Oracle beat on every number. Yet the stock fell about 8%
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Oracle beat on every number. Yet the stock fell about 8%.
For two first-year CEOs, a selloff on a blowout quarter is the harder result.
Q4 revenue hit $19.2 billion, up 21%. Cloud infrastructure rose 93%. Earnings came in at $2.11 a share against a $1.96 consensus. And contracted revenue Oracle hasn't booked yet, what it calls remaining performance obligations, jumped $85 billion in a single quarter to $638 billion, up 363% from a year ago.
So the selloff wasn't about demand. Customers have already committed, and many have prepaid. The challenge is what it takes to deliver on it.
Oracle spent $55.7 billion on capital projects last fiscal year and ran free cash flow to negative $23.7 billion getting there. To fund the next leg, it has guided to roughly $40 billion in new debt and equity, including $20 billion of stock sold into the open market. And close to half of that $638 billion backlog traces to one customer, OpenAI, under a single multi-year contract worth about $300 billion.
That is the situation Clay Magouyrk and Mike Sicilia walked into.
The two became co-CEOs in September 2025, when Safra Catz moved up to executive vice chair. Magouyrk built Oracle Cloud Infrastructure from a standing start after arriving from Amazon in 2014. Sicilia turned Oracle's industry software into an AI platform. Between them they have the engineering and product depth to run the buildout. What neither has done before is finance a bet this large with the market grading every quarter.
This was their first year-end print in charge. Catz spent a decade earning the credibility to spend at this scale. Magouyrk and Sicilia start earning theirs now.
The backlog tells you what Oracle's customers believe. The next four quarters tell you whether two first-year CEOs can turn signed contracts into cash before the financing gets ahead of them.
What would convince you this team can execute on that backlog: the contracts already signed, or how cleanly they fund the next $40 billion?
🔗 Source: Oracle Beats on Earnings, but Stock Drops on Plans to Raise Another $20 Billion
