Oracle lifts outlook on cloud surge

Oracle (ORCL) reported Q1 fiscal 2027 total revenue of $19.3 billion, an increase of about 30% year over year. The performance exceeded prior expectations and marked a record first quarter for the company. Cloud-related activities were the main driver of the growth, reflecting rising customer adoption of Oracle’s (ORCL) cloud services.

Total cloud revenue, including infrastructure and applications, reached $11.6 billion in the quarter. This represented a 62% year-over-year increase and accounted for a substantial share of overall company revenue. The figures highlight the growing importance of cloud offerings within Oracle’s (ORCL) business mix.

Within cloud, Infrastructure-as-a-Service (IaaS) was the standout category. Cloud Infrastructure revenue rose 121% year over year to $7.4 billion in Q1. This triple-digit growth made infrastructure the primary contributor to the company’s overall revenue acceleration.

Cloud Applications (SaaS) revenue also grew, reaching $4.2 billion and posting a 10% year-over-year increase. Together, the IaaS and SaaS segments underscored broad-based demand across Oracle’s cloud portfolio, with infrastructure clearly growing at a faster pace.

Oracle generated GAAP diluted earnings per share of $1.56 for the quarter, while non-GAAP EPS was $1.92. These profitability metrics reflected the benefit of higher-scale cloud operations and supported the company’s ability to reinvest in its business.

Operating cash flow for Q1 was about $23.1 billion, described as a record level for the company. At the same time, free cash flow was negative $5.0 billion as Oracle continued to invest heavily in expanding its cloud infrastructure capacity. The company reported that it had materially increased cloud capacity since the end of the prior quarter, including additional GPU deployments, and noted an accelerated conversion of backlog into recognized revenue.

On the back of these results, Oracle raised its full-year revenue target to at least $90 billion. The company also increased its non-GAAP earnings per share guidance to $8.10 for the full year. These updated targets reflect management’s expectations for continued momentum in the business.

For the next quarter, Oracle guided total revenue growth of roughly 30% to 34% in U.S. dollars. Total cloud revenue is expected to grow by about 65% to 71% in the same period. The outlook underscores the central role of cloud, and particularly cloud infrastructure, in Oracle’s near-term growth trajectory.