Oracle Corp. reported fourth-quarter results that beat Wall Street expectations and announced capital expenditure plans for fiscal 2027, triggering an 11% drop in overnight trading ahead of Thursday. The company reported revenue of $19.18 billion for the quarter ended in fiscal year 2026, which concluded in May 2026, surpassing the consensus estimate of $19.10 billion, while adjusted earnings of $2.03 per share beat the expected $1.96. The stock decline followed investor concerns about Oracle's elevated AI-related spending, as the company disclosed capital expenditure of $55.7 billion for fiscal year 2026 and projected $70 billion in capital expenditure for fiscal 2027, plus an additional $20 billion to $25 billion for prepayments. Management defended the investments as essential to capitalize on a surge in cloud demand, citing a remaining performance obligation that surged 363% year over year to a record $638 billion.
Oracle Projects $70 Billion Capital Expenditure for Fiscal 2027
Oracle reported capital expenditure of $55.7 billion for fiscal year 2026, which concluded in May 2026, exceeding its own projection of $50 billion. The company said capital expenditure in fiscal 2027 would be $70 billion, with an additional $20 billion to $25 billion allocated for prepayments for certain components. At the higher end, capex would exceed the company's projected $90 billion in revenue for the year.
To achieve that, Oracle said it would raise $40 billion in debt and equity this fiscal year, including $20 billion through a previously announced program to sell shares in the open market. In the fiscal year just ended, Oracle raised $43 billion in debt financing and $5 billion in equity. Simultaneously, Oracle's total liabilities, including debt, jumped by 48% to $218.7 billion, marking the sharpest surge on record.
Oracle's Remaining Performance Obligation Surges 363% to $638 Billion
Oracle's remaining performance obligation (RPO) — business booked but not yet realized as revenue — surged 363% year over year to $638 billion. Oracle's future business backlog now exceeds that of both Alphabet and Microsoft, whose RPOs, largely tied to their cloud operations, stood at $627 billion and $460 billion, respectively.
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"I think that it's very important that we stay focused on customers. So the nice thing is that I think whether you see it from existing RPO or increased contracts that we're getting, yes, there's a lot of things happening in the market, but we have a large, diverse set of customers, both very large and also smaller customers," Oracle CEO Clay Magouyrk said on a conference call with analysts.
Oracle Reports Q4 Revenue of $19.18 Billion, Beating Estimates
In Q4, Oracle's revenue surged 21% to $19.18 billion, surpassing Wall Street's consensus estimate of $19.10 billion. Net income rose to $4.22 billion from $3.43 billion a year ago, while adjusted earnings of $2.03 per share also surpassed an expected $1.96.
Analysts Offer Mixed Views on Oracle's Spending Plans
"This is the kind of quarter we call mixed," D.A. Davidson analyst Gil Luria said in an interview on CNBC. "Oracle's remaining performance obligation is now bigger than Microsoft's, Amazon's and Google's. They have more AI backlog to deliver than any of the three large hyperscalers."
He added: "A lot of the back and forth is now around the capital raise. They're going to need $40 billion in the fiscal year, but they stayed consistent to their previous statement that there is no more capital raise in this calendar year."
Daniel Newman, CEO of The Futurum Group, said the results had more positives than negatives. "OCI up over 90% while backlog rips by over $80 billion. A lot to like about this as another signal of growing AI demand and lower Oracle dependence on OpenAI," he wrote on X.
Retail Sentiment for Oracle Shifts Higher on Stocktwits
On Stocktwits, retail sentiment for ORCL shifted multiple points higher in the 'extremely bullish' zone (92/100), with 24-hour message volume increasing over 430%.
"$ORCL Personally, I'd give this earnings report a 9 out of 10. Revenue and EPS both beat expectations, and RPO surged to $638 billion, showing that AI-related demand remains incredibly strong," a trader said.
"The post-earnings selloff was disappointing, but that's also how Wall Street operates. The exact same numbers can be viewed as bullish today and bearish tomorrow, depending on the narrative the market chooses to focus on," they said, adding that from a long-term perspective, Oracle appears to have a capital and capacity problem, not a demand problem.
Notably, Oracle shares are down roughly 20% from their recent June 1 peak heading into the earnings report. Year-to-date, shares are up 4%.
FAQ
What did Oracle report for its fourth-quarter fiscal 2026 results?
Oracle reported fourth-quarter revenue of $19.18 billion, surpassing Wall Street's consensus estimate of $19.10 billion. Net income rose to $4.22 billion from $3.43 billion a year ago, while adjusted earnings of $2.03 per share beat the expected $1.96. The fiscal year 2026 concluded in May 2026.
Why did Oracle stock drop 11% overnight?
Oracle shares dropped 11% overnight ahead of Thursday following investor concerns about the company's elevated AI-related spending. Oracle disclosed capital expenditure of $55.7 billion for fiscal year 2026 and projected $70 billion in capital expenditure for fiscal 2027, plus an additional $20 billion to $25 billion for prepayments, with plans to raise $40 billion in debt and equity this fiscal year.
How much is Oracle's remaining performance obligation?
Oracle's remaining performance obligation (RPO) — business booked but not yet realized as revenue — surged 363% year over year to $638 billion. This backlog now exceeds that of both Alphabet and Microsoft, whose RPOs stood at $627 billion and $460 billion, respectively.
