Oracle delivered a solid Q2 FY2026, with total revenue of $16.1 billion, up 13% year over year, underpinned by accelerating cloud growth. Total cloud revenue rose 33% to $8.0 billion, with cloud infrastructure up 66% and GPU revenue surging 177%, reflecting AI-driven demand for Oracle Cloud Infrastructure (OCI). Cloud applications grew 11%, with back-office applications up 16% and industry-specific cloud apps contributing to cross-sell momentum. Remaining Performance Obligations (RPO) ended the quarter at $523.3 billion, a 433% YoY increase, driven by notable bookings with Meta, NVIDIA, and other strategic customers, and near-term capacity availability enabling faster revenue conversion (RPO expected to be recognized in the next twelve months grew 40% YoY).
Management signaled a constructive growth trajectory anchored by the One Oracle sales model, integration of AI capabilities across databases, applications, and AI data platform, and aggressive capacity expansion in OCI. The company guided for continued cloud revenue growth in Q3 (37-41% in constant currency; 40-44% in USD) and revenue growth of 16-18% (constant currency) / 19-21% (USD) for total revenues, with non-GAAP EPS rising 12-14% (constant currency) / 16-18% (USD). They also disclosed that FY2027 could benefit from roughly $4 billion of incremental revenue tied to the expanded RPO, though capex remains elevated (FY2027 capex could be about $15 billion higher than prior Q1 guidance). Cash flow remained a mixed picture, featuring operating cash flow of about $2.1 billion and a negative free cash flow of roughly $10 billion due to substantial data-center investment.
Looking ahead, Oracle emphasized AI-enabled differentiations—vectorizing data across Oracle databases, AI lakehouse capabilities, and unified multi-cloud data access—as core drivers of both application and database demand. With a broad, globally distributed cloud and a rapidly expanding ecosystem of partners and customers, Oracle sits at the center of enterprise AI adoption, while balancing capital intensity with a path to strong backlog monetization and durable revenue growth. Investors should monitor RPO realization timing, AI-driven cross-sell momentum, capital deployment efficiency, and the trajectory of free cash flow during ongoing data-center expansion.