- Oracle Corp reported Q4 FY26 revenue of $19.18B, beating estimates of $19.10B
- Adjusted EPS was $2.03, exceeding the forecasted $1.96
- Capital expenditure rose 162% to $55.7B, with FY27 capex forecast up to $95B
Oracle Corp's released its financial fine print for the fourth quarter of fiscal 2026 on Wednesday, largely exceeding market expectations. Despite this, the stock plummeted nearly 14% to a low of $175.28 on Thursday as higher AI-led capital expenditure and forecasts spooked investors.
The Larry Ellison-founded company topped estimates clocking an adjusted revenue of $19.18 billion (compared to an expected $19.10 billion) and an earnings per share of $2.03 adjusted (as against $1.96 estimated).
However, it posted a negative free cash flow of $23.7 billion with depreciation nearly doubling to $7.62 billion.Moreover, Capital expenditures jumped 162% to $55.7 billion.
While Oracle kept its full-year FY27 revenue target unchanged at $90 billion, it forecasted up to $95 billion capex in fiscal 2027 exceeding analysts' expectations of approximately $68 billion. Though, CFO Hilary Maxson clarified that the firm expects to recover up to $25 billion of that from customer repayments, she did not specify a timeline for the recovery.
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Notably, Maxson during the earnings call underlined that gross margins would "step down" in the current fiscal year as the company accelerates its data center buildout.
On top of this, Oracle is planning to raise approximately $40 billion through a combination of debt and equity financing including its previously announced $20 billion at-the-market equity issuance. This is after already having raised $43 billion in debt and $5 billion in equity in fiscal 2026 for spending into AI-led spending.
The cloud services revenue for the quarter under review reached $9.9 billion up 46% year-on-year in constant currency, while Oracle Cloud Infrastructure (OCI) revenue surged 92% to $5.8 billion. Although total software revenue edged down 2% in constant currency to $6.8 billion.
For the first quarter of FY27, the company sees adjusted earnings of $1.72 per share to $1.76 per share, on a revenue growth of 27% to 29%. Analysts estimated EPS forecast at $1.69, as against $1.39 in Q1FY26.
Oracle Share Price
The stock traded 11.5% lower at $178.04 apiece on the NYSE as of 12:07 p.m. on Thursday.
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