Q1 2027 Oracle Corporation Earnings Call Transcript
Key Points
- Total revenue reached a record $19.3 billion, up 30% year-over-year, with Q1 total revenue growing sequentially for the first time.
- Cloud infrastructure revenue surged 121% year-over-year to $7.4 billion, driven by record new megawatt capacity and strong demand.
- Remaining performance obligations (RPO) increased by $26 billion from Q4, with about half expected to convert to sales over the next 36 months.
- Non-GAAP EPS grew 30% year-over-year to $1.92, and non-GAAP operating income increased 31% to $8.2 billion.
- Oracle delivered 850 megawatts of AI capacity with over 300,000 GPUs in Q1, nearly triple Q4 deliveries, and GPU utilization remained high at 97.9%.
- Gross margin declined as expected due to data center ramp-up and increased infrastructure revenue mix, with further step-down anticipated.
- Capital expenditures for the quarter were $28 billion, leading to negative free cash flow of $5 billion, and full-year CapEx is projected at $90-$95 billion.
- NetSuite experienced slower decision cycles in the prior fiscal year, resulting in lower growth compared to other SaaS offerings.
- Potential data center delays in New Mexico and Wisconsin, though management states no impact on FY27 revenue guidance.
- Operating margin remained flat at 42% on a non-GAAP basis, with gross margin pressure offset by lower operating costs and efficiency actions.
Good day everyone, and welcome to the Oracle Corporation First Quarter Fiscal Year 2027 Earnings Call.
Just a reminder that this call is being recorded.
If you have a question today, please press *1 on your telephone keypad.
Please limit yourself to one question.
I would now like to hand the conference over to Mr. Ken Vond, Head of Investor Relations. Please go ahead, sir.
Thank you, Miriam. And good afternoon, everyone, and welcome to Oracle's first quarter fiscal year 2027 earnings conference call.
On the call today are Chief Executive Officer Mike Cecilia, Chief Executive Officer Clay McGurk, and Chief Financial Officer Hilary Maxson.
A copy of the press release, including financial results tables and supplemental financial metrics and guidance is now available on our investor relations website. Also available on our website is the slide deck that will be used in this call and a GAAP to non-GAAP reconciliation. As a reminder, today's
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