Oracle Corporation delivered a blockbuster fiscal third-quarter earnings report on Tuesday, posting its first quarter in over 15 years where both organic total revenue and non-GAAP earnings per share each grew at 20% or more in U.S. dollar terms—a milestone the company's CFO Doug Kehring described as a historic inflection point for the enterprise software giant's transformation into a premier AI cloud infrastructure provider.
Total quarterly revenues rose 22% year over year to $17.2 billion, ahead of Wall Street's consensus estimate of $16.9 billion. Cloud revenue, which includes both infrastructure-as-a-service and software-as-a-service, climbed 44% to $8.9 billion. Most striking was the performance of Oracle's cloud infrastructure segment, which surged 84% to $4.9 billion, reflecting surging demand from AI companies requiring large-scale GPU compute and data center capacity.
Oracle's remaining performance obligations—the total value of contracted future revenue not yet recognized—reached $553 billion, a 325% increase compared to the same period last year and a $29 billion sequential increase from Q2. The company attributed the dramatic RPO growth primarily to large-scale AI contracts in which customers either prepay for GPU procurement or supply chips directly to Oracle, meaning the company does not need to raise additional capital to fund fulfillment. The across-the-board beat came despite the stock having declined roughly 23% in 2026 prior to the report, creating a compressed valuation that made the earnings release all the more significant for battered investors.
Among the key strategic disclosures, Oracle confirmed it now holds a 15% equity stake in TikTok US following the platform's separation from ByteDance, with a board seat included—a development expected to contribute financially beginning in Q4 results. Oracle also confirmed that its Abilene, Texas data center campus, built in partnership with Crusoe Energy and contracted to serve OpenAI, has two fully operational buildings with the remainder of the campus on schedule.
Earlier this quarter, Oracle raised $30 billion through a combination of investment-grade bonds and mandatory convertible preferred stock as part of a broader $45 to $50 billion financing program, with the order book described as substantially oversubscribed. The debt raise, which initially rattled credit investors worried about Oracle's investment-grade rating, now appears more defensible given the contracted backlog underpinning the build-out. Looking ahead, Oracle guided for fiscal Q4 adjusted EPS of $1.92 to $1.96 versus the $1.70 consensus, and revenue growth of 19% to 20%.
The earnings release also addressed Oracle's use of AI code generation tools to restructure its product development teams. "AI models for generating computer code have become so efficient that we have been restructuring our product development teams into smaller, more agile and productive groups," the company said in its statement. This internal AI adoption is expected to accelerate software development output while reducing headcount costs, improving operating leverage over the medium term.
Oracle shares, which closed at approximately $149 on Tuesday before the earnings release, jumped as much as 10% to 14% in after-hours trading. Analysts at multiple firms are expected to raise price targets materially, with the median Wall Street target at $275 prior to the report. The strong result provides a notable positive outlier in an otherwise risk-off market dominated by energy and credit concerns.