TLDR
- Oracle’s cloud infrastructure revenue surged 121% year-over-year to $7.4 billion, beating analyst estimates of $7.19 billion
- Adjusted EPS came in at $1.92, topping the $1.74 Wall Street consensus; total revenue hit $19.3 billion, up 30%
- The stock gained about 4% in after-hours trading after closing at $152.94, having dropped 38% from its June 1 high
- Oracle’s total backlog now stands at $664 billion, with nearly half tied to a single cloud contract with OpenAI
- Capital expenditures are expected to hit $92 billion this fiscal year, up from $56 billion last year, with free cash flow now negative
Oracle posted first-quarter results Thursday that beat expectations on almost every line, sending the stock up around 4% in after-hours trading. The stock had closed at $152.94 before the results, down 5.4% on the day.
Adjusted EPS came in at $1.92, up from $1.47 a year ago and ahead of the $1.74 analyst consensus. Total revenue reached $19.3 billion, up 30% year-over-year and above the $19.1 billion estimate.
The headline number investors were watching most closely was cloud infrastructure revenue. That segment, which rents out AI computing power over the internet, jumped 121% to $7.4 billion. Analysts had penciled in $7.19 billion.
The rest of Oracle’s business grew at just 3%. That gap tells the story of where Oracle is heading.
ORACLE $ORCL Q1’27 EARNINGS HIGHLIGHTS
🔹 Revenue: $19.3B (Est. $19.14B) 🟢; +30% YoY
🔹 Adj. EPS: $1.92 (Est. $1.74) 🟢; +30% YoY
🔹 RPO: $664B; +$209B YoYFY Guide:
🔹 Revenue: At least $90B (Est. $89.79B) 🟢
🔹 Adj. EPS: $8.10 (Est. $8.07) 🟢Q2 Guide:
🔹 Adj. EPS:… pic.twitter.com/eIVYUkzDTC— Wall St Engine (@wallstengine) September 10, 2026
The company’s total backlog now sits at $664 billion. Almost half of that comes from a single contract with OpenAI. That concentration has made Oracle stock increasingly tied to sentiment around the AI startup.
OpenAI enthusiasm faded over the summer as its main competitor, Anthropic, gained ground quickly. Pricing pressure from cheaper AI models added to the concern. OpenAI cut prices across its GPT-5.6 model family in July and August. Oracle stock fell 38% from its June 1 peak heading into Thursday’s report.
September brought a shift. Oracle stock was up 8.4% coming into the earnings print.
Cloud Becoming the Core Business
Cloud infrastructure represented just 18% of Oracle’s revenue in fiscal year 2025. The company expects that to reach 60% of revenue next year. That transition is reshaping Oracle’s finances from the ground up.
Capital expenditure is the most visible sign of that shift. Oracle spent $28 billion on capex in the first quarter alone. For the full fiscal year, the company expects to spend $92 billion, up from $56 billion last year. In fiscal 2024, total capex was just $6.9 billion.
Free cash flow has turned negative as a result. Share buybacks have stopped and the share count is rising. Analysts do not expect free cash flow to return until 2030.
To fund the build-out, Oracle added $37 billion in long-term debt last year and completed a $20 billion at-the-market equity sale during the first quarter.
Data Center Capacity Growing Fast
Oracle added 850 megawatts of data center capacity in the quarter. The company is building out infrastructure for OpenAI and other large AI customers.
Despite the heavy spending, adjusted operating margin ticked up from last year. Oracle has managed to offset cloud’s lower gross margins through tighter operating expense control.
For the second quarter, Oracle guided roughly in line with analyst expectations. For the full fiscal year, it nudged up both adjusted EPS and revenue guidance.
The non-OpenAI portion of Oracle’s backlog more than doubled over the past year.
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