Oracle Corp (ORCL) Q4 2025 Earnings Call Highlights: Cloud Surge and Strategic Investments ...
Total Revenue: $15.9 billion, up 11% from last year.
Non-GAAP EPS: $1.70.
GAAP EPS: $1.19.
Total Cloud Revenue (SaaS + IaaS): $6.7 billion, up 27%.
Total Cloud Services and License Support Revenue: $11.7 billion, up 14%.
IaaS Revenue: $3 billion, up 52%.
OCI Consumption Revenue: Up 62%.
Cloud Database Services Revenue: Up 31%, annualized revenue of $2.6 billion.
Autonomous Database Consumption Revenue: Up 47%.
SaaS Revenue: $3.7 billion, up 11%.
Application Subscription Revenues: $5 billion, up 8%.
Software License Revenues: $2 billion, up 8%.
Operating Income Growth: 7%.
Full Fiscal Year Revenue: $57.4 billion, up 9%.
Total Cloud Services and License Support Revenue (Full Year): $44 billion, up 12%.
Operating Cash Flow (Full Year): $20.8 billion, up 12%.
Free Cash Flow (Full Year): Negative $400 million.
CapEx (Full Year): $21.2 billion.
Cash and Marketable Securities: $11.2 billion.
Short-term Deferred Revenue Balance: $9.4 billion.
Shares Repurchased: Over 1 million shares for $150 million.
Dividends Paid (Last 12 Months): $4.7 billion.
Quarterly Dividend Declared: $0.50 per share.
Remaining Performance Obligations (RPO): $138 billion, up 41%.
Cloud RPO Growth: 56%.
Operating Cash Flow (Q4): $6.2 billion.
Free Cash Flow (Q4): Negative $2.9 billion.
CapEx (Q4): $9.1 billion.
Warning! GuruFocus has detected 8 Warning Signs with ORCL.
Release Date: June 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Oracle Corp (NYSE:ORCL) reported double-digit revenue growth in Q4, with total revenue and EPS exceeding guidance.
The company's cloud transition has reached a tipping point, with cloud revenue (SaaS plus IaaS) up 27% to $6.7 billion.
Oracle's infrastructure business, OCI, is experiencing exceptional demand, with revenue expected to grow over 70% in the current year.
The company's strategic SaaS products are seeing strong bookings and higher renewal rates, contributing to accelerated growth.
Oracle's remaining performance obligations increased to $138 billion, up 41% from last year, indicating strong future revenue potential.
Oracle's free cash flow was negative $400 million for the fiscal year, with significant CapEx investments impacting cash flow.
The company is facing supply constraints, unable to meet the high demand for its cloud services, leading to scheduling customers into the future.
CapEx is expected to increase further to over $25 billion in FY26, which may strain financial resources.
Despite strong growth, there is a lack of understanding among investors about the durability and profitability of Oracle's AI business.
Oracle's cloud database migration from on-premise is still in progress, with a significant portion of the database business yet to transition to the cloud.
Q: Can you provide insights into Oracle's AI business and its impact on growth and profitability? A: Lawrence Ellison, Chairman and CTO, explained that Oracle holds most of the world's valuable data, primarily stored in Oracle databases. The latest Oracle 23 AI database is AI-centric, enabling companies to use AI models on their own data. This unique capability positions Oracle as a key enabler for enterprises to leverage AI, driving significant growth in their database business.
Q: How does Stargate contribute to Oracle's projected 70% growth in IaaS for fiscal '26? A: Safra Catz, CEO, noted that while Stargate is still in development, Oracle's partnerships and the demand for AI and database workloads are driving growth. The company is experiencing unprecedented demand, with a strong pipeline and RPO, indicating that Stargate will contribute to future growth, but it's not the sole driver.
Q: What is the reason behind Oracle's increased CapEx, and how does it support revenue growth? A: Safra Catz explained that the increased CapEx is primarily for equipment to meet demand, as Oracle is expanding its data center capacity. Lawrence Ellison added that demand is astronomical, and Oracle is investing in high-speed networking and other technologies to enhance their cloud infrastructure, which will support revenue growth.
Q: How is Oracle's cloud database business contributing to the 70% growth in OCI for fiscal '26? A: Safra Catz highlighted that the database business is growing robustly, with increased licensing and cloud metrics. The multi-cloud strategy and the ability to deploy databases in various clouds are driving demand. Lawrence Ellison added that moving database support to the cloud significantly increases revenue potential.
Q: Can you discuss the growth in Oracle's applications business, particularly in light of economic concerns? A: Safra Catz stated that Oracle's strategic SaaS products are performing well, driven by the demand for AI capabilities. The transition to cloud-based applications allows customers to leverage AI, making Oracle's offerings compelling. Lawrence Ellison added that Oracle's integrated suite of applications provides a one-stop solution for enterprises, reducing integration costs and enhancing appeal.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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