Oracle Q1 2026 earnings: cloud growth accelerates as contracted backlog surges past $455 billion
Oracle's Q1 FY2026 revenue grew 12% and cloud revenue jumped 28%, but the headline news was a surge in future contracted business tied to new AI deals.
| Q1 2026 | Reported |
|---|---|
| EPS | $1.01 |
| Revenue | $14.93B |
Figures as reported by the company to the SEC for the quarter ended August 31, 2025. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Total revenue rose 12% from a year earlier, and Oracle’s cloud business kept accelerating: cloud revenue climbed 28% to $7.2 billion, with cloud infrastructure (the computing power Oracle rents out) up 54% to about $3.3 billion.
- The standout figure was backlog: Oracle’s remaining performance obligations (contracted future revenue not yet delivered) jumped to more than $455 billion, up sharply from $317 billion just one quarter earlier, after signing several multi-billion-dollar cloud deals in the quarter, including a large agreement with OpenAI.
- CEO Safra Catz called it ‘an astonishing quarter’ and said she expects Oracle to sign more multi-billion-dollar customers, pushing backlog toward half a trillion dollars.
- Database revenue from running Oracle databases on rival clouds (Amazon, Google, Microsoft) grew more than 1,500% year over year, a sign that customers are increasingly using Oracle’s database technology even when their infrastructure sits elsewhere.
- Chairman and CTO Larry Ellison pointed to surging demand for AI ‘inferencing’ (running trained AI models to generate answers, as opposed to training them), which he said could ultimately be a bigger market than AI training itself, and outlined a new ‘Oracle AI Database’ service letting customers plug in outside AI models like ChatGPT or Gemini.
- Oracle said capital spending for the fiscal year is expected to be around $35 billion, mostly for revenue-generating equipment like servers and chips rather than buildings, reflecting how much it is investing to build out data-center capacity to meet cloud and AI demand.
- Profitability metrics over the trailing twelve months show an operating margin near 31% and a net profit margin above 25%, indicating Oracle is still converting a substantial share of revenue into profit even as it ramps up spending on new data centers.
- Return on equity over the trailing year stood above 50%, a sign of how efficiently the company has been generating profit relative to shareholders’ equity.
Q1 2026 in context
| Metric | Aug 2025 | Aug 2024 | Change |
|---|---|---|---|
| Revenue | $14.9B | $13.3B | +12.2% |
| Net income | $2.9B | $2.9B | -0.1% |
| Free cash flow | -$362M | $5.1B | -107.1% |
| Diluted EPS | $1.01 | $1.03 | -1.9% |
| Operating margin | 28.7% | 30.0% | -1.3 pts |
| Net margin | 19.6% | 22.0% | -2.4 pts |
Figures for the quarter ended Aug 2025 and the quarter ended Aug 2024, as reported to the SEC.
How the stock took it
Oracle Corp closed at $241.51 on Sep 9, 2025, the last session before the report, and at $307.86 on Sep 11, 2025, the first session after it — +27.5% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · earnings call