Oracle shares jumped 7% in after-hours trading after fiscal first-quarter results beat Wall Street estimates on revenue and profit. Cloud infrastructure revenue more than doubled, and the company raised its full-year guidance, even as capital spending and debt kept climbing.
Oracle shares jumped 7% in extended trading on Thursday after the software vendor's fiscal first-quarter results beat Wall Street estimates on revenue and profit. Revenue rose to $19.35 billion, above the $19.14 billion analysts expected. Adjusted earnings per share hit $1.92, versus $1.74 expected.
Net income climbed to $4.68 billion, or $1.56 per share, up from $2.93 billion a year earlier. Much of Oracle's growth is tied to data center expansion as it tries to become a bigger player in the AI boom.
Cloud infrastructure revenue more than doubles
Cloud infrastructure revenue more than doubled to $7.4 billion. Total cloud revenue surged 62% to $11.61 billion.
The company said it delivered 850 megawatts of new data center capacity during the quarter. Remaining performance obligations stood at $664 billion. Crypto Briefing said that marked a $209 billion increase from the prior quarter.
Spending and debt climb to fund the buildout
Yet capital expenditures soared to $28.50 billion from $8.50 billion a year earlier. Oracle posted negative free cash flow of $5.4 billion, compared with negative $362 million a year ago.
The company now carries $125 billion in debt. S&P downgraded Oracle's credit rating in July to one notch above junk status, citing its reliance on a few customers and an uncertain path to profitability in its AI data center business. The Financial Times reported Oracle has a $300 billion contract with OpenAI as part of its push to serve AI labs.
Oracle raises fiscal 2027 guidance
Oracle raised its outlook for the current fiscal year, now projecting adjusted earnings per share of $8.10 on at least $90 billion in revenue, above the $8.07 and $89.76 billion analysts had modeled. For the fiscal second quarter, the company guided for adjusted earnings per share between $1.85 and $1.93, with revenue growth of 30% to 34%. The Financial Times reported cloud growth is expected to accelerate to 64% to 70% year over year.
Despite the earnings beat, Oracle shares have lagged the broader stock market this year, dropping 22%. The S&P 500 has gained roughly 11% over the same period.
Sources: US Top News and Analysis, UK homepage, Crypto Briefing
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