Oracle Corporation (ORCL) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance, particularly in cloud revenue growth and optimistic future guidance, which are positive indicators for stock price. However, concerns about supply chain, economic factors, and CapEx risks temper the outlook. The shareholder return plan, with stable dividends and share repurchases, supports a positive sentiment. The Q&A section highlights strong demand and strategic positioning in AI and cloud, bolstering confidence despite some management vagueness. Overall, the positive factors outweigh the negatives, suggesting a likely stock price increase in the 2% to 8% range.
Key Financial Performance
Total Revenue Q4 2025 $15.9 billion, up 11% from last year.
Total Cloud Revenue Q4 2025 $6.7 billion, up 27%.
Total Cloud Services and License Support Revenue Q4 2025 $11.7 billion, up 14%.
IaaS Revenue Q4 2025 $3 billion, up 52%.
OCI Consumption Revenue Q4 2025 Up 62%.
Cloud Database Services Revenue Q4 2025 Up 31%, annualized revenue of $2.6 billion.
Autonomous Database Consumption Revenue Q4 2025 Up 47%.
Total Application Subscription Revenue Q4 2025 $5 billion, up 8%.
SaaS Revenue Q4 2025 $3.7 billion, up 11%.
Software License Revenues Q4 2025 $2 billion, up 8%.
Operating Income Q4 2025 Grew 7%.
Non-GAAP EPS Q4 2025 $1.70.
GAAP EPS Q4 2025 $1.19.
Total Revenue FY 2025 $57.4 billion, up 9%.
Total Cloud Services and License Support Revenue FY 2025 $44 billion, up 12%.
Total Application Subscription Revenue FY 2025 Grew 7%.
Infrastructure Subscription Revenues FY 2025 Grew 17%.
Total Cloud Services FY 2025 $24.5 billion, up 24%.
IaaS Revenue FY 2025 $10.2 billion, up 51%.
SaaS Revenue FY 2025 $14.3 billion, up 10%.
Operating Cash Flow FY 2025 $20.8 billion, up 12%.
Free Cash Flow FY 2025 Negative $400 million.
CapEx FY 2025 $21.2 billion.
Operating Cash Flow Q4 2025 $6.2 billion.
Free Cash Flow Q4 2025 Negative $2.9 billion.
CapEx Q4 2025 $9.1 billion.
Remaining Performance Obligations Q4 2025 $138 billion, up 41%.
Short-term Deferred Revenue Q4 2025 $9.4 billion.
Share Repurchase Q4 2025 $150 million for over 1 million shares.
Dividends Paid FY 2025 $4.7 billion.
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Operating Highlights
AI Agent-based Applications: Oracle has developed integrated AI agent-based applications for various sectors including ERP, EPM, supply chain, manufacturing, and customer engagement.
Oracle 23 AI Database: The latest version of Oracle Database, Oracle 23 AI, is designed to make customer data available to popular AI large language models while ensuring data privacy.
Cloud Infrastructure Revenue Growth: Cloud infrastructure revenue was reported at $10.2 billion for FY '25, up 51% from the previous year.
Total Cloud Revenue Guidance: For FY '26, Oracle expects total cloud revenue to grow over 40% in constant currency.
Remaining Performance Obligations (RPO): Remaining performance obligations stand at $138 billion, up 41% from last year.
CapEx Investments: CapEx for FY '26 is expected to exceed $25 billion to meet demand.
Market Positioning: Oracle aims to be the #1 cloud database and applications company, and plans to build more cloud infrastructure data centers than all competitors combined.
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Risk or Challenges
Competitive Pressures: Oracle faces intense competition in the cloud services market from major players like Microsoft Azure, Amazon AWS, and Google Cloud, which could impact market share and pricing strategies.
Regulatory Issues: The company acknowledges potential regulatory challenges that could arise from its global operations, particularly concerning data privacy and compliance with international laws.
Supply Chain Challenges: There are concerns regarding supply chain disruptions that may affect the availability of necessary components for cloud infrastructure, potentially hindering growth.
Economic Factors: Economic fluctuations and uncertainties could impact customer spending on cloud services, affecting revenue growth projections.
Currency Fluctuations: The company highlighted that currency exchange rates could have a significant impact on revenue and earnings, which may vary from expectations.
CapEx Investments: Oracle plans to increase capital expenditures significantly to meet demand, which poses a risk if anticipated revenue growth does not materialize.
Tax Rate Variability: The guidance for EPS assumes a stable tax rate, but one-time tax events could lead to variability in actual tax rates, affecting profitability.
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Guidance & Outlook
Remaining Performance Obligations (RPO): RPO stands at $138 billion, up $8 billion from last quarter and up 41% from last year.
Cloud Applications Growth: Expect cloud applications growth rate to accelerate due to strong bookings and higher renewal rates.
Cloud Infrastructure Revenue Growth: Expect OCI revenue to grow over 70% in FY '26.
CapEx: Expect FY '26 CapEx to be over $25 billion to meet demand.
AI Integration: Integration of over 100 AI agents into applications to enhance growth.
Market Positioning: Oracle aims to be the #1 cloud database and applications company.
Revenue Guidance for FY '26: Total revenue expected to be over $67 billion, up 16%.
Cloud Revenue Growth: Total cloud revenue expected to grow over 40% in constant currency.
Q1 Revenue Growth: Total revenues expected to grow from 11% to 13% in constant currency.
Non-GAAP EPS Guidance for Q1: Expected to grow between 4% to 6%, between $1.44 and $1.48.
RPO Growth: RPO expected to grow more than 100% in FY '26.
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Shareholder Return Plan
Quarterly Dividend: The Board of Directors declared a quarterly dividend of $0.50 per share.
Total Dividends Paid: Oracle has paid out dividends of $4.7 billion over the last 12 months.
Share Repurchase: In this quarter, Oracle repurchased a little over 1 million shares for a total of $150 million.
Shares Outstanding Reduction: Over the last 10 years, Oracle has reduced shares outstanding by more than 1/3 at an average share price of just over $54.
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Key Q&A
Q:Can you give us color or break out any numbers to help investors understand the durability and profitability of the AI business?
A:We have most of the world's valuable data in Oracle databases, and our latest version, Oracle 23 AI, is designed to enable companies to use AI on their own data. Our applications make all data available to AI models, which is a unique value proposition.
Q:Is Stargate part of the more than 70% growth you expect in IaaS in fiscal '26?
A:Stargate is still in formation, and while it will contribute to our growth, we have a lot of partnerships and demand that are driving our growth rate.
Q:Can you provide more color on the CapEx spending and how it helps yield more revenue?
A:Our CapEx is primarily for equipment and data center capacity to meet demand. We expect to exceed $25 billion in CapEx next year to match the insatiable demand.
Q:What are you hearing from customers in terms of migrating to cloud?
A:The database business is healthy and growing, with many customers looking to migrate to the cloud. We see significant demand for our cloud database offerings.
Q:Can you talk about the applications business and its growth?
A:Our strategic SaaS products are performing well, and many customers are moving to our integrated suite of applications to leverage AI capabilities.
Q:Why does the full stack nature of what you do remain important?
A:Having a full stack allows us to build better technology by integrating insights from applications and databases, leading to a more secure and reliable cloud.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific financial share of Stargate in the IaaS growth and the exact timing of its impact. Additionally, while they mentioned the CapEx increase, they did not provide detailed breakdowns of specific expenditures or how they directly correlate to revenue growth.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AG Research
AI analytics
AI beginning
AI feature
AI increase
AI language
AI platform
AI strength
Ada
Autonomous Database
Bond
Co
Database AI
EPM
ERP
FY
IaaS cloud
LLC Research
LLMs
Non USD
Research Division
Securities
application infrastructure
application world
area cloud
center infrastructure
chain manufacturing
cloud computing
currency dollar
enterprise
era cloud
industry application
infrastructure center
infrastructure competitor
suite AI
supply chain
target
ORCL Transcript
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Oracle's earnings call highlights significant growth in cloud revenue, strong partnerships, and aggressive AI expansion plans. Year-over-year increases in key financial metrics, such as total revenue and EPS, coupled with strategic partnerships with Meta and NVIDIA, indicate strong market positioning. Despite unclear timelines for AI margin improvements, the optimistic guidance and robust financial performance suggest a positive stock price reaction.
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The earnings call indicates strong growth in cloud applications and infrastructure, with significant revenue increases in key areas like autonomous databases and multi-cloud solutions. Despite a slight dip in total software revenue and negative free cash flow due to high CapEx, the optimistic revenue and EPS guidance, coupled with strategic AI advancements, suggest positive stock movement. The Q&A highlights unique advantages in AI and enterprise applications, reinforcing a positive outlook. However, lack of specific ROI details on CapEx and some unclear management responses prevent a stronger positive rating.
Oracle Corporation (ORCL) Q4 2025 Earnings Call Transcript
Positive6-12
The earnings call reveals strong financial performance, particularly in cloud revenue growth and optimistic future guidance, which are positive indicators for stock price. However, concerns about supply chain, economic factors, and CapEx risks temper the outlook. The shareholder return plan, with stable dividends and share repurchases, supports a positive sentiment. The Q&A section highlights strong demand and strategic positioning in AI and cloud, bolstering confidence despite some management vagueness. Overall, the positive factors outweigh the negatives, suggesting a likely stock price increase in the 2% to 8% range.
ORCL Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
