- Oracle fiscal Q1 revenue rose 30%, driven by a 121% jump in cloud infrastructure revenue, the business that rents computing power to AI companies.
- Remaining performance obligations reached $664 billion, more than seven times expected annual revenue, and Oracle raised its full-year revenue outlook to at least $90 billion. Roughly half the backlog should convert to revenue within three years.
- Oracle signed more than $30 billion of new AI cloud deals in the quarter, mostly structured as prepayments or customers bringing their own hardware, limiting Oracle's own capital outlay on those contracts.
- The build-out consumed $28.5 billion of data center and equipment spend in a single quarter, more than the cash the business generated. Free cash flow stayed negative and gross margin fell more than five points to 61%.
- OpenAI's $300 billion contract, starting in 2027, is close to half the backlog, concentrating risk on a loss-making counterparty. Oracle expanded its job-cut plan a day after the results.
Quotes
“acceleration”
“The backlog is the core of the growth story.”