Oracle Corporation Q1 FY2026 earnings call

• Oracle has become a go-to for AI workloads, with significant cloud contracts signed with AI companies like OpenAI, xAI, etc. Remaining performance obligations (RPO) top $455 billion, up 359% y-o-y and $317 billion from Q4. Cloud RPO grew nearly 500%. • Accelerated AI adoption internally; operating income expected to grow mid-teens this year and higher in FY2027. Non-GAAP EPS $1.47, GAAP $1.01. Operating cash flow $8.1 billion, free cash flow negative $362 million. CapEx $8.5 billion. Cash and marketable securities $11 billion. Short-term deferred revenue $12 billion, up 5%. Repurchased 440,000 shares for $95 million. Dividends $5 billion over 12 months. • Fiscal year 2026 CapEx expected around $35 billion. Oracle Cloud Infrastructure expected to grow 77% to $18 billion in FY2026, then increase to $32 billion, $73 billion, $114 billion, $144 billion in following years. RPO likely to exceed $500 billion. • Larry Ellison discussed AI inferencing being larger than training, Oracle's position as largest custodian of private enterprise data, new AI database with vectorization, ability to provide cloud at customer for $6 million (1% of competitors' cost), advanced application generator.

Total cloud revenue (apps and infrastructure) was up 27% to $7.2 billion. Cloud infrastructure revenue was $3.3 billion, up 54%. OCI consumption revenue was up 57%. Cloud database services were up 32% with annualized revenues near $2.8 billion. Autonomous Database revenue was up 43%. Multi-cloud database revenue grew 1529%. Cloud application revenue was $3.8 billion, up 10%. Strategic back-office application revenue was $2.4 billion, up 16%. Total software revenue for the quarter was $5.7 billion, down 2%. Total revenues for the quarter were $14.9 billion, up 11% from last year.

• Fiscal year 2026 total revenue growth 16% in constant currency. • Q2 total revenue growth 12%-14% in constant currency, 14%-% in USD. • Cloud revenue growth 32%-36% in constant currency, 33%-37% in USD. • Non-GAAP EPS growth 8%-10% in constant currency, 10%-12% in USD. • Fiscal year 2026 CapEx expected around $35 billion.

• Forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially. Factors in Oracle's most recent reports (10-K and 10-Q) and applicable amendments should be reviewed for a complete discussion of risks affecting future results.

Q: John DiFucci asks about what else drives the amazing forecasts.

A: Lawrence Ellison talks about inferencing demand, Oracle's position as custodian of data, cloud at customer, application generator.

Q: Brad Zelnick asks about enterprise applications and market share.

A: Lawrence Ellison talks about application generation, selling suites, AI inferencing capabilities.

Q: Derrick Wood asks about CapEx and operational costs for RPO.

A: Safra Catz talks about CapEx, equipment optimization, $35B CapEx for FY2026.

Q: Mark Moerdler asks about differentiation in AI training business.

A: Lawrence Ellison talks about network speed, performance advantages.

Q: Alex Zukin asks about pacing of Oracle AI database adoption.

A: Lawrence Ellison talks about demand for AI, bundling LLMs, Oracle's ability to deliver.