Oracle's Cloud Revenue Soars 62% as AI Contracts Swell RPO to $664B

Oracle posted record Q1 FY27 revenue of $19.3B with IaaS up 121%, but heavy datacenter spending drove free cash flow to negative $5.4B.

Oracle announced Q1 fiscal 2027 results on September 10, 2026, with total revenues up 30% to a record $19.3 billion and total cloud revenues up 62% to $11.6 billion. Cloud Infrastructure (IaaS) revenue surged 121% to $7.4 billion, which the company attributed to delivery of 850 megawatts of additional datacenter capacity, while Cloud Applications (SaaS) grew 10% to $4.2 billion. GAAP earnings per share rose 55% to $1.56 and non-GAAP EPS climbed 30% to $1.92, with GAAP operating income up 57% to $6.7 billion. Legacy software revenues fell 3% to $5.5 billion as customers continue migrating off on-premises deployments.

The headline surprise is the backlog: Remaining Performance Obligations rose $209 billion year-over-year to $664 billion, after Oracle booked more than $30 billion of additional AI cloud contracts in the quarter. The company said demand for AI cloud training and inferencing services continues to grow faster than supply, and it delivered more than 300,000 GPUs to AI cloud customers since the end of Q4, nearly triple the capacity delivered in Q4 FY26. Stock Titan characterized the 8-K filing impact as very high with neutral sentiment, noting the backlog reflects strong long-term demand for AI capacity.

Despite record operating cash flow of $23 billion, up 184%, Oracle's free cash flow was negative $5 billion for the quarter. Stock Titan reports the deficit was $5.4 billion, as capital expenditures of $28.5 billion to expand cloud infrastructure significantly exceeded operating cash inflows. To help fund the build-out, Oracle completed the sale of $20 billion of common stock through an at-the-market equity program during the quarter, which Stock Titan notes implies shareholder dilution. The company confirmed the newly booked AI contracts require no incremental impact on its capital-raising plans.

Oracle guided Q2 FY27 total revenue growth of 30% to 34%, with cloud revenue expected to grow 65% to 71% in USD, and non-GAAP EPS of $1.85 to $1.93 in USD. Excluding a one-time investment gain in the prior-year quarter from the sale of its Ampere interest, that EPS represents 21% to 25% growth in USD. For the full fiscal year 2027, the company now expects total revenue of at least $90 billion and non-GAAP EPS of $8.10. The board also declared a quarterly dividend of $0.50 per share, payable October 23 to stockholders of record on October 9. Alongside earnings, Oracle unveiled an AI Data Platform that automates creation of Enterprise Ontologies and a 100% agentic AI health care management system for hospitals.