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Oracle Corp Earnings - Analysis & Highlights for Q3 2025
Overview
PositivesNegativesOutlook
- Cloud database services revenue was up 28% to $2.3 billion.
- Total revenues for Q3 were $14.1 billion, up 8% YoY.
- RPO is now $130 billion, up 63% in cc, reflecting the growing trend of customers wanting larger and longer contracts.
- Oracle has built lots of agents on top of the Oracle databases and made those agents a part of their applications, modernizing and automating their applications.
- Software license revenues were down 8% to $1.1 billion.
- Non-GAAP tax rate for Q3 was 19.9%, higher than 19% guidance, and lowered EPS by $0.02.
- Total cloud revenue is expected to grow from 24% to 28% in constant currency, and from 25% to 27% in USD.
- Non-GAAP EPS is expected to grow from 0% to 2% and be between $1.62 and $1.66 in constant currency.
- Non-GAAP EPS is expected to grow between negative 1% and positive 1% and be between $1.61 and $1.65 in USD.
- The company expects to see increases in RPO due to a lot of demand.
- The company is confident in meeting its $66 billion revenue target for FY 2026, representing around a 15% growth rate.
Q&A Highlights from Oracle Corp Earnings Call Q3 2025
- Analyst asked about how Stargate, a related party, will flow through Oracle's financials.
- Stargate will place contracts with Oracle, and the financials will reflect that, but it won't cause any unique changes to Oracle's financials.
- Stargate will place contracts with Oracle, and the financials will reflect that, but it won't cause any unique changes to Oracle's financials.
- Analyst asked about how to think about RPO trends over the next few quarters in light of the recent performance.
- Safra A. Catz expects RPO to increase due to high demand for Oracle's cloud services, with significant numbers expected in the coming months. However, Oracle's remaining performance obligation may decrease due to capacity going online, but it is expected to remain large.
- Safra A. Catz expects RPO to increase due to high demand for Oracle's cloud services, with significant numbers expected in the coming months. However, Oracle's remaining performance obligation may decrease due to capacity going online, but it is expected to remain large.
- Analyst asked about the progress of deploying Oracle's products on hyperscalers, specifically regarding the 40 deployments needed to meet global enterprise demand.
- Safra Catz explained that while Oracle does not have full control over the deployment timeline, the company and its partners are motivated to get the products deployed as quickly as possible. She also mentioned that there is significant competition between the hyperscalers to grab workloads before their competitors, and that demand for Oracle's products is high.
- Safra Catz explained that while Oracle does not have full control over the deployment timeline, the company and its partners are motivated to get the products deployed as quickly as possible. She also mentioned that there is significant competition between the hyperscalers to grab workloads before their competitors, and that demand for Oracle's products is high.
- Analyst asked about Oracle's lower CapEx per dollar of IaaS and PaaS revenue compared to larger hyperscale cloud providers and how to understand the reason behind it.
- Lawrence Joseph Ellison explained that Oracle starts with smaller data centers and grows based on demand, which allows them to have higher utilization and lower labor costs. Additionally, Oracle has a high degree of standardization and automation in their cloud, which further improves margins. He also highlighted the importance of automation in reducing human error and improving security.
- Lawrence Joseph Ellison explained that Oracle starts with smaller data centers and grows based on demand, which allows them to have higher utilization and lower labor costs. Additionally, Oracle has a high degree of standardization and automation in their cloud, which further improves margins. He also highlighted the importance of automation in reducing human error and improving security.
