Executive Summary
Oracle Corporation's Q2 2025 results display a robust demand for cloud services, marking a decisive moment in its shift towards digital and AI-driven solutions. The company reported total revenues of $14.1 billion, representing a year-over-year increase of 9%. Notably, the cloud services and license support segments now constitute 77% of total revenues, evidencing the successful execution of Oracle's cloud-first strategy. EPS reached $1.10, reflecting a growth of 24% from the previous year and exceeding management's expectations. CEO Safra Catz highlighted that the shift toward cloud has successfully accelerated overall revenue growth, with cloud revenue expected to reach $25 billion this fiscal year. This performance is supported by exceptional demand in AI and strategic cloud applications, setting a promising trajectory for future quarters.
Key Performance Indicators
Key Insights
1. Total Revenue: $14.1 billion, up 9% YoY and 5.65% QoQ.
2. Net Income: $3.15 billion, a 25.89% increase YoY, showcasing enhanced profitability amid growing revenues.
3. EPS: $1.10, representing a 24% gain Y/Y.
4. Cloud Services Revenue: $10.8 billion, growing 12% driven by demand for AI and infrastructure solutions.
5. Remaining Performance Obligations (RPO): $97.3 billion, up 50% YoY, indicating strong forward revenue visibility.
6. Operating Income: $4.22 billion, leading to an operating mar...
Financial Highlights
1. Total Revenue: $14.1 billion, up 9% YoY and 5.65% QoQ.
2. Net Income: $3.15 billion, a 25.89% increase YoY, showcasing enhanced profitability amid growing revenues.
3. EPS: $1.10, representing a 24% gain Y/Y.
4. Cloud Services Revenue: $10.8 billion, growing 12% driven by demand for AI and infrastructure solutions.
5. Remaining Performance Obligations (RPO): $97.3 billion, up 50% YoY, indicating strong forward revenue visibility.
6. Operating Income: $4.22 billion, leading to an operating margin of 43%, reflecting expense discipline in a growing revenue environment.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
14.06B |
8.64% |
5.65% |
| Gross Profit |
9.97B |
8.40% |
6.10% |
| Operating Income |
4.22B |
16.51% |
5.74% |
| Net Income |
3.15B |
25.89% |
7.58% |
| EPS |
1.13 |
24.18% |
6.60% |
Key Financial Ratios
operatingProfitMargin
30%
operatingCashFlowPerShare
$0.47
freeCashFlowPerShare
$-0.96
dividendPayoutRatio
35.5%
Management Commentary
Theme: Strong Cloud Demand
- "Our largest revenue component, cloud services and license support, now represents 77% of total revenue and is also our fastest-growing line item" - Safra Catz.
Theme: AI Workload Leadership
- "Oracle continues to win large AI training workloads because we're faster and less expensive than the other infrastructure clouds" - Larry Ellison.
Theme: Future Guidance and Growth
- "For fiscal year 2025, we remain very confident and committed to full year total revenue growth growing double-digit" - Safra Catz.
Theme: RPO and Segment Growth
- "Our cloud RPO grew nearly 80% and now represent nearly three-fourths of total RPO" - Safra Catz.
"These results are being driven by the fact that our largest revenue component, cloud services and license support, now represents 77% of total revenue."
â Safra Catz
"The scale of this opportunity is unimaginable. As Safra said, this fiscal year, total Oracle Cloud revenue should top $25 billion."
â Larry Ellison
Forward Guidance
Management has provided optimistic guidance for Q3 2025, expecting total revenue growth of 9% to 11% in constant currency and 7% to 9% in USD terms. The cloud revenue growth is projected between 25% and 27%, underscoring confidence in continued demand for cloud services. Key watch points for investors include the potential impacts of currency fluctuations on earnings and the performance of core cloud segments as new datacenter capacities come online. Overall, the outlook remains strong with significant RPO indicative of long-term commitments from customers.