Oracle reports 6% revenue growth in Q3 FY 2025, cloud services surge

Oracle Corporation has reported a strong performance for the third quarter of fiscal 2025, highlighting significant revenue growth driven by its cloud infrastructure and AI computing segments. The company recorded total revenue of $14.1 billion, reflecting a 6% year-over-year increase in USD and 8% in constant currency, underscoring the continued expansion of its cloud services. The quarter saw a 62% surge in remaining performance obligations (RPO) to $130 billion, emphasizing Oracle’s increasing backlog of contracted cloud revenue.

As enterprises accelerate their adoption of AI-powered cloud computing, Oracle’s cloud services revenue climbed 23% in USD and 25% in constant currency, reaching $6.2 billion. This rapid expansion in Oracle’s cloud business is a testament to its growing role in providing AI-driven cloud solutions to major corporations.

What Drove Oracle’s Q3 Cloud Revenue Growth?

The company’s cloud revenue was propelled by Infrastructure as a Service (IaaS) and Software as a Service (SaaS). Oracle’s cloud infrastructure revenue surged 49% year-over-year in USD and 51% in constant currency, reflecting increasing enterprise reliance on Oracle’s data centers for AI computing. Meanwhile, cloud applications revenue climbed 9% in USD and 10% in constant currency, driven by strong demand for Oracle’s enterprise software solutions.

Oracle’s Fusion Cloud ERP segment delivered $0.9 billion in revenue, growing 16% in USD and 18% in constant currency, signaling heightened adoption of Oracle’s business management solutions. Similarly, NetSuite Cloud ERP revenue matched this growth, increasing 16% in USD and 17% in constant currency, as businesses expanded their cloud-based financial operations.

The company’s latest AI offerings are contributing significantly to its growth. Oracle has integrated AI-driven database technology into its cloud ecosystem, enabling enterprises to process data efficiently while maintaining security and privacy. This innovation is helping drive increased cloud revenue growth as organizations seek scalable AI computing platforms.

How Is Oracle’s Profitability Evolving?

Oracle’s GAAP operating income rose to $4.4 billion, with non-GAAP operating income reaching $6.2 billion, reflecting a 7% increase in USD and 9% in constant currency. The company also reported a 22% increase in GAAP net income to $2.9 billion, with non-GAAP net income growing 6% to $4.2 billion.

Earnings per share (EPS) showed steady growth, with GAAP EPS rising 20% to $1.02, while non-GAAP EPS climbed 4% to $1.47. These figures reflect Oracle’s ability to generate consistent earnings growth, even as it makes significant investments in AI infrastructure and cloud data centers.

Cash flow remained strong, with free cash flow for the past twelve months totaling $5.8 billion. Oracle’s ability to maintain positive cash generation despite heavy capital expenditures highlights its financial resilience.

What Are Oracle’s Expansion Plans for AI and Cloud Computing?

The company continues to expand its cloud infrastructure footprint, with plans to double its data center capacity by the end of the year. Demand for Oracle’s AI-driven cloud services has surged, with GPU consumption for AI training increasing 244% year-over-year. This surge reflects growing enterprise investments in AI computing power, a trend that is fueling Oracle’s cloud expansion.

The company’s MultiCloud revenue, derived from partnerships with Microsoft, Google, and Amazon, surged 92% in the last three months, signaling strong collaboration with industry leaders. These partnerships allow businesses to run AI workloads across multiple cloud environments, leveraging Oracle’s high-performance computing infrastructure.

Oracle’s upcoming Stargate contract, which is set to expand its AI training and inferencing business, represents another major growth opportunity. The company’s investments in AI and machine learning technologies continue to position it as a leader in enterprise cloud computing.

What Does Oracle’s Dividend Increase Mean for Investors?

Oracle’s Board of Directors has approved a 25% increase in the quarterly dividend, raising it from $0.40 to $0.50 per share. The dividend will be payable to shareholders of record as of April 10, 2025, with payment scheduled for April 23, 2025.

The decision to raise the dividend reflects Oracle’s strong earnings performance and confidence in future growth. Notably, Oracle’s Chairman and CTO did not participate in the deliberation or vote on this matter.

How Is Oracle Positioned for Future Growth?

With a $130 billion sales backlog, Oracle is well-positioned for continued revenue growth in the coming quarters. The company expects a 15% increase in overall revenue in its next fiscal year, supported by strong demand for AI and cloud computing services.

Oracle’s AI Data Platform, which integrates OpenAI ChatGPT, xAI Grok, and Meta’s Llama models, is set to play a pivotal role in AI-driven enterprise computing. This platform enables businesses to analyze their private data securely, while leveraging some of the most advanced AI technologies available.

As enterprises increasingly move towards AI-powered data analytics, Oracle is expected to capture a significant share of this growing market. The company’s commitment to expanding data center capacity and enhancing cloud infrastructure ensures that it remains competitive in the evolving cloud computing landscape.

Oracle’s Growth Trajectory Remains Strong

Oracle’s fiscal 2025 Q3 earnings highlight the company’s rapid cloud expansion, driven by strong AI adoption and cloud infrastructure demand. With a record sales backlog, increasing AI investment, and major cloud contracts, Oracle is well-positioned for continued financial strength. The company’s strategic investments in AI data processing, cloud security, and multi-cloud interoperability ensure that it remains at the forefront of the industry.

As enterprises accelerate their digital transformation, Oracle’s AI-enhanced cloud solutions are likely to see sustained demand, reinforcing its position as a leader in AI-driven cloud computing. With higher revenue expectations and a growing dividend, the company continues to offer strong value to investors while shaping the future of enterprise AI and cloud technology.