Oracle stock soars over 7% after hours! What signals are revealed by the 41% surge in RPO?

Heavy news comes from the US stock market after Wednesday—Oracle (ORCL.US) announced its Q4 FY2025 (ending May 31) earnings report, and the stock price immediately turned from decline to rise, closing up 7.58% after hours. What factors are driving this strong rebound?

Key Financial Data Surpassed Expectations

From a numerical perspective, Oracle’s performance this quarter was indeed impressive. Revenue reached $15.9 billion, an 11% year-over-year increase, exceeding analyst expectations; non-GAAP EPS was $1.70, surpassing growth expectations; and the board announced a quarterly cash dividend of $0.50.

Looking at the segments, core cloud services and license support revenue was $11.7 billion, up 14% YoY, remaining the main revenue driver. Cloud license and on-premises license revenue was $2.01 billion, up 9% YoY. Notably, total cloud revenue (IaaS plus SaaS) grew 27% YoY to $6.7 billion, accounting for 42% of total revenue.

Cloud Infrastructure Revenue Is the Real Highlight

However, the truly noteworthy data lies here—Cloud Infrastructure (IaaS) revenue was $3.0 billion, up 52% YoY. Although slightly below expectations, the rapid growth rate is still remarkable.

Chairman and CTO Larry Ellison shared an exciting statistic: multi-cloud database revenue from Amazon, Google, and Azure increased 115% from Q3 to Q4. Oracle currently operates 23 multi-cloud data centers, with 47 more to be built within the next 12 months. This indicates that the multi-cloud strategy is accelerating its implementation.

RPO Surge Indicates Strong Future Growth

The most critical indicator this quarter is the Remaining Performance Obligation (RPO), which surged 41% YoY to $138 billion. RPO reflects signed contracts yet to be recognized as revenue. The sharp increase suggests Oracle’s future revenue growth is supported by a clear pipeline of orders, with high certainty.

FY2026 Guidance Surpasses Expectations

Even more interesting is Oracle’s outlook for FY2026. CEO Safra Catz stated that the revenue guidance for FY2026 has been raised to over $67 billion, representing over 16% growth for the fiscal year. This figure is more aggressive than previous estimates.

In cloud business, overall cloud revenue is expected to grow over 40% YoY, with cloud infrastructure (OCI) revenue growth exceeding 70%. Most importantly, RPO is projected to grow over 100% in FY2026.

Larry Ellison further added that triple-digit growth in multi-cloud revenue will continue into FY2026. Revenue from Oracle Cloud@Customer data centers increased 104% YoY, with 29 centers online and another 30 to be built in FY2026. Total OCI consumption revenue grew 62% YoY in Q4, with growth accelerating.

Significant Capital Expenditure Has Its Reasons

Interestingly, Oracle is ramping up capital investments significantly. Capital expenditure for FY2025 exceeded $21 billion, more than tripling the less than $7 billion in FY2024. Safra Catz admitted that capital expenditure in FY2026 will exceed $25 billion, mainly due to order backlog and the need to significantly expand capacity.

This seemingly crazy investment reflects the reality of supply-demand imbalance—Oracle is seizing the cloud infrastructure market opportunity, betting on future growth with real cash.

Summary

The value of Oracle’s quarterly report lies in: the surge in RPO indicating order certainty, the fruitful results of its multi-cloud strategy, accelerated cloud business growth, and upward revision of future revenue guidance. As AI applications accelerate their deployment, Oracle, as an enterprise database and cloud infrastructure provider, is harvesting the benefits. The strong after-hours stock performance may well be the market’s recognition of its future prospects.