Oracle Corporation · Q1 FY2027 call

If I had to describe this quarter in one word, I think it would be acceleration. […] For the first time, Q1 total revenue grew sequentially, an important sign of our continued progress in building scaled infrastructure.

The vast majority of those new contracts were via prepay or bring your own hardware or similar mechanic, so will not require incremental capital from Oracle. Also, that new RPO will not impact our CapEx or revenues until fiscal 2028 or beyond.

We now expect around half of our RPO to convert into sales over the next 36 months.

We continue to anticipate $90 billion-$95 billion in CapEx for the full year, with not more than $70 billion in net cash CapEx.

Customers used our embedded AI capabilities more than 150 million times during the quarter, with usage growing 42% sequentially. Our AI agents executed more than 3.5 million times in production during the quarter, nearly doubling quarter over quarter.

We delivered 850 megawatts of AI capacity containing more than 300,000 GPUs to customers since the end of Q4. Delivery in Q1 is almost three times what we delivered in all of Q4 and 73% of the total capacity we delivered last fiscal year.

GPU utilization remains extremely high at 97.9% in Q1. GPU longevity and value continue to impress. Of all the GPUs that came up for renewal in Q1, that capacity was renewed or resold at a 20% premium to prior contracts. The majority of those GPUs are four years or older.

We delivered 131,000 GPUs there in Q1, 1.9 times the volume delivered in Q4. […] The recently released GPT-6 Astra was trained at our site in Abilene.

Multicloud database revenue grew 353% year over year, and multicloud customers grew 180% year over year.

I think that we have to separate out in our minds what Oracle spends as CapEx, uncouple that directly from how we think about how the business can grow. […] It does not all have to flow from Oracle side. It does not have to be Oracle CapEx. I do not see it as a limitation to the growth of our business.

As soon as they ramp up, very shortly thereafter, they are delivering a free cash flow conversion ratio of something like 100% to post-tax EBITDA.

To the question about impact on FY 2027 revenue, neither of these sites will have any impact into our previously stated FY 2027 revenue or earnings guidance.

Over the next couple of years, as we finish the ramp-up, you can reasonably expect that gross margin would flatten, I would say.