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What has to happen in Services

Model as of

This page changes Services inside the complete ORCL model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

ORCL forward model
Horizon
Consolidated fair value $105.37 all other verticals held in this portfolio case
Final-quarter revenue $1.28B 3% of company revenue
Explicit segment contribution $5.10B EBITDA less segment capex, before corporate items

Recognition follows datacenter delivery, and Oracle has already told the market FY2027 gross margin steps down while sites ramp. This case runs the build a quarter or two late against a book that is 88% beyond the next twelve months, and prices the cost of getting there: about $40B a year of new debt and equity against free cash flow that was negative $23.7B in FY2026. The RPO does not disappear here — it arrives later and costs more to serve.

Services

Basis quarter$1.41B
Final quarter$1.28B
Implied CAGR−2%
Final revenue mix3%

Consulting and support services that implement and migrate customers onto everything else: $5.7B in FY2026, up 10%, and newly profitable at a 26.7% segment margin against 19% two years ago. It is a trailing indicator of cloud adoption — it grows when customers are actively moving, which is why it turned up at the same time OCI did.

Last four quarters
2026 Q2 $1.43B Reported
2026 Q3 $1.44B Reported
2026 Q4 $1.52B Reported
2027 Q1 $1.41B Reported
ConsultingAdvanced customer supportEducation
Sequential growth 0.0%/qtr decaying toward +1.5% Q1 has landed roughly flat against the prior Q4 in each of the last two years, at +0.1% and -7.6%.
Services

Latest: $1.28B (2032Q1E)

Period Value
2025Q1 $1.26B
2025Q2 $1.33B
2025Q3 $1.29B
2025Q4 $1.35B
2026Q1 $1.35B
2026Q2 $1.43B
2026Q3 $1.44B
2026Q4 $1.52B
2027Q1 $1.41B
2027Q2E $1.39B
2027Q3E $1.37B
2027Q4E $1.36B
2028Q1E $1.35B
2028Q2E $1.34B
2028Q3E $1.33B
2028Q4E $1.32B
2029Q1E $1.31B
2029Q2E $1.31B
2029Q3E $1.30B
2029Q4E $1.30B
2030Q1E $1.30B
2030Q2E $1.29B
2030Q3E $1.29B
2030Q4E $1.29B
2031Q1E $1.29B
2031Q2E $1.28B
2031Q3E $1.28B
2031Q4E $1.28B
2032Q1E $1.28B

Assumptions & reasoning

  • The margin here is disclosed and it has moved hard: segment operating income went from $916M on $5,431M in FY2024 to $1,533M on $5,743M in FY2026, nearly doubling the margin on 6% more revenue.
  • Services growth turned from -3% in FY2024 to +10% in FY2026, inflecting in the same year OCI did. Treat it as confirmation of migration activity rather than as an independent driver.
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