Oracle's Q3 2025 Earnings Call: Unpacking Contradictions on Stargate Project, AI Demand, and Margin Strategies

These are the key contradictions discussed in Oracle's latest 2025 Q3 earnings call, specifically including: Stargate project details and impact on financials, AI demand in different environments, OCI margin improvements, AI market transitions, and Oracle's Gen 2 architecture and its impact on CapEx:



Record-breaking RPO and Bookings:
- Oracle Corporation added $48 billion to its backlog in Q3 2025, with the RPO balance now at $130 billion, representing a 63% year-over-year increase.
- The unprecedented bookings were driven by strong demand for cloud services and the strategic advantage of Oracle's Gen 2 architecture, particularly in AI training and inferencing.

Cloud Revenue and Infrastructure Growth:
- Oracle's total cloud revenue was $6.2 billion, up 25%, with Infrastructure as a Service (IaaS) revenue at $2.7 billion, up 51% year-over-year.
- The growth was fueled by high demand for AI services and cloud database subscriptions, reflecting Oracle's competitive position in the AI market and database migration to cloud.

AI and Infrastructure Subscriptions:
- Oracle Cloud Infrastructure revenue grew 51% in Q3, and AI-related GPU consumption revenue is nearly 3.5 times last year's size.
- The significant growth in AI was attributed to Oracle's technological advantages, such as faster AI training and high-speed networking capabilities.

Database and Application Segment Performance:
- Oracle's database subscription revenues increased by 6%, and strategic SaaS applications reached $8.6 billion, up 8%.
- The growth in these segments was driven by ongoing on-premise database migration to cloud services and increased adoption of Oracle's SaaS applications.