Oracle has outlined a robust growth forecast for its fiscal years 2026 and 2027, driven by escalating demand for AI computing capabilities. The company anticipates revenue increases of 15% in fiscal 2026 and 20% in fiscal 2027, surpassing analyst predictions provided by LSEG.
Despite fiscal third-quarter (Q3 FY25) sales not meeting expectations, Oracle executives expressed optimism about AI-driven growth in future periods. Following the announcement, Oracle’s shares experienced a 3.5% rise in after-hours trading on Monday, although the stock has decreased by 11% since the beginning of the year.
The cloud infrastructure segment at Oracle has become a significant focus area due to demand for computing power essential for AI projects. This segment saw revenues rise by 49% from the previous year, reaching $2.7bn. Overall quarterly revenue increased year-over-year (YoY) by 6%, reaching $14.13bn, which was slightly below estimates from analysts as compiled by Visible Alpha.
Larry Ellison, Oracle’s chairman and CTO, revealed that the company is on track to ramp up its data centre capacity twofold in 2025. “Customer demand is at record levels,” said Ellison. “Our Database MultiCloud revenue from Microsoft, Google and Amazon is up 92% in the last three months alone. GPU consumption for AI training grew 244% in the last 12 months. And we are seeing enormous demand for AI inferencing on our customers’ private data.”
Oracle’s earnings and cloud services performance
In terms of earnings, Oracle reported an adjusted earnings per share of $1.47, narrowly missing the expected $1.49. Net income rose to $2.94bn, or $1.02 per share, up from $2.4bn, or $0.85 per share, from the previous year.
Oracle’s cloud services sector played a crucial role in these financial results, seeing a year-over-year revenue uplift of 10% to $11.01bn, accounting for 78% of total sales. Combined IaaS and SaaS cloud revenue increased by 23%, reaching $6.2bn.
CEO Safra Catz stated that Oracle anticipates a revenue increase beginning in June for fiscal 2026 and highlighted key cloud partnerships with companies like Nvidia, Meta, OpenAI, and Elon Musk’s xAI. “Oracle signed sales contracts for more than $48bn in Q3,” said Catz. “This record sales number pushed our Remaining Performance Obligations, or RPO, up 63% to over $130bn.”
For the ongoing quarter, Oracle projects revenue growth between 8% and 10%, slightly below analyst expectations of about 11%, translating to approximately $15.91bn according to LSEG data. Additionally, Oracle expects adjusted earnings per share ranging from $1.61 to $1.65, compared to the analyst consensus of $1.79.
The remaining performance obligations for the third quarter reached $130bn, representing a 62% increase in USD and a 63% rise in constant currency terms.
GAAP earnings per share went up by 20% to $1.02, while non-GAAP earnings per share increased by 4% to reach $1.47.
The company’s third-quarter total revenue amounted to $14.1bn, marking a 6% increase in USD and an 8% rise in constant currency terms. IaaS revenue, meanwhile, rose by 49% in USD and by 51% in constant currency terms to reach $2.7bn during this quarter. SaaS revenue amounted to $3.6bn with an increase of 9% in USD and 10% in constant currency terms.
Furthermore, Fusion Cloud ERP (SaaS) revenue grew by 16% in USD and by 18% in constant currency terms to reach $900m. Similarly, NetSuite Cloud ERP (SaaS) revenue also showed growth of 16% in USD and rose by 17% in constant currency terms during this period.
In January, Oracle announced the launch of a joint initiative with OpenAI and SoftBank named Stargate to develop AI infrastructure in the US. This venture has committed an initial investment of $100bn, with plans to potentially expand it up to $500bn over four years.
Read more: Trump administration unveils $500bn Stargate initiative to dominate AI infrastructure
