Oracle's stock rallies by 8.7% after earnings beat with +44% revenue of $8.9 billion

Oracle shares climbed hard after the company posted quarterly numbers that beat Wall Street estimates and lifted its fiscal 2027 revenue target. The stock rose as much as 10% in extended trading on Tuesday before trimming some of that jump.

By press time, ORCL was still up 8.7%. The market reaction came after the software company reported adjusted earnings per share of $1.79, ahead of the $1.70 expected by analysts tracked by LSEG. Revenue came in at $17.19 billion, above the $16.91 billion consensus.

The company also gave new guidance for the fiscal fourth quarter that kept investors focused on its cloud and AI buildout. Oracle said it expects adjusted earnings per share in a range of $1.92 to $1.96 in constant currency, and $1.96 to $2.00 in U.S. dollars.

It said total revenue should grow 18% to 20% in constant currency and 19% to 21% in U.S. dollars. For cloud revenue, the company projected growth of 44% to 48% in constant currency and 46% to 50% in U.S. dollars. That is where a lot of the heat in this report sits.

Oracle lifts forecasts as cloud demand and AI contracts pile up

A major number in the report was remaining performance obligations, or RPO, which ended the quarter at $553 billion. That was up 325% from a year earlier and up $29 billion from the prior quarter.

The company said most of that jump in the third quarter came from large AI contracts. It also said it does not expect to raise extra funds to support most of those deals because the equipment is largely covered upfront.

In some cases, customers prepay so Oracle can buy the needed GPUs. In other cases, customers buy the GPUs themselves and provide them to Oracle.

The company left its fiscal 2026 outlook unchanged. It still expects $67 billion in revenue for that year and $50 billion in capital expenditures. For fiscal 2027, though, it raised total revenue guidance to $90 billion. That upgrade mattered. So did the message behind it.

Oracle said demand for cloud capacity used for AI training and inferencing is still running ahead of supply. It also said some of the biggest buyers of AI cloud capacity have improved their financial position, giving the company room to meet and likely beat its fiscal 2027 growth target.

There was also a shareholder payout update. The board declared a quarterly cash dividend of $0.50 per share on outstanding common stock. The dividend will go to stockholders of record at the close of business on April 9, 2026, with payment set for April 24, 2026.

Oracle funds expansion and rebuilds software teams around AI coding tools

Back in February, the company said it planned to raise up to $50 billion through debt and equity financing and said it did not expect to issue any more bonds beyond that amount during calendar year 2026.

Within days, Oracle raised $30 billion through a mix of investment-grade bonds and mandatory convertible preferred stock.

The company said demand was huge and that the order book was heavily oversubscribed. It also said the at-the-market equity portion of the financing program has not started yet.

The company tied a lot of its future plan to changes inside its engineering work.Oracle said AI models used to generate computer code have become efficient enough that it is reorganizing product development teams into smaller and more productive groups.It said the new coding tools let it build more software faster and with fewer people.

Oracle also said this is helping it create more SaaS applications across more industries at a lower cost, while making those application suites more competitive and more profitable.

Larry Ellison, Oracle’s owner, chief technology officer, and executive chairman, used the earnings call to make that point directly.

He said, “Thank God we have these coding tools now that allow us to build a comprehensive set of software, agent-based software, to implement, to automate a complete ecosystem like healthcare or financial services.”

Larry added, “That’s what we’re doing at Oracle. That’s why we think we’re a disruptor. That’s why we think the SaaS apocalypse applies to others but not to us.”

CEO Mike Sicilia pushed the same line.He said he does not agree with the idea of a Saaspocalypse.

Mike said, “I do think that AI tools and their coding capabilities would be a threat if we weren’t adopting them, but we are, and very rapidly.” He added, “We are building brand new SaaS products using AI and also embedding AI agents right into our existing applications suites.”

Sicilia also said customers are not telling the company they want to throw out their core systems overnight.

Mike said, “I’ve not yet met a customer who tells me they’re ready to give away their retail merchandising system, their core banking system, demand deposit account systems, electronic health record systems, and some cobbling together of niche AI features are going to replace all of that overnight.”

He added, “In fact, we hear quite the opposite from the customers.”

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