Oracle is a mature enterprise software giant that has successfully pivoted into cloud infrastructure, and the numbers tell a compelling story of accelerating revenue, expanding margins, and massive reinvestment. Revenue has grown from roughly $37 billion in fiscal 2016 to $67 billion in fiscal 2026 — a pace that has been picking up in recent years rather than slowing down. Profitability remains strong, with operating margins consistently above 25% and trending higher. The one area demanding attention is capital expenditure: Oracle is spending at an extraordinary rate to build out its cloud infrastructure, with capex hitting $55.7 billion in fiscal 2026 and an eye-watering $28.5 billion in just the most recent single quarter. This is a deliberate, high-conviction bet on AI-driven cloud demand, but it significantly elevates execution and financing risk. For investors, Oracle looks like a business with durable competitive advantages, solid cash generation, and a management team making a very large wager on its own future.
Snapshot & Big Picture
Oracle Corporation (ORCL) operates primarily in enterprise technology — databases, cloud infrastructure (OCI), SaaS applications, and legacy on-premise software. The company's fiscal year ends May 31. Over the past decade, Oracle has been methodically shifting its revenue mix away from perpetual licenses toward subscriptions and cloud services, a transition that has taken time to show up in the top line but is now driving notably faster growth. The most recent fiscal year (ending May 31, 2026) saw revenue reach $67.4 billion, up from $57.4 billion the prior year — a 17.3% year-over-year increase and the strongest absolute dollar growth in the company's history.
| Fiscal Year End | Revenue ($B) | EBITDA ($B) | Operating Margin | Net Margin |
|---|---|---|---|---|
| May 2026 | $67.4 | $29.9 | 30.6% | 25.4% |
| May 2025 | $57.4 | $23.9 | 30.8% | 21.7% |
| May 2024 | $53.0 | $21.5 | 29.0% | 19.8% |
| May 2023 | $50.0 | $19.2 | 26.2% | 17.0% |
| May 2022 | $42.4 | $14.0 | 25.7% | 15.8% |
| May 2021 | $40.5 | $18.1 | 37.6% | 34.0% |
| May 2020 | $39.1 | $16.9 | 35.6% | 25.9% |
| May 2019 | $39.5 | $16.5 | 34.3% | 28.1% |
| May 2018 | $39.4 | $16.0 | 33.7% | 9.1% |
| May 2017 | $37.8 | $15.4 | 34.2% | 25.0% |
| May 2016 | $37.0 | $15.1 | 34.0% | 24.0% |
Latest Quarter Snapshot
The most recent quarterly filing covers the period ending August 31, 2026 — one quarter into Oracle's fiscal year 2027 — making it more current than the annual figures above. Revenue for the quarter came in at $19.3 billion, which annualizes to roughly $77 billion and suggests continued acceleration. The operating margin of 34.8% and net margin of 24.6% for the quarter are both healthy and trending above the full fiscal 2026 averages, indicating improving operating leverage even as investment intensifies.
| Metric | Q1 FY2027 (Aug 2026) |
|---|---|
| Revenue | $19.3B |
| EBITDA | $10.1B |
| Gross Margin | 28.2% |
| Operating Margin | 34.8% |
| Net Margin | 24.6% |
| Current Ratio | 1.17 |
| Debt-to-Equity | 0.11 |
| Capital Expenditures | $28.5B |
| CapEx-to-Revenue | 147.3% |
The capex-to-revenue ratio of 147% for this single quarter is exceptional and warrants specific attention — it means Oracle spent nearly 1.5x its quarterly revenue on capital investment. This reflects massive data center build-out commitments and is not expected to be a permanent operating run rate, but it underscores just how aggressively the company is expanding infrastructure capacity.
Profitability
Oracle's profitability picture is broadly positive but has some nuance. Operating margins dipped from the high-30% range seen in fiscal 2019–2021 down to the mid-to-high 20s in fiscal 2022–2023, largely as the company absorbed the costs of integrating Cerner (acquired in 2022) and ramped cloud investment. Since then, margins have recovered and are now trending back up — operating margin reached 30.6% in fiscal 2026 and 34.8% in the most recent quarter, suggesting the integration drag is fading and cloud economics are kicking in.
Net margins tell a similar story, with the notable exception of fiscal 2018 (9.1% net margin), which was impacted by U.S. tax reform charges rather than operational weakness. Stripping that out, the underlying net profitability of the business has been consistently strong. The recent trend — net margins expanding from 15.8% in fiscal 2022 to 25.4% in fiscal 2026 — reflects real operating leverage as the cloud revenue mix grows and fixed costs are spread over a larger revenue base.
Financial Health
Oracle's balance sheet has undergone significant changes over the past several years, largely driven by the $28+ billion acquisition of Cerner in fiscal 2022. The debt-to-equity ratio swung sharply — from 0.20 in fiscal 2019 to a negative reading in fiscal 2022 (reflecting negative book equity at the time of peak debt), and then to 3.78 in fiscal 2023 as equity normalized. The ratio has since improved dramatically to 0.17 in fiscal 2026 and 0.11 in the most recent quarter, suggesting Oracle is deleveraging meaningfully as earnings accumulate.
The current ratio has historically been comfortable — above 2.0 for much of the 2016–2021 period — but compressed to around 0.71–0.91 in fiscal 2023–2024 as short-term obligations rose post-acquisition. It has since recovered to 1.15 in fiscal 2026 and 1.17 in the latest quarter, which is a healthier position and shows improving liquidity.
Capital Expenditures: This is the defining financial story of Oracle's current chapter. CapEx was modest for most of its history — below $2.5 billion annually through fiscal 2021 (under 7% of revenue). It then began climbing: $4.5B in fiscal 2022, $8.7B in fiscal 2023, $6.9B in fiscal 2024, and then a dramatic surge to $21.2B in fiscal 2025 and $55.7B in fiscal 2026. As a share of revenue, capex has gone from ~4% historically to 37% in fiscal 2025 and 83% in fiscal 2026. The most recent single quarter saw $28.5 billion in capex — a 147% capex-to-revenue ratio — signaling an extraordinary acceleration. This is almost entirely driven by Oracle Cloud Infrastructure (OCI) data center construction to meet AI workload demand. The implication is clear: Oracle is transitioning from an asset-light software model to a highly capital-intensive infrastructure model, at least during this build phase. Whether these investments generate the returns needed to justify their scale is the central question for long-term investors.
| Fiscal Year End | CapEx ($B) | CapEx-to-Revenue |
|---|---|---|
| May 2026 | $55.7B | 82.6% |
| May 2025 | $21.2B | 37.0% |
| May 2024 | $6.9B | 13.0% |
| May 2023 | $8.7B | 17.4% |
| May 2022 | $4.5B | 10.6% |
| May 2021 | $2.1B | 5.3% |
| May 2020 | $1.6B | 4.0% |
| May 2019 | $1.7B | 4.2% |
| May 2018 | $1.7B | 4.4% |
| May 2017 | $2.0B | 5.3% |
| May 2016 | $1.2B | 3.2% |
| Q1 FY2027 (Aug 2026) | $28.5B | 147.3% |
Growth
Oracle's revenue growth was essentially flat for about five years (fiscal 2016–2021), hovering between $37B and $40.5B, before beginning a sustained climb. The CAGR figures below capture the inflection clearly:
| Window | Start Year | End Year | Start Revenue | End Revenue | CAGR |
|---|---|---|---|---|---|
| 3-Year | FY2023 (May 2023) | FY2026 (May 2026) | $50.0B | $67.4B | 10.5% |
| 5-Year | FY2021 (May 2021) | FY2026 (May 2026) | $40.5B | $67.4B | 10.7% |
| 10-Year | FY2016 (May 2016) | FY2026 (May 2026) | $37.0B | $67.4B | 6.2% |
The 10-year CAGR of 6.2% reflects the long period of near-stagnation before the cloud transition gained traction, while the 3- and 5-year CAGRs of approximately 10.5% and 10.7% capture the more recent acceleration. The similarity between the 3- and 5-year figures suggests the current growth rate is relatively consistent rather than a one-year spike — and with the quarterly revenue run rate now annualizing above $77 billion, there is a credible case that the pace is still increasing.
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