Oracle (甲骨文) posts blockbuster quarter as AI contracts swell RPO to $553 billion

Results and outlook

Oracle (甲骨文) told investors it delivered one of its strongest quarters in 15 years, with cloud revenue (IaaS + SaaS) reaching $8.9 billion—up 44% year‑over‑year—and accounting for 52% of total sales for the first time. The company said remaining performance obligations (RPO), a forward‑looking backlog measure, stood at $553 billion at quarter end, a 325% year‑over‑year jump and roughly eight times the firm’s full‑year revenue guide of $67 billion. Q4 FY2026 revenue is expected to rise 19–21% in dollar terms, cloud revenue 46–50%, and non‑GAAP EPS is projected at $1.96–$2.00.

Oracle also completed $30 billion of financing this quarter through investment‑grade bonds and mandatory convertible preferred stock, reportedly oversubscribed, and kept its full‑year CapEx guidance unchanged at $50 billion—equivalent to roughly 75% of projected annual revenue. Management raised the FY2027 revenue target to $90 billion, signaling continued confidence in AI‑related demand.

Why it matters — AI, GPUs and market share

The company attributes the RPO surge mainly to large AI contracts, which it says are often supported by customer prepayments or by customers supplying GPUs directly—steps that reduce Oracle’s need to finance massive hardware purchases. Why does that matter? Prepaid contracts and customer‑supplied accelerators both increase revenue visibility and soften capital intensity risk amid tight GPU supply and U.S. export controls that complicate global chip flows.

It has been reported that Oracle’s cloud infrastructure (OCI) is winning business from incumbents by offering lower cost and AI‑optimized configurations, particularly for large model training and enterprise AI projects. Analysts note this could mark a structural share shift away from AWS and Azure if OCI’s momentum holds.

Risks and market reaction

Market skepticism is not gone: ORCL shares had fallen more than 22% year‑to‑date ahead of the report, trading around $151 and well below a 52‑week high of $344, leaving analysts’ average target at $253. The company’s strategy carries risk—$50 billion a year in CapEx is a double‑edged sword. If AI demand slows or contracted projects fail to convert into cash flow, leverage and execution risk would rise quickly. Investors will be watching contract delivery, GPU procurement paths, and free cash flow closely in the quarters ahead.

Note: the source text provided to this piece refers to Oracle (甲骨文), not Phoenix New Media (凤凰新媒体).