Oracle Books More Than $30 Billion in AI Contracts, Raising Obligations to $664 Billion
Key Facts
Oracle booked more than $30 billion in additional cloud AI contracts during the first quarter of its fiscal 2027, bringing remaining performance obligations to $664 billion, according to the company’s September earnings announcement. The new contracts add to a backlog of future revenue the company has committed to deliver as demand for its cloud infrastructure accelerates. Oracle said remaining performance obligations increased by $209 billion year over year to $664 billion. In the same announcement, the company raised its fiscal 2027 forecast to revenue of at least $90 billion and non-GAAP earnings of $8.10 per share. These figures date to the September announcement and do not represent a new announcement on November 6.
The quarterly comparison shows obligations of $638 billion in the previous quarter, before reaching $664 billion at the end of the first quarter of FY2027, according to data reported by Reuters via Investing.com. Oracle’s quarterly revenue was $19.3 billion, up 30%, exceeding the average analyst estimate of $19.14 billion. The company said demand for cloud AI training and inference services is growing faster than supply. It added 850 megawatts of data-center capacity during the quarter and said delivery of that capacity reflected strong execution in its infrastructure business. Oracle described the drivers of revenue and obligations growth as “increasing demand for cloud infrastructure for AI training and inference.”
Against the backdrop of its expanding obligations, Oracle said most of the increase in its backlog during the third and fourth quarters of FY2026 came from large AI contracts. This reflects the backlog’s reliance on large-scale agreements, while converting bookings into revenue remains tied to delivering the services and infrastructure customers need. Operating cash flow in the first quarter of FY2027 reached a record $23 billion, up 184%, but free cash flow was negative $5 billion. In the same quarter, the company completed a $20 billion sale of common stock before commissions through its at-the-market offering program. Oracle had said in its FY2026 earnings announcement that it expected to raise about $40 billion during FY2027 through a mix of debt and equity, including the announced $20 billion stock offering.
The September earnings announcement was reflected in the stock’s trading at the time: shares rose about 8% in extended trading after the announcement, after falling more than 20% from the start of the year through that point, according to Reuters via Investing.com. The following morning, the stock rose 5.5% before the market opened, while remaining down more than 21% year to date, compared with gains of nearly 11% for the S&P 500. Oracle’s November 5 closing price of $115.16 is reported in EL7 data. That data indicates only the closing price, without independent, reliable confirmation of the session’s trading range. The figure therefore does not establish the price range cited in the earlier account of the November 5 session.
How the contractual backlog converts into revenue remains a focus for investors, alongside the financing of data-center expansion. Reuters reported that JPMorgan analysts raised questions including the sustainability of contract growth, the extent to which obligations will convert into revenue as some data centers are delayed, and the need to raise additional capital. For the second quarter of FY2027, Oracle forecast total revenue growth of between 30% and 34%, and cloud revenue growth of between 64% and 70% in constant currency. It also forecast non-GAAP earnings of between $1.83 and $1.91 per share in constant currency, representing growth of between 19% and 23% after excluding a one-time investment gain in the year-earlier quarter. Oracle’s investor FAQ page says the company will announce its second-quarter results on December 14, 2026.