[NEW YORK] Oracle reported a surge in bookings and gave a revenue forecast for the fiscal year beginning in June that topped estimates, fuelling confidence that the company is gaining large customers for its cloud infrastructure business.
“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 on Monday (Mar 10). “We expect that our huge US$130 billion sales backlog will help drive a 15 per cent increase in Oracle’s overall revenue in our next fiscal year.”
Oracle’s efforts the past few years to become a major player in the competitive industry of renting out computing power and storage were validated recently when the company announced a joint venture at the White House with OpenAI and Softbank to spend at least US$100 billion to build out data centres for the artificial intelligence (AI) startup.
“Solid demand for its cloud infrastructure for generative AI and partnerships with the three largest cloud hyperscalers may catapult Oracle to become the fourth-largest cloud provider,” Anurag Rana, an analyst at Bloomberg Intelligence, wrote in a note before the results were released.
Heading into earnings, many investors expected a rise in cloud infrastructure bookings and capital expenditures due to the joint venture, dubbed Stargate. The project’s first campus is taking shape in Abilene, Texas, where tens of thousands of powerful AI chips from Nvidia will be delivered in the coming months.
Catz said remaining performance obligations, a measure of bookings, would “continue to grow rapidly – as we look forward to signing our first Stargate contract”.
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Investors are closely tracking data centre 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 centres.
But Oracle chairman Larry Ellison said customer demand “is at record levels” and the company is scheduled to double its data centre capacity in the calendar year.
The shares gained about 1 per cent in extended trading after closing at US$148.79 in New York. The stock has declined 11 per cent this year, in line with a broader stock market rout.
Remaining performance obligations (RPO) – a measure of bookings – were US$130 billion in the period ended Feb 28, compared with US$97.3 billion in the previous quarter. Analysts, on average, estimated that Oracle’s sales would jump 13 per cent in the 2026 fiscal year.
“We think the strong RPO growth and initial FY26 guidance trump the weaker Q3 results,” Raimo Lenschow, an analyst at Barclays, wrote in a note.
Fiscal third-quarter revenue increased 6 per cent to US$14.1 billion, the company said. Analysts, on average, projected US$14.4 billion, according to data compiled by Bloomberg. Sales from Oracle’s closely watched cloud infrastructure business jumped 49 per cent to US$2.7 billion.
Earnings, excluding some items, were US$1.47 per share. Analysts, on average, estimated US$1.49. Total cloud revenue, including infrastructure and applications, increased 23 per cent to US$6.2 billion. Analysts, on average, estimated US$6.3 billion.
ByteDance’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 on 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. BLOOMBERG
