Oracle announced its first-quarter revenue exceeded Wall Street's predictions, fueled by robust demand for its cloud computing services, particularly from heightened enterprise spending on AI. The company's shares, which had declined more than 20% this year, saw a nearly 7% increase in extended trading following the positive report. This performance suggests that Oracle's substantial investments in data centers are yielding positive results by securing more enterprise contracts.
Sales in Oracle's crucial cloud infrastructure business surged by 121% to $7.4 billion, surpassing analysts' average estimates of $7.19 billion. Total quarterly revenues rose 30% to $19.3 billion, beating the $19.14 billion analysts had anticipated. Total cloud revenues (IaaS + SaaS) increased by 62% to $11.6 billion, with Cloud Applications (SaaS) revenue growing 10% to $4.2 billion. The company's revenue backlog, or Remaining Performance Obligations (RPO), grew to $664 billion at the end of the first fiscal quarter, up from $638 billion in the previous three months, and significantly higher than analysts' estimates of $639.89 billion. This backlog includes over $30 billion in new AI cloud contracts.
Oracle's GAAP earnings per share increased by 55% to $1.56, while non-GAAP earnings per share rose 30% to $1.92. The company also announced a record Q1 operating cash flow of $23 billion, an increase of 184%, though free cash flow was negative $5 billion due to ongoing investments in its Cloud Infrastructure business. Oracle confirmed that it delivered over 300,000 GPUs to its AI Cloud customers in Q1 FY27, nearly triple the capacity delivered in Q4 FY26, and brought 850 megawatts of data center capacity online during the June-August quarter.
For the full fiscal year 2027, Oracle now projects total revenue to be at least $90 billion and non-GAAP EPS to reach $8.10. The company's heavy spending in this area has allowed it to compete effectively in a market largely dominated by tech giants like Amazon, Microsoft, and Google. Oracle also revealed a new AI Data Platform designed to automate the creation of Enterprise Ontologies, enabling businesses to efficiently use advanced AI models with their private data.
