Oracle's Cloud Infrastructure Revenue Jumps 121% to $7.4 Billion as Backlog Swells to $664 Billion

Oracle topped Wall Street's estimates for its fiscal first quarter of 2027, driven by triple-digit growth in its cloud infrastructure business and a remaining performance obligation (RPO) backlog that swelled to $664 billion. The results also showed a sharp jump in capital spending and a widening cash burn as the company races to build out data center capacity for AI customers.

Quarterly Results Beat Wall Street Estimates

Oracle's non-GAAP earnings per share came in at $1.92, ahead of the $1.74 expected by analysts polled by LSEG, while revenue of $19.35 billion topped the $19.14 billion consensus, according to CNBC. Total cloud revenue rose 62% to $11.61 billion, above the $11.51 billion consensus tracked by StreetAccount, while software revenue fell 3% to $5.55 billion, missing StreetAccount's $5.61 billion estimate, CNBC reported.

Within that cloud business, Oracle's cloud infrastructure revenue rose 121% to $7.4 billion, according to the company's announcement as carried by Stock Titan.

GAAP net income available to common shareholders reached $4.68 billion, or $1.56 per diluted share, up from $2.93 billion, or $1.01 per share, a year earlier, CNBC and Stock Titan both reported. Non-GAAP net income available to common shareholders grew 34% to $5.8 billion, according to Oracle's announcement carried by Stock Titan.

Backlog Swells on AI Demand

Oracle's remaining performance obligations, a measure of contracted but unrecognized revenue, deferred revenue and uncollected invoices, stood at $664 billion at quarter's end, up $209 billion year over year and above StreetAccount's $630.6 billion consensus, CNBC and Stock Titan reported. By our calculation, based on those two figures, RPO stood at roughly $455 billion a year earlier ($664 billion minus the $209 billion year-over-year increase).

Oracle said it booked more than $30 billion of additional AI cloud contracts during the quarter, pushing RPO to the $664 billion level, and stated that based on how those contracts are structured, there is no incremental impact on its plans to raise capital, according to the company's announcement carried by Stock Titan. Oracle also said in its RPO disclosure that "customer demand for AI Cloud Training and Inferencing Services continues to grow faster than supply," per the same announcement.

On the capacity side, Oracle said it delivered 850 megawatts of additional data center capacity during the quarter, a figure also reported by CNBC, and said it has delivered more than 300,000 GPUs to AI cloud customers since the end of the fourth quarter, almost triple the capacity delivered in fiscal fourth-quarter 2026, according to the company's announcement carried by Stock Titan.

Capital Spending Surges as Cash Burn Widens

Capital expenditures more than tripled to $28.50 billion from $8.50 billion a year earlier, CNBC reported. By our calculation using those figures, that represents an increase of roughly $20 billion, or about 235%, year over year. Free cash flow was negative $5.4 billion, compared with negative $362 million a year earlier, according to CNBC; Oracle's own announcement, as carried by Stock Titan, put negative free cash flow for the quarter at roughly $5 billion.

CNBC reported that Oracle now carries $125 billion in debt and, in CNBC's characterization, has a weaker cash position and a lower credit rating than hyperscaler competitors.

Despite the spending increase, Oracle's guidance on capital spending for the full year is unchanged, Chief Financial Officer Hilary Maxson said in a briefing with reporters, according to CNBC. Maxson also addressed concerns about build-out timelines, saying, "Nothing that we know today would lead us to believe that New Mexico or any of our other sites are delayed relative to the schedules that we included, for example, in our fiscal '27 outlook," per CNBC's account of the same briefing.

Other Business Highlights

During the quarter, Oracle announced AI agents for human resources teams and won a Pentagon contract worth up to $7 billion over a decade, CNBC reported. The company's board also declared a quarterly cash dividend of $0.50 per share, payable October 23, 2026 to shareholders of record as of October 9, 2026, according to Oracle's announcement carried by Stock Titan.

Bottom Line

Oracle's headline numbers, a revenue and EPS beat alongside a $664 billion backlog swollen by more than $30 billion in new AI contracts, point to demand for AI cloud infrastructure that Oracle itself says is outrunning its supply of capacity. That demand is coming at a steep near-term cost: capital expenditures of $28.5 billion for the quarter and negative free cash flow of roughly $5 billion to $5.4 billion, set against a debt load CNBC pegs at $125 billion. Management's message, delivered through CFO Hilary Maxson, is that full-year capital spending guidance and data center timelines are unchanged despite the scale of the buildout. Our reading of these figures is that the key open question is whether the backlog converts into recognized revenue and margin at the pace investors expect, which will depend on execution over coming quarters and is not something the reported figures alone can answer.