Oracle Cloud Revenue Surges 62%, AI Contracts Top $30 Billion in Q1; Full-Year Outlook Raised

Oracle Corp. delivered fiscal first-quarter results that underscored accelerating demand for its AI cloud infrastructure, with total revenue rising 30% to a record $19.3 billion and cloud revenue jumping 62% to $11.6 billion. The company raised its full-year revenue and earnings guidance, signaling that enterprise AI spending momentum remains robust.

Cloud Infrastructure (IaaS) revenue surged 121% to $7.4 billion, while Cloud Applications (SaaS) grew 10% to $4.2 billion, according to the company’s earnings release. Software revenue fell 3% to $5.5 billion, reflecting the ongoing shift from on-premises deployments to the cloud.

Non-GAAP earnings per share rose 30% to $1.92, exceeding analyst expectations by about 10%, according to Seeking Alpha. On a GAAP basis, EPS climbed 55% to $1.56. Non-GAAP operating income increased 31% to $8.2 billion, with operating margin holding roughly flat at 42%, as reported by MarketBeat.

Remaining performance obligations (RPO) reached $664 billion, up $209 billion year over year. Oracle booked more than $30 billion in additional AI cloud contracts during the quarter, the company said in its press release. Chief Financial Officer Hilary Maxson noted that most of the new contracts use customer prepayments, bring-your-own-hardware arrangements or similar structures that will not require incremental capital from Oracle, according to MarketBeat. Those contracts are not expected to affect capital expenditures or revenue until fiscal 2028 or later.

Oracle delivered 850 megawatts of AI capacity during the quarter, including more than 300,000 graphics processing units — nearly triple the amount delivered in the preceding fourth quarter and 73% of the total capacity delivered in the prior fiscal year, Co-Chief Executive Officer Clay Magouyrk said on the earnings call, as reported by MarketBeat. GPU utilization stood at 97.9%, and capacity that came up for renewal was renewed or resold at prices 20% above prior contracts. Magouyrk said most of those GPUs were four years old or older.

Operating cash flow hit a record $23 billion, aided by customer prepayments, according to Maxson. Capital expenditures totaled $28 billion, resulting in negative free cash flow of $5 billion. Oracle continues to expect full-year capital spending of $90 billion to $95 billion, with net cash capital expenditures not exceeding $70 billion. The company completed its previously disclosed $20 billion at-the-market equity issuance during the quarter. Maxson said Oracle had not provided a specific timetable for returning to positive free cash flow, but noted that projects become strong cash-flow generators shortly after ramping, with potential free-cash-flow conversion of about 100% of post-tax EBITDA, per MarketBeat.

On the applications side, Oracle’s SaaS business grew 14% in Fusion revenue, while Oracle Health accelerated and industry applications rose more than 20%, Co-Chief Executive Officer Mike Sicilia said on the call, as reported by MarketBeat. Customers used Oracle’s embedded AI capabilities more than 150 million times during the quarter, up 42% sequentially. AI agents executed more than 3.5 million times in production, nearly doubling from the prior quarter. The number of customers’ AI agents in production rose 90% to more than 2,300.

Oracle announced several new AI products. The Oracle AI Data Platform automates the creation of enterprise ontologies, making it easier for companies to use AI on private data, according to the press release. The company also introduced a 100% agentic AI health care management system for hospitals and clinics, described as a collection of AI agents for every medical specialty.

Magouyrk said Oracle expects to deliver its first NVIDIA Vera Rubin systems to customers in the second quarter. The company’s multicloud database revenue rose 353% year over year, and multicloud customers grew 180%, he added.

For the second quarter, Oracle guided total revenue growth of 30% to 34% in constant currency, cloud revenue growth of 64% to 71%, and non-GAAP EPS of $1.85 to $1.93. For the full fiscal year 2027, the company now expects revenue of at least $90 billion and non-GAAP EPS of $8.10.

The board declared a quarterly cash dividend of $0.50 per share, payable Oct. 23 to holders of record Oct. 9.

Oracle shares were under pressure in after-hours trading following the results, amid a broader market selloff that saw U.S. oil prices surge above $100 a barrel and Treasury yields climb, according to MarketWatch. Oracle’s report comes as investors scrutinize the returns on massive AI infrastructure spending across the technology sector.