Oracle (ORCL.N) will release its first-quarter fiscal 2027 earnings report after the US stock market closes on Thursday. Wall Street expects first-quarter revenue of approximately $19.1 billion, representing a year-over-year increase of approximately 28%, and adjusted earnings per share of approximately $1.75. The company's latest guidance is: total revenue growth of 27% to 29%, total cloud revenue growth of 58% to 64%, and non-GAAP earnings per share of $1.72 to $1.76.
Oracle has been accelerating its transformation from a traditional software company to a cloud infrastructure and AI infrastructure provider in recent years. In fiscal 2026, the company's cloud revenue grew by 39% to $34 billion, with cloud infrastructure revenue growing by 77% to $18.1 billion; fourth-quarter OCI revenue further increased by 93% year-over-year to $5.8 billion. Meanwhile, the company's remaining fulfillment obligations (RPO) reached $638 billion at the end of the fourth fiscal quarter, an increase of $85 billion from the previous quarter, representing a significant year-over-year increase of 363%, with a large portion of the increase coming from large AI contracts.
On the one hand, this large backlog of orders indicates a huge future demand for Oracle infrastructure. On the other hand, investors need to see Oracle actually build the required capacity and convert these contracts into revenue. Management's comments on timelines, data center capacity, and customer deployments are crucial. A growing backlog of orders is good news. However, if the backlog doesn't grow as fast as it becomes profitable and fails to offset the investment required to fulfill those orders, the situation will be very different.
Analysts believe that investors will focus on Oracle's cloud growth, the alignment of AI demand with capital expenditures, data center construction progress, financing needs, and the speed at which large orders are converted into revenue and cash flow.
