Oracle's Q3 Fiscal Year 2026: The Full-Scale Explosion of the AI Era
To be honest, Oracle’s financial report this time was truly impressive. For the first time in 15 years, it achieved over 20% growth in both revenue and profit—a remarkable achievement for any tech giant. Even more impressive is that they completed their financial report just 10 days after the quarter ended, much faster than other companies in the S&P 500. This actually reflects the strength of the Oracle Fusion system—managing their own business with their own products—a confidence not every company possesses.
Financial Performance and Major Transactions
Quarterly performance
The data for the third quarter of fiscal year 2026 is indeed impressive. Both organic total revenue and non-GAAP earnings per share grew by more than 20% in dollar terms, the first time in 15 years. It’s worth noting that Oracle’s business is now many times larger and more complex than it was 15 years ago, and maintaining such growth demonstrates that they have indeed found the right direction in their cloud transformation and AI strategy.
Major transactions and financing activities
In January of this year, Oracle completed a notable transaction—the data business of TikTok US was spun off from ByteDance, with Oracle acquiring a 15% stake in the new independent company and a board seat. This transaction has no impact on existing technology service revenue, the equity is accounted for using the equity method, and the related gains will be recognized in non-operating income or loss for the fourth quarter of fiscal year 2026.
In terms of financing, Oracle announced a major plan in February: to raise up to 30 billion through investment-grade bonds and mandatory convertible preferred stock, with the order book oversubscribed. Notably, they have not yet initiated the “market-price” equity tranche, indicating strong market confidence in Oracle.
Application business operation status
Cloud application revenue growth
The cloud applications business performed quite solidly in the third quarter. Revenue grew 11% in constant currency terms, reaching an annualized run rate of $16.1 billion. More importantly, all segments grew, with no obvious weak points. Fusion ERP grew 14%, SCM grew 15%, HCM also grew 15%, and even the relatively slower CX grew by 6%. NetSuite maintained an 11% growth rate, while industry SaaS solutions (hotels, construction, retail, etc.) grew by a combined 19%, a very respectable figure.
One detail worth noting is that deferred revenue from cloud applications grew by 14%, higher than the quarterly revenue growth of 11%. This typically indicates that business is accelerating, with customers signing larger and larger contracts, but revenue recognition takes time.
AI’s Empowerment and Competitive Advantage in Application Business
Some in the market say, “SaaS is dead, and AI will kill it,” but Oracle’s experience proves that AI is actually enhancing SaaS, not replacing it. They have already embedded more than 1,000 AI agents into their existing applications; these are not gimmicks, but real tools for solving problems.
