Oracle is set to announce its fiscal first-quarter results on Thursday, reporting significant financial metrics that highlight the disparity between its operational performance and stock performance. The company currently holds a remaining performance obligation of approximately $638 billion, a backlog that has surged 363% over the past year and exceeds its annual revenue of $67.4 billion. Despite a 93% increase in cloud infrastructure revenue last quarter and management guiding for 34% revenue growth this fiscal year, Oracle’s stock has fallen 17.7% year to date and about 28% over the last twelve months.
The Zacks Consensus Estimate anticipates earnings of $1.74 per share on revenue of around $19.14 billion, indicating over 28% growth. Investors are particularly focused on whether cloud revenue will meet management’s forecasted growth of 58% to 64% year over year, as this validation is essential for converting their $638 billion backlog into revenue. Additionally, Oracle plans to raise $40 billion through debt and equity to finance projected net cash capex of approximately $70 billion for fiscal 2027.
Analysts have raised concerns regarding concentration risks, particularly with OpenAI, which is believed to comprise over half of Oracle’s backlog and is currently experiencing significant financial losses. As Oracle prepares for its earnings report, key elements to watch include confirmation of its revenue and EPS targets, cloud revenue growth performance, and updates on its capital expenditures and financing plans.
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