Focus on U.S. Stocks' Q1 2026 Earnings Reports
This quarter, Oracle's AI data center revenue nearly doubled to $5.8 billion, but the capital expenditures for expanding these AI data centers also rose sharply.
Oracle reported its fiscal year-end quarter results for the period ending in May. Total quarterly revenue reached $19.2 billion, a 21% increase year-over-year, though this growth rate showed a slight deceleration compared to the previous quarter. However, when adjusted for currency fluctuations and calculated on a constant currency basis, the company's revenue growth actually accelerated.
The cloud and software company continues to heavily invest in its AI data center business. Revenue for this segment nearly doubled this quarter to $5.8 billion. However, the associated capital expenditures for expansion also surged significantly to $16.5 billion. For the full year, Oracle's capital expenditure more than doubled, reaching $55.66 billion, far exceeding the company's full-year operating cash flow of $31.9 billion.
To bridge the funding gap, Oracle utilized debt and equity financing and signaled plans to add another $2 billion in debt financing in 2027.
Simultaneously, the quarterly data revealed sluggish growth in Oracle's software business. As enterprise customers shift from perpetual software licenses to cloud-based subscription services, the company's traditional software revenue declined by 2% year-over-year. Its cloud subscription software revenue for the quarter was $4.1 billion, growing only 10% year-over-year, which represents a 3 percentage point slowdown from the previous quarter. However, Oracle management indicated that the growth rate for its backlog of unbooked software application contract revenue is stronger. Following the earnings release, Oracle's pre-market share price tumbled 7.9%.
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