Oracle raises revenue guidance as cloud infrastructure growth accelerates
The software giant raised its fiscal 2027 total revenue guidance to $90 billion following a 22% increase in quarterly sales.
Oracle (ORCL), the enterprise software provider, reported accelerating revenue growth in the third quarter of fiscal 2026, driven by a surge in cloud infrastructure demand.
The results marked a shift in the company's growth trajectory, as total revenue rose 22% year-over-year to $17.2 billion. This represented an acceleration from the 14% growth recorded in the second quarter.
Cloud revenue grew 44% year-over-year to $8.9 billion. The growth was led by Cloud Infrastructure (IaaS), which rose 84% to $4.9 billion, accelerating from a 68% increase in the prior quarter. Cloud Application (SaaS) revenue grew 13% to $4.0 billion, a slight increase over the 11% growth seen in the second quarter.
Non-GAAP earnings per share grew 21% year-over-year to $1.79. This growth rate decelerated from the 54% increase reported in the second quarter. The non-GAAP operating margin remained steady at 44%, consistent with the 43% reported in the previous quarter.
Remaining Performance Obligations increased 325% year-over-year to $553 billion. While the total grew, the rate of increase slowed from the 438% jump to $523 billion seen in the second quarter. Multicloud Database Revenue also saw a deceleration in growth, moving from 817% in the second quarter to 531% in the third.
Oracle raised its total revenue guidance for fiscal year 2027 to $90 billion.
The company's aggressive expansion into cloud capacity resulted in a significant rise in capital expenditures, which climbed from $10.7 billion in fiscal 2025 first quarter to $48.3 billion in fiscal 2026 third quarter. Consequently, free cash flow turned negative, falling from $11.3 billion in fiscal 2025 to negative $24.7 billion in the third quarter of fiscal 2026.
Oracle previously announced a strategic shift toward chip neutrality in the second quarter. This pivot led to the sale of the company's interest in the chip maker Ampere, which generated a $2.7 billion pre-tax gain.
Source: company public filings.