Oracle delivered first-quarter results on Thursday that exceeded expectations across nearly all metrics, driving shares higher by roughly 4% during after-hours trading. The stock had finished regular trading at $152.94, declining 5.4% during the session.
On an adjusted basis, earnings per share hit $1.92, climbing from $1.47 in the same period last year and surpassing the analyst consensus of $1.74. Overall revenue totaled $19.3 billion, representing a 30% year-over-year increase and exceeding the $19.1 billion projection.
The critical metric drawing the most investor attention was cloud infrastructure revenue. This division, which provides AI computing power via internet-based services, skyrocketed 121% to $7.4 billion. Wall Street analysts had forecast $7.19 billion.
Oracle’s remaining business segments expanded by merely 3%. This stark contrast illustrates the company’s strategic direction.
ORACLE $ORCL Q1’27 EARNINGS HIGHLIGHTS
Revenue: $19.3B (Est. $19.14B)
; +30% YoY
FY Guide:
Q2 Guide:
— Wall St Engine (@wallstengine) September 10, 2026
The total backlog for the company currently stands at $664 billion. Approximately half of this figure stems from one agreement with OpenAI. This heavy reliance has resulted in Oracle’s stock performance becoming increasingly correlated with market sentiment surrounding the artificial intelligence company.
Optimism around OpenAI diminished during the summer months as rival Anthropic rapidly gained market share. Concerns mounted as pricing competition from more affordable AI models intensified. OpenAI reduced pricing throughout its GPT-5.6 model lineup during July and August. Oracle’s stock dropped 38% from its June 1 high leading into Thursday’s earnings announcement.
Momentum shifted in September. Oracle shares had climbed 8.4% before the earnings release.
Cloud infrastructure accounted for merely 18% of Oracle’s total revenue during fiscal year 2025. The company projects this segment will comprise 60% of revenue in the upcoming year. This dramatic transformation is fundamentally restructuring Oracle’s financial profile.
Capital investment serves as the most obvious indicator of this strategic pivot. Oracle invested $28 billion in capital expenditures during the first quarter alone. Throughout the complete fiscal year, management anticipates spending $92 billion, a substantial increase from $56 billion last year. During fiscal 2024, total capex amounted to only $6.9 billion.
Free cash flow has consequently moved into negative territory. Stock repurchase programs have been suspended and the outstanding share count is increasing. Industry analysts don’t anticipate positive free cash flow returning until 2030.
To finance this massive infrastructure expansion, Oracle increased long-term debt by $37 billion last year and executed a $20 billion at-the-market equity offering during the first quarter.
Oracle expanded data center capacity by 850 megawatts during the quarter. The company is constructing infrastructure to support OpenAI alongside other major AI clients.
Despite the substantial capital investments, adjusted operating margin improved compared to the previous year. Oracle has successfully balanced cloud’s narrower gross margins through more disciplined operating expense management.
Looking ahead to the second quarter, Oracle provided guidance that closely aligned with analyst forecasts. For the complete fiscal year, the company raised both adjusted EPS and revenue projections.
The segment of Oracle’s backlog excluding OpenAI more than doubled during the past year.
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