ORCL · Q2 2026 Earnings

Bullish

Oracle Corporation

Reported December 10, 2025

30-second summary

30-second take: Revenue grew 14% YoY to $16.06B and non-GAAP EPS came in at $2.26 (+54% YoY) — but both GAAP and non-GAAP EPS were materially inflated by a $2.7B pre-tax gain on the sale of Oracle's interest in Ampere, which flowed through non-operating income ($2,668M). Strip that out and the EPS print is much less of a beat than the headline suggests. The real story is again backlog and OCI trajectory: RPO reached $523B (+15% QoQ), clearing the "exceed half-a-trillion" bar management set last quarter, and Cloud Infrastructure revenue printed $4.08B (+68% YoY reported / +66% constant currency) — a step-up from Q1's 55%. The $18B FY2026 OCI guide was reaffirmed, but management gave no Q3 dollar guide.

Headline numbers

EPS

Q2 FY2026

$2.26

Revenue

Q2 FY2026

$16.06B

+14.0% YoY

Operating margin

Q2 FY2026

29.4%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$16.06B	+14.0%	$14.93B	+7.6%
EPS	$2.26	—	$1.47	+53.7%
Operating margin	29.4%	—	29.0%	+40bps

Guidance

Oracle reaffirmed Cloud Infrastructure growth trajectory at $18B for FY2026 (77% growth) with Q2 actuals showing RPO reached $523B, validating the half-trillion-dollar trajectory; no forward guidance provided for Q3 FY2026.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
RPO (Remaining Performance Obligations)	FY 2026	likely to exceed half-a-trillion dollars	$523 billion	in-line with qualitative guide	Met

Reaffirmed unchanged this quarter: Cloud Infrastructure Revenue ($18 billion)

Segment performance

Q2 FY2026

Segment	Q2 FY2026	YoY
Cloud Infrastructure (IaaS)	$4.079B	+68.0%
Cloud Applications (SaaS)	$3.898B	+11.0%
Fusion Cloud ERP (SaaS)	$1.1B	+18.0%
NetSuite Cloud ERP (SaaS)	$1B	+13.0%
Total Cloud	$7.977B	+34.0%
Software	$5.877B	-3.0%
Hardware	$0.776B	+7.0%
Services	$1.428B	+7.0%
Cloud Revenue Growth (constant currency)	33%	—
Cloud Infrastructure Growth (constant currency)	66%	—

Platform metrics

Q2 FY2026

Segment	Q2 FY2026
Remaining Performance Obligations (RPO)	$523 billion
RPO Sequential Growth	15%
Multicloud Database Growth	817%
Short-term Deferred Revenues	$9.9 billion

Profitability

Q2 FY2026

Segment	Q2 FY2026
Non-GAAP Operating Margin	41.8%
Operating Cash Flow (trailing twelve months)	$22.3 billion

Management tone

Transcript not available for this brief; tone analysis is press-release-derived only.

Q4 FY2025 acceleration thesis → Q1 FY2026 multi-year dollar curve reveal → Q2 FY2026 chip-neutrality and multicloud distribution emphasis.

The most material new framing in the Q2 release is the explicit invocation of "chip neutrality" — "Oracle is committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers." This came alongside the Ampere divestiture, which Ellison explicitly tied to the policy: Oracle "no longer think[s] it is strategic for us to continue designing, manufacturing and using our own chips in our cloud datacenters." Last quarter's narrative was about absolute OCI dollar commitments; this quarter introduces a supply-side hedge. Whether that's defensive (margin pressure from Nvidia pricing) or offensive (AMD/custom silicon supply at scale) is the question for the next call.

The multicloud distribution count became a specific number — "more than halfway through building 72 Oracle Multicloud datacenters to be embedded throughout the Amazon, Google and Microsoft clouds." Last quarter management telegraphed "MultiCloud every quarter for several years" qualitatively; this quarter the 72-site target makes the buildout falsifiable. It also reframes the competitive story: Oracle is positioning itself as the database layer inside the hyperscalers rather than against them.

The AI-as-operating-model framing hardened. Q4 FY2025 invoked AI as demand tailwind ("OCI revenue growth rates are skyrocketing"); Q1 FY2026 leaned on multi-year dollar commitments; this quarter the language is "AI allows us to automate complex multistep processes that were impossible to automate before AI" and "AI will make them all better and bigger" applied to Fusion, NetSuite, and HCM. The pivot is from AI-as-infrastructure-demand to AI-as-product-margin-lever inside the applications franchise — which is the bridge management needs to build if SaaS at +11% is going to re-accelerate.

Answers to last quarter's watch list

OCI growth trajectory — IaaS printed +68% YoY (+66% constant currency), a clear step-up from Q1's +55% and Q4 FY2025's +52%. With $3.35B (Q1) + $4.08B (Q2) = $7.43B of OCI revenue in the first half against an $18B FY2026 commitment, Oracle needs $10.57B across Q3+Q4 — implying the back half must run materially above Q2's pace, but the Q2 step-up makes that more credible than it looked one quarter ago. Status: Resolved positively

RPO progression toward $500B — Cleared. RPO reached $523B at Q2 vs. the $500B bar management set for end-FY2026; the company added $68B sequentially in a single quarter against a ~$45B-over-three-quarters requirement from last quarter's math. The new question is what the FY2026 endpoint actually looks like, not whether the half-trillion mark is reachable. Status: Resolved positively

Capex and free cash flow — Resolved, negatively. LTM capex was $35.5B and LTM FCF was -$13.2B, versus +$9.5B at Q2 FY2025 — a ~$22.7B YoY swing. LTM operating cash flow of $22.3B was completely consumed by capex and then some. The capex-versus-OCF gap is no longer a question; it's a confirmed structural feature of the buildout. Status: Resolved negatively

MultiCloud database revenue disclosure — Still not disclosed in absolute dollars. Management again gave a growth rate (+817% YoY) without an absolute base. The deceleration from +1,529% to +817% is uninterpretable without a dollar figure. Status: Not resolved

Q2 dollar guidance — Confirmed as a pattern, not a one-quarter omission. The Q2 release again provided no Q3 FY2026 revenue or EPS dollar guide; Oracle has now skipped two consecutive quarters of next-quarter dollar guidance in favor of multi-year framing and qualitative statements. This is the new disclosure regime. Status: Resolved negatively

What to watch into next quarter

OCI run-rate vs. $18B FY2026 commitment: H1 OCI revenue is $7.43B; H2 needs $10.57B to hit the guide, implying roughly $5.0–$5.5B per quarter — a further step-up from Q2's $4.08B. Watch whether Q3 IaaS prints above $5B; below that level the FY2026 guide tightens uncomfortably.

RPO composition and duration: $523B RPO with $9.9B short-term deferred revenue is a ~50:1 long-to-short ratio. Watch for any disclosure on the weighted-average duration of RPO and the concentration of the multi-billion-dollar OCI contracts; the revenue ramp depends on consumption cadence, not bookings.

Capex trajectory and financing: LTM capex of $35.5B against LTM OCF of $22.3B leaves a ~$13B gap funded by debt — long-term notes payable rose to $100B from $85B in six months. Watch whether Q3 capex accelerates further toward the FY2028 $73B OCI step, and whether the debt issuance pace is sustainable.

Chip neutrality follow-through: Management invoked CPU and GPU supplier neutrality for the first time and sold Ampere as part of the same pivot. Watch whether the Q3 call quantifies AMD or custom-silicon deployments, or whether this stays a defensive talking point. A named non-Nvidia GPU customer or capacity figure would validate the framing.

Software segment trajectory: Software license fell -21% YoY in Q2 (vs. -12% in Q1), an accelerating decline; software support held flat at +1%. Watch whether license decline stabilizes or continues to steepen — at the current pace it becomes a measurable drag on total growth even as OCI ramps.

Underlying EPS ex-Ampere: With a ~$2.7B pre-tax gain inflating Q2 EPS, watch the Q3 print for a clean comparison; the YoY EPS growth rate will reset sharply lower once the one-time gain is out of the quarter.

Sources

Oracle Corporation Q2 FY2026 Press Release (Exhibit 99.1), December 10, 2025 — https://www.sec.gov/Archives/edgar/data/1341439/000119312525314207/orcl-ex99_1.htm
Oracle Corporation Q1 FY2026 Press Release (Exhibit 99.1), September 9, 2025 — prior quarter baseline for OCI ramp and RPO trajectory.
Oracle Corporation Q4 FY2025 Press Release (Exhibit 99.1), June 11, 2025 — prior-year baseline for OCI growth comparison.

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