Earlier this month, I published Even More Of The Latest Thoughts From American Technology Companies On AI (2026 Q1). In it, I shared commentary in earnings conference calls for the first quarter of 2026, from the leaders of technology companies that I follow or have a vested interest in, on the topic of AI and how the technology could impact their industry and the business world writ large.

A few more technology companies I’m watching hosted earnings conference calls for 2025’s fourth quarter after I prepared the article. The leaders of these companies also had insights on AI that I think would be useful to share. This is an ongoing series. For the older commentary:

2023 Q1 – here and here
2023 Q2 – here and here
2023 Q3 – here and here
2023 Q4 – here and here
2024 Q1 – here and here
2024 Q2 – here and here
2024 Q3 – here and here
2024 Q4 – here, here, and here
2025 Q1 – here and here
2025 Q2 – here and here
2025 Q3 – here, here, and here
2025 Q4 – here, here, here, and here

With that, here are the latest commentary, in no particular order:

Adobe (NASDAQ: ADBE)

Adobe’s management sees AI changing customer behaviour at unprecedented speed and this means Adobe needs to change its strategy; management now thinks the immediate opportunity for Adobe is to accelerate new user acquisition and lifetime value through freemium offerings; Acrobat and Express MAU (monthly active users) has increased from 700 million a year ago to 850 million in 2026 Q1 (FY2026 Q2); Business Professional and Consumer traffic on adobe.com is up 35% year-on-year in 2026 Q1 (FY2026 Q2) and management wants to serve this traffic without immediate paywalls; management has increased creative freemium MAU from 50 million a year ago to 90 million in 2026 Q1 (FY2026 Q2); management wants to expand the Firefly freemium experience to acquire users; the shift to freemium will have a negative short-term impact on Adobe’s ARR but will build the foundation for long-term growth; Firefly freemium users who convert to paid users display early signs of significant credit consumption; Adobe’s products feature highly in intent-based search, so management thinks it’s better for the company’s long-term growth to allow users to experience Adobe for free first; management has plenty of prior experience converting freemium users to paid users

Relative even to the beginning of fiscal 2026, AI is accelerating customer behavior at an unprecedented speed, and we need to evolve our strategy and execution to address these changing expectations. Much like our developers have embraced and expanded the AI coding market, there’s a transformation underway for how consumers are discovering, experiencing, onboarding and purchasing products across all categories, including creativity, productivity, gaming and entertainment. As it relates to creativity and productivity, there is an unprecedented demand across additional surfaces for the combination of content consumption and content creation. Conversational interfaces and agents now orchestrate across tools to achieve outcomes faster. The proliferation of media generation models is reshaping and democratizing content workflows from ideation through delivery. AI-first applications that will serve broader audiences need to provide free, intuitive onboarding that drive usage and monetization through paywalls. Big picture, the immediate opportunity for Adobe is to accelerate new user acquisition and lifetime value through a freemium offering.

As it relates to Business Professionals and Consumers, we have dramatically increased Acrobat and Express MAU from greater than 700 million to greater than 850 million year-over-year. The opportunity is to serve billions of Business Professionals and Consumers through a comprehensive freemium funnel, building on the success of the Adobe Reader model…

…Business Professional and Consumer traffic on adobe.com seeking Adobe capabilities is growing 35% year-over-year. We believe this traffic is better served through a customized, friction-free onboarding experience without immediate pay walls and will result in greater customer acquisition and deeper engagement over time…

…For next-generation creators, the opportunity is to deliver an AI production studio across web and mobile that seamlessly integrates with the power and precision capabilities of Creative Cloud. We have increased our creative freemium MAU from 50 million to 90 million year-over-year. The opportunity is to attract hundreds of millions of additional creators through a freemium funnel based on the early success of Firefly…

…The new personalized journeys for creators drove approximately 50% increase in Firefly ARR quarter-over-quarter through Firefly apps and credit packs. Based on this early success, we are confident that we should expand the Firefly freemium experience to acquire and delight the next generation of creatives…

…While we continue to attract strong traffic to adobe.com, which grew over 40% year-over-year, our traditional direct-to-pay journeys may not always fulfill visitor intent as a growing number of new users are first looking to quickly complete their intended task as they begin their relationship with Adobe. Given products like Adobe Firefly, Express and Acrobat AI Assistant have friction-free onboarding and significant adoption, we can now rebalance our journeys to better serve this new generation of users rather than send them predominantly to direct-to-pay journeys. This shift will come at the cost of short-term ARR, but will accelerate user acquisition in MAU, while building the foundation for long-term growth by removing friction from user onboarding, enabling deeper user engagement and driving stronger lifetime value…

…Firefly freemium users who convert to our paid plans are highly engaged with early indications of significant credit consumption…

…What we see is a shift in — or an emergence in terms of LLM usage, and that is driving a lot more intent-based search. So what is an intent-based search? Someone might type into a search engine, summarize this PDF, right? And what we do is we are using SEO and SEM and some of Anil’s Semrush capabilities now to make sure that we’re ranking high when someone types in something like summarize PDF. When the user clicks on our link, we take them instead of taking them to adobe.com and talking to them about Acrobat, we’re now taking them directly into Acrobat web with a single call to action, which is upload your PDF and then we summarize it for them. And when we summarize it for them, we then introduce them to this idea that they can use AI Assistant to even to have — and ask some questions. And we use this process to let them build habit before we start giving them paywalls. So that’s an evolution. If we just took that traffic direct to a paid flow to buy Acrobat and download Acrobat, it wouldn’t produce as much opportunity long term for Adobe. Similarly, in Firefly, we see things like a growth in terms like generating pixel art for social media posts. Again, we have ranked really high in SEO SEM, then we take them directly into Firefly so they can upload an image of themselves, create this pixelated version, maybe introduce them to this idea that you can convert that to video, but it’s a very different flow. And that’s where the world is going…

…We found in that process, things like Edit PDF or Redact PDF inquiries are a great opportunity to take a user that’s built up a habit, using these products and convert them to a long-term paid customer. a lot of that same learning that infrastructure that we have in place for Acrobat that we’ve developed over the years, that same infrastructure applies to everything we’re doing, as you said, with Express, with Firefly, with Acrobat AI Assistant. And the foundation of how we’re taking that 90 million of creative freemium MAU and converting that is identical.

Adobe’s management is seeing massive growth in content creation for marketing use cases; management is seeing an enormous opportunity in marketing use cases; management is seeing enterprises increasingly bringing marketing capabilities in-house because of AI, and they are looking to Adobe for headless and agentic capabilities with pricing models that address outcomes as well as AI usage; Adobe’s AI-first ARR (annual recurring revenue) for Customer Experience Orchestration grew 4x year-on-year in 2026 Q1 (FY2026 Q2); the acquisition of Semrush has helped to improve Adobe’s Customer Experience Orchestration offering by allowing Adobe to offer a brand visibility product; Adobe’s GenStudio ARR grew 25% year-on-year in 2026 Q1 (FY2026 Q2); Semrush added $480 million of ARR to Adobe; management thinks the upcoming brand-visibility product will become a must-have for chief marketing officers (CMOs)

Content creation designed specifically for marketing use cases is exploding. New AI coworkers and agents offer organizations the ability to deliver automation and outcomes powered by context, data, MCPs and skills. These address the dual needs of enterprises to expand consumer centricity and cost savings in the era of AI. Business models are expanding to include consumption and outcome-based pricing along with subscriptions. The total marketing opportunity across people, software, agency and channel spend is enormous.

AI is changing enterprise behaviors as they’re increasingly bringing more marketing capabilities in-house through their adoption of software platforms and the creation of custom models that uniquely capture their brand intelligence. IT organizations are looking to Adobe to accelerate their provisioning, deployment and customization to serve their consumers through the availability of headless and agentic capabilities with pricing models that address outcomes as well as AI usage. Customer Experience Orchestration, AI-first ARR grew 4x year-over-year, reflecting how Adobe is the leader in both the traditional marketing category and the emerging Customer Experience Orchestration category. The introduction of Adobe CX Enterprise and CX Enterprise Coworker at Adobe Summit expands the vision and delivery of our category-defining CXO solutions.

The successful acquisition of Semrush unifies our search engine optimization, generative engine optimization and AEM solutions to further extend our CXO offering. We will deliver this integrated offering that addresses brand visibility at the Cannes Lions Festival of Creativity later this month. This combination of creativity and marketing uniquely differentiates Adobe. No other company brings together what creators and marketers can do across our applications and delivery platforms.

Adobe GenStudio ARR grew over 25% year-over-year, reflecting enterprise demand for an end-to-end solution that spans workflow and planning, creation and production, asset management, activation and delivery and reporting and insights…

…Semrush added $480 million ARR to our book of business and expands our ability to serve marketers of every scale. We are rapidly integrating Semrush into Adobe, uniting Semrush’s discoverability intelligence with Adobe’s agentic web apps. We look forward to unveiling a comprehensive brand visibility solution, combining Semrush with Adobe at the Cannes Lions Festival of Creativity later this month…

…Every brand across the world wants to have the right placement and regardless of which LLM consumers are using. They want to have the right message, and they want to have their messages show up on LLMs, on social media and all the other new platforms that consumers are going to. And we believe that the best way to do that is to take their content that they have already within their content management system like Adobe Experience Manager, and make sure it gets out there, whether it’s the bots and the agents that the LLMs have or third-party sites, which have credibility with these LLMs, making sure that all the brand visibility shows up in the right places. That requires the integration of what Semrush brings, which is the outside in knowledge of how — what is actually being prompted for what’s being searched for and that the database that they have of all of the prompts and search queries and so on and combine it with the inside-out intelligence that we have with all the content, marrying those two provides us the opportunity to bring the most comprehensive brand visibility solution in the market, and that’s what we’re introducing it Cannes later this month. So we are super excited about that, and we believe that this is going to be a must-have for every CMO.

Adobe’s AI-first ARR (annual recurring revenue) tripled year-on-year in 2026 Q1 (FY2026 Q2), after also tripling in 2025 Q4 (FY2026 Q1); Adobe’s AI-first ARR is now $500 million

Adobe’s AI innovation has driven an impressive 3x year-over-year increase in AI first ARR to greater than $500 million.

Under the Business Professionals and Consumers group, Adobe’s management recently introduced the Adobe Productivity Agent, which shifts Acrobat from a static document tool to an interactive experience; users can now share branded PDF Spaces with customisable AI assistants tailored to specific audiences; Acrobat AI Assistant paid MAU was up 150% year-on-year in 2026 Q1 (FY2026 Q2)

This quarter, we introduced the Adobe Productivity Agent, shifting Acrobat from a static document tool to an interactive experience. The Productivity Agent is an AI experience built into Acrobat that draws on Adobe Acrobat’s document intelligence and Adobe Express’ AI-first creation capabilities to help business professionals understand, create and share information. It can turn documents into rich outputs like presentations, podcasts and social content, support conversational PDF editing and power the new sharing capabilities in PDF Spaces. Customers get the agent through Acrobat AI plans.

Users can also now share branded PDF Spaces with customizable AI Assistants tailored to a specific audience, whether for sales prospecting, content marketing or research delivery. Early adopters of PDF Spaces, including Vice Media, Kid Cudi, Jessica Yellin and Mindy Weiss are using PDF spaces to move audiences from passive reading to interactive engagement…

…Acrobat AI Assistant paid MAU grew over 150% year-over-year and lifetime AI users in Acrobat tripled year-over-year, showing both monetization traction and broad-based engagement.

Under the Creative and Marketing Professionals group, generative credit consumption is growing strongly; traffic from the Creative and Marketing Professionals group was up 50% year-on-year in 2026 Q1 (FY2026 Q2); Firefly ARR was up 50% sequentially in 2026 Q1 (FY2026 Q2); management has launched Adobe Creative Agent beta; Adobe Creative Agent will be monetised through Adobe’s existing credit consumption model; Adobe Creative Agent is available in the major chatbot products; Firefly’s ending ARR in 2026 Q1 (FY2026 Q2) is approaching $300 million; the number of generated assets in Firefly Enterprise was up 4x year-on-year in 2026 Q1 (FY2026 Q2); Adobe has a partnership with NVIDIA for Firefly Foundry

Demand for AI content creation is exploding across ideation, generation and semantic editing, and generative credit consumption continues to show strong growth…

…In Q2, C&CP traffic to adobe.com grew over 50% year-over-year…

…This immense volume of traffic drawn to the Adobe brand, includes users seeking to purchase Creative Cloud, Photoshop and other CC apps and an increasing number of new users who are looking for Adobe Magic to complete a creative task with a friction-free experience…

…Firefly ARR grew approximately 50% quarter-over-quarter through Firefly apps and credit packs. We were excited to launch the Adobe Creative Agent beta in Q2. The agent is available as part of Creative Cloud and Firefly subscriptions and provides a conversational experience to achieve complex and repetitive creative tasks. Agent usage will be monetized through our existing credit consumption model. The Adobe Creative agent is also available in Claude, ChatGPT and soon, Copilot and Gemini…

…In Premiere, we launched a brand-new color mode, a first-of-its-kind color grading experience built specifically for video editors. We continue to deepen AI capabilities across our flagship Creative Cloud applications Photoshop added Rotate Object and Illustrator released Turntable, both enabling subscribers to turn 2D photos and illustrations into 3D renditions they can rotate and harmonize into their work. Capabilities like these drove record AI usage within our flagship applications.

Firefly continues to support third-party models now with Kling 3.0 and Kling 3.0 Omni. Firefly ending ARR across Firefly App, Firefly credit packs and Firefly Enterprise is approaching $300 million exiting Q2. Firefly Enterprise spanning Firefly Services, Adobe Firefly Foundry and Brand Intelligence is helping the world’s largest brands industrialized content production with brand-safe custom models. The number of generated assets grew more than 4x year-over-year making it an AI content engine for marketing at scale.

Our announced NVIDIA partnership will bring accelerated computing to Adobe Firefly Foundry for faster, higher-performing custom models across image, video, audio, vector and 3D, plus a cloud-native 3D digital twin built on Omniverse and OpenUSD.

Adobe’s management is focused on 3 AI-first solutions to target the marketing automation and customer experience orchestration opportunities, namely, Adobe Experience Platform (AEP), Adobe GenStudio, and Adobe Experience Manager (AEM); GenStudio ARR was up 25% year-on-year in 2026 Q1 (FY2026 Q2); subscription revenue for AEP was up 30% year-on-year in 2026 Q1 (FY2026 Q2); AEP delivers 70 billion profile activations and 35 trillion segment evaluations daily, and 1 trillion experiences annually; more than 80% of AEP and AEM customers are now using Adobe’s agentic capabilities; there are 1,500 customer trials happening for Adobe’s agentic web offerings; management recently launched Adobe CX Enterprise, which is an agentic system for enterprises to manage their entire customer life cycle; CX Enterprise has a feature called CX Enterprise Coworker, which is a specialised AI agent that executes tasks based on business goals; CX Enterprise Coworker has seen great customer interest since launch, with 150 enterprises in early adoption; management recently launched Adobe Brand Intelligence, which helps enterprises create and validate on-brand content; Adobe Brand Intelligence is headless, so it can integrate with other apps outside of Adobe; in 2026 Q1 (FY2026 Q2), Adobe announced native integrations on major AI platforms; CX Enterprise Coworker capabilities are integrated into NVIDIA’s NemoClaw platform; global agencies are standardising on Adobe partly for its AI capabilities

The opportunity for AI-powered marketing automation and customer experience orchestration is large and growing, and we are continuing to gain market share and expand our leadership. We are focused on 3 critical AI-first solutions: Adobe Experience Platform and native apps for customer engagement; Adobe GenStudio for content supply chain; and Adobe Experience Manager agentic web apps for brand visibility…

…GenStudio ending ARR grew over 25% year-over-year as leading brands and agencies continue to standardize on Adobe to power their content supply chain;
Subscription revenue for AEP and native apps grew over 30% year-over-year. AEP delivers over 70 billion profile activations and 35 trillion segment evaluations per day, as well as more than 1 trillion experiences per year;
Over 80% of AEP and AEM customers are now using agentic capabilities built into our products.
Over 1,500 customer trials are underway for our agentic web offerings — Adobe LLM Optimizer, Sites Optimizer and Brand Concierge…

…We launched Adobe CX Enterprise, a new end-to-end agentic AI system that simplifies how enterprises manage their entire customer life cycle, from acquiring and engaging prospects to driving conversion and lasting loyalty. Adobe CX Enterprise brings together AI agents, agent skills and Model Context Protocol endpoints with an intelligence and governance layer to deliver reliable and auditable agentic workflows that enable highly personalized, differentiated customer experiences. Over 20,000 global brands have built their business on Adobe and CX Enterprise will help usher them into the era of agentic AI. As part of CX Enterprise, we announced CX Enterprise Coworker, a specialized AI agent that executes tasks based on business goals, dramatically increasing productivity and campaign execution. CX Enterprise Coworker has garnered tremendous customer interest since launch, with over 150 leading enterprises in the early adoption program prior to general availability this week…

…We also introduced Adobe Brand Intelligence, a continuous learning system that helps enterprises create and validate on-brand content faster and with less effort. Adobe Brand Intelligence learns from creative and marketing team feedback, approvals and rejections in real time. It is a headless platform exposed through APIs, so it can integrate with existing first and third-party apps rather than running as a separate app…

…In Q2, we announced native integrations with major enterprise AI platforms, including Microsoft Copilot, Anthropic, OpenAI and Google Gemini. Our partnership with NVIDIA brings CX Enterprise Coworker capabilities into the NemoClaw enterprise agent platform, enabling brands to deploy Adobe’s customer experience intelligence within NVIDIA’s secure policy-governed OpenShell run time. Leading global agencies, including Dentsu, Havas, Omnicom, Publicis, Stagwell and WPP are standardizing on Adobe, combining our AI-powered capabilities with their unique IP and industry expertise to co-develop innovative, differentiated solutions for joint clients.

Adobe’s management has seen AI driving companies to add to all the capital that’s already being spent on coding, and they think a similar dynamic will happen with the creative industry; management wants Adobe to be the AI platform for all creativity across all surfaces

I like to also characterize this much like what’s happened with the code opportunity. If you think about what’s happened with the code opportunity across AI, it’s just completely being turned upside down. And every company is thinking about how they can add to all of the billions that is already spent in code. The same opportunity exists, I think, in every single category, whether that’s gaming, entertainment and creativity. And this is an opportunity for us not just to focus on creative pros and communicators who’ve traditionally been the strength of this company, but to actually become that AI platform for all creativity across every single surface. The success that we’ve seen associated with what we have done on these new products. We talked about the MAU, we’ve talked about the ARR that’s coming. We want to just have a singular focus right now to make sure that we go capture that immense opportunity with a singular focus and a clear marketing message.

Adobe’s management thinks the company is uniquely suited to tackle creativity solutions, in relation to possible competition from the AI platform companies

Whether it’s Amazon, Microsoft or Google, we are huge users of their cloud services, which at the end of the day is a significant revenue stream for them. So we have great partnerships with all three of them. I think with Google specifically, we also partner on how we can jointly go to media and entertainment. We are a big user of their Nano Banana within our applications. So I think there’s a lot of synergy associated with that.

I think with OpenAI and with Anthropic, they are looking to say, how can they become more of a sort of platform of choice and provide us. I think all of their focus right now, I would say, Brad, is on code. And that’s where everybody is doing a [indiscernible] left on that. And I think creativity is an area that we not only have a passion for that we’re uniquely qualified, and so this is our time and our opportunity to leverage everything that they are providing. And so with every one of them, we have a great partnership. But I think as it relates to the consumer side of creativity, which is where this is going after, we’re, I think, a company of one in terms of the focus that we can have on that particular business.

Oracle (NYSE: ORCL)

Oracle had very strong year-on-year revenue growth of 93% for its Cloud Infrastructure business in 2026 Q1 (FY2026 Q4), driven by AI demand

Cloud infrastructure revenue grew 93%, reflecting strong demand for both AI workloads and our database services, and cloud apps was up double-digit at plus 10%.

Oracle’s gross margin for FY2026 has declined as it builds out its AI infrastructure business; the buildout has also caused free cash flow to be negative; management expects Oracle’s capex to be more than $70 billion for fiscal 2027; management sees strong returns on the capex Oracle is deploying; Oracle will be raising $40 billion in debt and equity in fiscal 2027 to support its capex; Oracle’s capex is creating near-term pressure on gross margins, but management expects rapid improvement in the margins once Oracle’s data centers reach full contractual revenues; management actually wants to accelerate Oracle’s capex; management sees the returns on Oracle’s capex to be in the high 20s percentage at steady state, with even higher returns for capex that support bring-your-own-hardware contracts

For the full year, our gross margin stepped down around 5 points as expected as we start to see the impacts from the build-out of our infrastructure business and the acceleration in its revenues, primarily offset by lower operating costs as a percentage of revenue, driven by operating efficiencies. All of this translated into strong cash flow from operations of $32 billion, up 54%. We did continue with our program of capital investment tied to unlocking the strong growth opportunities in front of us. Our net cash outlay for capital expenditures for the full year was $48 billion, taking into account equity payments and timing impacts of around $8 billion…

…We’ll continue those investments in our fiscal year 2027, with an expected net cash outlay for capital expenditures of around $70 billion. This includes customer prepayments and timing impacts expected at around $20 billion to $25 billion, so our reported CapEx will be higher by this amount. Importantly, these investments are being driven by committed customer demand reflected in our record RPO, giving us confidence in our long-term outlook as well as strong returns on the capital we’re deploying…

…To support our capital investment program, we expect to raise around $40 billion in debt and equity in our fiscal year ’27 and that includes our already announced $20 billion at-the-market equity issuance. We don’t anticipate raising additional debt funding in calendar year 2026…

…While these investments are creating pressure on the near term to gross margins in our infrastructure business, we expect margin performance in infrastructure to improve rapidly as we reach full contractual revenue levels at our data centers…

…Part of my job is to figure out ways to actually accelerate CapEx. Hilary has a tough life. My job is starting to spend the money a little bit faster, so I can get ramped revenue sometimes…

…The way I think about return from that business model is in return on invested capital. And what we see is return on invested capital in the high 20s at a steady state. So once the revenues have ramped for large projects at the project level. And that doesn’t take into account upside like who knows if the GPUs don’t need to be replaced over the long term and things like that. Just purely in the steady state, when we’re at the steady state of the contracts that we have. And as we’re generally able to preserve and improve margins in the case of things like bring-your-own-hardware, the ROIC structures, the ROIC for those types of structures will be even higher. And again, that back of envelope, I’m just calculating return on invested capital is after-tax operating margin plus depreciation divided by gross investments, so total gross CapEx at the project level.

Oracle’s remaining performance obligation (RPO) in 2026 Q1 (FY2026 Q4) was up 363% year-on-year to $638 billion (was $553 billion in 2025 Q4), driven by demand for AI infrastructure

Our remaining performance obligations, or RPO, finished at $638 billion, up 363%. This unprecedented level of RPO provides exceptional visibility into our future revenue growth, all supported by long-term contractual customer commitments and reflects the strong customer demand we see across both AI infrastructure and cloud services.

Oracle’s management sees customers wanting to use AI to increase productivity quickly, and within budget; Oracle’s customers are now past the experimental stage with AI and are looking to implement enterprise-grade agentic solutions; Oracle’s customers are looking to leverage their proprietary data with AI; management is seeing customers wanting to achieve a positive ROI from AI quickly

Our customers are now focused on how to leverage AI in their own businesses. They want AI to increase productivity, enhance customer service, and create real competitive advantages. But they want to do it quickly and within their existing budget envelope…

…Our customers have moved past the experiment stage with AI. They are ready to implement enterprise-grade, complete agentic solutions to help run their businesses…

…I’m also having very interesting conversations with our customers around leveraging their own proprietary data sets with AI. Much of this data already sits in an Oracle database or is generated by Oracle applications. For many enterprises, inferencing against decades of rich operations data is where the benefits of AI compound exponentially…

…One of the things we’re increasingly hearing from customers is how much are we going to spend on AI? And how do I get ROI very quickly?

Oracle’s management sees Oracle having a unique advantage in AI by providing the entire suite of applications, data, infrastructure, and AI tooling; Oracle has delivered over 1,000 AI agents over the past year; management sees Oracle as being the fastest, most affordable way for customers to consume AI; Oracle’s customers are looking to leverage their proprietary data with AI, and much of this data is already in an Oracle database; management thinks inference against proprietary data is how enterprises can benefit from AI; Oracle’s full stack allows customers to quickly leverage AI with their private data; Claro, National Health Service, Lojas, and QXO are examples of customers using all or parts of Oracle’s full stack for AI

Oracle’s unique advantage is that we deliver the applications, the data, the infrastructure, the AI tooling, and the industry expertise together. That combination invariably puts us at the center of customer conversations, whether they’re existing Oracle customers or not…

…Over the past year, we have delivered more than 1,000 AI agents across our application suites. These agentic-based offerings can reason, decide, and execute work across processes. So the quickest, most affordable and most productive way customers can begin consuming AI is just to continue using Oracle’s applications. Since every 3 months, they get more and more of the AI features built for them and ready to go. This is a major shift in enterprise software, and Oracle is uniquely positioned to lead it…

This is why Claro, a major telecommunications provider in Latin America, chose OCI, field services applications and our AI data platform to automate customer service for their 30 million subscribers this quarter. U.K. National Health Service’s Shared Business Services; Lojas, the Brazilian retailer; and QXO, the fastest-growing building products distributor in the United States, combined AI-ready Oracle infrastructure or database products with Oracle applications to move their businesses forward.

Oracle’s management recently launched Oracle AI Agent Memory for developers to build agents that can remember and utilise enterprise context; management recently launched Oracle Deep Data Security that precisely limits what an AI agent can see or act upon; management has added vector database search and other features into Oracle’s database product

Last quarter, we also released a long list of major new AI functionality in the Oracle database. Here are just 2 examples. The Oracle AI Agent Memory is a library that helps developers build agents that can remember, reason and act with enterprise context. Oracle Deep Data Security has data access rules at the database level. This protects against both unauthorized access and it limits precisely what data a user and any AI agent acting on their behalf can see or act upon…

…The innovation in the database, I mentioned a couple of Deep Data Security and Agent Memory that we put into the database, things like vector database search and features that we’ve been adding into the database are part and parcel to the companies’ AI strategies.

Oracle’s management is simplifying how customers consume and pay for AI agents; customers can purchase additional tokens on top of the AI innovation they are getting from Oracle for free; management is introducing outcome-based pricing models, such as interview agents that are priced based on the number of candidates screened; management had a limited roll out of Oracle’s token bundle in 2026 Q1 (FY2026 Q4); the limited roll out already saw 33 customers repurchase tokens; it can be tricky to price on outcomes if the company offering the agentic service is not the entity that’s creating the outcome, but in Oracle’s case, it has a full stack service, so it’s easy to measure outcomes; management expects the initiative to simplify how customers consume and pay for AI agents to resonate with customers and boost Oracle’s growth

We are simplifying how customers consume and pay for agentic capabilities. Our new agentic pricing aligns with customer value. Now much of our AI innovation in our core applications continues to be included at no extra charge. However, customers can also purchase additional agentic capacity in a simple, predictable way by purchasing bundles of tokens that can be used across our application suites. We’re also introducing outcome-based commercial models that align pricing directly to the value derived. For example, interview agents that are priced based on the number of candidates screened or hospitality upsell agents priced on the percentage of end consumer upsell transactions. In Q4, we started a limited rollout of our token bundles and had 33 customers, like Aon Services Corporation and Liberty Energy, repurchase tokens to have access to more advanced reasoning and models…

…In health care, in our new AI-based automated agents where we’re automating doctors’ notes, we’re automating lab orders. We’re able to measure and actually price based on patient throughput, which is what the providers — one of the things providers care about is how many people can we get through a health care system, reduce waiting queues, give better service to patients…

…The sort of difficult thing is that you’re not creating the outcome in the first place, that’s a tricky thing to price in. But since we’ve made this full stack investment and since we’re able to very easily take the best of the output from the large language models to our customers, pair that with our — both our horizontal applications and our industry applications, we have a very easy way to measure outcomes for our customers…

…We’re allowing as much flexibility and as much aligned with the value in our pricing models across our entire application suite as we possibly can. And I expect that, that will continue to resonate well with customers as it did in the quarter. And as we roll it out across our entire fleet, it certainly should be helpful for our growth story as well.

Oracle’s management thinks the AI infrastructure market dwarfs the existing cloud infrastructure market; management sees the AI infrastructure market as being trillions of dollars per year

Cloud infrastructure has become a very large market because of the ever-growing demand for server-side computing. AI infrastructure makes the existing cloud infrastructure market look small. Everything we see shows this market size is trillions of dollars per year.

Most of Oracle’s AI infrastructure contracts signed in 2026 Q1 (FY2026 Q4) are either bring-your-own hardware or prepaid; bring-your-own hardware and prepaid contracts have similar margins as Oracle’s other contracts; Oracle delivered 1.2 gigawatts of AI infrastructure to customers in FY2026, with 2026 Q2 (FY2027 Q1) deliveries already approaching 1 gigawatt; management thinks there will be many winners in AI and they want all of them as Oracle customers; Oracle’s AI infrastructure business has many tenants; Oracle had 35,000 GPUs from 59 customers come up for renewals in 2026 Q1 (FY2026 Q4) and 49% of those customers renewed for 92% of the GPUs, with the remaining 8% sold to other customers; Oracle’s global GPU utilisation is 97.5%; Oracle’s Abilene, Texas AI data centre has delivered 42% of its total capacity, with 35% of further capacity to be delivered in the next 90 days; Oracle’s Shackelford, Texas AI data center will begin delivery to customers in 2027 H1; Oracle’s Dona Ana County, New Mexico AI data center will start customer delivery in 2027 H1; Oracle’s Saline, Michigan AI data center will start customer delivery in 2027 H2; Oracle’s Port Washington, Wisconsin AI data center will start customer delivery in 2027 H2; management thinks the propensity for customers to renew AI infrastructure contracts with Oracle depends on the company’s ability to maintain massive GPU clusters; management sees a path for Oracle’s AI infrastructure business to earn higher margins over time even as it lowers prices for customers; for the bring-your-own-hardware AI infrastructure business, Oracle is providing data centers that are properly constructed and designed, the appropriate networking technologies, and every other thing necessary apart from the AI accelerator chips; it’s not easy to operate the bring-your-own-hardware AI infrastructure business

We signed $67 billion in AI infrastructure contracts this quarter, the majority of which was either bring-your-own-hardware or prepaid. This increases our combination of bring-your-own-hardware or prepaid customer contracts to $75 billion, with those contracts having no degradation in margin compared to our other contracts…

…Q4 finalizes an impressive FY ’26 where we delivered more than 1.2 gigawatts to customers. Our pace of delivery continues to accelerate with our FY ’27 Q1 delivery approaching 1 gigawatt, nearly the same capacity as we’ve delivered in the previous 4 quarters combined. There will be many winners named, and our strategy is to have them all as customers. We continue to diversify across our largest customers with 4 customers contracting for more than $8 billion this quarter.

Our infrastructure is fundamentally multitenant, and we continually allocate capacity between customers. In Q4, 35,000 GPUs from 59 separate customers were up for renewal. 49% of those customers renewed for 92% of those GPUs. That doesn’t mean, though, that 8% of those GPUs were idle. Most of those GPUs themselves were subsequently sold to other customers in the same quarter. Our global GPU utilization rate is 97.5%…

…Abilene, Texas today has delivered 42% of the total capacity. An additional 35% of capacity will be delivered in the next 90 days, with the remainder delivering in the subsequent quarter. Moving forward to Shackelford, Texas. We contracted this in August of 2025. Customer delivery begins in the first half of FY ’27 — sorry, first half of calendar year ’27. 115 megawatts of power capacity is already available online, more than 1 month ahead of schedule. If we take a look at Doña Ana County, New Mexico. We contracted this in September of 2025. Customer delivery begins in the first half of calendar year ’27 as well. Power design is based on gigawatts of clean, energy-efficient Bloom fuel cells. If we look at Saline, Michigan, we contracted this in October of 2025. Customer delivery begins in the second half of 2027. The network core is ahead of schedule and delivered at the end of this calendar year. And then to the final site I want to touch on, Port Washington, Wisconsin. This was contracted in September of 2025 and delivery begins in the second half of calendar year ’27…

…I find that largely what affects future renewals is that several years of relationship that we’re going to have between now and then. And we’re fundamentally in the service business. If you think that you’re just buying something and then you’re done with it, it’s not the way it works, right? These people are relying on what we do at Oracle to run and maintain these massive clusters every day…

…As the market continues to mature, and we deploy more and more of our research and development dollars and making things more efficient, I think there’s ways that Oracle gets higher and higher margins, but we actually can offer lower and lower prices to our customers….

…One of the things that Oracle can provide to our customers is that we can go out and put upfront capital and then depreciate that over a period of time and help finance the customers’ usage of that. But that’s not the only thing we provide and for a lot of customers it’s not even the most important thing to provide. What they contract with us for is the ability to go out and get the data centers constructed, design them properly, secure them, design networks that go inside of them, install a cloud, give them a complementary set of services around the specific hardware because it turns out that a set of these accelerators on their own is not functioning cloud. You need general purpose compute, you need general purpose storage, you need load balancers, you need security function, you need identity. You need all of that to actually make this stuff usable and Oracle provides all of that…

…Anyone that thinks that these things are easy to operate is very confused. So you’re not just buying a single rack and putting it into your data hall. These are extremely complex clusters that require constant care and feeding, constant maintenance across the network and the hardware itself.

Oracle’s management sees agentic coding as the most obvious and valuable use case of AI; Oracle’s internal demand for agentic coding is not slowing down and the same goes for the company’s customers; management sees enormous demand for agentic coding

AI is delivering value on multiple fronts, but the most clear and obvious is agentic coding. This is an area where we have a front row seat as both the provider and as a consumer. Agentic coding tools has completely changed how Oracle operates, and we see no slowdown in our own demand for such capabilities. The same is true for all the customers and partners we work with. The demand for AI infrastructure in this domain alone is enormous, ignoring the many, many other growth areas.

Oracle’s management sees demand for AI infrastructure to be massively higher than supply for at least a few years ahead

I think there’s clearly several years in, there’s still a massively higher demand than there is supply.

Oracle’s management thinks the SaaSpocalypse does not apply to mission-critical software systems, as customers realise that AI that’s built into existing SaaS solutions is a good approach

As far as impact of SaaSapocalypse, I would say maybe a couple of quarters ago, there were some delayed decision cycles out there as customers saw through that. But really, particularly in the mission-critical systems space, which is where we play at Oracle, people have quickly moved on to that and realized that enterprise software, particularly when you have AI built into our SaaS solutions is certainly a very good approach and is necessary to move forward for the modernization and protection of their businesses.

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