Oracle eases AI spending worries with plan to turn cash flow positive
ORCL•Oracle expects capital spending to peak this fiscal year and next, and says it will raise no more than $20 billion in additional financing through fiscal 2030. It expects free cash flow to turn positive in the second half of fiscal 2028 and exceed $30 billion in fiscal 2029.
1. Funding and cash flow
Oracle expects capital spending to peak this fiscal year and next as it expands cloud capacity. CFO Hilary Maxson said the company expects free cash flow to turn positive in the second half of fiscal 2028 and top $30 billion in fiscal 2029, when capital spending is set to decline.
2. Financing limits
Oracle said it needs up to $20 billion in additional funding for the remainder of fiscal 2027, split evenly between debt and equity, and called that the final amount needed to fund the remainder of this cycle. Earlier this year, it said it would raise $40 billion through debt and equity financing in fiscal 2027, including a $20 billion stock sale completed in the first quarter. As of August 31, it had $125.34 billion in notes payable and other borrowings and around $36.37 billion in cash and cash equivalents.
3. Longer-term targets
For fiscal 2030, Oracle forecast revenue above $225 billion, an adjusted operating margin above 40% and adjusted earnings above $21 per share. It reaffirmed its fiscal 2027 forecast of revenue above $90 billion and adjusted earnings of $8.10 per share.
