Oracle Boosts FY2027 Capex to $95B, Plans $40B Raise, Margins to Compress
ORCL•Oracle plans to boost fiscal 2027 capex to $90–$95 billion, driving net cash outlays of roughly $70 billion and prompting a $40 billion debt and equity raise. The firm reported Q4 revenue of $19.2 billion (up 21%) with RPO soaring 363% to $638 billion, but gross margins are forecast to compress.
1. Aggressive FY2027 Capital Program
Oracle projected FY2027 capital expenditures of $90–$95 billion, up from $55.7 billion in FY2026, expecting net cash outlays near $70 billion after customer prepayments and planning to raise about $40 billion via debt and equity, including a $20 billion at-the-market equity program.
2. Q4 Financial Performance
In Q4, Oracle achieved revenue of $19.2 billion (21% year-over-year growth), cloud infrastructure sales jumped 93% to $5.8 billion, GAAP EPS rose 21% to $1.45 and non-GAAP EPS climbed 24% to $2.11 (or $2.03 excluding a one-time gain).
3. Record Backlog and RPO Surge
Remaining performance obligations reached $638 billion, up 363% year-over-year and $85 billion sequentially, though approximately $75 billion of that reflects prepaid or customer-supplied GPU hardware rather than traditional contracted revenue.
4. FY2027 Guidance and Market Reaction
Oracle reaffirmed its FY2027 revenue target of $90 billion, guided Q1 revenue growth of 27%–29% and cloud growth of 58%–64%, but warned that data center ramp timing and mix will pressure gross margins, driving an 8–12% pre-market stock decline.
