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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 $122.53 all other verticals held in this portfolio case
Final-quarter revenue $1.42B 3% of company revenue
Explicit segment contribution $5.69B EBITDA less segment capex, before corporate items

Oracle will not publish RPO by customer, and what it does publish points at concentration: four customers each signed for more than $8B in a single quarter, and in the GPU renewal cohort fewer than half the customers came back. Management's answer is that the non-renewed capacity was resold inside the quarter at 97.5% global utilisation — true, and also exactly what you would expect while demand exceeds supply. This case asks what the book is worth if that stops being true.

Services

Basis quarter$1.41B
Final quarter$1.42B
Implied CAGR0%
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: $1.42B (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 $1.40B
2027Q3E $1.39B
2027Q4E $1.38B
2028Q1E $1.37B
2028Q2E $1.37B
2028Q3E $1.37B
2028Q4E $1.37B
2029Q1E $1.37B
2029Q2E $1.37B
2029Q3E $1.37B
2029Q4E $1.37B
2030Q1E $1.38B
2030Q2E $1.38B
2030Q3E $1.38B
2030Q4E $1.39B
2031Q1E $1.39B
2031Q2E $1.40B
2031Q3E $1.40B
2031Q4E $1.41B
2032Q1E $1.42B

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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