Oracle: Cloud infrastructure grows 121 percent
Oracle delivers 850 megawatts to AI customers and raises around 17 billion euros through share sales. Its software business shrinks.
Oracle grew cloud infrastructure revenue by 121 percent to around 6.4 billion euros in the first quarter of fiscal 2027. Its backlog stands at around 570 billion euros. Free cash flow remains negative at around 4.3 billion euros as the company installs data centers and graphics processors faster than operations can recoup the investment.
Key takeaways
- The infrastructure division outpaces the group. Total revenue rises 30 percent to around 17 billion euros.
- Traditional software revenue falls three percent. Oracle attributes this to installations moving from on-premises environments to the cloud. Cloud applications grow just ten percent.
- Delivered capacity nearly triples. Since the previous quarter ended, AI cloud customers received 850 megawatts with more than 300,000 graphics processors, nearly three times the previous quarter’s volume.
- Oracle raises fresh equity to fund expansion. The group continually issues new common shares on the stock market. Oracle says the new AI cloud contracts leave its capital-raising plans unchanged.
Related:Terraform Apply in the cloud: Commands from the US? / AWS removes private preview path to Azure again
What is Oracle Cloud Infrastructure? Oracle Cloud Infrastructure is Oracle’s infrastructure cloud: compute, storage and networking billed as a service. The release calls this business Cloud Infra or IaaS. Cloud applications (SaaS) are reported separately.
Infrastructure revenue rises to 6.4 billion euros
The quarterly earnings release dated 10 September 2026 comes from Austin. Group revenue rises 30 percent to around 17 billion euros, while infrastructure alone grows 121 percent to around 6.4 billion euros. The table shows the other business lines; hardware and services account for the remaining group revenue.
Oracle was long seen as a database vendor promising a cloud future. This quarter, infrastructure growth shows up in revenue. IaaS grows much faster than the group and several times faster than cloud applications, which rise just ten percent to around 3.6 billion euros.
| Metric | Q1 fiscal 2027 | Change |
|---|---|---|
| Group revenue | around 17 billion euros | +30 % |
| Total cloud revenue | around 10 billion euros | +62 % |
| Cloud infrastructure (IaaS) | around 6.4 billion euros | +121 % |
| Cloud applications (SaaS) | around 3.6 billion euros | +10 % |
| Software (on-premises) | around 4.7 billion euros | -3 % |
| Backlog (RPO) | around 570 billion euros | +180 billion euros year on year |
Oracle, quarterly earnings release dated 10 September 2026. Euro amounts rounded using the European Central Bank (ECB) reference rate for the same day.
850 megawatts delivered to customers
Co-CEO Clay Magouyrk said on the earnings call on 10 September 2026 that Oracle had delivered 850 megawatts of AI capacity with more than 300,000 graphics processors to customers since the previous quarter ended, nearly three times the previous quarter’s volume. Most is at the Abilene campus in Texas, where Magouyrk said 618 megawatts had been delivered in six of eight buildings. Further sites are being built in New Mexico and Wisconsin.
The 850 megawatts represent electrical connection capacity across several sites. Data centers of this scale need power contracts, transformers, cooling and permits before the first graphics processor starts computing. Oracle reports the capacity as delivered to customers during the quarter. The group named no European sites.
Software revenue falls three percent
Traditional software revenue falls three percent to around 4.7 billion euros. Oracle attributes this to customers’ continued migration from on-premises environments to the cloud. Infrastructure and software revenues are thus moving in opposite directions.
This shifts group revenue from licenses to infrastructure. Infrastructure generates around 6.4 billion euros in quarterly revenue, exceeding traditional software’s roughly 4.7 billion euros.
Oracle sells shares to fund expansion
According to the quarterly release, operating cash flow rises 184 percent to around 20 billion euros, while free cash flow remains negative at around 4.3 billion euros. Expansion creates the gap: Oracle spends around 24 billion euros on data centers and graphics processors during the quarter, exceeding cloud revenue.
In the same quarter, Oracle sells common shares through an at-the-market program, issuing them over time on the stock market. Proceeds before commissions total around 17 billion euros. The program forms part of a previously announced investment plan. The proceeds provide equity rather than debt.
Oracle also reports new AI cloud contracts worth more than 25 billion euros in the quarterly release. The company says these contracts leave its capital-raising plans unchanged because most customers pay upfront or install their own hardware in Oracle’s data centers, as CFO Hilary Maxson explained on the earnings call.
570 billion euros in backlog await connection and acceptance
Remaining Performance Obligations, or RPO, are contracted services yet to be recognized as revenue. Oracle reports around 570 billion euros, up 180 billion euros from a year earlier. The backlog is many times quarterly revenue. Much consists of multiyear AI capacity contracts requiring capacity to be built, accepted and billed. Maxson said around half the backlog should become revenue within 36 months.
The outlook leaves the same capacity question unresolved. For full-year 2027, Oracle expects revenue of at least 77 billion euros. For the second quarter, it expects cloud revenue growth of 65 to 71 percent and total revenue growth of 30 to 34 percent. This requires the 850 megawatts to be more than a one-off peak. Power connections at the next sites and customer acceptance of completed capacity remain unresolved.
Frequently asked questions
What did Oracle report for the first quarter of fiscal 2027?
Cloud infrastructure revenue grows 121 percent to around 6.4 billion euros. Group revenue rises 30 percent to around 17 billion euros. The backlog stands at around 570 billion euros, while free cash flow remains negative.
What is a remaining performance obligation?
It is contracted revenue Oracle has yet to recognize. It includes signed cloud contracts and deferred amounts. The backlog represents neither cash in the bank nor a completed data center building.
Why does free cash flow remain negative?
Operating cash flow is positive and growing strongly. Investment in data centers and graphics processors is deducted from it. After these expenses, the quarterly balance is around 4.3 billion euros below zero.
Where is the new capacity located?
Most of the 850 megawatts is at the Abilene campus in Texas, with 618 megawatts in six of eight buildings, according to Magouyrk. Further large sites are being built in New Mexico and Wisconsin. Oracle named no European sites on the earnings call.
What has changed in the software business?
Traditional software revenue falls three percent to around 4.7 billion euros as customers move installations from their own data centers to the cloud. Customers keep paying, but for a different product. Infrastructure therefore outpaces software this quarter.
Editor's Picks
cloudmagazinNvidia buys Hugging Face: Open models remain an optioncloudmagazinOpenAI buys Macs where agents click like humanscloudmagazinGoogle Links TPU Payback to Five-Year ContractsMore from the MBF Media Network
MyBusinessFutureManufacturers report CRA incidents to ENISA before the CSIRTDigital ChiefsSLB buys Kelvion: 3.5 billion for AI coolingSecurityTodayUnauthorized commands possible on 8,393 Gitea serversImage source: AI-generated (September 2026)
Translated from the German original using artificial intelligence. The German version is authoritative.
Also available in
