There was much anxiety ahead of Oracle's Q3 earnings release: yes, revenue growth would be solid but would it come at the expense of even more capex, which has sent the stock price tumbling more than 50% since its record high on Sept 10. In the end, it turned out the company had learned from recent mistakes and projected a goldilocks future: strong revenue and just right capex.

Here is what Oracle reports for Q3:

Of note here, sales in the company’s closely watched infrastructure business gained 81% to $4.9 billion in the period ended Feb. 28, the company said Tuesday in a statement. That marked a faster increase than estimate of 79% and compared with a 68% revenue rise in the previous quarter. Going down the line:

And while the above is all good, what wasn't so good is that ORCL's Q2 capex came in at a stunning $18.6 billion, triple the number from a year ago, and 50% higher than the Q1 capex print. To say that the company is incinerating money is doing a disservice to incinerators.

Elsewhere, the company's remaining performance obligation, a measure of bookings, were $553 billion, compared with the $523 billion reported in the prior quarter.

Looking ahead to the fourth quarter, the company's guidance range came above estimates:

Adding across, this means that for fiscal 2026, Oracle expectsrevenue of $67 billion and capital expenditures of $50 billion,which is unchanged from our most recent previous guidance. Incidentally, there is no way in hell ORCL's full year 2026 CapEx is only $50 billion since its LTM capex is already $48.25 billion.

Perhaps most importantly, Oracle also published its fiscal 2027 guidance which is as follows:

There was no mention of what 2027 capex will be, so expect some very pointed questions on the call because alongside massive capex comes just as massive cash burn, which, as shown below... is terrifying. As readers are well aware, the question for the past 6 months has been:just how much debt will ORCL need to fund it?

Cash burn aside, Oracle's earnings were solid, with the company posting cloud revenue that was better than expected and projected strong sales in the upcoming fiscal year, a sign the company is turning its massive AI bookings into revenue.

Source: ZeroHedge News