Oracle Corporation

ORCL
Financial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
Latest Q Revenue
$17.2B
Q3 FY2026 · +22% YoY
TTM ROIC
11.9%
FY2025 · NOPAT / Invested Capital (Debt + Equity); NOPAT = EBIT × (1 - Tax Rate); EBIT $17,678M × 0.84 = $14,849M; Invested Capital = $125,073M · WACC ~8.7% · Moat spread +3.2pp
Margin Profile
Gross 71.3%
Operating 42%
FCF -0.7%
FY2025
Net Debt
$91.1B
Cash $13.0B · Debt $104.1B · FY2025
Diluted Shares
2.88B
FY2025

Business Overview

ticker: ORCL step: 01 generated: 2026-05-11 source: quick-research

Oracle Corporation (ORCL) — Business Overview

Business Description

Oracle is a global enterprise software and cloud infrastructure provider. Historically the leading enterprise database company, Oracle has pivoted aggressively to Oracle Cloud Infrastructure (OCI), positioning itself as the #4 hyperscaler — and the preferred AI infrastructure provider for hyperscale training workloads via the $500B Stargate initiative (with OpenAI, SoftBank, NVIDIA) announced January 2025. Co-founder Larry Ellison remains Executive Chairman and CTO; Safra Catz is CEO.

Revenue Model

  • Cloud Services & License Support (~75% of revenue): Oracle Cloud Infrastructure (OCI compute/storage/networking) + SaaS (Fusion ERP, NetSuite, Oracle Health/Cerner) + legacy license support
  • Cloud License & On-Premise License (~10%): Net-new license sales for self-managed Oracle Database deployments
  • Hardware (~5%): Exadata engineered systems optimized for Oracle Database
  • Services (~10%): Consulting and implementation

Oracle's growth driver is OCI: Cloud Infrastructure grew 84% YoY in Q3 FY26 to $4.9B/quarter — accelerating from 68% in Q2. OCI alone could reach $18B in FY26 with management projecting $144B by FY30.

Products & Services

  • Oracle Cloud Infrastructure (OCI): Compute (including Nvidia H100/H200/Blackwell GPU clusters), networking (RDMA — key differentiator for LLM training), storage, autonomous database
  • Oracle Database: Industry-leading relational database (now in autonomous, fully managed cloud form)
  • Fusion ERP / EPM / HCM / SCM: Cloud applications competing with SAP, Workday
  • NetSuite: Mid-market ERP (acquired 2016 for $9.3B)
  • Oracle Health (Cerner): EHR + clinical AI agent platform (acquired 2022 for $28.3B)
  • Engineered systems: Exadata, Zero Data Loss Recovery Appliance, etc.
  • MySQL HeatWave, Java, GoldenGate

Customer Base & Go-to-Market

  • AI hyperscalers (transformative): OpenAI ($300B / 5-year deal signed Sep 2025), xAI, Meta, NVIDIA, AMD all use OCI for AI workloads
  • Fortune 500 / Global 2000: Run Oracle Database, Fusion ERP, or Cerner
  • Mid-market: NetSuite SMB and mid-enterprise
  • Healthcare: Oracle Health platform serving thousands of hospitals
  • Government: US Department of Defense Joint Warfighting Cloud (JWCC) participant

Competitive Position

Oracle is now the AI infrastructure "wild card" — historically a distant #4 hyperscaler behind AWS/Azure/GCP, but the OpenAI/Stargate deal repositioned it as a peer provider for the very largest training jobs. RDMA networking is the key technical differentiator vs. AWS/Azure for training LLMs at scale. Moats: Oracle Database lock-in (most enterprise mission-critical workloads), Cerner installed base, autonomous database technology, direct relationship with Nvidia (priority access to GPU allocation). Faces hyperscaler dominance from AWS/Microsoft/Google in mainstream cloud and SAP/Workday in SaaS.

Key Facts

  • Founded: 1977 (by Larry Ellison, Bob Miner, Ed Oates)
  • Headquarters: Austin, TX (relocated from Redwood City, CA in 2020)
  • Employees: ~159,000 (with ~30,000 layoffs announced 2026)
  • Exchange: NYSE
  • Sector / Industry: Technology / Software & Cloud Infrastructure
  • Market Cap: ~$485B (May 2026)
  • CEO: Safra Catz
  • Executive Chairman & CTO: Larry Ellison
  • Founder & largest shareholder: Larry Ellison (~42% ownership)
  • FY end: May

Financial Snapshot

ticker: ORCL step: 04 generated: 2026-05-11 source: quick-research

Oracle Corporation (ORCL) — Financial Snapshot

Note: Oracle's fiscal year ends in May. "FY2025" below = fiscal year ended May 2025.

Income Statement Summary

Metric FY2024 FY2025 FY2026E YoY
Revenue $53.0B $58.5B ~$67B +15%
Gross Margin 73.5% 71.3% 67.8% -3.5pp (mix shift to OCI)
Operating Margin (adj) 44% 42% 38% -4pp
Net Income (adj) $13.4B $14.8B ~$15B +1%
EPS (adj, diluted) $4.83 $5.30 $5.60 +6%

Q3 FY2026 Highlights (most recent reported)

Metric Q3 FY26 YoY Change
Total Revenue $17.2B +22%
Cloud Infrastructure (OCI) $4.9B +84% (accel from +68%)
Cloud Services & License Support $13.5B +20%
RPO Backlog $553B +325% (vs. $130B prior year)
Q3 RPO Add $29B sequential

Cash Flow & Balance Sheet (FY2026E)

Metric Value
Operating Cash Flow ~$26B
Capital Expenditures ~($50B) (more than 2x FY2025's $21B)
Free Cash Flow NEGATIVE ~$10B in Q2 FY26 — worst print in Oracle history
Cash & Investments ~$13B
Total Debt >$100B (up from ~$80B pre-AI buildout)

Key Ratios (approximate, May 2026)

  • P/E (forward): ~30x | EV/Sales: ~9x | Dividend Yield: ~1.0%
  • Net Debt/EBITDA: ~3.0x (rising as capex outpaces EBITDA growth)
  • RPO/Revenue: ~9x (versus historical 2-3x for software companies)

Growth Profile

Oracle's transformation is the most dramatic in mega-cap tech. RPO surged from $130B (Q3 FY25) → $553B (Q3 FY26) on the back of mega-deals — most prominently the $300B / 5-year OpenAI deal signed September 2025 (part of the $500B Stargate initiative). Cloud Infrastructure is growing 80-90% YoY. The trade-off: FY26 capex will be ~$50B (vs. $21B FY25), gross margin is compressing from 73% → 68% as low-margin OCI scales, and free cash flow has gone negative.

Forward Estimates

  • FY2026E Revenue: ~$67B (+15% YoY)
  • FY2026E EPS: ~$5.60-5.70 (consensus)
  • FY2027E Revenue: ~$80B (+20%)
  • FY2027E EPS: ~$7-7.50
  • OCI revenue FY2026: ~$18B; FY2030E target: $144B
  • Capex FY2026: $50B reaffirmed; FY2027 likely $60-70B

Capital Return

Dividend ~$2.00/share annual ($1.5B yearly); buybacks have been deprioritized given AI capex priority. Larry Ellison's ~42% stake provides "skin in the game" alignment but means dividend matters more than buybacks for capital return on float.

The Bear Math

At $50B capex, OCI must generate sustainable EBITDA of $15-20B at 35-40% margin to justify the spend. If OpenAI under-utilizes (e.g., reports of OpenAI missing internal revenue targets) or if hyperscaler customers pull back, FY27-29 FCF doesn't recover and debt servicing becomes an overhang.

Deeper Financial Analysis

The fundamental tier adds 9 additional research dimensions for $ORCL.

Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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