Building on initial market reactions to Oracle's fiscal Q2 earnings miss—including drops in Bitcoin and Nasdaq futures—the company detailed cloud revenue shortfalls, a $15 billion capex hike to $50 billion for FY2026, and negative free cash flow amid AI data center expansion. Shares fell 10.84%, erasing $68 billion in value, despite a 19% year-to-date gain.
Oracle's fiscal second quarter results, ended November 30, 2025, showed total revenues up 14% to $16.1 billion but missing estimates. Cloud sales reached $7.98 billion (up 34% YoY), with infrastructure (key for AI) at $4.08 billion (up 68%) and applications at $3.9 billion (up 11%), both below expectations.
Q3 adjusted EPS guidance is $1.64-$1.68, under the $1.72 consensus. Capex hit $12 billion last quarter (vs. $8.25B expected), with FY2026 now at $50 billion—$15 billion above prior forecast—mostly for OpenAI-linked data centers. Free cash flow was negative $10 billion; total debt $106 billion.
Analyst Jacob Bourne (Emarketer) highlighted scrutiny over debt-financed data centers and concentration risk. CFO Doug Kehring noted investments target revenue-generating equipment. Remaining performance obligations rose to $523 billion.
This first report under new co-CEOs Clay Magouyrk and Mike Sicilia (replacing Safra Catz) underscores profitability challenges in the competitive cloud market with partners like OpenAI, TikTok, and Meta. S&P Global's Melissa Otto cited uncertainty from spending and debt.
