Oracle Corp shares tank 10% afterhours despite earnings beat; Here's why

Shares of Oracle Corp. fell 10% in extended trading despite announcing results that were higher than expectations and raising its full fiscal Earnings Per Share forecast.

How Did Oracle Fare In Q4 Fiscal 2026?

Oracle Corp.'s results were ahead of estimates on both the revenue and the EPS front. The company's revenue of $19.18 billion was higher than the $19.1 billion estimate, while its Earnings Per Share (EPS) of $2.03 was higher than the $1.96 estimate on an adjusted basis.

For the quarter gone by, Oracle's revenue grew by 21% from last year, while net profit rose to $4.22 billion.

During the full fiscal, Oracle reported negative free cash flow of $23.7 billion with depreciation nearly doubling to $7.62 billion. Capex went up by 162% from last year.

What Has Oracle Guided For Fiscal 2027?

For the new fiscal, Oracle Corp. has maintained its previous revenue guidance of $90 billion, while raising its EPS projections to $8.05, higher than analyst estimates of $8.01. Analysts were also projecting the revenue guidance to be trimmed down to $88.9 billion.

Why Did Oracle Shares Fall Afterhours?

In its earnings statement, Oracle said that it now foresees raising $40 billion through debt and equity financing this year, double of the $20 billion it had earlier projected.

This is not the first fund raise that Oracle had announced. It has already raised $43 billion in debt and another $5 billion in equity financing through fiscal 2026, a move that had already spooked investors, resulting in a sharp sell-off for the stock.

Another reason behind the fall was Oracle's core business. Revenue from cloud offerings grew by 47% from last year to $9.91 billion, a figure lower than the consensus estimates of $9.97 billion. Cloud infra revenue grew 93% to $5.8 billion, way below market leader Amazon's tally of $37.59 billion in the most recent quarter.

For fiscal 2027, Oracle's cash outlay will be around $70 billion and that is excluding the $20 billion to $25 billion in prepayments from customers.

Who Is Bullish On Oracle?

Bank of America's analysts, who recommend buying the stock even after results, said that 50% of Oracle's remaining performance obligations, which is revenue yet to be recognized, comes from OpenAI. For the quarter, Oracle's RPO rose by 363% to $638 billion, well above the analyst estimates of $595.7 billion.

Shares of Oracle Corp are down 10.2% in extended trading to $201.26. The stock will most likely turn negative for 2026 if these losses hold. The stock is down nearly 50% from its 52-week high of $345.72.