oracle Shares rose 4% in after-hours trading Thursday after the software vendor reported better-than-expected quarterly results.
Here is the company’s performance compared to the LSEG consensus:
Earnings per share: $1.92 adjusted vs. $1.74 expected Revenue: $19.35 billion vs. $19.14 billion expected
Oracle’s revenue increased approximately 30% in the first quarter of its fiscal year ended Aug. 31 compared to the same period a year ago, according to a statement. Net income was $4.68 billion, or $1.56 per share, up from $2.93 billion, or $1.01 per share, in the year-ago period. Adjusted earnings do not include stock-based compensation expense.
For the fiscal second quarter, Oracle expected adjusted earnings per share of $1.85 to $1.93 and revenue growth of 30% to 34%. Analysts surveyed by LSEG expected adjusted earnings per share of $1.89 and revenue of $21.2 billion, which would represent growth of 32%.
Much of the company’s expansion is tied to data center growth, as Oracle seeks to become a bigger player in the artificial intelligence boom. However, Oracle is less cash-strapped and has a lower credit rating than its hyperscalar competitors. The company currently has $125 billion in debt and negative free cash flow of $5.4 billion (compared to negative $362 million a year ago).
Capital spending in the first quarter jumped to $28.5 billion from $8.5 billion a year earlier. The company announced it delivered 850 megawatts of data center capacity during the quarter.
Oracle stock is down 22% since the beginning of the year as of Thursday’s close, while the S&P 500 index is up about 11%.
Cloud revenue for the quarter rose 62% to $11.61 billion, beating the $11.51 billion consensus of analysts surveyed by StreetAccount. Revenue from cloud infrastructure more than doubled to $7.4 billion, beating the consensus estimate of $7.09 billion.
For fiscal year 2027, Oracle currently expects adjusted earnings per share to be $8.10 on revenue of at least $90 billion. LSEG consensus was for earnings of $8.07 per share and revenue of $89.76 billion. Oracle’s finance chief Hilary Maxson said in a briefing with reporters that there is no change to the company’s guidance for capital spending for the year.
Analysts were looking for information about any hiccups in Oracle’s data center construction ahead of the earnings release after Bloomberg reported that a natural gas pipeline for the New Mexico data center was behind schedule.
“What we know now does not lead us to believe that New Mexico or any other location is behind schedule relative to, say, the schedule we included in our FY27 outlook,” Maxon said at a news conference.
CEO Clay Magouyrk said on a conference call with analysts that Oracle is working on obtaining an air permit in New Mexico.
Revenue for the company’s software division was $5.55 billion, down about 3% and below the StreetAccount consensus of $5.61 billion.
Oracle’s remaining performance obligations at the end of the quarter were $664 billion, higher than the StreetAccount consensus of $630.6 billion. This total includes contracted but unrecognized revenue, deferred revenue, and uncollected invoices.
“In the first quarter, we signed more than $30 billion in additional AI contracts without requiring additional capital from Oracle,” Matouyrk said.
During the quarter, Oracle announced an AI agent for human resources teams and won a Pentagon contract worth up to $7 billion over 10 years.
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