Oracle reports earnings beat and strong cloud growth in Q1

Oracle's shares rose 7% in after-hours trading on Thursday after the company released its fiscal first-quarter results, which exceeded consensus estimates. Adjusted earnings came in at $1.92 per share versus the $1.74 expected, and revenue reached $19.35 billion, slightly above the $19.14 billion forecast.

Year-over-year revenue grew nearly 30%, and net income increased to $4.68 billion, or $1.56 per share, from $2.93 billion a year earlier. Cloud revenue climbed 62% to $11.61 billion, beating the $11.51 billion consensus, while cloud infrastructure revenue more than doubled to $7.4 billion.

For the second fiscal quarter, Oracle projected adjusted earnings of $1.85-$1.93 per share and revenue growth of 30%-34%, compared with analysts' expectations of $1.89 per share and $21.20 billion in revenue. The company also reaffirmed its full-year outlook of at least $90 billion in revenue and $8.10 in adjusted earnings per share.

Oracle highlighted progress in its data-center expansion, delivering 850 megawatts of capacity during the quarter, and announced new AI agents for human-resources functions. The firm also secured a Pentagon contract valued at up to $7 billion over ten years.

Chief financial officer Hilary Maxson told reporters that there were no known delays in the New Mexico data-center project or other sites relative to the company's fiscal 2027 outlook. CEO Clay Magouyrk noted that the company closed more than $30 billion of additional AI contracts in the quarter without requiring extra capital.

Despite the earnings beat, Oracle's cash position remains weaker than that of larger cloud competitors, with $125 billion in debt and negative free cash flow of $5.4 billion for the quarter. Capital expenditures rose sharply to $28.5 billion from $8.5 billion a year earlier.