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Oracle Corporation Common Stock
Our verdict on Oracle Corporation Common Stock isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The Fiscal 2024 Restructuring Plan is noted as being substantially complete, allowing management to pivot to a new 2026 plan. (3 met across 3 tracked commitments)
“The total estimated restructuring costs associated with the 2026 Restructuring Plan are up to $2.1 billion and will be recorded to the restructuring expense line item within our condensed consolidated statements of operations as they are incurred through the end of the plan.”
Cloud revenues as a percentage of total revenues increased to 50% for the nine-month period ended February 28, 2026, compared to 43% in the prior year period. (1 met across 1 tracked commitment)
“our expectation that the proportion of our cloud revenues relative to our total revenues will continue to increase”
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How durable is the business?
The Americas region continues to expand its share of total revenue, growing 15% year-over-year and now accounting for 65% of the geographic mix. (5 expanding across 2 engines)
“Services Revenues: Total revenues 1,443... Total Margin % 28%... Percent Change Actual 12%”
Oracle's backlog of contracted future revenue reached a massive $455.3 billion, though it is lower than the previously extracted $552.6 billion, it still represents a 359% increase over the prior year's $99.1 billion. (3 expanding)
“Remaining performance obligations were $455.3 billion and $99.1 billion as of August 31, 2025 and 2024, respectively. The increase... was primarily attributable to certain significant cloud contracts.”
See the full cited Business Model analysis of Oracle Corporation Common Stock
Where does growth come from?
Oracle has significantly increased its long-term commitments for data center capacity. Operating lease commitments rose to $18.8 billion, primarily for data centers, with terms extending up to 15 years. (5 accelerating across 5 signals, 1 leading indicator)
“As of February 28, 2026, we had $261 billion of additional lease commitments, substantially all related to data center arrangements, that are generally expected to commence between the fourth quarter of fiscal 2026 and fiscal 2028”
Cloud services now represent 38% of total quarterly revenue, up from 33% in the prior year period. This shift toward recurring cloud subscriptions is a structural trend in Oracle's business model. (5 accelerating across 5 signals)
“Cloud revenues represented 52% and 50% of our total revenues for the three- and nine-month periods ended February 28, 2026, respectively, and 44% and 43% of our total revenues for the three- and nine-month periods ended February 28, 2025, respectively.”
See the full cited Future Growth analysis of Oracle Corporation Common Stock
What could break the thesis?
Free cash flow for fiscal 2025 turned negative at $(394) million, a sharp decline from positive $11.8 billion in fiscal 2024. This was primarily due to a 209% increase in capital expenditures to $21.2 billion to support cloud infrastructure growth. (3 intensifying, 2 stable, 1 high-severity)
“Notes payable and other borrowings, current $ 9,887 $ 7,271 ... Notes payable and other borrowings, non-current 124,718 85,297”
Cloud and license segment margin decreased from 64% in fiscal 2024 to 63% in fiscal 2025. Expenses in this segment grew 15% (outpacing 11% revenue growth), driven by a $1.6 billion increase in infrastructure costs. (2 intensifying, 2 stable, 1 high-severity)
“As of February 28, 2026, we had $261 billion of additional lease commitments, substantially all related to data center arrangements... for terms of fifteen to nineteen years that were not reflected on our condensed consolidated balance sheets.”
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