Oracle shares (NYSE: ORCL) are a huge pre-market gainer, after the US software giant posted a stronger-than-expected fiscal third-quarter result. Adjusted earnings came in at US$1.79 a share, ahead of market forecasts of US$1.23, while revenue reached US$17.2 billion, beating expectations of US$16.91 billion.
The Oracle share price is sitting at $165.80, up 10.98% ahead of the U.S market open, after a more than difficult start to the year that had seen ORCL drop 23.66% ahead of the earnings print.
The standout in amongst a strong quarter was Oracle’s cloud business. Infrastructure-as-a-service revenue rose 84% from a year earlier to US$4.9 billion, while total cloud revenue climbed 44% to US$8.9 billion. The company also reported remaining performance obligations jumping to US$553 billion, reflecting strong demand tied largely to AI-related contracts.
RPO at that level is up 325% from a year earlier and US$29 billion higher than the previous quarter. The sharp increase was driven largely by major AI-related agreements. Oracle said these deals have been structured in a way that limits the need for extra capital, with much of the required hardware either paid for in advance by customers buying GPUs or supplied directly by customers themselves.
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Cloud applications revenue rose 13 per cent to US$4.0 billion, helped by ongoing strength in its core business software products. Fusion Cloud ERP generated US$1.1 billion in revenue, up 17 per cent in US dollar terms, while NetSuite Cloud ERP also delivered US$1.1 billion, increasing 14 per cent. The result points to continued success in moving legacy enterprise customers onto recurring cloud subscriptions.
The company stated that demand for AI training and inference capacity still exceeds available supply. It also noted that some of the biggest users of AI cloud infrastructure have recently improved their financial footing, a trend that could support Oracle’s outlook. Taken together, those conditions leave the group well placed to achieve, and potentially beat, its revenue growth targets for fiscal 2027 and the years beyond.
