Oracle Corp Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Oracle Corp (ORCL) Q2 2026 earnings call covered key financial results including revenue growth, RPO, and EPS, with a focus on cloud services. Business segment performance highlighted cloud infrastructure and applications growth. Discussions on capital allocation addressed investments in data centers and funding strategies. Industry trends emphasized AI infrastructure demand and multicloud adoption. Growth opportunities included AI database and data platform solutions. Financial guidance provided revenue and EPS targets for Q3 and FY 2026, with increased CapEx expectations.
Key Financial Results:
Total revenues for the quarter were $16.1 billion, up 13%.
Non-GAAP EPS was $2.26, up 51%, while GAAP EPS was $2.10, up 86%.
Remaining Performance Obligations (RPO) ended the quarter at $523.3 billion, up 433% from last year and up $68 billion since the end of August.
$4 billion of additional revenue is now expected in FY 2027.
Full year FY 2026 revenue expectation of $67 billion remains unchanged.
Fiscal 2026 CapEx will be about $15 billion higher than previously forecasted.
Business Segment Results:
Total cloud revenue, which includes both applications and infrastructure, was up 33% at $8 billion.
Cloud revenue now accounts for half of Oracle's overall revenue.
Cloud Infrastructure revenue was $4.1 billion, up 66% with GPU related revenue growing 177%.
Cloud database services revenue was up 30% with Autonomous Database revenue up 43% and Multicloud consumption up 817%.
Cloud applications revenue was $3.9 billion and up 11%.
Strategic back office applications revenue was $2.4 billion and up 16%.
Capital Allocation:
CapEx was $12 billion, reflecting investments being made to support accelerating growth.
The vast majority of CapEx investments are for revenue generating equipment going into data centers.
Oracle expects to maintain its investment grade debt rating.
Industry Trends and Dynamics:
There is significant and unprecedented demand for Oracle's cloud services.
Strong demand for AI infrastructure is present across training and inferencing.
Increasing demand is seen across all clouds for Oracle Database Services.
Competitive Landscape:
Oracle's Cloud Infrastructure businesses continue to grow much faster than competitors.
Oracle's unique combination of infrastructure and applications differentiates it from other hyperscalers.
Growth Opportunities and Strategies:
Oracle is bringing all three layers of its software stack together to enable AI models to do multi-step reasoning on private enterprise data while keeping that data private and secure.
Oracle's AI data platform unifies all data and allows reasoning on all of the data using the latest AI models.
Combining industry application sales team and Fusion sales teams into a single selling organization enables sellers to have more strategic one Oracle conversations with customers to sell higher and to sell more.
Financial Guidance and Outlook:
Total cloud revenue is expected to grow from 37% to 41% in constant currency, and from 40% to 44% in USD for Q3.
Total revenues are expected to grow from 16% to 18% in constant currency and from 19% to 21% in USD for Q3.
Non-GAAP EPS is expected to grow between 12% to 14% and be between $1.64 and $1.68 in constant currency, and grow between 16% to 18% and be between $1.70 and $1.74 in USD for Q3.
Multicloud Strategy
Multicloud database consumption has increased 817% year-over-year.
Oracle launched 11 multi-cloud regions this quarter bringing the total to 45 regions live across AWS, Azure and GCP, with 27 more planned over the next month.
