Oracle Raises Outlook as AI Capacity Expands

Oracle reported first-quarter fiscal 2027 results that beat expectations. Non-GAAP earnings reached $1.92 per share, topping the Zacks Consensus Estimate of $1.74. Revenue came in at $19.35 billion, ahead of the projected $19.13 billion.

Chief financial officer Hilary Maxson raised the full-year fiscal 2027 revenue outlook to at least $90 billion, representing 34% growth, alongside non-GAAP earnings of $8.10 per share. For the fiscal second quarter, Maxson guided total revenue growth of 30% to 34%, cloud revenue growth of 65% to 71%, and non-GAAP earnings between $1.85 and $1.93 per share. Remaining performance obligations rose by $26 billion from the prior quarter, with about half expected to convert into sales over the next 36 months.

Chief executive officer Clay Magouyrk stated that OCI added 850 megawatts of AI capacity and over 300,000 GPUs since the end of the fourth quarter, reaching a 97.9% GPU utilization rate. Magouyrk noted that all expiring GPU capacity was renewed or resold at a 20% premium over prior contracts, despite most units being at least four years old. Regarding potential data center delays in New Mexico and Wisconsin, Magouyrk affirmed that neither site threatens the fiscal 2027 outlook.

On capital spending, Maxson reiterated planned fiscal 2027 CapEx of $90 billion to $95 billion, with net cash CapEx capped at $70 billion, though she offered no timetable for positive free cash flow. Chief executive officer Mike Sicilia reported that SaaS revenue rose 10%, Fusion increased 14%, and industry applications grew more than 20%, while active AI agents climbed 90% sequentially to over 2,300.