Oracle jumps 7% as cloud revenue doubles, capex soars — SkimNews
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- Oracle shares climbed 7% in extended trading after Q1 FY earnings beat LSEG consensus: adjusted EPS of $1.92 (vs. $1.74 expected) and revenue of $19.35B (vs. $19.14B expected); revenue grew nearly 30% YoY for the quarter ended Aug. 31.
- Cloud infrastructure revenue more than doubled to $7.4B, beating the $7.09B StreetAccount estimate, while total cloud revenue jumped 62% to $11.61B — but traditional software revenue slipped 3% to $5.55B, below the $5.61B consensus.
- Capital expenditures soared to $28.50B from $8.50B a year earlier as Oracle delivered 850 megawatts of new data center capacity; CFO Hilary Maxson told reporters no sites, including New Mexico, appear delayed relative to the fiscal '27 schedule.
- Oracle's balance sheet now carries $125B in debt and negative free cash flow of -$5.4B (vs. -$362M a year earlier), leaving it with a weaker credit position than hyperscaler peers.
- FY27 guidance was raised to $8.10 adjusted EPS on at least $90B in revenue, with remaining performance obligations of $664B topping the $630.6B consensus; Q2 guidance calls for $1.85-$1.93 adjusted EPS and 30-34% revenue growth.
- Despite Thursday's beat, Oracle's stock remains down 22% YTD through Thursday's close against an S&P 500 gain of roughly 11%; Oracle also secured a Pentagon contract worth up to $7B over a decade and launched AI agents for HR teams.
Why it matters: Oracle's cloud infrastructure revenue more than doubled, but capex tripled to $28.5B and debt hit $125B, with free cash flow worsening to -$5.4B from -$362M. The 7% pop rewards the beat, yet shares remain down 22% YTD against an S&P 500 up ~11% — leaving investors to price whether this capital intensity converts to durable returns.
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