Oracle reported adjusted earnings per share of $2.11, surpassing the expected $1.96, and revenue of $19.18 billion, slightly above the $19.10 billion forecast. The company's revenue grew 21% year-over-year, with net income rising to $4.22 billion from $3.43 billion a year earlier.
Despite maintaining its revenue guidance of $90 billion for the fiscal year 2027, Oracle raised its adjusted earnings per share forecast to $8.05, ahead of the $8.01 anticipated by analysts. However, the announcement of a $40 billion capital raise, including a $20 billion share sale, has raised investor concerns about whether the demand for AI can justify such a large influx of capital.
Oracle's negative free cash flow of $23.7 billion for the fiscal year adds to these worries. The company reported a 47% increase in cloud revenue to $9.91 billion, although software revenue dipped slightly to $6.82 billion. Notably, cloud infrastructure revenue surged 93% to $5.8 billion.
Analysts noted that over 50% of Oracle's remaining performance obligation, which reached $638 billion, is linked to OpenAI. The stock's decline in after-hours trading reflects investor apprehension regarding the company's aggressive financing strategy amidst uncertain AI demand