Oracle Corp. reported disappointing quarterly results and gave a sales and profit forecast for the current quarter that fell short of analysts’ estimates. Still, the company trumpeted a surge in bookings and said its growing cloud infrastructure business will boost revenue over the next two fiscal years.
Fiscal third-quarter sales increased 6% to $14.1 billion. Analysts, on average, projected $14.4 billion, according to data compiled by Bloomberg. Revenue from Oracle’s cloud infrastructure also missed estimates, sending shares down in extended trading.
Remaining performance obligations — a measure of bookings — were $130 billion in the period ended Feb. 28, compared with $97.3 billion in the previous quarter. Oracle projected sales will increase 15% in the fiscal year beginning in June and 20% in fiscal year 2027. Analysts, on average, estimated increases of 13% and 14%, respectively.
Much of the future sales bump was attributed to Oracle’s growing cloud infrastructure business, which has been fueled by demand for computing power to run artificial intelligence workloads. The company’s strategy to become a major player in the competitive industry of renting out computing power and storage was validated in January when it announced a joint venture with OpenAI and Softbank Group Corp. on a $100 billion project to build data centers for the AI startup.
“We have now signed cloud agreements with several world leading technology companies including: OpenAI, xAI, Meta, Nvidia and AMD,” Chief Executive Officer Safra Catz said Monday in a statement.
While the campus for the joint venture is taking shape in Abilene, Texas, Catz said Oracle’s $130 billion in remaining performance obligations didn’t include any business from the project, dubbed Stargate. Bookings will “continue to grow rapidly — as we look forward to signing our first Stargate contract,” she said.
Investors are closely tracking data center spending across the industry for any signs of a pullback. Chinese upstart DeepSeek released a new open-source AI model that it claims rivals the abilities of US technology at a fraction of the cost, which triggered concerns that companies are investing too much on building data centers.
Oracle’s capital expenditures — monitored by analysts as a metric of data center building — were $5.9 billion in the quarter, far ahead of the average analyst estimate of $3.8 billion. Chairman Larry Ellison said the company is scheduled to double its data center capacity in the calendar year with demand “at record levels.” “Management’s fiscal 2026 revenue growth target of 15%, vs. consensus for 13%, is encouraging, suggesting clients are continuing to invest in AI infrastructure.” Anurag Rana, an analyst at Bloomberg Intelligence, wrote in a note after the results.
The shares, which gained as much as 6% after the results were released, declined about 3.7% in extended trading at 6:40 p.m. in New York. The stock closed at $148.79 in New York and has fallen 11% this year, in line with a broader stock market rout. Profit, excluding some items, was $1.47 per share in the quarter. Analysts, on average, estimated $1.49. Total cloud revenue, including infrastructure and applications, increased 23% to $6.2 billion, compared with the average estimate of $6.3 billion.
Oracle said sales in the period ending in May will increase 8% to 10%. Analysts estimated 11% growth. Profit, excluding some items, will be about $1.61 to $1.65 a share, compared with the average projection of $1.77 a share.
ByteDance Ltd.’s TikTok, a major customer of Oracle’s cloud, is slated to be banned from the US unless it can find an American buyer by April, under a law that went into effect this year. President Donald Trump said Sunday he was negotiating with four different possible buyers for TikTok’s US business and that a deal for the social video app could come “soon.”
For Oracle, TikTok represents an “ongoing wild card,” wrote Mark R Murphy, an analyst at JP Morgan, in a note ahead of the results. Executives didn’t comment on TikTok during Monday’s earnings conference call.
