Oracle Japan (TSE:4716) Q2 EPS Beat Reinforces Bullish Cloud Growth Narrative

Oracle Corporation Japan (TSE:4716) has posted another solid quarter, with Q2 2026 revenue of ¥68.4 billion and basic EPS of ¥117.9, supported by net income of ¥15.1 billion. The company has seen revenue move from ¥61.4 billion in Q2 2025 to ¥68.4 billion in Q2 2026, while basic EPS stepped up from ¥109.0 to ¥117.9 over the same period. This trajectory keeps margins in focus as investors weigh how much profit the business can squeeze from that higher sales base.

See our full analysis for Oracle Corporation Japan.

With the latest numbers on the table, the next step is to see how this earnings print lines up with the dominant narratives around Oracle Corporation Japan, and where the data might start to challenge them.

See what the community is saying about Oracle Corporation Japan

Trailing Revenue Near ¥273 billion

• Over the last 12 months, Oracle Corporation Japan generated about ¥272,892 million in revenue and ¥61,296 million in net income, pointing to a business that is scaling meaningfully beyond the single Q2 snapshot.
• Consensus narrative leans bullish on cloud and AI, and these trailing figures show why:
  • Revenue has risen from ¥252,418 million to ¥272,892 million over the past year, in line with the view that cloud partnerships and migrations are supporting steady top line growth.
  • Net income over the same period moved from ¥58,280 million to ¥61,296 million, which fits the story that cloud driven efficiency gains are helping earnings, even as some older on premise licenses are expected to stabilize.

Margins Solid But Slightly Softer

• The trailing net profit margin sits at 22.5 percent, a touch below the 23.1 percent level reported a year earlier, so profitability is still strong even if it is not quite as high as before.
• Bulls highlight cost savings and efficiency from cloud migrations, yet the small margin dip introduces a nuance:
  • Moves like Shiseido shifting sales and customer analysis systems to Oracle Cloud are meant to improve efficiency, but the 0.6 percentage point margin slippage shows that not all of these benefits are yet flowing fully through to the bottom line.
  • At the same time, analysts expect margins to edge up to about 23.3 percent over the next three years, so the latest 22.5 percent level becomes a reference point for judging whether those improvements actually materialize.

On the back of strong cloud demand but only slightly softer margins, some investors are asking how long Oracle Japan can keep compounding profits at this pace before competitive pressures bite into pricing and profitability more noticeably. 🐻 Oracle Corporation Japan Bear Case

Premium Valuation Versus DCF and Peers

• The shares trade around ¥13,390 against a DCF fair value of roughly ¥11,475.38 and sit on a 28 times P E multiple versus about 19.9 times for the Japan software industry and 21.7 times for peers.
• Supporters argue that forecast growth can justify this premium, and the numbers offer both backing and pushback:
  • Revenue and earnings are each expected to grow at roughly 8 to 9 percent per year, and earnings have already grown about 4.7 percent per year over five years with a 5.2 percent lift in the latest year, which helps explain why some are willing to pay more than the sector average.
  • However, with the stock above DCF fair value and only about 30.1 percent upside to an analyst target of ¥17,420.00, the valuation leaves less room for error if growth, margins, or cloud momentum slow versus these expectations.

Bulls see Oracle Japan as a high quality compounder with cloud and AI tailwinds, and they are paying up now in the hope that today’s premium multiple still leaves room for compounding returns. 🐂 Oracle Corporation Japan Bull Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Oracle Corporation Japan on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Oracle Corporation Japan.

Explore Alternatives

Oracle Corporation Japan is delivering growth, but softer margins and a premium valuation versus DCF and peers leave investors with less room for disappointment if expectations slip.

If that combination of tightening margins and stretched pricing makes you uneasy, use our these 904 undervalued stocks based on cash flows today to quickly surface candidates where earnings power and valuation are better aligned.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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