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ORCL · Forward model · Software support · Concentration case

What has to happen in Software support

Model as of

This page changes Software support 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 $3.58B 8% of company revenue
Explicit segment contribution $56.15B 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.

Software support

Basis quarter$4.89B
Final quarter$3.58B
Implied CAGR−6%
Final revenue mix8%

The annuity under the old Oracle: maintenance on the on-premise licence base, about $19.8B a year and essentially flat for three years. It funds everything else. It declines slowly as customers migrate to cloud, and the migration is visible in the licence line above it rather than here, because support attrition lags licence attrition by years.

Last four quarters
2026 Q2 $4.94B Reported
2026 Q3 $4.97B Reported
2026 Q4 $4.94B Reported
2027 Q1 $4.89B Reported
Maintenance and support on on-premise licences
Sequential growth 0.0%/qtr decaying toward −1.0% Support revenue moved between -0.5% and +0.7% sequentially in each of the last eight reported quarters.
Software support

Latest: $3.58B (2032Q1E)

Period Value
2025Q1 $4.90B
2025Q2 $4.87B
2025Q3 $4.80B
2025Q4 $4.96B
2026Q1 $4.96B
2026Q2 $4.94B
2026Q3 $4.97B
2026Q4 $4.94B
2027Q1 $4.89B
2027Q2E $4.85B
2027Q3E $4.79B
2027Q4E $4.74B
2028Q1E $4.68B
2028Q2E $4.61B
2028Q3E $4.55B
2028Q4E $4.48B
2029Q1E $4.41B
2029Q2E $4.34B
2029Q3E $4.27B
2029Q4E $4.20B
2030Q1E $4.13B
2030Q2E $4.06B
2030Q3E $3.99B
2030Q4E $3.92B
2031Q1E $3.85B
2031Q2E $3.78B
2031Q3E $3.71B
2031Q4E $3.65B
2032Q1E $3.58B

Assumptions & reasoning

  • Flat is the finding, not an absence of one: $19.5B, $19.5B and $19.8B across FY2024 to FY2026 while licence revenue fell 9% in the last year. Support has not yet followed licence down, and when it does it takes roughly 85 cents of segment margin per dollar with it.
  • The margin assigned here is the single largest cost assumption in the brief. Oracle publishes one margin for all of cloud and software, so an 85% support margin and a 27% infrastructure margin are a judgement about mix, constrained only by having to average back to the disclosed blend.
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