Latest quarter
Oracle reported Q1 FY2027 revenue of $19.3 billion, up 29.6% from $14.9 billion in Q1 FY2026. The company’s $19.3 billion of revenue was above the consensus of $19.1 billion, while adjusted EPS of $1.92 was above the consensus of $1.74.
Oracle reported diluted EPS of $1.56, compared with $1.01 a year earlier, while its gross margin was 60.0%, versus 67.3% a year earlier. The company reported an operating margin of 34.8%, compared with 28.7% a year earlier. Oracle said cloud and software revenue rose by $4.3 billion from a year earlier as customers bought applications and infrastructure technologies and renewed cloud contracts; cloud infrastructure accounted for 91% of constant-currency cloud-revenue growth.
The filing shows operating cash flow of $23.1 billion and free cash flow of −$5.4 billion for Q1 FY2027. Oracle spent $28.5 billion on capital expenditures, primarily for data-center expansion. Revenue growth of 29.6% was above Oracle’s prior Q1 FY2027 guidance of 27.0% to 29.0%.
| Q1 FY2027 | Q1 FY2026 | Change | |
|---|---|---|---|
| Revenue | $19.3 billion | $14.9 billion | 29.6% |
| Diluted EPS | $1.56 | $1.01 | 54.5% |
| Gross margin | 60.0% | 67.3% | −7.3 percentage points |
| Operating margin | 34.8% | 28.7% | 6.1 percentage points |
| Free cash flow | −$5.4 billion | −$362.0 million | — |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $1.92 | $1.74 | Beat by 10.3% |
| Revenue | $19.3 billion | $19.1 billion | Beat by 1.11% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
| Against its own guidance | For | Guided | Reported | Result |
|---|---|---|---|---|
| Revenue growth | Q1 FY2027 | 27.0%–29.0% | 29.6% | Above the guide |
What management said on the call
On the Q1 FY2027 call, Clayton Magouyrk said Oracle closed more than $30 billion of additional AI contracts that required no additional Oracle capital. He said the vast majority of the quarter’s contracts used customer prepayments or customer-provided hardware, and Oracle said it expects around half of its remaining performance obligations to convert into sales over the next 36 months.
Magouyrk said Oracle plans to deliver its first NVIDIA Vera Rubin systems to customers in Q2 FY2027. He also said the company is pursuing an air permit for its New Mexico data-center project, while Oracle is working with partners to design and deliver grid-energy capacity for its Wisconsin site. Magouyrk said neither site would affect Oracle’s previously stated FY2027 revenue or earnings guidance.
Analysts asked about capital investment, and Magouyrk said rising memory, SSD and hard-drive prices were supply-chain cost pressures. He said Oracle uses fixed-price contracts when costs are known or locked in, while contracts can pass through costs when those costs are uncertain. Hilary Maxson said Oracle continues to anticipate $90.0 billion to $95.0 billion in FY2027 capital expenditures, with net cash capital expenditures of no more than $70.0 billion.
Maxson said Oracle had completed its previously disclosed $20 billion at-the-market equity issuance during Q1. Asked about free cash flow, she said Oracle had not provided, and did not expect to provide, a timeframe for when it would turn positive. She also said Oracle expects gross margin to flatten over the next couple of years as its data-center ramp-up concludes.
For the quarter ahead, Maxson said Oracle expects Q2 FY2027 cloud-revenue growth of 65.0% to 71.0% in U.S. dollars, total revenue growth of 30.0% to 34.0%, and non-GAAP EPS of $1.85 to $1.93.
Guidance
Oracle now expects FY2027 revenue of at least $90.0 billion and FY2027 non-GAAP EPS of $8.10. For Q2 FY2027, Oracle expects revenue growth of 30.0% to 34.0% in both constant currency and U.S. dollars, cloud-revenue growth of 64.0% to 70.0% in constant currency and 65.0% to 71.0% in U.S. dollars, and non-GAAP EPS of $1.83 to $1.91 in constant currency and $1.85 to $1.93 in U.S. dollars. Oracle continues to anticipate $90.0 billion to $95.0 billion of FY2027 capital expenditures and net cash capital expenditures of no more than $70.0 billion.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| EPS, non-GAAP | FY2027 | $8.10 | — | New |
| Revenue | FY2027 | $90.0 billion | — | New |
| EPS, Non Gaap, usd | Q2 FY2027 | $1.85–$1.93 | — | New |
| EPS, Non Gaap, constant Currency | Q2 FY2027 | $1.83–$1.91 | — | New |
| Capex, Net Cash | FY2027 | $70.0 billion | — | New |
| EPS, non-GAAP | Q2 FY2027 | $1.85–$1.93 | Q1 FY2027: $1.72–$1.76 | Raised |
| EPS growth, Cagr | through FY2030 | $0.28 | — | New |
| Revenue growth, Cagr | through FY2030 | 31.0% | — | New |