Executive Summary
Oracle reported Q1 FY2026 results with a USD 14.926 billion top line, up 4.47% year-over-year and 5.63% quarter-over-quarter, driven by continued demand for Oracle cloud services and software licenses. GAAP gross profit expanded to USD 14.506 billion, yielding an implied gross margin of roughly 97.2% based on the reported data, while operating income reached USD 4.278 billion and net income USD 2.927 billion, translating to an EPS of USD 1.04 (USD 1.01 diluted). Management commentary underscored progress in cloud adoption and integration across Oracle Cloud Infrastructure, NetSuite, and Fusion applications, with emphasis on AI-enabled automation and cost discipline. However, free cash flow remained negative at USD 0.362 billion as capital expenditure surged to USD 8.502 billion, reflecting aggressive cloud-building investments and data-center expansion. Operating cash flow stood at USD 8.14 billion, with total investing cash outflows of USD 8.718 billion and financing activity contributing USD 0.21 billion, leaving cash at period-end of USD 10.445 billion. Net debt approached USD 94.964 billion on the back of elevated long-term leverage. The results reinforce a dual trajectory: durable software and cloud software margins and a robust services ecosystem, paired with a deliberate ramp of cloud infrastructure investments that pressure near-term free cash flow but potentially enhance long-run operating leverage and competitive position.
Key Performance Indicators
QoQ: -1.86% | YoY:-12.34%
Key Insights
Revenue: USD 14.926B; YoY +4.47%; QoQ +5.63%; Gross Profit: USD 14.506B; Gross Margin (reported): ~97.2% (revenue vs cost of revenue) ; Operating Income: USD 4.278B; Operating Margin: 28.65%; Net Income: USD 2.927B; Net Margin: 19.61%; EPS (GAAP): USD 1.04; EPS Diluted: USD 1.01; Weighted Avg Shares: 2.826B (basic) / 2.909B (diluted); Operating Cash Flow: USD 8.14B; Capex: USD -8.502B; Free Cash Flow: USD -0.362B; Net Cash Provided by Operating Activities: USD 8.14B; Net Cash Used in Investing A...
Financial Highlights
Revenue: USD 14.926B; YoY +4.47%; QoQ +5.63%; Gross Profit: USD 14.506B; Gross Margin (reported): ~97.2% (revenue vs cost of revenue) ; Operating Income: USD 4.278B; Operating Margin: 28.65%; Net Income: USD 2.927B; Net Margin: 19.61%; EPS (GAAP): USD 1.04; EPS Diluted: USD 1.01; Weighted Avg Shares: 2.826B (basic) / 2.909B (diluted); Operating Cash Flow: USD 8.14B; Capex: USD -8.502B; Free Cash Flow: USD -0.362B; Net Cash Provided by Operating Activities: USD 8.14B; Net Cash Used in Investing Activities: USD -8.718B; Net Cash Provided by Financing Activities: USD 0.21B; Cash and Cash Equivalents End of Period: USD 10.445B; Long-Term Debt: USD 96.33B; Total Debt: USD 105.409B; Net Debt: USD 94.964B; Total Assets: USD 180.449B; Total Liabilities: USD 155.783B; Total Stockholders’ Equity: USD 24.154B.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
14.93B |
4.47% |
5.63% |
| Gross Profit |
14.51B |
50.77% |
46.01% |
| Operating Income |
4.28B |
-12.34% |
-1.86% |
| Net Income |
2.93B |
-6.90% |
-0.31% |
| EPS |
1.04 |
-8.77% |
-0.95% |
Management Commentary
transcriptHighlights: "Transcript data not provided in the input. When available, synthesize management commentary by themes (strategy, operations, market conditions) with context and significance."
Forward Guidance
No explicit forward-looking targets were disclosed in the provided data for FY2026 beyond the QQ1 results. Based on the qualitative backdrop and industry dynamics, the plausible trajectory includes: (1) continued expansion of Oracle Cloud, especially in Fusion ERP/NetSuite, with AI-enabled automation driving utilization and stickiness; (2) margin improvement potential as cloud mix grows and optimization programs mature; (3) near-term FCF pressure due to aggressive Capex, but long-term FCF normalization as cloud infrastructure assets scale and cost-of-revenue economics improve. Investors should monitor (i) cloud growth trajectory and mix (infrastructure vs applications), (ii) cadence of Capex and resulting free cash flow, (iii) debt maturity profile and refinancing risk, and (iv) competitive dynamics with hyperscalers and peer software vendors.