Why did ORCL's Q3 2025 earnings fall short?

Oracle's Q3 2025 earnings fell short, missing analysts' expectations in both EPS and revenue, despite strong cloud infrastructure growth and AI demand, due to several key factors:

1. **Component Delays and Currency Headwinds**: Oracle faced component delays that slowed cloud capacity expansion, and currency headwinds negatively affected EPS, highlighting exposure to foreign exchange fluctuations. These factors contributed to the shortfall in earnings.
2. **Software License Revenues Decline**: There was a decline of 8% in software license revenues, amounting to $1.1 billion, indicating a potential challenge in this segment. This decline likely impacted the overall revenue figure.
3. **Revenue Recognition**: Oracle's revenue recognition practices came under scrutiny, with concerns over the timing and treatment of certain contracts, particularly in the context of its cloud offerings. This issue may have affected the reported revenue figures.

Despite these shortcomings, Oracle's cloud growth, driven by AI demand, and a strong backlog of sales contracts provide a positive outlook for future revenue growth. The company's strategic investments in AI and cloud infrastructure are expected to yield results in the coming quarters.