Key facts
- Oracle reported first-quarter revenue of $19.3 billion, a 30% increase year-over-year and above analyst estimates.
- The company's revenue backlog reached $664 billion, boosted by over $30 billion in new AI cloud contracts.
- Oracle maintained its fiscal 2027 capital expenditure forecast between $90 billion and $95 billion.
- Cloud infrastructure revenue grew 121% in the first quarter.
- Oracle shares were trading 6% higher following the results.
Oracle Inc. exceeded Wall Street's revenue expectations for its first fiscal quarter, driven by strong demand for its AI cloud services and a significant increase in its revenue backlog. The company reported $19.3 billion in total revenue, a 30% increase from a year earlier, surpassing analysts' average estimate of $19.14 billion.
Oracle's shares rose 6% following the results, which included a 121% surge in cloud infrastructure revenue. The company's revenue backlog swelled to $664 billion, exceeding analyst estimates of $639.89 billion, according to Visible Alpha data. This growth was fueled by over $30 billion in additional AI cloud contracts booked during the quarter.
The results aim to alleviate investor concerns regarding Oracle's substantial debt-driven spending on data centers and AI infrastructure. Analysts from J.P. Morgan noted that the results should address questions about sustained backlog growth, revenue conversion amid data center delays, and the need for further capital raises. Lale Akoner, etoro market strategist, commented that the results should ease fears that Oracle is building data center capacity ahead of demand.
Oracle maintained its fiscal 2027 capital expenditure forecast at $90 billion to $95 billion, signaling continued investment in its infrastructure. Despite the positive earnings, Oracle's shares have been down more than 21% year-to-date prior to Friday's premarket gains, underperforming the S&P 500 index.