Oracle reported a significant increase in its cloud infrastructure (OCI) revenue for the first quarter of fiscal year 2027, reaching $7.4 billion—a 121% rise compared to the same period last year. Total revenue for the quarter was $19.3 billion, marking a 30% year-over-year increase. New AI-related contracts signed during the quarter exceeded $30 billion. The growth rate for OCI revenue climbed from 93% in the previous quarter to 121% in this one. Oracle's remaining performance obligation (RPO), which represents future revenue commitments from contracts, rose by $209 billion year-over-year, reaching $664 billion. The company estimates that about half of this RPO will be converted into revenue over the next three years. To meet the rising demand for AI training and inference, Oracle delivered over 300,000 GPUs in the quarter. Since the end of the previous quarter, the company has added 850 megawatts of computing capacity dedicated to AI—nearly three times the amount delivered in the previous quarter and 73% of the total from the previous fiscal year. The GPU utilization rate reached 97.9%, indicating high efficiency in using these resources. Even older GPUs retained significant value, with those reaching the end of their contracts being renewed or resold at prices 20% higher than previous contracts. Many of these devices had been in use for over four years. Oracle's operating cash flow for the quarter hit a record $23 billion, but investment expenses reached $28.5 billion, leading to a negative free cash flow of $5.4 billion. The company now expects investment expenses to range between $90 and $95 billion for the entire fiscal year. To reduce pressure on its cash reserves, Oracle is exploring arrangements where customers pay deposits or purchase equipment like GPUs themselves, while Oracle manages the operation of data centers and the cloud. Additionally, the company is using supplier financing, which allows equipment payments to align with customer billing schedules. Clay Magouyrk, Oracle’s co-president and CEO, emphasized that these strategies do not reduce the company’s overall investment needs but allow Oracle to maintain its infrastructure expansion pace without depleting its liquidity. Despite delays in constructing some large data centers in New Mexico and Wisconsin, which are still awaiting approvals and electrical connections, Oracle maintains that its annual forecasts will remain unaffected. The company is simultaneously expanding its infrastructure across multiple regions without relying on the progress of any single site. Oracle’s AI strategy extends beyond infrastructure. The company is integrating AI agents into its existing enterprise applications, aiming to create a new growth engine for its SaaS (software as a service) business. Rather than replacing existing enterprise software, AI agents will transform how these systems are used—allowing humans to focus on exception management and decision-making while AI applies business rules. Oracle also plans to use AI in software development to significantly reduce deployment times, cutting multi-year projects to just a few months or even weeks. In addition to internal efforts, Oracle is strengthening its ties with external AI developers. The OCI marketplace now offers access to tools like OpenAI’s API, ChatGPT for Work, and Codex, as well as support for GPT-6 Astra. Google’s Gemini is integrated into Oracle’s enterprise applications, and other models, such as Grok and DeepSeek, are also available on OCI. As a result of this AI expansion, Oracle has raised its full-year 2027 revenue forecast to a minimum of $90 billion. For the second quarter, the company expects total revenue growth of 30 to 34% year-over-year and cloud revenue growth of 65 to 71%.