Oracle Reports Fiscal Q1 2027 Earnings: AI Backlog Growth Faces Scrutiny

Oracle Corporation reported its fiscal first-quarter 2027 earnings after the market closed on Thursday, marking its most significant test yet for its long-term bet on artificial intelligence-driven cloud revenue growth. The company’s backlog—remaining performance obligations—rose to $638 billion, a 363% year-over-year increase from $553 billion in the prior quarter, with roughly half of that tied to a single customer, OpenAI. Yet, despite this record backlog, Oracle’s financial health remains under pressure, with free cash flow negative for five straight quarters, including a fiscal 2026 deficit of $23.7 billion, despite operating cash flow of $32 billion. Capital expenditures surged to $55.6 billion in fiscal 2026, more than doubling from the prior year, and guidance for fiscal 2027 capex ranges from $70 billion to $95 billion, underscoring aggressive investment in infrastructure and AI capabilities.