Oracle Q3 FY26 Results Highlight Explosive AI-Driven Cloud Growth

Oracle Corporation (NYSE: ORCL) reported a strong fiscal third quarter for 2026, fueled by accelerating demand for cloud infrastructure and artificial intelligence workloads. The company delivered double-digit revenue growth and strong earnings expansion, while remaining performance obligations surged due to large AI cloud contracts.

Oracle Corporation stock AI analysis chart

Strong Revenue and Earnings Growth

For fiscal Q3 2026, Oracle reported total revenue of $17.2 billion, representing 22% year-over-year growth in USD (18% in constant currency). This marks the first quarter in over 15 years where Oracle achieved 20%+ growth in both revenue and non-GAAP earnings per share.

Q3 GAAP operating income increased 25% year over year in USD to $5.5 billion, translating to a 32% operating margin, up from 31% a year ago. Non-GAAP operating income reached $7.4 billion, resulting in a 43% operating margin, compared with 44% in Q3 FY25.

GAAP net income was $3.7 billion, with earnings per share of $1.27, up 24% in USD. Non-GAAP net income was $5.2 billion, up 23% in USD. Non-GAAP earnings per share increased to $1.79 from $1.47.

Cloud and AI Demand Driving Growth

Oracle’s cloud business continues to be the primary growth engine.

Total cloud revenue: $8.9 billion (up 44% in USD)
Cloud Infrastructure revenue (IaaS): $4.9 billion (up 84% in USD)
Cloud Applications revenue (SaaS): $4.0 billion (up 13% in USD)

The standout figure was Remaining Performance Obligations (RPO), which reached $553 billion, up 325% year-over-year in USD. Most of the increase in RPO in Q3 related to large scale AI contracts where Oracle does not expect to have to raise any incremental funds to support these contracts as most of the equipment needed is either funded upfront via customer prepayments so Oracle can purchase the GPUs, or the customer buys the GPUs and supplies them to Oracle.

Oracle also highlighted that AI code generation tools are significantly improving internal software development productivity, allowing the company to build more SaaS applications for more industries at lower cost.

Heavy Capex and Financing

Oracle is aggressively investing to capture AI infrastructure demand.

FY2026 capital expenditure guidance: $50 billion
In February, Oracle announced raising up to $50 billion in debt and equity financing, and the company does not expect to issue any additional bonds beyond this amount in calendar year 2026
$30 billion already raised through bonds and mandatory convertible preferred stock

Over the last twelve months, operating cash flow was $23.5 billion, up 13% in USD. Capital expenditures (CapEx) for the trailing twelve months hit a staggering $48.25 billion, leading to a negative free cash flow of $24.7 billion.

Oracle ended February 28, 2026, with $9.9 billion in notes payable and other current borrowings, compared with $7.3 billion on May 31, 2025, and $124.7 billion in long-term borrowings, up from $85.3 billion. Short-term deferred revenues were $9.9 billion.

Forward Guidance

Oracle expects growth to remain strong in the coming quarters.

Q4 FY2026 guidance:

Revenue growth: 19%–21% in USD; 18%–20% in constant currency
Cloud revenue growth: 46%–50% in USD; 44%–48% in constant currency
Non-GAAP EPS: $1.96–$2.00 in USD; $1.92–$1.96 in constant currency

For the full fiscal year:

FY2026 revenue: ~$67 billion
FY2027 revenue target: $90 billion (raised guidance)

Technical Analysis

From a technical perspective, Oracle’s stock is facing an immediate resistance level around $187. If the share price successfully breaks above this level and maintains momentum, the next major resistance zone could appear near $210. A sustained move above these levels would likely confirm a bullish trend for the stock.

However, if the stock fails to overcome the $187 resistance, it may retrace to test lower support levels. The first significant support area lies near $137, while a deeper correction could bring the price toward the longer-term support zone around $121.