Oracle: Fiscal 1Q27 Financial Results
Generating $19.3 billion, up 0.5% QoQ and up 30% YoY
This is a Press Release edited by StorageNewsletter.com on September 23, 2026 at 2:01 pmSummary:
- Q1 GAAP earnings per share up 55% in USD and up 54% in constant currency to $1.56, non-GAAP earnings per share up 30% in USD and constant currency to $1.92
- Record Q1 total revenues up 30% in USD and constant currency to $19.3 billion
- Record Q1 total cloud revenues up 62% in USD and up 61% in constant currency to $11.6 billion
- Q1 cloud infra (IaaS) revenue up 121% in USD and up 120% in constant currency to $7.4 billion
- Q1 cloud apps (SaaS) revenue up 10% in USD and constant currency to $4.2 billion
- Remaining performance obligations or RPO up $209 billion YoY to $664 billion
Oracle Corp. announced Q1 FY27 results with strong revenue growth.
Total quarterly revenues increased 30% to $19.3 billion, reflecting strong execution in our infrastructure business, with the delivery of 850MW additional datacenter capacity. Cloud revenues (IaaS + SaaS) increased 62% to $11.6 billion, driven by 121% growth in Cloud Infrastructure (IaaS), and 10% growth in Cloud Applications (SaaS). Software revenues were down 3% to $5.5 billion, reflecting our customers’ continuing migration from on-premises software to the Cloud. Services revenues were $1.4 billion, up 5%, and Hardware revenues were $0.8 billion, up 15%.
Oracle generated Q1 GAAP operating income of $6.7 billion, up 57%, while non-GAAP operating income rose to $8.2 billion, up 31%, driven by continued broad-based demand in Cloud Infrastructure and Cloud Applications. GAAP net income available to common shareholders reached $4.7 billion, up 60%, and non-GAAP net income available to common shareholders grew to $5.8 billion, up 34%. Q1 GAAP earnings per share increased to $1.56, up 55%, and non-GAAP earnings per share climbed to $1.92, up 30%.
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Oracle’s strong operating income translated to a record Q1 operating cash flow of $23 billion, up 184%. Free cash flow was negative $5 billion for Q1 as Oracle continued to execute on investments to support the growth of its Cloud Infrastructure business.
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Remaining Performance Obligations
Customer demand for AI Cloud Training and Inferencing Services continues to grow faster than supply. Oracle booked more than $30 billion of additional AI cloud contracts in Q1 increasing its RPO to $664 billion. Based on the structuring of those new contracts, the Company confirms there is no incremental impact on its plans to raise capital. Since the end of Q4, Oracle also delivered more than 300,000 GPUs to its AI Cloud customers and almost triple the capacity delivered in Q4 FY26.
Capital Investment Program and Capital Funding
During Q1 FY 2027, Oracle successfully completed the sale of $20 billion of common stock (before commissions) through an At-the-Market (ATM) equity program, as part of its previously disclosed capital investment program.
Guidance for Q2 FY 2027
Oracle is providing the following forward-looking guidance for Q2 FY 2027:
- Total revenues are expected to grow between 30% and 34% in constant currency and USD
- Total Cloud revenue is expected to grow between 64% and 70% in constant currency and between 65% and 71% in USD
- Non-GAAP earnings per share is expected to be between $1.83 and $1.91 in constant currency and between $1.85 and $1.93 in USD, which represents growth of 19% to 23% in constant currency and 21% to 25% in USD excluding a one-time gain from Q2 FY20261
Guidance for Full FY 2027
For fiscal year 2027, we now expect total revenue to be at least $90 billion, and non-GAAP EPS to be at $8.10.
New Oracle AI Data Platform Automatically Generates Enterprise Ontology
Virtually all of Oracle’s enterprise customers want to use AI to reason on their private data and to use AI agents to automate their business processes. To do this efficiently, customers must first precisely describe the semantic details of their private data and business processes in an Enterprise Ontology (a model defining the core concepts, relationships and rules of the business). Palantir pioneered the use of AI on private enterprise data by carefully crafting Enterprise Ontologies for each of their customers. The new Oracle AI Data Platform fully automates the creation of Enterprise Ontologies—making it inexpensive, easy and fast and for any enterprise to use the most advanced AI models to reason on their private data and automate their business processes.
New 100% Agentic AI Health Care Management System for Hospitals and Clinics
Oracle’s AI Health Care Management and Electronic Health Records system is an all-new 100% Agentic system made up of a collection of AI agents for every medical specialty from General Medicine to Oncology to Radiology. These specialized AI agents assist medical professionals in diagnosing and treating their patients—leading to better quality of care and better outcomes. AI is on the brink of making quality healthcare accessible to more people throughout the world.
Common Stock Quarterly Dividend
The board of directors declared a quarterly cash dividend of $0.50 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on October 9, 2026, with a payment date of October 23, 2026.
Footnote
1 Q2 FY26 results included a one-time net investment gain from the sale of Oracle’s interest in Ampere. Including the investment gain, Q2 FY27 non-GAAP earnings per share is expected to decline between -19% and -15% in constant currency and decline between -18% and -14% in USD
Comments
Total revenue rose 30% to $19.3B YoY but is almost flat sequentially with 4Q26 at $19.2B. The cloud revenue (IaaS + SaaS) grew 62% to $11.6B. Cloud Infrastructure was up 121% and Cloud Applications up 10%. What s performance for a player who refused the cloud for many years promoting only on-premises approaches, we all remember some sentences from Larry Ellison several years ago. Multiple waves have pushed him to completely flip his position, difficult to resist o the market and strong moves even if you're Oracle and Larry Ellison.
Software revenue fell 3% to $5.5B as customers keep moving from on-premises to cloud. Services brought in $1.4B (+5%) and hardware $0.8B (+15%).
Regarding OCI, within IaaS, CPU & GPU infrastructure revenue reached $6.5B (+151%) and database $0.9B (+26%). Multi-cloud database grew 353%. Oracle reported 97.9% AI infrastructure utilization, a 20% average premium on GPUs renewed or resold during the quarter, and nine consecutive quarters of accelerating infrastructure revenue. Since the end of Q4, it has delivered more than 300,000 GPUs to AI cloud customers, almost three times the capacity delivered in 4Q26.
The business is obviously positive but at the same time we see a significant backlog and funding. Oracle signed more than $30B in new AI cloud contracts, lifting RPO to $664B, and says their structure does not add to its capital-raising plans. Most of the new RPO came through customer prepayments or bring-your-own-hardware deals. Capex totaled $28B, or $18B net cash outlay. Oracle also finished selling $20B of common stock through its at-the-market program. It raised its FY27 outlook to at least $90B in revenue.
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In terms of market, the whole market is growing fast. Synergy Research puts 2Q26 cloud infrastructure spending at $143.4B, up about 43%, the fastest growth in eight years. AWS grew about 37%, Azure 43% and Google Cloud 82%. OCI's +121% is the fastest of the group, but on a smaller base. At about $7.4B per quarter, it is still well below Google Cloud's $24.8B and AWS's $42B. OCI is a key player but clearly well behind top well known hyperscalers.
But there is a drawback in this and it explains why Oracle tried to issue both equity and debt as its free cash flow is still negative. Its customer base remains concentrated on a few AI labs, OpenAI above all.
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Next October 24, the company will organize its investor day, it will be interesting to learn where Oracle has to show how quickly the $664B backlog turns into cash.
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