Oracle revealed news of another huge cloud contract, on top of accelerating growth
Oracle has signed a cloud services contract worth $30 billion a year which will start hitting its books in fiscal year 2028, according to a company filing.
In a fair disclosure filing with the Securities and Exchange Commission, Oracle said that CEO Safra Catz was going to meet with company colleagues on Monday and tell them that the company’s MultiCloud database revenue continues to grow at triple-digit rates, and that the company “signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.” No further details were included in the filing on the customer’s identity.
It was just a few weeks ago that Oracle highlighted its MultiCloud growth rate and indicated a series of high and accelerating growth numbers, including that its pipeline of committed projects pipeline had grown 41% during the most recent quarter to $138 billion. During the company’s fiscal fourth quarter call in mid-June, the tsunami of cloud demand that Oracle is riding became clearer. Catz expressed confidence that Oracle Cloud Infrastructure (OCI) revenues would grow 70% in the coming year.
On that same call, Chairman and CTO Larry Ellison promised: “Oracle will be the number one cloud database company. Oracle will be the number one cloud applications company, and Oracle will be the number one builder and operator of cloud infrastructure data centers. We will build and operate more cloud infrastructure data centers than all of our cloud infrastructure competitors combined.”
“A few years ago, I told you that we’ve reached a tipping point in our cloud transition and expected revenue growth to accelerate, and it has,” Catz said on the call.
What’s behind the growth? “We are the key enabler for enterprises to use their own data and AI models,” Ellison said. But many of Oracle’s large contracts are for enterprise cloud services and not directly related to AI, he added, calling out Chinese retail giant Temu as one example.
Oracle’s data center growth is ‘skyrocketing’, with even higher demand expected
Oracle has 23 MultiCloud data centers that are live, where it offers interconnect and database integration with other hyperscalers’ clouds, with another 47 slated to be built in the next 12 months. Its MultiCloud database revenues grew 115% in the most recent quarter, and the company expects triple-digit growth to continue in its next fiscal year. It also has 29 Oracle Cloud@Customer data centers in which it offers public cloud infrastructure and managed cloud services, with 30 more being built in the coming year.
That’s being driven by an extensive pipeline of customers waiting for compute capacity —more demand than the company can keep pace with. And Catz said that Oracle’s pipeline of committed projects is expected to grow by more than 100% in fiscal 2026. “This is a situation that we have not seen in our history,” she said. “And the numbers themselves are so enormous.”
Ellison chimed in that if the massive Stargate data center project — where Oracle is one of the major partners — turns out as advertised, then Oracle will have understated its pipeline growth.
Meeting that demand with data center infrastructure means substantial capital expenditures. Oracle estimated as it works to meet demand from its backlog, it will spend $25 billion next year in capex — and maybe more. Catz said that the $25 billion figure “may turn out to be understated.” The “vast majority” of those capex investments are not for data center land or buildings, but for revenue-generating equipment, she added.
“We are putting out as much capacity as we possibly can as quickly as we can. … It is all to meet demand,” Catz said. “We don’t build unless we’ve got orders for our capacity to be built out.” Ellison further clarified that with its capex spend, Oracle is “filling out” data centers and buying components for its compute hardware. (Of note: Both executives said that they have had no issues getting enough GPUs.)
Ellison said that the company is making large investments in engineering and high-speed networking—already considered one of its competitive “strong suits” by research company SemiAnalysis—to reduce its capex costs. But, he added, “Capex is going to go up because the demand right now seems almost insatiable. I mean, I don’t know how to describe it. I’ve never seen anything remotely like this. … People are calling up and asking us, ‘Please, can you find us more capacity? We’ll take it wherever. It’s in Malaysia? We’ll take it, fine.'”
As the company brings more data center capacity online, it expects revenues and profits to grow even faster. For Oracle’s fiscal year 2025, cloud infrastructure revenue was up 51% to $10.2 billion. That is expects to increase more than 70% in fiscal 2026.
“Oracle is well on its way to being not only the world’s largest cloud application company, but also one of the world’s largest cloud infrastructure companies,” Catz said.
