A month has gone by since the last earnings report for Oracle (ORCL). Shares have lost about 21.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Oracle due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Oracle Corporation before we dive into how investors and analysts have reacted as of late.
Oracle Q4 Earnings Beat Estimates, Cloud Growth Fuels Revenues
Oracle reported fourth-quarter fiscal 2026 non-GAAP earnings of $2.11 per share, which beat the Zacks Consensus Estimate by 7.65% and surged 24% in dollar terms and 23% in constant currency (cc) on a year-over-year basis.
Total quarterly revenues beat the consensus mark by 0.54% and increased 21% year over year to $19.2 billion, reflecting broad-based demand for Oracle's industry-leading cloud technology and applications suites.
Cloud revenues (IaaS + SaaS) increased 47% to $9.9 billion, driven by 93% growth in Cloud Infrastructure (IaaS), and 10% growth in Cloud Applications (SaaS). This represents a notable acceleration in cloud infrastructure growth compared to prior quarters, signaling unprecedented demand from AI-focused customers.
Oracle's Remaining Performance Obligations ended the fourth quarter at $638 billion, up 363% from the prior year and $85 billion sequentially from the end of the fiscal third quarter. Most of the RPO increase in both the fiscal third and fourth quarters was large-scale AI contracts where the customer prepaid Oracle for the purchase of the GPUs, or the customer bought and supplied the GPUs to Oracle. This substantial backlog provides remarkable visibility into future revenue growth.
ORCL's Q4 Top-Line Details
Cloud Infrastructure revenues (IaaS) surged 93% in USD and 92% in cc to $5.8 billion, marking another dramatic acceleration from the fiscal third quarter's 84% growth rate. Cloud Application revenues (SaaS) were $4.1 billion, up 10% in USD and 9% in cc.
Total cloud revenues (SaaS plus IaaS) surged 47% in USD and 46% in cc to $9.9 billion, demonstrating that cloud remains the primary driver of Oracle's growth trajectory. Cloud revenues now represent 52% of total quarterly revenues.
Software revenues were down 2% to $6.8 billion, reflecting customers' continuing migration from on-premise software to the Cloud. Services revenues were $1.5 billion, up 13%, and Hardware revenues were $0.9 billion, up 9%.
Operating Details of Oracle
Oracle generated fourth-quarter GAAP operating income of $6.1 billion, up 20%, while non-GAAP operating income rose to a record $8.6 billion, up 22%, driven by strong revenue growth and operating efficiency actions taken during the quarter.
GAAP net income available to common shareholders reached $4.2 billion, up 23%, and non-GAAP net income available to common shareholders grew to $6.2 billion, up 26%. Fiscal fourth-quarter GAAP earnings per share increased to $1.45, up 21%, and non-GAAP earnings per share climbed to $2.111, up 24%.
ORCL's Balance Sheet & Cash Flow
Oracle's strong operating income translated to a record fiscal year operating cash flow of $32 billion, up 54%. However, free cash flow was negative $23.7 billion for fiscal 2026 as Oracle continued to execute on investments to support the growth of its Cloud Infrastructure business.
Total notes payable and borrowings stood at approximately $129.5 billion as of May 31, 2026 (current portion of $7.2 billion and non-current portion of $122.3 billion). In fiscal 2026, Oracle raised $43 billion in debt financing and $5 billion in equity financing. In fiscal 2027, Oracle expects to raise approximately $40 billion through a combination of debt and equity financing, including its previously announced $20 billion at-the-market equity issuance.
The board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock, consistent with prior quarters.
Forward Guidance
Oracle provided the following forward-looking guidance for first-quarter fiscal 2027. Total Revenues are expected to grow from 27% to 29% in both constant currency and USD. Total Cloud revenues are expected to grow between 57% and 63% in constant currency and 58% and 64% in USD. Non-GAAP earnings per share are expected to grow in the range of 16-19% and be between $1.71 and $1.75 in constant currency. Non-GAAP earnings per share are projected to increase 17% to 20% and be between $1.72 and $1.76 in USD.
For fiscal 2027, the company confirmed prior revenue guidance of $90 billion and raised non-GAAP EPS guidance to $8.05, indicating growth of 18% after adjusting for the one-time events of selling its Ampere chip business and Bloom Energy warrants in fiscal 2026.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 5.31% due to these changes.
VGM Scores
Currently, Oracle has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Oracle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
