Oracle beats on earnings, but stock drops on plans to raise another $20 billion

Oracle reported better-than-expected earnings and revenue for the fiscal fourth quarter on Wednesday while also raising its profit forecast for the year. The stock dropped 6% in extended trading as the company plans to raise more money to finance its AI buildout.

Here's how the company did in comparison with LSEG consensus:

Revenue increased 21% year over year in the quarter, which ended on May 31, according to a statement . Net income rose to $4.22 billion, or $1.45 per share, from $3.43 billion, or $1.19 per share, a year ago. Adjusted earnings exclude impact of stock-based compensation.

The company maintained its previous revenue guidance of $90 billion for the 2027 fiscal year, while lifting its forecast of adjusted earnings per share to $8.05. Analysts were projecting $8.01 per share and $88.90 billion in revenue.

Oracle said it foresees raising $40 billion through debt and equity financing, including a $20 billion share sale it announced earlier. That's after raising $43 billion in debt and $5 billion in equity in fiscal 2026, a move that concerned investors due to uncertainty about whether demand for artificial intelligence can justify that much new capital.

For the fiscal year, Oracle reported $23.7 billion in negative free cash flow, with $55.66 billion in capital expenditures, which were up 162%.

The company called for $1.72 to $1.76 in adjusted earnings per share for the fiscal first quarter, with 27% to 29% revenue growth. Analysts polled by LSEG had been expecting $1.68 in adjusted earnings per share, along with $19.06 billion in revenue, implying about 28% growth.

Revenue from cloud offerings increased 47% in the quarter to $9.91 billion. Analysts polled by StreetAccount had expected $9.97 billion. Software revenue, including licenses and support, totaled $6.82 billion, down 2% but above StreetAccount's $6.93 billion consensus.