Oracle Q3 Earnings Beat as Cloud Growth Accelerates
Oracle Q3 earnings beat as cloud and AI infrastructure revenue accelerated, prompting a FY2027 revenue raise and renewed trader interest and heavier flows.
KEY TAKEAWAYS
- Oracle reported fiscal Q3 revenue of $17.2 billion, up 22% year-over-year.
- Cloud revenue accelerated to $8.9 billion, up 44% year-over-year, powered by IaaS strength.
- Oracle raised FY2027 revenue guidance to $90 billion, citing stronger AI-infrastructure demand.
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Oracle Corp. (ORCL) reported fiscal third-quarter 2026 results on March 10, driven by accelerating cloud and AI-infrastructure sales. The company raised its fiscal 2027 revenue outlook following the strong quarter.
Quarter Results and Guidance
Oracle’s total revenue for fiscal Q3 2026 reached $17.2 billion, up 22% year-over-year in U.S. dollars, the company said in a press release. Cloud revenue, combining Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS), totaled $8.9 billion, a 44% increase year-over-year. Cloud Infrastructure revenue rose 84% to $4.9 billion, while Cloud Applications revenue grew 13% to $4.0 billion.
GAAP earnings per share were $1.27, up 24% year-over-year, and non-GAAP EPS reached $1.79, a 21% increase. GAAP net income was $3.7 billion, and non-GAAP net income rose 23% to $5.2 billion.
Oracle set fiscal 2026 total revenue at $67 billion and raised its fiscal 2027 guidance to $90 billion, citing strong AI demand. The company forecasted fourth-quarter revenue growth of 19% to 21% in U.S. dollars, cloud growth between 46% and 50%, and non-GAAP EPS of $1.96 to $2.00 in its filing.
Fusion Cloud ERP revenue was $1.1 billion, up 17% year-over-year, while NetSuite Cloud ERP revenue also reached $1.1 billion, a 14% increase.
“This Q3 was the first quarter in over 15 years where organic total revenue and non-GAAP earnings per share both grew at 20% or more in USD,” Oracle said.
RPO and Capital Outlook
Remaining Performance Obligations (RPO), a measure of contracted future revenue, surged to $553 billion, up 325% year-over-year and $29 billion sequentially. The increase reflected large AI contracts involving customer prepayments or supplied GPUs. Oracle said it does not expect to require additional funding to support these contracts.
Trailing 12-month operating cash flow rose 13% to $23.5 billion, while free cash flow was negative $24.7 billion. The company guided fiscal 2026 capital expenditures at $50 billion.
Oracle also disclosed a 15% ownership stake in TikTok’s U.S. business.
The larger order backlog from AI contracts and the elevated capital plan support the higher fiscal 2027 revenue guidance. Oracle expects to convert this AI demand into revenue while managing near-term cash flow and infrastructure spending.
