‘You’re at a disadvantage if you do not use this,’ Oracle CEO Safra Catz says.
Oracle CEO Safra Catz called artificial intelligence a “motivator” for finally getting laggard organizations to adopt the cloud.
“That is such a time saver and so much incredible productivity and insight that you’re at a disadvantage if you do not use this,” she said. “So much of the work that my teams do is enabled because of these advanced technologies, and it’s your way to get there. Ultimately, everyone’s going to come to it, and it should be motivating them, because it is such a massive not only productivity improvement–and as a result, lower cost–but it also gives you incredible insight into your business. It’s really amazing.”
Catz’s comments were among the highlights of the Austin, Texas-based database products giant’s third fiscal quarter earnings call held Monday. The call covered the three months ended Feb. 28.
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Oracle Q3 2025
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Catz told analysts on the call that the vendor’s recent partnerships with the three hyperscalers–Microsoft, Amazon Web Services and Google–has positioned Oracle to get revenue whether customers come in through a hyperscaler or through Oracle itself.
During the quarter, Oracle’s 101st cloud region came online, Catz said. The vendor expects its available power capacity will double this calendar year and triple by the end of its next fiscal year. Oracle has 40 cloud regions planned the hyperscalers.
“It’s just a matter of time before we have more cloud regions than all of our competitors combined,” she said. “We are the destination of choice for both AI training and inferencing.”
Oracle In The Agent Era
Oracle Chief Technology Officer and co-founder Larry Ellison said that the quality of the vendor’s AI agents have helped to separate it from the competition.
He said that agents are so integral to this next AI wave that vendors won’t have the ability to separate the money made on agents compared to the money made on applications.
“We’re selling more and more health care systems because we have a lot of the agents embedded in them, which helps doctors, which produces better outcomes for patients and saves governments and payers money,” he said. “The applications themselves will migrate to be basically a bunch of connected AI agents. You’re not going to be able to separate how much did you make on the AI agents and how much did you make on the rest of the application. All of our applications are becoming AI agents.”
Ellison said that AI inferencing “is a much bigger opportunity” for the vendor compared to AI training. Not many organizations will need to build frontier models, but hundreds of thousands of Oracle customers will consume AI models and train AI models on private data and run agents and applications on top.
Ellison told analysts that Oracle is “building a gigantic 64,000 GPU, liquid-cooled Nvidia GB200 cluster for AI training” to meet increased demand, as well as a multibillion-dollar contract with Advanced Micro Devices (AMD) “to build a cluster of 30,000 of their latest MI355X GPUs.”
Q3 In Depth
Oracle saw $14.1 billion in total revenue during the quarter, up 8 percent year over year ignoring foreign exchange.
Cloud revenue accounted for $6.2 billion during the quarter, up 25 percent year over year. Infrastructure-as-a-service (IaaS) was $2.7 billion, up 51 percent. Software-as-a-service (SaaS) revenue was $3.6 billion, up 10 percent.
The Fusion Cloud enterprise resource planning (ERP) offer brought in $900 million during the quarter, up 18 percent year over year. NetSuite Cloud ERP brought in the same amount, up 18 percent year over year.
Cloud services and license support revenues grew 12 percent year over year to $11 billion, according to the vendor. Cloud license and on-premises license revenues fell 8 percent year over year ignoring foreign exchange to $1.1 billion.
Cloud database services have an annualized revenue of $2.3 billion and grew 28 percent year over year. Autonomous Database consumption revenue grew 42 percent year over year.
The vendor’s remaining performance obligations (RPO) was $130 billion, up 63 percent year over year ignoring foreign exchange. That backlog should help increase Oracle’s overall revenue in the next fiscal year by 15 percent, according to the vendor.
The backlog also doesn’t include any business from the $500 billion Stargate AI infrastructure venture planned by Oracle, OpenAI and Softbank.
Oracle’s multi-cloud database revenue from the hyperscalers grew 92 percent in the last three months. Graphics processing unit (GPU) training consumption for AI training more than tripled year over year.
Oracle’s capital expenditures (CapEx) for the 2025 fiscal year should be more than double year over year, around $16 billion, Catz said on the call. “We remain careful to pace and align our CapEx investments appropriately and in line with booking trends.”
Oracle’s stock traded at about $154 a share after market close Monday, up about 5 percent.
Catz forecasted that cloud infrastructure revenue for fiscal year 2025 will grow faster than the 50 percent reported last year. “It will be even faster for fiscal year 2026–likely a lot faster,” she said. “Our confidence in meeting our $66 billion revenue target for FY26 is now stronger than ever and represents around a 15 percent growth rate.”
Catz took the fiscal year 2027 growth rate up to 20 percent during the call.
In the fourth fiscal quarter, Catz said to expect total revenues to 9 percent to 11 percent ignoring foreign exchange. Total cloud revenue should grow 24 percent to 28 percent year over year.
