Oracle Q3 Revenue Soars 22% to $17.2B; Cloud Infrastructure Jumps 81%
Oracle reported Q3 revenue of $17.2B, up 22% year-over-year, exceeding the $16.96B consensus. Cloud infrastructure revenue jumped 81% on an $810M sequential dollar add, while SaaS rose 11% and performance obligations climbed $29B to $553B, prompting analysts to lift price targets to $250 and $320.
1. Q3 Financial Highlights
Oracle reported total Q3 revenue of $17.2 billion, representing a 22% year-over-year increase that surpassed the street consensus of $16.96 billion. Capital expenditures for the quarter reached $18.6 billion, with guidance signaling a material step-down in capex for the final fiscal quarter.
2. Cloud and AI Infrastructure Growth
Cloud infrastructure revenue surged 81% in constant currency, driven by a record $810 million sequential dollar addition. SaaS revenue climbed 11%, while gross margin on AI infrastructure capacity delivered in Q3 stood at 32%, within the company’s 30–40% target range.
3. Analyst Responses and Price Targets
UBS reaffirmed its Buy rating with a $250 price target, citing expected 15–20% EPS growth and robust AI exposure. Jefferies raised its target to $320, noting a $29 billion sequential increase in remaining performance obligations to $553 billion, and Bank of America increased its FY27 revenue forecast to $90 billion.
4. Outlook and Guidance
Oracle reaffirmed its FY26 revenue targets and projected Q4 revenue growth of 18–20%, aligning with analyst estimates. Management highlighted a mix of asset-light, bring-your-own-hardware deals and upfront payments as key drivers, while noting deceleration in Fusion and NetSuite SaaS growth and uncertainty over large AI contract timing.