividend of $0.50 per share, payable on October 23, 2026, to stockholders of record as of October 9, 2026.
• Capital expenditures for the quarter were $28.5 billion.
• Deferred revenues increased significantly, with a $11.4 billion increase attributed to customer prepayments with a significant financing component.