Oracle beats Q4 estimates, plunges 7% after hours on $40B plan

Oracle reported fiscal fourth-quarter adjusted earnings of $2.11 a share, topping estimates, but shares slid more than 7% in after-hours trading after the company unveiled a $40 billion debt and equity financing plan.

"The results validate our AI infrastructure strategy, but the capital raise introduces near-term dilution concerns," Stefan Slowinski, analyst at BNP Paribas, said. He maintains a $283 price target on the stock.

Metric	Actual	Consensus	Beat/Miss
Revenue	$19.18B	$19.09B	+0.5%
Adj. EPS	$2.11	$1.96	+$0.15
Cloud Infrastructure	$5.8B	$5.72B	+1.4%

Revenue rose 21% from a year earlier to $19.18 billion, while net income climbed to $4.22 billion, or $1.45 a share, from $3.43 billion a year ago. Cloud infrastructure revenue jumped 93% to $5.8 billion, slightly above the $5.72 billion consensus. Remaining performance obligations, a key measure of contracted future revenue, surged 363% to $638 billion, topping the $595.67 billion estimate. Bank of America analysts said more than half of that backlog comes from Oracle's partnership with OpenAI.

The after-hours decline erased roughly $40 billion in market value, driven by dilution concerns from the $20 billion at-the-market equity offering included in the $40 billion financing package. Oracle maintained its fiscal 2027 revenue target of $90 billion while raising its adjusted earnings forecast to $8.05 a share, above the $8.01 consensus. For the current quarter, the company projected adjusted earnings of $1.72 to $1.76 a share on revenue growth of 27% to 29%, both above analyst estimates.

Oracle also secured a $395.8 million, 10-year federal contract with the Office of Personnel Management to consolidate more than 100 HR systems into a single platform serving 2 million federal employees, beating out Workday, IBM and SAP.

The financing plan signals Oracle expects its aggressive AI infrastructure buildout to continue straining the balance sheet. The company reported negative free cash flow of $23.7 billion for fiscal 2026 as capital expenditures reached $48.25 billion. Investors will watch the earnings call at 5 p.m. ET for details on the pace of Stargate campus buildouts and the timeline to positive free cash flow.

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