Oracle shares jump as cloud infrastructure revenue doubles

Oracle ↘ 5.38% reported fiscal first-quarter results on Thursday that handily beat analyst expectations, powered by a 121% surge in cloud infrastructure revenue that sent shares climbing in after-hours trading.

The Austin, Texas-based company posted adjusted earnings of $1.92 per share on revenue of $19.3 billion for the quarter ended Aug. 31, according to its earnings release. Analysts had forecast adjusted earnings of $1.74 per share and revenue of $19.14 billion, according to LSEG data cited by Reuters. Total revenue grew 30% year over year, while GAAP net income rose 60% to $4.68 billion, or $1.56 per share.cnbc+2

Cloud infrastructure revenue — the segment most closely tied to the AI boom — more than doubled to $7.4 billion, beating the $7.09 billion StreetAccount consensus. Total cloud revenue climbed 62% to $11.6 billion. Oracle's legacy software business, however, declined 3% to $5.5 billion as customers continued migrating to cloud services.investor.oracle+2

AI Demand Fuels Record Backlog

Oracle booked more than $30 billion in new AI cloud contracts during the quarter, pushing its remaining performance obligations to $664 billion — up $209 billion year over year and well above the $630.6 billion analyst consensus. The company delivered 850 megawatts of new data center capacity and more than 300,000 GPUs to AI cloud customers in the period.reuters+2

For fiscal 2027, Oracle raised its outlook, now projecting at least $90 billion in revenue and adjusted earnings per share of $8.10, up from its prior forecast of $8.05. For the fiscal second quarter, the company guided for revenue growth of 30% to 34% and adjusted earnings of $1.85 to $1.93 per share.investor.oracle+1

Spending Surge Weighs on Cash Flow

The results come amid investor concern over Oracle's aggressive capital spending. The company spent $28.5 billion on capital expenditures in the quarter, compared with $8.5 billion a year earlier. While operating cash flow hit a record $23.1 billion, free cash flow was negative $5.4 billion. Oracle's total debt now stands at $125 billion, and S&P Global ↘ 1.90% downgraded the company's credit rating in July, citing weak cash flow and rising business risk, according to Reuters.qz+2

Oracle also completed a $20 billion common stock sale through an at-the-market equity program during the quarter to help fund its buildout. Shares had fallen roughly 22% this year through Thursday's close, even as the S&P 500 gained about 11%.investor.oracle+2