Key Highlights

● Total revenues were $19.3bn, up 30%, with cloud infrastructure up 121%.

● Remaining performance obligations were $664bn, up $209bn year on year.

● Capital expenditure was $28.5bn, leaving free cash flow negative at $5.4bn.

● Oracle sold $20bn of common stock through its at-the-market programme.

Oracle Corporation (NYSE:ORCL) reported first-quarter fiscal 2027 results on 10 September 2026, for the quarter ended 31 August. Total revenues were $19.3bn, up 30% in both US dollars and constant currency. Total cloud revenues reached $11.6bn, up 62%, with cloud infrastructure at $7.4bn, up 121%, and cloud applications at $4.2bn, up 10%. Software revenue fell 3% to $5.5bn, while services rose 5% to $1.4bn and hardware 15% to $0.8bn.

GAAP diluted earnings per share were $1.56, up 55%, and non-GAAP earnings per share were $1.92, up 30%. These figures come from the company's own press release, and non-GAAP measures exclude items the company specifies in its reconciliations. GAAP operating income was $6.7bn, up 57%, and non-GAAP operating income was $8.2bn, up 31%. GAAP net income available to common shareholders was $4.7bn, up 60%, and non-GAAP $5.8bn, up 34%. Revenue a year earlier was $14.9bn.

Contracted backlog and capacity

The release reported remaining performance obligations of $664bn, up $209bn year on year, and said more than $30bn of additional AI cloud contracts were booked in the quarter. Oracle said it delivered 850MW of additional datacentre capacity, and more than 300,000 GPUs to AI cloud customers since the end of the fourth quarter. It also stated that customer demand for AI cloud training and inferencing services continues to grow faster than supply. Backlog measures contracted future revenue rather than revenue itself, and its conversion depends on Oracle's ability to build, power and equip capacity on schedule. Cloud applications growth of 10% was far slower than infrastructure growth of 121%, so the two cloud lines are developing at very different speeds.

Cash flow and funding

The cash-flow picture is mixed. Operating cash flow was $23.1bn, up 184%, but capital expenditure was $28.5bn, compared with $8.5bn a year earlier, leaving free cash flow negative at $5.4bn. During the quarter Oracle sold $20bn of common stock, before commissions, through its at-the-market programme, and the release states that the company confirms there is no incremental impact on its plans to raise capital. The quarterly dividend is $0.50 per share, with a record date of 9 October and payment on 23 October 2026. Equity issuance increases the share count and so dilutes existing holders' proportionate ownership.

Management guidance

For the second quarter of fiscal 2027, Oracle guided to total revenue growth of 30% to 34% and cloud revenue growth of 65% to 71% in US dollars, with non-GAAP earnings per share of $1.85 to $1.93. The company noted that this growth comparison excludes a one-time gain in the prior-year quarter; including that gain, it expects non-GAAP earnings per share to decline by 14% to 18%. For the full fiscal year it guided to revenue of at least $90bn. All of these are management forecasts, not results.

Capacity Delivery and Cash Conversion Must Keep Pace With the Backlog

Oracle's annual report for the year ended 31 May 2026 sets out the risks. It says AI investments may not be recouped, that long-term datacentre leases and supplier commitments may not match customer contract terms, and that spending ahead of revenue could increase the need for external financing. It also notes concentration among a number of large customers in certain infrastructure offerings, and exposure to customer non-payment, with some customers highly leveraged. Power availability and GPU and memory supply are further constraints. The central question for the next results is whether capacity delivery and cash conversion keep pace with the contracted backlog. The annual report also shows that cloud revenues were 51% of total revenues in fiscal 2026, and research and development spending was $10.3bn.