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ORACLE CORP (ORCL) Q4 2025 Earnings Summary

Executive Summary

  • Oracle delivered a strong Q4 FY2025: total revenue $15.90B (+11% YoY), GAAP EPS $1.19 and non-GAAP EPS $1.70; both revenue and EPS exceeded Wall Street consensus. Cloud revenue (IaaS+SaaS) rose 27% to $6.7B, with IaaS up 52% to $3.0B, driven by surging OCI consumption (+62%) and multi-cloud database momentum .
  • Remaining Performance Obligations reached $138B (+41% YoY), with cloud RPO up 56%; management raised FY2026 outlook to at least $67B total revenue (+16%) and expects total cloud growth >40% and OCI >70%—a clear acceleration trajectory .
  • Q4 beat Street estimates on both revenue and EPS; prior two quarters were roughly in line to modest misses, setting up Q4’s beat as a narrative-shifting catalyst centered on OCI capacity additions, multi-cloud expansion, and AI workload demand [GetEstimates]* .
  • Catalysts ahead: aggressive capacity build (FY26 CapEx >$25B), accelerating multi-cloud deployments (23 live, 47 planned), and database AI platform adoption; board declared a $0.50 dividend payable July 24, 2025 .

What Went Well and What Went Wrong

What Went Well

  • Cloud Infrastructure strength: IaaS revenue $3.0B (+52% YoY) and OCI consumption +62% in Q4; management highlighted “demand continues to dramatically outstrip supply” .
  • Multi-cloud acceleration: MultiCloud database revenue from Amazon, Google and Azure grew 115% from Q3 to Q4; 23 multicloud datacenters live with 47 more planned over 12 months .
  • Confidence and raised outlook: FY2026 revenue “at least $67B,” total cloud growth >40%, OCI growth >70%; RPO likely to grow >100% in FY26, signaling durable demand and visibility .
    • Quote: “We expect our total cloud growth rate—applications plus infrastructure—will increase from 24% in FY25 to over 40% in FY26… Cloud Infrastructure… over 70%” — CEO Safra Catz .

What Went Wrong

  • Free cash flow headwind: Trailing 4-quarter FCF turned negative (-$0.394B) as CapEx surged to $21.2B in FY25 to meet demand; management expects FY26 CapEx >$25B .
  • Margin mix pressure: Non-GAAP operating margin in Q4 was 44% vs 47% a year ago; GAAP operating margin 32% vs 33% last year—reflecting investment intensity despite revenue growth .
  • Prior-quarter misses: Q3 and Q2 were modest misses versus consensus on both revenue and EPS, underscoring the importance of Q4’s beat and FY26 acceleration to reset expectations [GetEstimates]*.

Financial Results

Headline Performance vs Prior Periods

MetricQ2 FY2025Q3 FY2025Q4 FY2025
Total Revenue ($USD Billions)$14.06 $14.13 $15.90
GAAP Diluted EPS ($)$1.10 $1.02 $1.19
Non-GAAP Diluted EPS ($)$1.47 $1.47 $1.70
Non-GAAP Operating Margin (%)43% 44% 44%

Actual vs S&P Global Consensus (EPS and Revenue)

MetricQ2 FY2025Q3 FY2025Q4 FY2025
Revenue Actual ($USD Billions)$14.06 $14.13 $15.90
Revenue Consensus ($USD Billions)$14.12*$14.39*$15.59*
EPS Actual (Non-GAAP, $)$1.47 $1.47 $1.70
EPS Consensus ($)$1.48*$1.49*$1.64*
  • Q4 FY2025: Bold beats on revenue ($15.90B vs $15.59B*) and EPS ($1.70 vs $1.64*).
  • Q2/Q3: Slight misses vs consensus on both revenue and EPS.
    Values retrieved from S&P Global.*

Segment Breakdown (Q4 FY2025)

SegmentRevenue ($USD Billions)YoY Growth
Cloud Revenue (IaaS + SaaS)$6.70 +27%
Cloud Infrastructure (IaaS)$3.00 +52%
Cloud Applications (SaaS)$3.70 +12%
Fusion Cloud ERP$1.00 +22%
NetSuite Cloud ERP$1.00 +18%
Cloud Services & License Support$11.70 +14%
Cloud License & On-Premise License$2.01 +9%
Hardware$0.85 +1%
Services$1.35 -2%

KPIs and Cash Flow

KPIQ4 FY2025Context
Remaining Performance Obligations (RPO)$138B +41% YoY
Cloud RPO Growth+56% On top of +80% last year
Short-term Deferred Revenue$9.4B —
OCI Consumption Revenue Growth+62% —
GAAP Operating Income (Q4)$5.11B —
Non-GAAP Operating Income (Q4)$7.04B —
Operating Cash Flow (FY25)$20.8B +12% YoY
CapEx (FY25)$21.2B Data center build-out
Free Cash Flow (TTM, Q4)-$0.394B CapEx headwind
Diluted Weighted Avg Shares (Q4)2,871M —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue Growth (YoY, constant currency)Q1 FY20269–11% (Q4 guide for Q4 itself) 11–13% CC; 12–14% USD Raised sequential outlook
Total Cloud Revenue Growth (YoY)Q1 FY202624–28% (Q4 for Q4 itself) 26–30% (CC and USD) Raised
Non-GAAP EPSQ1 FY2026$1.61–$1.65 (Q4 for Q4 itself) $1.44–$1.48 CC; $1.46–$1.50 USD New quarter range
Base Tax Rate (Non-GAAP)Q1 FY202619% 19% Maintained
Total RevenueFY2026Double-digit growth commentary ≥ $67B (+16%) Formalized target up
Total Cloud GrowthFY2026Acceleration commentary >40% Raised
OCI (Cloud Infrastructure) GrowthFY2026>50% for FY2025; faster in FY26 >70% Raised materially
RPO GrowthFY2026RPO up 50% (Q2) >100% Raised outlook
DividendNext payment$0.40 prior in Q2 $0.50 declared; record July 10, pay July 24, 2025 Increased and scheduled

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY2025)Previous Mentions (Q3 FY2025)Current Period (Q4 FY2025)Trend
AI training and performanceDelivered largest 65k H200 GPU supercomputer; AI customers include OpenAI, xAI, NVIDIA, Meta Hyper-growth in AI training and multi-cloud; networking investments to avoid bottlenecks Continued strong AI demand; OCI consumption +62%; multi-cloud database rev +115% QoQ Accelerating
Multi-cloud expansion17 regions live; 35 planned with Azure/Google/AWS 18 multi-cloud regions live; +40 planned 23 multi-cloud datacenters live; +47 planned in 12 months Expanding rapidly
CapEx & capacityCapEx $4B in Q2; FY25 CapEx to double FY24 CapEx matched op cash flow ~$5.9B; capacity constraints easing in FY26 Q1 FY25 CapEx $21.2B; FY26 CapEx >$25B; “insatiable” demand Rising investment
Cloud DB migrationCloud DB services +28% ann. rev $2.2B; multi-cloud run-rate >$100M Cloud DB services +31% ann. rev $2.6B Autonomous DB consumption +47%; DB@AWS GA announced post-Q4 Accelerating, product expansion
Applications (SaaS)Strategic back-office ann. rev $8.4B, +18% Strategic back-office ann. rev $9.3B, +20% SaaS $3.7B, +12%; Fusion ERP +22%; NetSuite +18% Strong adoption
Macro/tariffs——Tariffs: “no impact” on applications momentum Neutral

Management Commentary

  • Safra Catz: “We expect our total cloud growth rate—applications plus infrastructure—will increase from 24% in FY25 to over 40% in FY26… Cloud Infrastructure… over 70%… And RPO is likely to grow more than 100% in FY26” .
  • Larry Ellison: “MultiCloud database revenue from Amazon, Google and Azure grew 115% from Q3 to Q4… OCI revenue growth rates are skyrocketing—so is demand” .
  • Safra Catz: “OCI consumption revenue was up 62%. Demand continues to dramatically outstrip supply” .
  • Larry Ellison: “Oracle will be… the number one cloud database… applications… and builder/operator of cloud infrastructure data centers” .

Q&A Highlights

  • Capacity and CapEx: Management cited unprecedented orders (“take all the capacity you have wherever it is”), justifying FY26 CapEx >$25B; emphasized networking innovation to speed data movement and enhance economics .
  • Stargate/AI partnerships: Stargate “still in formation”; OpenAI-related business already contributing; if Stargate fully materializes, RPO growth may be understated .
  • Multi-cloud deployments: Customers want global primary/backup footprints; 40 planned deployments over ~12 months across Azure/AWS/Google to meet global enterprise needs .
  • Applications strategy: Increasing preference for Oracle’s integrated AI agent-based suites across ERP/EPM/Supply Chain/HR and industry verticals, reducing integration cost and complexity .

Estimates Context

  • Q4 FY2025 beat: Revenue $15.90B vs $15.59B*; non-GAAP EPS $1.70 vs $1.64* — significant upside led by OCI and multi-cloud adoption .
  • Prior quarters: Q2 and Q3 modestly below consensus on revenue and EPS, now offset by Q4 momentum and raised FY26 outlook [GetEstimates]*.
  • Near-term: Q1 FY2026 guidance (EPS $1.46–$1.50 USD; revenue +12–14% USD) suggests Street revisions higher for cloud lines and OCI growth trajectory .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • OCI growth inflecting: IaaS +52% and OCI consumption +62% with RPO velocity point to sustained revenue acceleration and likely upward estimate revisions .
  • Multi-cloud is a structural tailwind: 23 live datacenters and 47 planned, plus DB@AWS GA, reduce adoption friction and broaden Oracle’s reach across hyperscalers .
  • Investment cycle underway: CapEx ramp (FY26 >$25B) is dilutive to FCF near term but should translate to faster revenue growth and scale benefits over 12–24 months .
  • Margin watch: Non-GAAP operating margin steady at ~44% in Q4; monitor mix effects from capacity adds versus scale leverage as cloud lines expand .
  • Applications resilience: Fusion and NetSuite growth (22% and 18%) plus integrated AI agents bolster SaaS trajectory and cross-sell with database and OCI .
  • Guidance is assertive: FY2026 ≥$67B revenue, total cloud >40%, OCI >70% implies a higher base growth path; narrative likely remains AI/multi-cloud capacity constrained rather than demand constrained .
  • Trading implications: Near-term—positive skew from Q4 beat and raised guidance; watch supply ramp cadence and CapEx execution. Medium-term—multi-cloud/DB AI platform adoption and capacity additions should support multiple expansion as revenue visibility increases .

Additional Relevant Press Releases

  • Oracle Database@AWS general availability expands multi-cloud deployment options for Oracle database workloads in AWS regions, complementing existing Azure/Google integrations .

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