Michael Kramer: How to Analyse Oracle Before Earnings

Oracle’s market capitalisation has risen from roughly $165 billion in late 2022 to roughly $430 billion on 31 August 2026, after peaking at $935 billion in September 2025. Most of the company’s revenue comes from its cloud and software business, which accounted for about 87% of its $67.4 billion in total revenue in fiscal 2026.

(Source: LSEG, as of 31 August 2026. Calculations based on LSEG data)
(Past performance is not a reliable indicator of future results)

Earnings History

Across the 21 quarters shown, Oracle’s revenue exceeded analysts’ consensus mean estimate in 10 quarters, while EPS exceeded the consensus mean estimate in 15. Among the positive surprises, EPS was an average of 7.8% above consensus, while revenue was an average of 1.2% above consensus.

(Source: LSEG, as of 31 August 2026. Calculations based on LSEG data)
(Past performance is not a reliable indicator of future results)

Revenue Growth

In the fiscal fourth quarter of 2026, Oracle’s cloud revenue grew by 47.1% year on year to $9.9 billion and represented 51.7% of the company’s total revenue of $19.2 billion. Software revenue contracted by 2.1% to $6.8 billion, representing 35.6% of total revenue. In fiscal 2026, cloud revenue grew by 38.7% to $34.0 billion, while software revenue contracted by 0.7% to $24.5 billion. Total revenue rose by 17.4% year on year to $67.4 billion.

(Source: LSEG, as of 31 August 2026. Calculations based on LSEG data)
(Past performance is not a reliable indicator of future results)

Capex Growth

In the fiscal fourth quarter of 2026, capex rose by 81.7% year on year to $16.5 billion, taking trailing-12-month capex to $55.7 billion. Capital expenditure increased substantially in fiscal 2026, with reported expenditure exceeding the analysts’ consensus mean in each of the four quarters.

(Source: LSEG, as of 31 August 2026. Calculations based on LSEG data)
(Past performance is not a reliable indicator of future results)

Free Cash Flow

Oracle’s trailing-12-month free cash flow fell from $13.8 billion in the fiscal fourth quarter of 2021 to negative $23.7 billion in the fiscal fourth quarter of 2026. Quarterly free cash flow was negative $1.9 billion, compared with negative $2.9 billion a year earlier.

(Source: LSEG, as of 31 August 2026. Calculations based on LSEG data)
(Past performance is not a reliable indicator of future results)

Options-Implied Earnings Range

Option prices can be used to calculate an implied trading range around an earnings announcement. Across the 12 announcements shown, 10-day at-the-money implied volatility produced an average one-standard-deviation range of ±12.5%, while the average absolute realised next-session move was 12.5%. The next-session share-price move remained within the calculated range in six cases and outside it in six.

The implied range was estimated using the 10-day at-the-money implied volatility observed at the last close before each report, scaled to the option’s 10-day term using implied volatility × √(10/365) and applied to the share price. This yields a one-standard-deviation range based on option prices. It does not represent a forecast or indicate the direction of the share-price move.

(Source: LSEG (price data) and VolVue (implied volatility), as of 31 August 2026. Calculations based on LSEG and VolVue data)
(Past performance is not a reliable indicator of future results)

Valuation Metrics

As of 31 August 2026, Oracle’s forward price-to-earnings ratio, based on analysts’ estimates for the next 12 months, was 16.9. From August 2021 to August 2026, the average P/E was 20.7, and the median was 19.2, placing the 31 August observation below both measures for the period.

Historical valuation multiples provide context for how the market has priced the company over time. These comparisons do not indicate whether the shares are currently overvalued or undervalued.

(Source: LSEG, as of 31 August 2026. Calculations based on LSEG data)
(Past performance is not a reliable indicator of future results)

As of 31 August 2026, Oracle’s forward price-to-sales ratio, based on analysts’ consensus mean revenue estimates for the next 12 months, was 4.3. From August 2021 to August 2026, the average P/S ratio was 6.0, and the median was 5.7, placing the 31 August observation below both measures for the period.

(Source: LSEG, as of 31 August 2026. Calculations based on LSEG data)
(Past performance is not a reliable indicator of future results)

Over the period shown, Oracle’s trailing-12-month EPS recorded an average year-on-year growth rate of 11%, with a median of 9%. Revenue growth averaged 9%, with a median of 8%.

In the fiscal fourth quarter of 2026, trailing-12-month EPS growth of 25.2% exceeded the historical average and median. Trailing-12-month revenue growth of 17.4% was above both its historical median and average.

(Source: LSEG, as of 31 August 2026. Calculations based on LSEG data)
(Past performance is not a reliable indicator of future results)

Conclusion

Oracle’s earnings history, revenue growth by category, capex, free cash flow, options-implied ranges and valuation multiples provide historical context ahead of the company’s fiscal first-quarter 2027 results.

As of 31 August 2026, Oracle’s forward P/E and P/S ratios were below their respective historical averages and medians for the periods shown. In the fiscal fourth quarter of 2026, its trailing-12-month EPS and revenue growth rates were above their respective historical averages and medians. These measures describe historical observations and do not provide a forecast for the next earnings announcement. Past performance is not a reliable indicator of future results.