Analyst(s): Futurum Research
Publication Date: December 12, 2025
Oracle’s Q2 FY 2026 highlights sustained cloud infrastructure growth and a sharply expanded backlog tied to AI capacity commitments. Management increased FY 2026 capital expenditure plans to meet near-term demand while emphasizing multicloud database, industry cloud traction, and financing discipline.
What is Covered in this Article:
- Oracle’s Q2 FY 2026 financial results
- AI infrastructure capacity and capex strategy
- Multicloud database and data platform traction
- Applications and industry cloud cross-sell dynamics
- Guidance and Final Thoughts
The News: Oracle (NYSE: ORCL) reported Q2 FY 2026 results. Revenue was $16.1 billion, up 14% year on year (YoY), versus consensus $16.2 billion. Cloud revenue (IaaS plus SaaS) was $8.0 billion, up 34% YoY; Cloud Infrastructure (IaaS) was $4.1 billion, up 68% YoY; Cloud Applications (SaaS) was $3.9 billion, up 11% YoY. Software revenue was $5.9 billion, down 3% YoY; Hardware was $0.8 billion, up 7% YoY; Services was $1.4 billion, up 7% YoY. Non-GAAP operating income was $6.7 billion, up 10% YoY, with a 42% operating margin versus 43% a year ago. Non-GAAP net income was $6.6 billion, up 57% YoY, and non-GAAP diluted EPS was $2.26, up 54% YoY.
“Remaining Performance Obligations (RPO) increased by $68 billion in Q2—up 15% sequentially to $523 billion—highlighted by new commitments from Meta, NVIDIA, and others,” said Oracle Principal Financial Officer, Doug Kehring. “Q2 GAAP earnings per share was up 91% to $2.10, and non-GAAP earnings per share was up 54% to $2.26. Our GAAP and non-GAAP earnings per share were both positively impacted by a $2.7 billion pre-tax gain in the sale of Oracle’s interest in our Ampere chip company.”
Oracle Q2 FY 2026: Cloud Grows; Capex Rises for AI Buildout
Analyst Take: Oracle’s quarter underscores robust cloud infrastructure demand and a rapidly scaling AI backlog, with revenue conversion lagging consensus by a narrow margin. The company lifted FY 2026 capex plans to support near-term capacity, while reiterating funding flexibility and investment-grade discipline. Multicloud database momentum and a new AI data platform strategy are positioned to drive higher attach and workload stickiness across OCI and partner clouds. Applications growth benefited from cross-sell synergies after the sales reorg, with healthcare and industry suites providing incremental pipeline velocity.
AI Infrastructure Capacity and Financing Discipline
Oracle is accelerating capacity delivery to meet AI training and inference demand, handing over roughly 400 megawatts of data center capacity in the quarter and delivering 50% more GPU capacity versus Q1. Management cited GPU-related revenue growth of 177% and progress on next-gen accelerators, with more than 96,000 NVIDIA Grace Blackwell GB200 units delivered and AMD MI355 capacity beginning to ship. Q2 capex was $12.0 billion, and FY 2026 capex is now expected to be about $50.0 billion, up by approximately $15.0 billion versus the prior forecast. The company outlined financing options, including customer-provided chips and supplier lease models, to better align cash outflows with receipts and reduce reliance on traditional borrowing. Oracle emphasized maintaining investment-grade ratings while prioritizing revenue-generating equipment over owned real estate and power, which are typically leased. This approach seeks to balance rapid AI scale-up with capital efficiency and risk management.
Multicloud Database and AI Data Platform
Multicloud database consumption increased 817% YoY as Oracle launched 11 new multicloud regions in the quarter, bringing the total to 45 live across AWS, Azure, and GCP, with 27 more planned. Oracle introduced multicloud universal credits and a multicloud channel reseller program to simplify procurement and unify pricing, a move designed to reduce friction and expand routes to market. Database services revenue grew 30% and Autonomous Database grew 43% YoY, supporting higher attach to data and analytics workloads. Management positioned the Oracle AI data platform to enable multi-step reasoning across enterprise data—spanning Oracle databases, non-Oracle databases, object stores, and bespoke applications—while preserving data security. With top foundation models available in Oracle Cloud and tight integration across data and applications, Oracle aims to increase workload stickiness and differentiation across partner clouds. These moves should support sustained growth in OCI database services and accelerate backlog monetization.
Applications Reorg and Industry Cloud Momentum
Cloud applications revenue rose 11% YoY, with strategic back-office applications up 16% and strong contributions from Fusion ERP (up 18% YoY), Fusion HCM (up 14% YoY), and NetSuite (up 13% YoY). Oracle combined its industry and Fusion sales teams into a single go-to-market motion, enabling larger, more strategic deals that blend back-office suites with industry clouds. Management highlighted 21% combined growth across several industry clouds (hospitality, construction, retail, banking, restaurants, local governments, communications). In healthcare, Oracle now counts 274 customers live on its clinical AI agent, and its AI-based ambulatory EHR is generally available with U.S. regulatory approval. These proof points, alongside AI-enabled workflows in areas such as loan origination and care management, strengthen the case for reacceleration in applications. The consolidation of sales motions and embedded AI is set to increase deal sizes and improve attach across Oracle’s applications portfolio.
Guidance and Final Thoughts
For Q3 FY 2026, Oracle expects total cloud revenue to grow 40% to 44% and total revenue to grow 19% to 21%, with non-GAAP EPS of $1.70 to $1.74. Management maintained full-year FY 2026 revenue guidance of $67.0 billion, noted an incremental $4.0 billion tailwind to FY 2027 revenue from newly added RPO, and increased FY 2026 capex expectations by approximately $15.0 billion. The company reiterated multiple funding levers and a commitment to investment-grade ratings to support capacity delivery. While elevated capex introduces near-term cash flow pressure, the record RPO and multicloud database momentum provide visibility for continued growth. The setup suggests OCI revenue acceleration as capacity comes online and backlog begins to convert at a faster pace.
See the full press release on Oracle’s Q2 FY 2026 financial results on their website.
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