Oracle Corporation (ORCL) — Company Research

Last Updated: 14 July 2026

Oracle Corporation is one of the world's largest enterprise software and cloud infrastructure companies, and right now it is the market's most dramatic AI story. Fiscal 2026 (ended 31 May 2026) delivered record revenue of $67.4bn and a remaining performance obligation (RPO) backlog of $638bn — up 363% in a year, driven by enormous AI contracts including a reported ~$300bn multiyear deal with OpenAI. Yet the shares have collapsed: June 2026 was Oracle's worst month in over three decades and late June its worst week since the 2001 dot-com bust, with the stock hitting a 12-month low of $131.54 on 13 July — down more than 60% from September 2025's $345.72 high. The tension is simple: a record backlog on one side; negative $23.7bn free cash flow, $129.5bn of borrowings and a credit downgrade on the other. This report sets out the facts.

1. Company Snapshot

Field	Value
Company	Oracle Corporation
Ticker / Exchange	ORCL / NYSE
Headquarters	Austin, Texas, USA
Founded	1977 (by Larry Ellison, Bob Miner and Ed Oates)
CEO	Clay Magouyrk and Mike Sicilia (co-CEOs since September 2025); Larry Ellison remains Chairman & CTO, Safra Catz Executive Vice Chair
Employees	~141,000 (FY2026 10-K — down ~21,000 in a year amid AI-driven restructuring)
Sector	Enterprise software and cloud infrastructure
Revenue (FY2026, ended 31 May 2026)	$67,357m (up 17% year-over-year)
Net income (FY2026, GAAP, available to common)	$16,984m (non-GAAP $22,234m, boosted by one-time investment gains)
Market cap	~$380bn (13 July 2026, share price $131.54)
Dividend	$0.50 per quarter ($2.00 annualised; next payment 24 July 2026)

2. Bull vs Bear Case

Bull Case

• Unprecedented revenue visibility: RPO of $638bn (up 363% year-over-year, and up $85bn sequentially in Q4 alone) is a contracted backlog nearly ten times FY2026 revenue; $75bn of the large AI contracts is prepaid or customer-supplied hardware, reducing the capital Oracle itself must raise.
• OCI is hyper-growing: cloud infrastructure revenue rose 77% to $18.1bn in FY2026 and 93% in Q4; management guides total cloud revenue up 57–63% in constant currency for Q1 FY2027 and confirms $90bn total revenue guidance for FY2027.
• Earnings are compounding through the build-out: FY2026 GAAP EPS rose 34% to $5.83 and operating cash flow jumped 54% to a record $32.0bn — the P&L is strengthening even while the balance sheet carries the datacentre construction.
• Differentiated AI database franchise: the Oracle Multicloud AI Database grew 404% in Q4 — the fastest-growing product in company history — and a new AI version of the Cerner patient-care system is expected to push Oracle Health to double-digit growth in FY2027.
• Valuation reset: after a ~62% fall from the high, the stock trades at roughly 16x the company's own FY2027 non-GAAP EPS guidance of $8.05 — a fraction of the multiple it commanded in September 2025.

Bear Case

• Free cash flow is deeply negative: −$23.7bn in FY2026 as capex hit $55.7bn (up 162%); Oracle is spending far faster than the business generates cash and funding the gap externally.
• Leverage and rating pressure: total borrowings reached $129.5bn at 31 May 2026 after $43bn of new debt in FY2026; S&P downgraded Oracle to BBB−, one notch above junk, and another ~$40bn of debt and equity (including a $20bn at-the-market equity programme diluting holders by roughly 5%) is planned for FY2027.
• Extreme customer concentration: OpenAI's reported ~$300bn contract is close to half the RPO and does not begin until 2027 — if OpenAI's demand or funding tightens, Oracle absorbs the loss through leases and debt already on its books.
• Backlog is not revenue: converting $638bn of RPO depends on GPU supply, datacentre power availability and customers actually consuming capacity on schedule; any slippage pushes revenue right while interest and depreciation land on time.
• Momentum is broken: the worst month in three decades (June 2026, ~−35%), the worst week since 2001, and a 12-month low of $131.54 on 13 July show the market repricing execution risk — legacy software revenue is also shrinking (down 1% in FY2026).

3. Revenue Segments

Oracle reports revenue by offering. Figures below are FY2026 (year ended 31 May 2026) from the Q4 FY2026 earnings release.

Segment	% of revenue	What it is
Cloud services (IaaS + SaaS)	50.5% ($33,989m)	Oracle Cloud Infrastructure (OCI) compute/storage/networking for AI training and inference ($18,101m, +77%) plus cloud applications — Fusion ERP, NetSuite, Oracle Health ($15,888m, +11%).
Software (licence + support)	36.4% ($24,541m)	On-premise database and middleware licences ($4,737m, −9%) and the high-margin annuity of software support contracts ($19,804m, +1%). Slowly declining as customers migrate to cloud.
Services	8.5% ($5,743m)	Consulting, implementation and education services around Oracle products (+10%).
Hardware	4.6% ($3,084m)	Engineered systems (Exadata), servers and storage, including hardware support (+5%).

4. Business Model

How the money is made: Oracle sells the plumbing of enterprise computing — databases, business applications and, increasingly, raw AI infrastructure. Historically the model was licence-plus-support: sell a perpetual database licence, then collect ~95%-renewal support fees for decades. That annuity ($19.8bn of support revenue in FY2026) still funds the company. The growth engine is now OCI: Oracle builds gigawatt-scale datacentres, fills them with GPUs, and rents capacity under long-term contracts to AI labs and enterprises — capital-intensive, but contracted years ahead (hence the $638bn RPO).

Unit economics: software support and SaaS carry very high incremental margins; OCI margins are structurally lower and front-loaded with depreciation — FY2026 "cloud and software" cost of revenue rose 52% against 17% revenue growth, and depreciation more than doubled year-over-year to $7.6bn as new capacity came online. Non-GAAP operating margin held at 43% in FY2026 (GAAP 31%). Interest expense reached $4.6bn against $129.5bn of borrowings.

Moat: mission-critical database entrenchment (switching costs measured in decades), a full-stack position spanning applications to silicon-adjacent infrastructure, and — in AI — early capacity commitments and networking design that made OCI the fastest-growing hyperscale cloud. The Multicloud AI Database (Oracle databases running inside AWS/Azure/Google datacentres) monetises rivals' footprints.

Capital allocation: the priority has flipped from buybacks (just $95m in FY2026 versus $600m in FY2025 and tens of billions in prior years) to datacentre capex ($55.7bn). The dividend continues at $0.50/quarter (~$5.8bn paid in FY2026), and FY2026 added $43bn of debt plus $5bn of mandatory convertible preferred equity; ~$40bn more is planned for FY2027.

5. Financial Health

All figures from Oracle earnings releases (SEC Form 8-K exhibits) and EDGAR XBRL filings. Oracle's fiscal year ends 31 May — "FY2026" ended 31 May 2026.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE, $m)
FY2022	$42,440m	+4.8%	$2.41	$4.90	$1.28	$72,110m
FY2023	$49,954m	+17.7%	$3.07	$5.12	$1.44	$86,420m
FY2024	$52,961m	+6.0%	$3.71	$5.56	$1.60	$76,264m
FY2025	$57,399m	+8.4%	$4.34	$6.03	$1.80	$85,297m
FY2026	$67,357m	+17.3%	$5.83	$7.63	$2.00	$122,342m

Notes: FY2023's jump reflects the first full year of the Cerner acquisition. FY2026 non-GAAP EPS of $7.63 includes one-time investment gains (sale of the Ampere chip stake and Bloom Energy warrants); excluding them it would be $6.83, up 13%. Dividend/share reflects the declared quarterly rate ($0.32, raised to $0.40 in March 2023 and to $0.50 in April 2025). Long-term debt is notes payable and other borrowings, non-current, at fiscal year-end; a further $7,199m was current at 31 May 2026. FY2026 operating cash flow was $31,977m, capital expenditure $55,663m, free cash flow −$23,686m, and D&A $9,294m (depreciation $7,623m + intangible amortisation $1,671m), all per the FY2026 cash flow statement.

Quarter / Half	Revenue ($m)	Adjusted EPS	GAAP EPS
Q4 FY2026 (ended 31 May 2026)	$19,184m	$2.11	$1.45
Q3 FY2026	$17,190m	$1.79	$1.27
Q2 FY2026	$16,058m	$2.26	$2.10
Q1 FY2026	$14,926m	$1.47	$1.01
FY 2026 total	$67,357m	$7.63	$5.83

Q2 FY2026's outsized EPS (GAAP $2.10, up 91%) included large one-time investment gains; Q4's $2.11 non-GAAP would have been $2.03 excluding them. Cash and marketable securities stood at $31.9bn at 31 May 2026 against total borrowings of $129.5bn.

6. Valuation Metrics

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	~$380bn (share price $131.54 at 13 July 2026 close, ~2.9bn shares)
Trailing P/E (GAAP)	~23x ($131.54 / FY2026 GAAP EPS $5.83)
P/E (forward)	~16x ($131.54 / management's FY2027 non-GAAP EPS guidance of $8.05) — non-GAAP guidance basis
P/S (TTM)	~5.6x (market cap ~$380bn / FY2026 revenue $67.36bn)
Enterprise value	~$478bn (market cap ~$380bn + total borrowings $129.5bn ($7,199m current + $122,342m non-current) − cash and marketable securities $31.9bn per 31 May 2026 balance sheet)
EV/EBITDA (TTM)	~16x (EV ~$478bn / FY2026 EBITDA ~$29.9bn = GAAP operating income $20,606m + depreciation $7,623m + intangible amortisation $1,671m)
P/FCF	n/m — free cash flow is negative (operating cash flow $31,977m − capex $55,663m = −$23,686m per FY2026 cash flow statement); on operating cash flow alone the multiple would be ~12x
52-week high	$345.72 (September 2025)
52-week low	$130.76
Short interest (% of float)	~1.3% of shares outstanding (37.7m shares, 15 June 2026 settlement)
Days to cover	~1.2

7. What Are They Building

Oracle is building AI datacentres at a scale matched only by the hyperscalers — $55.7bn of capex in FY2026, up 162%, with gigawatt campuses intended to run on clean energy from natural-gas fuel cells. The contracted demand behind that build is the $638bn RPO, dominated by large AI training and inference deals (reportedly ~$300bn from OpenAI over roughly five years starting 2027); $75bn of these contracts is prepaid or customer-supplied GPUs, which reduces Oracle's own funding needs. On the software side, the flagship projects are the Oracle Multicloud AI Database — Oracle databases running natively inside AWS, Azure and Google Cloud, which grew 404% in Q4 FY2026, the fastest-growing product in company history — and the AI rebuild of Oracle Health: a completely new AI version of the Cerner hospital and clinic patient-care system, plus AI clinical-trial and molecular-design tooling, which management expects to push Oracle Health to double-digit growth in FY2027. Autonomous database, high-performance RDMA networking and Exadata engineered systems remain the differentiated substrate underneath. Track the price action on our Live Charts page.

8. Competitive Landscape

Oracle's cloud infrastructure business competes directly with the three hyperscalers; its applications business fights SAP, Workday and Salesforce. Market caps as retrieved July 2026.

Peer	Market cap (Jul 2026)	Key 2025 metric
Microsoft (MSFT)	~$2.92tn	Azure revenue surpassed $75bn in FY2025 (ended 30 Jun 2025), up 34%; Microsoft Cloud $168.9bn
Amazon (AMZN)	~$2.57tn	AWS 2025 revenue $128.7bn, up 19%, with a Q4 run-rate of ~$142bn
Alphabet (GOOGL)	~$4.33tn	Google Cloud 2025 revenue $58.7bn, up ~36%, exiting the year above a $70bn run-rate
NVIDIA (NVDA)	~$4.85tn (1 Jul 2026)	Supplier rather than direct rival — the GPU spend driving Oracle's capex; world's largest company by market cap

OCI is far smaller than AWS or Azure in absolute terms ($18.1bn vs $128.7bn and $75bn+ respectively) but is growing several times faster from its base, and Oracle is the only database incumbent among the four.

9. Leadership & Insider Activity

Oracle promoted Clay Magouyrk (previously President of Oracle Cloud Infrastructure, ex-AWS, architect of Gen2 OCI) and Mike Sicilia (previously President of Oracle Industries, who joined via the Primavera acquisition) to co-CEOs on 22 September 2025. Safra Catz, CEO since 2014, became Executive Vice Chair of the board; founder Larry Ellison remains Chairman and Chief Technology Officer. The workforce shrank by roughly 21,000 (~13%) to 141,000 during FY2026 as AI adoption reshaped operations.

Name	Date	Type	Shares	Price	Value	Plan Type
Jeffrey Henley (Vice Chairman)	24 Jun 2026	Option exercise and sale	400,000	~$159 avg	$63.66m	Rule 10b5-1 (adopted 2 Jan 2026)
Lawrence Ellison (Chairman & CTO)	23 Oct 2025	Stock option grant	571,286	$280.07 exercise price	—	Equity award (vests 25%/yr, expires 2035)

Beyond the pre-scheduled Henley sale and routine equity awards, searches found no material insider open-market buying in 2026; no purchases by the new co-CEOs were identified following the June share-price fall.

10. Risks

• Leverage and funding (Financial): borrowings of $129.5bn, an S&P downgrade to BBB− (one notch above junk), and a planned ~$40bn FY2027 raise — including a $20bn at-the-market equity programme implying roughly 5% dilution — leave little room for execution error if rates stay high or credit markets tighten.
• Negative free cash flow (Financial): −$23.7bn in FY2026 with capex guided higher still; depreciation and interest costs land on schedule even if revenue conversion slips.
• Customer concentration (Operational): OpenAI reportedly accounts for close to half the $638bn RPO under a ~$300bn contract that does not begin until 2027; OpenAI's own funding needs make this a genuine counterparty risk that Oracle would absorb through leases and debt already on its books.
• Backlog conversion (Operational): turning RPO into revenue depends on GPU supply, grid power availability and customer consumption schedules — all outside Oracle's full control.
• Hyperscaler competition (Competitive): AWS, Azure and Google Cloud have larger scale, stronger balance sheets and their own AI silicon; price competition for AI capacity could compress OCI economics precisely as Oracle's depreciation peaks.
• Legacy erosion (Operational): software revenue fell 1% in FY2026 (licences −9%); the cloud transition must keep outrunning the decline of the licence/support annuity that funds the dividend.

11. Recent Developments

• 10 Jun 2026 — Record Q4 and FY2026 results. Q4 revenue $19.2bn (+21%), Q4 GAAP EPS $1.45, non-GAAP $2.11; FY2026 revenue $67.4bn (+17%), GAAP EPS $5.83 (+34%); RPO up $85bn sequentially to $638bn (+363% YoY); FY2027 guidance confirmed at $90bn revenue with non-GAAP EPS raised to $8.05. Operating cash flow a record $32bn; free cash flow −$23.7bn.
• 23 Jun 2026 — Workforce down ~21,000 in a year. Headcount fell ~13% to 141,000 during FY2026, with the 10-K citing AI adoption and deployment across operations as a driver of workforce reductions.
• 26 Jun 2026 — Worst week since the 2001 dot-com bust. The stock closed out its worst week in 25 years as investors dwelt on the $130bn+ debt load, negative free cash flow and S&P's downgrade to BBB−; June ended as Oracle's worst month in over three decades (roughly −35%).
• 13 Jul 2026 — Shares hit a 12-month low of $131.54 (−6.5% on the day), about 62% below September 2025's $345.72 peak, as debate continued over whether the ~$300bn OpenAI commitment — nearly half the backlog, starting 2027 — is an asset or a liability.

12. Key Dates

Check our Economic Calendar for macro events, and discuss this name on the ChartsView Forum.

• 24 Jul 2026 — Quarterly dividend of $0.50/share paid (record date 10 July 2026)
• 14 Sep 2026 — Q1 FY2027 results (confirmed, after US market close); guidance is total revenue +27–29% and non-GAAP EPS $1.72–$1.76
• Expected Nov 2026 — Annual meeting of stockholders
• Expected FY2027 — ~$40bn of debt and equity financing, including the $20bn at-the-market equity issuance (no additional debt expected in calendar 2026)
• Expected 2027 — Reported ~$300bn OpenAI contract begins contributing to revenue

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