Oracle Corporation reported its fiscal third-quarter earnings on March 10, 2025, revealing a miss on both earnings and revenue estimates. Despite the disappointing figures, the company highlighted robust growth in its cloud services, particularly driven by demand for artificial intelligence (AI) infrastructure.

Key Takeaways

• Earnings per share (EPS) of $1.47 missed the expected $1.49.
• Revenue of $14.13 billion fell short of the $14.39 billion forecast.
• Cloud services revenue increased by 23% year-over-year, reaching $6.2 billion.
• Oracle anticipates a 15% revenue growth for fiscal 2026 and 20% for fiscal 2027.
• The company is on track to double its data center capacity this year.

Earnings Overview

In the latest earnings report, Oracle’s adjusted earnings per share came in at $1.47, slightly below analysts’ expectations of $1.49. The company’s revenue for the quarter was reported at $14.13 billion, missing the consensus estimate of $14.39 billion. This marks a 6% increase from the previous year, but it was not enough to satisfy market expectations.

Despite the earnings miss, Oracle’s net income rose 22% to $2.94 billion, indicating strong underlying profitability. The company attributed much of its revenue growth to its cloud services, which saw a significant increase in demand, particularly for AI-related projects.

Cloud Services Growth

Oracle’s cloud services revenue surged by 23% year-over-year, reaching $6.2 billion. This growth is largely driven by the increasing demand for AI computing power, as businesses seek to leverage cloud infrastructure for their AI initiatives. The company reported that its cloud infrastructure segment alone grew by 49%, reflecting the booming interest in AI applications.

Chairman Larry Ellison stated, “We are on schedule to double our data center capacity this calendar year. Customer demand is at record levels.” This expansion is crucial as Oracle positions itself to compete with larger players like Amazon and Microsoft in the cloud market.

Future Outlook

Looking ahead, Oracle provided a positive outlook for the upcoming fiscal years. The company expects revenue to grow by 15% in fiscal 2026 and 20% in fiscal 2027, both of which exceed analysts’ projections. This optimistic forecast is bolstered by a significant increase in remaining performance obligations (RPO), which reached $130 billion, indicating strong future sales potential.

However, the company also acknowledged challenges, including a potential overspend on data center infrastructure. Analysts have raised concerns about whether the current investments in AI infrastructure will yield the expected returns.

Market Reaction

Following the earnings report, Oracle’s stock experienced a mixed reaction. Initially, shares dipped by as much as 7.5% in early trading, reflecting investor disappointment over the earnings miss. However, analysts noted that the strong growth in cloud services and the promising outlook for future revenue could provide a foundation for recovery.

In conclusion, while Oracle’s latest earnings report revealed some shortcomings, the company’s strong performance in cloud services and its ambitious growth plans signal a potentially bright future as it navigates the competitive landscape of AI and cloud computing.

Sources

• Oracle (ORCL) Q3 Earnings and Revenues Miss Estimates, Yahoo Finance.
• Oracle (ORCL) Q3 earnings report 2025, CNBC.
• Oracle Stock Slips After Earnings Miss. Stargate AI Project Coming ‘Fairly Soon.’, Investor’s Business Daily.
• Oracle Reports Lackluster Results, Damping Cloud Enthusiasm, Yahoo Finance.
• Oracle gives strong long-term growth outlook as AI cloud demand soars, Reuters.