Oracle reported a 27% year-on-year increase in net income available to common shareholders for the third quarter of fiscal 2026 (Q3 FY26), with profit rising to $3.7bn from $2.9bn in the same period a year earlier.

Basic earnings per share increased to $1.29 from $1.05, and diluted earnings per share rose to $1.27 from $1.02. On a non-GAAP basis, net income reached $5.2bn, up 23% in US dollars and 18% in constant currency, while non-GAAP earnings per share were $1.79, representing growth of 21% in US dollars and 16% in constant currency.

GAAP earnings per share were $1.27, which was 24% higher in US dollars and 16% higher in constant currency than in the prior-year quarter.

Revenue for the quarter ended 28 February 2026 totalled $17.2bn, an increase of 22% in US dollars and 18% in constant currency compared with $14.1bn a year earlier.

Cloud revenue, which includes infrastructure and applications services, reached $8.9bn and rose 44% in US dollars and 41% in constant currency.

Software revenue, excluding cloud, stood at $6.1bn, up 3% in US dollars but down 1% on a constant currency basis. Hardware revenue was $714m, an increase of 2% in US dollars and a decline of 2% in constant currency, while services revenue advanced 12% in US dollars to $1.44bn.

Within cloud operations, Oracle Cloud Infrastructure (IaaS) generated $4.9bn in revenue, an 84% increase in US dollars and an 81% increase in constant currency, making it the fastest-growing cloud component.

Cloud applications (SaaS) revenue totalled $4.0bn, rising 13% in US dollars and 11% in constant currency. Fusion Cloud ERP contributed $1.1bn, growing 17% in US dollars and 14% in constant currency, and NetSuite Cloud ERP also delivered $1.1bn, up 14% in US dollars and 11% in constant currency.

Oracle reported that Oracle Cloud Database (IaaS) revenue expanded by 35%, while revenue from multicloud database services increased by 531% in US dollars. The company noted that this quarter marked the first time in more than 15 years that organic total revenue and non-GAAP earnings per share both grew by at least 20% in US dollars.

GAAP operating income for the period was $5.5bn. Non-GAAP operating income reached $7.4bn, reflecting a 19% increase year-on-year in US dollars and a 14% rise in constant currency. Total operating expenses were $11.7bn.

Operating cash flow for the trailing twelve months amounted to $23.5bn, up 13% in US dollars, and short-term deferred revenue stood at $9.9bn.

Remaining Performance Obligations (RPO) closed the quarter at $553bn, representing a 325% increase from the previous year and a $29bn rise from the prior quarter. Oracle attributed most of this increase to large AI-related cloud contracts.

For many of these agreements, the company stated that customers either provide prepayments that enable Oracle to procure graphic processing units (GPUs) or purchase the GPUs themselves and supply them to the company. This structure reduces the need for Oracle to raise additional funds specifically to support these contracts.

Last month, the company outlined plans to obtain up to $50bn in debt and equity financing and has indicated that it does not anticipate issuing further bonds in calendar 2026 beyond that amount. Shortly after announcing the programme, Oracle raised $30bn through a combination of investment grade bonds and mandatory convertible preferred stock and has not yet started the at-the-market equity portion.

Oracle said demand for cloud computing related to AI training and inferencing is increasing more rapidly than available capacity and that some of the largest users of AI cloud services have recently strengthened their financial positions. This trend supports its expectation that it can meet and possibly exceed its revenue growth forecasts for fiscal 2027 and later years.

The company also reported that improvements in AI code-generation models are allowing it to reorganise product development into smaller teams and produce software more quickly and with lower staffing levels. It expects this to enable the creation of more SaaS applications across additional industries at reduced cost.

Oracle updates quarterly and full-year financial guidance

For the fourth quarter of fiscal 2026, Oracle expects total revenue to rise between 18% and 20% in constant currency and between 19% and 21% in US dollars. It forecasts total cloud revenue growth of 44% to 48% in constant currency and 46% to 50% in US dollars.

Non-GAAP earnings per share are projected to increase 15% to 17%, to a range of $1.92 to $1.96 in constant currency and $1.96 to $2.00 in US dollars.

For the full 2026 fiscal year, Oracle continues to project revenue of $67bn and capital expenditure of $50bn. The company has revised its fiscal 2027 revenue guidance to $90bn, up from its previous forecast.

Oracle CEO highlights AI infrastructure scale-up and partner cloud expansion

During the earnings call, Oracle CEO Clay McGork focused on multicloud database services and AI infrastructure, noting that both segments are expanding rapidly and that demand currently exceeds available capacity.

He highlighted that multicloud database revenue grew 531% year on year and AI infrastructure revenue increased 243%, with the company aiming to convert this demand into profitable recurring revenue through its execution plans and long-standing database technology.

McGork said Oracle’s partnerships with Microsoft, Google and Amazon have opened significant pent-up demand from customers that want to use Oracle databases on other clouds, and that the company is quickly adding regions with these partners.

He also pointed to the $553bn RPO and more than 10 gigawatts (GW) of partner-funded power and data centre capacity as indicators of future AI-related revenue. According to McGork, improvements in supply chain, deployment processes and business models are helping Oracle scale AI infrastructure while maintaining gross margins above 30%.