Oracle (ORCL) Q3 2025 earnings summary

Executive summary

• Q3 FY25 total revenue rose 6% year-over-year to $14.1B, with cloud revenue up 25% to $6.2B and cloud infrastructure revenue up 51% to $2.7B, driven by strong cloud and license revenues and major agreements with leading technology firms.

• Net income for Q3 FY25 was $2.94B, up 22% year-over-year; GAAP EPS up 20% to $1.02, non-GAAP EPS up 4% to $1.47.

• Remaining Performance Obligations (RPO) surged 63% to $130B, fueled by record $48B in bookings and major cloud contracts.

• Board increased the quarterly dividend by 25% to $0.50 per share.

• Operating margin improved to 31% GAAP and 44% non-GAAP, reflecting higher revenues and cost efficiencies.

Financial highlights

• Total cloud revenue (SaaS and IaaS) up 25% to $6.2B; SaaS up 10% to $3.6B, IaaS up 51% to $2.7B year-over-year.

• Cloud services and license support revenue up 12% to $11B; cloud license and on-premise license revenue down 10% to $1.1B.

• Operating income for Q3: $4.36B (+16% year-over-year); non-GAAP operating income $6.2B (+7%).

• Operating cash flow for Q3 was $5.9B; trailing 12-month operating cash flow up 14% to $20.7B.

• Free cash flow for trailing 12 months at $5.8B.

Outlook and guidance

• Fiscal 2025 CapEx expected to more than double to ~$16B; data center capacity on track to double in calendar 2025.

• Q4 revenue expected to grow 9%-11% constant currency; cloud revenue expected to grow 24%-28% constant currency.

• FY 2026 revenue target of $66B (15% growth); FY 2027 growth rate expected around 20%.

• Management expects the $130B sales backlog to drive a 15% increase in overall revenue in the next fiscal year.

• Ongoing investments in R&D and cloud infrastructure to support future growth.