# Oracle Corporation (ORCL) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-12  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/ORCL/thesis · /stocks/ORCL/memo

## 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 ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/ORCL/fundamental

## Navigation

- Overview: /stocks/ORCL
- Financials (this page): /stocks/ORCL/financials
- Thesis: /stocks/ORCL/thesis
- Investment Memo: /stocks/ORCL/memo
- Coverage universe: /stocks