Oracle Q4 Revenue Hits Record High. But Shares Fall Over 7% Post-Market, Capex Rise to $55.7 Billion Sparks Investor Concern

TradingKey - On June 10, Eastern Time, Oracle ( ORCL) shares fell more than 7% in after-hours trading after the company released its fourth-quarter fiscal 2026 results. As of press time, the stock remained down 4.85%, trading at 191.49.

In the fourth quarter, Oracle's total revenue reached a record $19.2 billion, exceeding market expectations of $19.1 billion, representing a year-over-year increase of 21% in USD terms and 20% in constant currency terms.

Breaking down the business segments, total cloud revenue reached $9.9 billion, a 47% increase year-over-year, making it the company's primary revenue source. Specifically, Cloud Infrastructure (IaaS) revenue was $5.8 billion, up 93% year-over-year, slightly exceeding market expectations of 91%; Cloud Application (SaaS) revenue reached $4.1 billion, up 10% year-over-year.

On the earnings front, GAAP EPS was $1.45, up 21% year-over-year; non-GAAP EPS was $2.11, up 24% year-over-year.

During the period, Remaining Performance Obligations (RPO) reached a record high, increasing by $85 billion sequentially from $553 billion to $638 billion. Oracle disclosed that almost all of the incremental growth in RPO for the third and fourth quarters of fiscal 2026 came from large-scale AI contracts. These contracts utilize two innovative models: customers prepaying directly for GPU purchases, or purchasing GPUs themselves and delivering them to Oracle for use. To date, cumulative investment from these two types of customers has reached $75 billion, significantly reducing Oracle's external financing needs for building its own AI data centers.

For fiscal year 2026, Oracle's total revenue reached a record $67.4 billion, up 17% year-over-year; total cloud revenue was $34.0 billion, up 39% year-over-year. GAAP EPS increased 34% year-over-year to $5.83; non-GAAP EPS rose 27% to $7.63.

Regarding guidance, Oracle expects total revenue for Q1 FY27 to grow 27%-29%. Total cloud revenue is projected to grow 57%-63% in constant currency terms and 58%-64% in USD terms. Non-GAAP EPS is expected to grow 16%-19% in constant currency terms, reaching $1.71 to $1.75.

For full-year guidance, Oracle officially confirmed its fiscal 2027 total revenue target of $90 billion remains unchanged, while raising its non-GAAP EPS guidance to $8.05.

Furthermore, excluding one-time events in fiscal 2026—namely the sale of its Ampere chip business and Bloom Energy warrants—the company's fiscal 2027 EPS would achieve 18% year-over-year growth.

Notably, the company's capital expenditures for the quarter ended May 31 reached $15.9 billion, driving full-year capex to $55.7 billion. This significantly exceeded the previous guidance of $50 billion, sparking investor concerns over the profitability of its AI infrastructure business.

As a legacy database giant, Oracle is pivoting aggressively to become an AI computing provider, building large-scale data centers for clients like OpenAI. To support these massive investments, the company has announced plans to raise a total of $50 billion through debt and equity financing in 2026.