Oracle Q1 2027 earnings beat as cloud infrastructure revenue rises 121%

Oracle Q1 2027 earnings came in above Wall Street expectations, sending the shares higher in extended trading after the report. For investors, the results pair fast cloud growth and stronger guidance with a costly data-center expansion that pushed quarterly free cash flow further below zero.

For the fiscal first quarter ended Aug. 31, Oracle reported adjusted earnings of $1.92 a share on $19.35 billion in revenue. That exceeded the LSEG consensus estimates of $1.74 a share and $19.14 billion in revenue, according to CNBC. The revenue result was about $210 million above that estimate, while adjusted earnings exceeded it by $0.18 a share.

CNBC reported that Oracle shares were about 4% higher in extended trading. Quartz reported a 7% after-hours gain. The reports differ on the size of the move.

What drove Oracle’s Q1 2027 earnings beat?

Total revenue rose almost 30% from a year earlier. Cloud revenue increased 62% to $11.61 billion, above the $11.51 billion StreetAccount consensus cited by CNBC. Cloud infrastructure revenue rose 121% to $7.4 billion, exceeding the cited $7.09 billion estimate.

Oracle has tied its data-center expansion to its broader push in AI cloud infrastructure. The company said it delivered 850 megawatts of data-center capacity during the quarter, and CEO Clay Magouyrk said it signed more than $30 billion in additional AI contracts.

The figures also show cloud growth alongside a decline in software revenue. Software revenue fell about 3% to $5.55 billion, below the $5.61 billion StreetAccount estimate cited by CNBC.

Oracle’s reported GAAP, or generally accepted accounting principles, net income was $4.68 billion, or $1.56 per share, compared with $2.93 billion, or $1.01 per share, a year earlier. The $1.92 earnings figure used in the analyst comparison is adjusted earnings, which CNBC said excludes stock-based compensation expense. Investors comparing the two measures can review the distinction between revenue and earnings.

What is Oracle forecasting for the rest of fiscal 2027?

Oracle forecast second-quarter adjusted earnings of $1.85 to $1.93 a share and revenue growth of 30% to 34%. For the full fiscal year, it expects at least $90 billion in revenue and adjusted earnings of $8.10 a share. CNBC said the LSEG consensus had called for $89.76 billion in revenue and $8.07 in adjusted earnings per share.

The company ended the quarter with $664 billion in remaining performance obligations, above the $630.6 billion StreetAccount estimate cited by CNBC. Remaining performance obligations include contracted but unrecognized revenue, deferred revenue and uncollected invoices. They are a measure of commitments, rather than revenue already recorded.

Why are investors watching Oracle’s spending?

Oracle spent $28.5 billion on capital expenditures in the quarter, up from $8.5 billion a year earlier, CNBC reported. Free cash flow was negative $5.4 billion, compared with negative $362 million a year earlier, and CNBC reported $125 billion in debt.

Chief Financial Officer Hilary Maxson said Oracle’s full-year capital-spending guidance was unchanged. The spending and negative free cash flow underscore the importance of execution and demand as Oracle expands its data-center capacity.

This story draws on original reporting from CNBC.