EARNINGS REVIEW
Oracle, FY26 Q4 Earnings Results
Historical quarterly report · Results and outlook reflect information available at the time of that release. Actual results from subsequent quarters are not incorporated into the outlook.
Strong IaaS growth and expanding contract balances drove revenue. Quarterly OCF improved, but cash CapEx was larger, leaving FCF negative. Financing and customer prepayment arrangements for fulfilling large contracts are key.
Assessment · Demand and the contract base are strong, but accompanied by investment and borrowing burdens. Conditions for a more favorable investment assessment are actual delivery of IaaS growth and a narrower FCF deficit. RPO size alone does not establish certainty or a probability of investment recovery.
Key management and company statements
Earnings release · Short original excerpt“substantially reduces the amount of capital Oracle must raise”Meaning · This substantially reduces the capital Oracle needs to raise.
Context · This company wording describes customer GPU prepayments and direct supply arrangements. It is not arbitrarily attributed to a specific CEO or CFO.
Original statement ↗01 Revenue, operating income and results versus expectations
Year over year · Revenue 15.903 → 19.184 B$ (+20.6% · +3.281 B$), Operating income 5.109 → 6.133 B$ (+20.0% · +1.024 B$).
Quarter over quarter · Revenue 17.190 → 19.184 B$ (+11.6% · +1.994 B$), Operating income 5.464 → 6.133 B$ (+12.2% · +0.669 B$), Operating margin 31.8% → 32.0% (+0.2%p).
IaaS revenue increased by 2.792 B$ year over year, growing 93%. SaaS revenue increased by 0.384 B$. Together they represent Cloud revenue of 9.913 B$; software, hardware and services revenue are not separately added in the table above.
Results versus previous guidance
Revenue guidance 18.925~19.243 B$ → actual 19.184 B$. Within the range, 0.059 B$ below the high end.
02 Earnings sustainability · From operating income to net income
Net income attributable to common shareholders after preferred dividends is a separate metric from net income of 4.304 B$. This quarter's net non-operating income and expenses include interest expense and investment gains and are distinguished from operating income.
Company-reported non-GAAP EPS also included a one-time investment gain. As the company provided a separate growth rate excluding that gain, an adjusted label alone does not make all earnings recurring.
- Operating income
- 6.133 B$
- Net non-operating income/loss
- −0.763 B$
- Income tax expense
- −1.066 B$
- Consolidated net income
- 4.304 B$
Net income of 4.304 B$ in the existing quarterly data is on a consolidated basis.
03 Cash flow quality · Net income → OCF → FCF
Q4 OCF of 14.620 B$ and cash CapEx of 16.493 B$ were derived by subtracting nine-month cumulative amounts in the same fiscal year from annual cash flows. FCF was −1.873 B$, distinct from annual FCF of approximately −23.7 B$ in the release.
Pretax income and income tax use the directly disclosed Q4 figures of 5.370 B$ and 1.066 B$. The 0.001 B$ difference from annual-minus-nine-month calculations was not added to the directly disclosed quarterly values.
- Consolidated net income
- 4.304 B$
- Total net adjustments, including non-cash items and working capital¹
- 10.316 B$
- Operating cash flow
- 14.620 B$
- Cash CapEx
- −16.493 B$
- FCF
- −1.873 B$
¹ Total net adjustments calculated as OCF minus net income. This is not a single disclosed line item; it combines non-cash items, working capital, classification differences and other adjustments.
FCF versus the previous quarter · −11.484 → −1.873 B$, a 9.611 B$ improvement.
04 Financial capacity · Net debt and payment obligations
Previous-quarter net cash · 2026-02-28
Cash and liquid assets 39.132 / Borrowings 134.605 B$
Current-quarter net cash · 2026-05-31
Cash and liquid assets 31.894 / Borrowings 129.541 B$
Net debt deteriorated by 2.174 B$ from the previous quarter. The carrying amount of current borrowings is 7.199 B$. This may differ from the principal maturity schedule.
The company said it raised approximately 43 B$ in debt and 5 B$ in equity in FY2026. These are not quarterly financing amounts. It planned to raise approximately 40 B$ more in combined debt and equity in FY2027, including the existing 20 B$ at-the-market stock issuance plan.
Customer GPU prepayments or direct supply can reduce the company's burden, but revenue recognition, cash collection and capital deployment do not occur simultaneously across the entire contract. Financing plans and contract execution schedules should be assessed together.
Common definitions · Cash and liquid assets = cash equivalents + current investments and deposits. Borrowings = carrying amount of interest-bearing debt (current + non-current), excluding separate lease liabilities. This differs from total liabilities of 218.703 B$. Restricted cash, non-current securities and non-current deposits are excluded from cash and liquid assets.
05 Investment, capital allocation and cash recovery
Infrastructure expansion is a prerequisite for future revenue, but cash investment exceeded OCF in the current quarter. Even as RPO grows, cash collection can vary with capacity-delivery delays, financing costs and the pace of customer-specific contract execution.
This quarter, cash CapEx/revenue was 86.0% and FCF/revenue was −9.8%. These ratios should not be used as a simple ranking of companies with different business models and FCF definitions.
06 Next-quarter and full-year outlook and implications
YoY +27.0%~+29.0% · QoQ −1.2%~+0.4%. Comparison revenue was 14.926 B$ in the corresponding prior-year quarter and 19.184 B$ in the current quarter. Growth rates were calculated from the underlying amounts.
The company guided to next-quarter USD revenue growth of 27~29%; the amount range below applies these rates to the corresponding prior-year revenue. FY2027 annual revenue guidance was 90 B$.
The next-quarter Cloud revenue growth outlook was 58~64% in USD. Dividing contract balances by quarterly revenue does not establish an achievable revenue growth rate.
RPO / Backlog
QoQ 552.600 → 638.000 B$ (+15.5% · +85.400 B$).
YoY 137.800 → 638.000 B$ (+363.0% · +500.200 B$).
Remaining performance obligations (RPO) under customer contracts; distinct from total orders or uncommitted negotiations · Contract balances are not equivalent to committed next-quarter revenue or cash inflows. RPO scope differs across companies.
RPO disclosure ↗Quarterly results · CY-aligned view
Amounts in B$. The table shows all 4 quarters of the prior year and the current year's reported quarters, based on the report's CY-aligned year. Each fiscal quarter is assigned to the calendar quarter with the greatest overlap in its actual reporting period; the original FY/CY label and start and end dates are also shown. Amounts have not been recalculated into actual calendar quarters.
| CY alignment | 2025 · 4 quarters | 2026 · 2 quarters | Change this quarter | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Metric | 2025 total4-quarter totalBalances are at period end | 1QFY25 Q324-12-01 ~25-02-28 | 2QFY25 Q425-03-01 ~25-05-31 | 3QFY26 Q125-06-01 ~25-08-31 | 4QFY26 Q225-09-01 ~25-11-30 | 2026 YTD2-quarter totalBalances are at period end | 1QFY26 Q325-12-01 ~26-02-28 | 2QFY26 Q426-03-01 ~26-05-31 | QoQvs FY26 Q3 | YoYvs FY25 Q4 |
| Revenue | 61.017 | 14.130 | 15.903 | 14.926 | 16.058 | 36.374 | 17.190 | 19.184 | +11.6%+1.994 B$ | +20.6%+3.281 B$ |
| Operating income | 18.475 | 4.358 | 5.109 | 4.277 | 4.731 | 11.597 | 5.464 | 6.133 | +12.2%+0.669 B$ | +20.0%+1.024 B$ |
| Operating margin | 30.3% | 30.8% | 32.1% | 28.7% | 29.5% | 31.9% | 31.8% | 32.0% | +0.2%p | −0.2%p |
| FCF | −13.181 | 0.071 | −2.923 | −0.362 | −9.967 | −13.357 | −11.484 | −1.873 | +9.611 B$ | +1.050 B$ |
| Operating cash flow | 22.296 | 5.933 | 6.157 | 8.140 | 2.066 | 21.771 | 7.151 | 14.620 | +104.4%+7.469 B$ | +137.5%+8.463 B$ |
| Cash CapEx | 35.477 | 5.862 | 9.080 | 8.502 | 12.033 | 35.128 | 18.635 | 16.493 | −11.5%−2.142 B$ | +81.6%+7.413 B$ |
| Net cash | −88.309 | −78.453 | −81.365 | −80.310 | −88.309 | −97.647 | −95.473 | −97.647 | −2.174 B$ | −16.282 B$ |
| Cash and liquid assets | 19.766 | 17.823 | 11.203 | 11.005 | 19.766 | 31.894 | 39.132 | 31.894 | −18.5%−7.238 B$ | +184.7%+20.691 B$ |
| Borrowings | 108.075 | 96.276 | 92.568 | 91.315 | 108.075 | 129.541 | 134.605 | 129.541 | −3.8%−5.064 B$ | +39.9%+36.973 B$ |
Indented rows are components of, or reference items for, the parent metric. Net cash = cash and liquid assets − borrowings. Depending on company definitions, FCF may include additional adjustments such as lease principal and therefore differ from operating cash flow − cash CapEx. See the cash flow discussion for the detailed definition.
Annual totals and year-to-date totals precede the quarters for each year. Revenue, earnings and cash flow are sums of quarterly values; operating margin equals total operating income divided by total revenue; net cash, cash and borrowings are the final quarter's ending balances. Do not make a simple annual comparison of totals covering different period lengths.
Net cash = cash and liquid assets − borrowings. A negative value indicates net debt. Changes in FCF and net cash are shown as absolute amounts in B$. Quarterly values were not adjusted to match disclosed annual totals.
Comparison bases, calculations and quarterly sources
Calculations and presentation · Amounts in B$. US disclosures in millions of dollars were preserved by dividing by 1,000. Where only cumulative cash flow was available, the preceding cumulative amount in the same fiscal year was subtracted. YoY, QoQ and margins were calculated before display rounding. Earnings growth from negative or 0 bases is shown as a sign change and/or absolute amount.
Opinions and outlook · Management quotations include short original excerpts and translations. Unless identified as earnings call transcripts, quotations come from earnings releases. Interpretations and implications are the author's judgments. No numerically unverified probabilities of achieving targets are assigned.