Oracle Corporation (ORCL) reported a significant 22% increase in total revenues for its fiscal third quarter 2026, totaling $17.2 billion, and a non-GAAP EPS of $1.79, exceeding expectations by 5.29%. This quarter, which ended on February 28, 2026, marks the first in over 15 years with both organic total revenues and non-GAAP EPS growing by over 20%. Despite strong performance, Oracle shares have declined 45.9% over the past six months, compared to a 2.3% gain in the Zacks Computer and Technology sector.
Cloud revenue was a standout, surging 44% year-over-year to $8.9 billion, while cloud infrastructure revenues leaped 84% to $4.9 billion. Remaining Performance Obligations also grew to $553 billion, a notable increase of 325% year-over-year. Management projects a revenue growth of 19% to 21% for the fourth quarter of fiscal 2026, with fiscal year 2027 revenue guidance raised to $90 billion, reflecting strong demand for AI cloud services.
While Oracle’s expansion into cloud and AI offers promise, the company faces challenges including $13.18 billion in negative free cash flow and ongoing legal issues from a securities fraud lawsuit. Investors are advised to weigh the steep valuation and potential risks against the backdrop of Oracle’s ambitious growth strategy.
