Oracle Q2 FY2026 Earnings Conference Call

Summary

Oracle reported strong Q2 FY2026 results with accelerating growth across cloud infrastructure and applications. The company achieved $523.3 billion in RPO, representing 433% year-over-year growth, driven by major contracts with Meta, NVIDIA, and other large customers. Cloud infrastructure revenue surged 66% to $4.1 billion, with GPU-related revenue growing 177%, while total cloud revenue reached $8 billion, up 33%. The company is rapidly expanding capacity with 147 live regions and delivered 400 megawatts of new data center capacity in the quarter. Oracle's strategic focus on AI infrastructure and database services is paying dividends, with multi-cloud database consumption up 817% and strong customer adoption across various industries. The company has unified its sales organization by combining industry-based and Fusion application teams to drive cross-selling synergies. Management expressed confidence in continued growth acceleration, particularly in cloud applications, supported by 14% growth in deferred revenue outpacing the 11% revenue growth. Oracle expects $4 billion in additional revenue for FY 2027 from Q2 bookings while maintaining disciplined capital allocation and commitment to investment-grade debt rating.

Key Points

• Remaining Performance Obligations (RPO) reached $523.3 billion, up 433% year-over-year, with $68 billion added in Q2
• Total cloud revenue grew 33% to $8 billion, representing significant acceleration from 24% last year
• Cloud infrastructure revenue up 66% to $4.1 billion, with GPU-related revenue growing 177%
• Multi-cloud database consumption increased 817% year-over-year
• OCI now operates 147 live customer-facing regions with 64 more planned
• Delivered close to 400 megawatts of data center capacity and 50% more GPU capacity than Q1
• Oracle AI database and AI data platform enable AI models to reason on private enterprise data
• Cloud applications revenue up 11% with strategic back-office applications up 16%
• Completed sales organization restructuring combining industry and fusion application teams
• Non-GAAP EPS grew 51% to $2.26, GAAP EPS up 86% to $2.10

Action Items

• Execute on $4 billion additional revenue expected in FY 2027 from new RPO bookings
• Invest approximately $15 billion more in CapEx for FY 2026 than previously forecasted
• Continue accelerated pace of data center capacity delivery
• Launch 27 additional multi-cloud regions over the next month
• Deliver more than 96,000 NVIDIA Grace Blackwell GB 200 units for Abilene, Texas super cluster

Decisions

• Maintain investment-grade debt rating as foundational principle
• Pursue business expansion only when meeting profitability requirements and favorable capital terms
• Combined industry-based cloud apps and Fusion cloud apps under one selling organization globally
• Expect to need substantially less than $100 billion analyst estimates for infrastructure build-out through alternative financing models

Participants