Oracle Q4 Beats Estimates, Software Slides, Debt Up
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- Oracle reported adjusted Q4 earnings per share of $2.11, topping the $1.96 consensus and up from $1.70 a year earlier.
- Oracle posted Q4 revenue of $19.2 billion, beating the $19.1 billion forecast and rising 21% year‑over‑year.
- Oracle's cloud‑infrastructure (OCI) sales reached $5.8 billion, up 93% YoY and edging out analyst expectations.
- Oracle's legacy software sales slipped 2% and cloud‑software revenue missed targets, leaving total software revenue at $11 billion, a modest 2% YoY increase.
- Oracle announced FY2026 capital expenditures of about $70 billion plus $20‑$25 billion customer‑paid, and plans an additional $40 billion in FY2027.
- Oracle's debt and lease liabilities rose 50% to $156 billion, with $261 billion of lease obligations not yet commenced.
- Oracle holds a $638 billion backlog, over half tied to a multiyear OCI contract with OpenAI, and projects OCI revenue of $166 billion by FY2030 (≈75% of total sales).
Why it matters: Oracle's aggressive AI‑cloud push expands its revenue base but comes at the cost of higher debt and shrinking free‑cash flow, pressuring shareholders while betting on future AI demand; a lagging software segment and margin compression further strain earnings and raise execution risk for its data‑center buildout.
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