Oracle beats on earnings and revenue, adds $20 billion to planned capital raise

In a notable fiscal fourth quarter report released on Wednesday, Oracle delivered earnings and revenue that exceeded market expectations, prompting an upward revision of its profit forecast for the upcoming year. Despite this positive news, the company's stock fell by 5% in after-hours trading as Oracle announced plans to secure additional funds to support its ambitious AI development initiatives. The reported revenue for the quarter, which concluded on May 31, showed a remarkable 21% year-over-year increase. Net income surged to $4.22 billion, translating to $1.45 per share, up from $3.43 billion, or $1.19 per share, a year earlier. The adjusted earnings, which exclude stock-based compensation costs, reflect a robust performance, with Oracle maintaining its revenue guidance of $90 billion for the fiscal year 2027. Additionally, the company raised its forecast for adjusted earnings per share to $8.05, slightly above analysts' expectations of $8.01 per share and $88.90 billion in revenue. Looking ahead, Oracle aims to generate $40 billion through a combination of debt and equity financing, which includes a recently announced $20 billion share sale. This move follows a significant capital raise in fiscal 2026 where the company secured $43 billion in debt and $5 billion in equity. Investors have expressed concerns regarding whether the anticipated demand for artificial intelligence can substantiate such substantial capital influx. For the fiscal year, Oracle reported negative free cash flow of $23.7 billion. The company projected adjusted earnings per share between $1.72 and $1.76 for the first fiscal quarter, expecting revenue growth of 27% to 29%. Analysts had predicted $1.68 in adjusted earnings per share, alongside $19.06 billion in revenue, indicating around 28% growth. In terms of cloud offerings, Oracle experienced a 47% revenue increase, reaching $9.91 billion for the quarter, although it fell slightly short of the $9.97 billion that analysts had anticipated. Software revenue, which includes licenses and support, amounted to $6.82 billion, a 2% dip but still better than the expected $6.93 billion. Notably, cloud infrastructure revenue soared by 93% to $5.8 billion during the quarter. As of May 31, Oracle's remaining performance obligation, which includes revenue not yet recognized, rose to $638 billion, a staggering 363% increase compared to the previous year. Analysts had projected this figure to be around $595.67 billion. Analysts from Bank of America, who maintain a 'buy' recommendation for Oracle shares, noted that more than 50% of this obligation is attributed to contracts with OpenAI. In executive news, Oracle appointed Hilary Maxson, a former executive from Schneider Electric, as its new chief financial officer. Additionally, Related Digital and Blackstone have secured funding for a $16 billion Oracle data center in Michigan. As of the close of trading on Wednesday, Oracle shares had gained 3% in 2026, while the S&P 500 index had risen by 6%. Company executives are scheduled to discuss these results during a conference call at 5 p.m. ET.