Oracle reported first-quarter revenue of 19.3 billion US dollars on 10 September 2026, up 30% from a year earlier. Cloud infrastructure revenue rose 121% to 7.4 billion dollars and the contracted backlog reached 664 billion dollars. The Oracle earnings showed 28.5 billion dollars of capital spending and negative free cash flow.
What Oracle Reported for the Quarter
The figures cover Oracle’s fiscal first quarter of 2027, which ran from June to August 2026 and ended on 31 August. Oracle’s financial year ends on 31 May, so its first quarter is three months out of step with the calendar quarter most companies report.
Revenue growth is now almost entirely a cloud infrastructure story, and the rest of the business is close to flat.
| Segment | Q1 FY2027 revenue | Change year on year |
|---|---|---|
| Cloud infrastructure (IaaS) | $7.4 billion | Up 121% |
| Cloud applications (SaaS) | $4.2 billion | Up 10% |
| Software (licence and support) | $5.5 billion | Down 3% |
| Services | $1.4 billion | Up 5% |
| Hardware | $0.8 billion | Up 15% |
| Total | $19.3 billion | Up 30% |
Earnings per share on a generally accepted accounting principles basis were $1.56, up 55%. On the adjusted basis Oracle prefers, earnings were $1.92 a share, up 30%. Both came in above the average analyst estimate before the release, which stood at roughly $1.74 a share on about $19.1 billion of revenue. Operating income was $6.7 billion on a GAAP basis, a 35% margin. The full detail is in the earnings release Oracle filed with the Securities and Exchange Commission.
What the $664 Billion Backlog Is, and What It Is Not
Remaining performance obligations, or RPO, is the figure driving nearly all coverage of this company, and it is routinely quoted without being defined. It is the total value of contracts a company has signed but not yet delivered or billed. It is a measure of promises, not of cash received.
Oracle’s RPO stood at 664 billion dollars at the end of the quarter, up 209 billion dollars over twelve months. The sequential picture is more informative than the annual one:
- End of Q4 FY2026 (31 May 2026): $638 billion.
- End of Q1 FY2027 (31 August 2026): $664 billion, an increase of $26 billion.
- New AI cloud contracts booked in the quarter: more than $30 billion, according to Oracle.
Those two numbers differ because revenue recognised during the quarter draws the backlog down as new bookings add to it. A backlog that grows by less than the quarter’s new bookings is a backlog being converted into revenue, which is what the 121% cloud infrastructure growth reflects.
The concentration in that backlog is the part Oracle does not break out. The Wall Street Journal has reported a five-year agreement with OpenAI worth roughly 300 billion dollars beginning in 2027, which would be close to half the total. Oracle has not published a customer-by-customer split, so the share attributable to any single customer is reported rather than confirmed. OpenAI’s own trajectory, including the GPT-6 Astra launch earlier in September 2026, is therefore material to how much of that backlog converts.
What It Costs Oracle to Serve That Backlog
Contracted demand of this size has to be built before it can be billed, and the building is now the dominant fact in Oracle’s accounts.
Capital expenditure was 28.5 billion dollars in the quarter. For comparison, Oracle spent 55.7 billion dollars on capital expenditure across the whole of its 2026 financial year, so a single quarter has consumed more than half of the previous year’s total.
Operating cash flow was 23 billion dollars, up 184%. Because capital spending exceeded it, free cash flow, which is what remains after that spending, came to minus 5 billion dollars. That is an improvement in direction from the 2026 financial year, when Oracle generated 32 billion dollars of operating cash flow and recorded negative free cash flow of 23.7 billion dollars across the twelve months.
Oracle is funding the gap in the capital markets. It raised 43 billion dollars of debt and 5 billion dollars of equity during the 2026 financial year, and the Q1 release discloses a 20 billion dollar at-the-market share issuance programme, before commissions. On the June 2026 earnings call the chief financial officer, Hilary Maxson, put the expected net cash outlay for capital expenditure in the 2027 financial year at about 70 billion dollars.
None of this is unique to Oracle. Financing the purchase of computing capacity is now a defining constraint across the sector, from hyperscalers to model developers such as Mistral AI, which raised 3 billion euros in September 2026 largely to buy compute.
The Physical Constraint: 850 Megawatts and 300,000 GPUs
Oracle disclosed two operational numbers for the quarter that translate the financial ones into physical terms. It delivered 850 megawatts of additional datacentre capacity, and it delivered more than 300,000 graphics processing units to AI customers.
Megawatts, not contracts, are what limits how quickly a backlog of this kind becomes revenue. A signed contract cannot be billed until there is powered, cooled floor space with chips in it, which is why capacity delivered has become a headline disclosure alongside revenue.
What Oracle Told the Market to Expect Next
Oracle issued guidance for the current quarter and reaffirmed a full-year figure. Guidance is a company forecast, not a result.
- Q2 FY2027 revenue: Expected to grow 30% to 34%.
- Q2 FY2027 cloud revenue: Expected to grow 65% to 71% in US dollars.
- Q2 FY2027 adjusted earnings: $1.85 to $1.93 a share in US dollars.
- Full-year FY2027 revenue: At least $90 billion.
- Full-year FY2027 adjusted earnings: $8.10 a share.
The board declared a quarterly dividend of 50 cents a share, with a record date of 9 October 2026 and payment on 23 October 2026.
As of 11 September 2026, these are the results as filed for the quarter ended 31 August 2026. The share price reaction after the release is not reflected here; the earnings call was held after the figures were published and market pricing moves continuously.
Frequently Asked Questions
What Did Oracle Report in Its Q1 FY2027 Earnings?
Revenue of 19.3 billion US dollars, up 30%, for the quarter ended 31 August 2026. Cloud revenue was 11.6 billion dollars, up 62%, with cloud infrastructure up 121% to 7.4 billion dollars. Adjusted earnings were $1.92 a share.
What Is Oracle’s RPO or Backlog?
Remaining performance obligations is the value of signed contracts not yet delivered or billed. Oracle’s stood at 664 billion US dollars on 31 August 2026, up 209 billion dollars year on year and 26 billion dollars over the previous quarter.
Why Is Oracle’s Free Cash Flow Negative?
Capital spending exceeded cash generated from operations. Oracle spent 28.5 billion dollars building datacentre capacity in the quarter against 23 billion dollars of operating cash flow, leaving free cash flow at minus 5 billion dollars.
How Much Is Oracle Spending on Data Centres?
28.5 billion US dollars in the first quarter of its 2027 financial year, against 55.7 billion dollars across the whole of the 2026 financial year. The chief financial officer guided in June 2026 to a net cash outlay of about 70 billion dollars for the 2027 financial year.
What Is Oracle’s Guidance for Fiscal 2027?
At least 90 billion US dollars of total revenue and adjusted earnings of $8.10 a share. For the second quarter, Oracle guided to revenue growth of 30% to 34% and adjusted earnings of $1.85 to $1.93 a share.
