Big Red reckons paying for datacenters is easy when you have half a trillion dollars of cloud orders on the books
Oracle says AI code generation tools have become so efficient, and it is so good at using them, that it will dodge the SaaSpocalypse and watch smaller rivals suffer.
Big Red delivered that news in its Q3 results, after which co-CEO Mike Sicilia used the company’s earnings call to say “AI tools and their coding capabilities would be a threat if we weren't adopting them, but we are and very rapidly.”
“The use of AI coding tools inside Oracle is enabling smaller engineering teams to deliver more complete solutions to our customers more quickly,” he said. “We are building brand-new SaaS products using AI and also embedding AI agents right into our existing application suites.”
Sicilia said Oracle has just built three new customer experience (CX) applications, plus a new website generator it used to refresh its website.
“We've built these new CX products to help our customers sell, not simply to administer a forecast or generate e-mail opens,” Sicilia boasted, before listing other AI-infused additions to its products and declaring “these are not systems that can be replaced by a small collection of niche features cobbled together and bolted on in the name of AI.”
“So yes, some smaller or single-focused SaaS players may well be disrupted, but Oracle will not be among them,” he concluded.
In recent weeks, the rumor mill has suggested Oracle is set to make substantial layoffs to ensure it has the cash to finance its massive cloud builds.
The wording Big Red used to describe its vibe coding adventures – smaller teams but building more products – left room for future job cuts.
But co-CEO Clay Magouyrk was at pains to point out that Oracle has figured out how to pay for cloud builds without straining its finances, by using “A combination of bring your own hardware and upfront customer payments.”
That sort of deal, he said, “enables us to continue expanding [our datacenter footprint] without any negative cash flow from Oracle.” Big Red inked $29 billion of contracts in a quarter using its new deals, and has $553 billion of remaining performance obligations (RPO) – services customers say they want but have not yet used or paid for – on its books, with most new orders covering AI infrastructure.
Revenue for the quarter hit $17.2 billion, up 22 percent year-over-year. AI infrastructure accounted for $4.9 billion of that, up 84 percent. Revenue from IaaS and SaaS, which Oracle groups under “Cloud,” grew 44 percent to $8.9 billion.
The company predicted full year revenue of $67 billion and increased its forecast for its next financial year to $90 billion.
“We are overdelivering on FY '26 revenue and earnings, and we are constantly raising our FY '27 forecast,” Magouyrk said. “This is made possible by Oracle's transition from a predominantly seasonal license business into a highly predictable, recurring revenue cloud business.” ®