Oracle’s cloud infrastructure revenue rose 121% year over year to $7.4 billion in the quarter ended 31 August, as the company booked more than $30 billion in new AI cloud contracts and added large amounts of computing capacity for customers.
The company reported fiscal first-quarter results on Thursday that exceeded analyst estimates. Oracle stock rose 7% in after-hours trading following the announcement, after falling 22% this year through Thursday’s close. The S&P 500 had gained roughly 11% over the same period.
Total cloud revenue increased 62% to $11.6 billion. Overall revenue grew 30% to $19.35 billion, above the $19.14 billion expected by analysts polled by LSEG. Adjusted earnings rose 30% from the prior-year period to $1.92 per share, compared with analyst forecasts of $1.74 per share.
On a GAAP basis, net income available to common shareholders was $4.68 billion, or $1.56 per diluted share. That compared with $2.93 billion, or $1.01 per share, in the year-ago quarter.
Oracle brought 850 megawatts of new data-centre capacity online during the period and delivered more than 300,000 graphics processing units, or GPUs, to AI cloud customers. The figures point to the practical demands behind the company’s contract growth: selling cloud capacity requires first building the facilities and installing the hardware needed to provide it.
That construction is showing up clearly in Oracle’s cash flows. Capital spending rose to $28.5 billion from $8.5 billion in the same quarter last year. Capital expenditures for fiscal 2026 totalled $55.7 billion. Operating cash flow reached a record $23.1 billion, up 184%, while free cash flow was negative $5.4 billion as cloud infrastructure spending continued.
Oracle has $125 billion in total debt. Its results therefore present investors with two linked questions: whether the new contracts convert into delivered services and revenue, and whether the investment required to serve them produces the profit margins investors expect.
Its remaining performance obligations reached $664 billion at the end of the quarter, up $209 billion from the same period a year earlier. That was above the $630.6 billion expected by analysts polled by StreetAccount. The measure reflects contracted business yet to be recognised as revenue, making it a useful indication of the volume of work Oracle expects to deliver.
For the fiscal second quarter, Oracle forecast adjusted earnings per share of $1.85 to $1.93 and total revenue growth of 30% to 34%. The company also raised its full-year fiscal 2027 outlook to a minimum of $90 billion in revenue alongside adjusted earnings of $8.10 per share.
The raised outlook and after-hours share move suggest that investors welcomed the scale of Oracle’s cloud demand and its reported contract pipeline. The cost of meeting that demand remains substantial. Oracle’s ability to sustain its current infrastructure growth rate, finance further capacity additions and improve free cash flow will depend on how quickly the contracted AI business becomes operating revenue.
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